November 2018 – Page 3 – Economic World News

Can we really get a ‘better’ deal?

http://blogs.lse.ac.uk/brexit/2018/11/16/can-we-really-get-a-better-deal/

Theresa May’s plan kicks the Brexit ‘can’ down the road because any Brexit deal will be inferior to the status quo, write Michael Ellington and Costas Milas (Liverpool).

Publication of the 585-page Brexit-deal document was immediately followed by swift criticism of Mrs May’s negotiating ‘outcome’ and a series of cabinet resignations. When academics are asked to examine a PhD student, they are sent a 200+ pages of a PhD thesis and are then asked to examine the candidate no less than a week later. How on earth everybody read the Brexit document in a few hours to…start firing remains a mystery to us.

In any case, it comes as no surprise that Mrs May put forward a very vague deal, which, in essence, kicks the Brexit ‘can’ down the road. In our view, this is because any concrete Brexit deal will be inferior to the current status quo. She knows this very well and she is not willing to face the electoral blame.

In extending the Brexit transition to…20XX, Mrs May appears to believe that a version of the so-called ‘Chequers plan’ works. Recall that the Chequers plan proposes tax or tariff-free trade with the EU, while leaving the UK free to pursue trade deals outside the EU. The plan suggests that the UK would collect tariffs on the EU’s behalf for any goods entering the country but destined to be sent on to EU countries. The 585-page document is not clear on whether we will eventually become the ‘tax collector’ of the EU.

Featured image credit: Photo by Ilovetheeu, under a CC-BY-SA-4.0 licence.

In any case, this very plan has already been indirectly torn apart by the publication of the 2018 Global Competitiveness Report. This report, published by the influential World Economic Forum, suggested that, among 140 countries, the UK economy lost competitive ground as it dropped down from 6th place in 2017 to 8th place in 2018. The report also noted a deterioration in the UK ‘product market’ environment. The product market environment refers to domestic competition and trade openness; the latter relating to trade tariffs, complexity of tariffs and efficiency of the clearance process.

Since the UK is already witnessing a deteriorating performance in this very area, why on earth are we insisting on a version of the ‘Chequers plan’, which proposes an even more complicated clearance process? Even worse, why on earth Germany seems (?) to agree on us doing the clearance process for them when they are already ranked the best country in the world in doing this job, while we are ranked ten places behind them?

The reality, however, of the 585-page document and the subsequent resignations is that prolonged uncertainty is already ‘killing’ our economy. We see evidence of this in Figure 1,which plots together business investment growth in the UK and economic policy uncertainty. Economic policy uncertainty is constructed based on newspaper articles regarding policy uncertainty from The Times and The Financial Times.

Figure 1. Business investment growth and policy uncertainty in the UK, 1999-2018 (quarterly data)

Source: ONS and Policy Uncertainty

Notice from Figure 1 that policy uncertainty, which increased rapidly on our way to the EU referendum, recorded a notable decline only after early 2017, when Theresa May decided to trigger Article 50. Indeed, by eventually triggering Article 50, our government was ‘forced’ to start negotiating with our EU partners in a constructive manner. In fact, Figure 1 identifies a clear negative relationship between business investment growth and policy uncertainty. Higher policy uncertainty makes firms less willing to invest in the UK economy, which takes its toll on our future economic prospects. In fact, according to the Confederation of British Industry, 80 per cent of businesses say that Brexit affects negatively their investment decisions.

Critics of Mrs May think that we can get a ‘better’ deal. On what grounds really? Our EU partners have long realised (and witness this even more based on today’s resignations) that our government appears in ‘disarray’. Why on earth would they be willing to concede more when we are in such a weak negotiating position?

The point is that we are sleep-walking to a ‘no-deal’ Brexit. Ending up with a no-deal Brexit will push the Bank of England to the limit. Backed up by our brand new research, the Bank’s policymakers will be forced to stave-off the adverse impact of a huge fall in confidence and business investment through monetary stimulus.

It won’t be the first time. Indeed, Mark Carney and his Monetary Policy Committee (MPC) fellows had to step in to ‘save the day’ the morning after the referendum date when David Cameron was too busy resigning as Prime Minister. The hope is that they will be spared from doing the same job again.

So what are the alternatives? Mrs May could take her Brexit deal to the people’s vote. That is, call immediately for a referendum on her Brexit deal: her deal versus the current status quo as an alternative. No more Brexit games. Going back to the negotiating table in the hope that the same negotiators will come up with something (slightly) more meaningful is a folly. Our economy cannot afford any more Brexit games. As simple as that.

This article gives the views of the authors, and not the position of LSE Brexit, nor of the London School of Economics and Political Science. It also appeared on LSE Business Review.

Michael Ellington is Lecturer in Finance at the University of Liverpool.

Costas Milas is Professor of Finance at the University of Liverpool.

PM May refuses to say DUP will back her Brexit deal in parliament

http://www.politico.eu/article/pm-theresa-may-refuses-to-say-dup-will-back-her-brexit-deal-in-parliament/

Britain’s Prime Minister Theresa May | Matt Dunham/AFP via Getty Images

Theresa May held her nerve in a half-hour radio phone-in with the British public.

Prime Minister Theresa May refused to confirm whether her Northern Ireland backers, the Democratic Unionist Party (DUP), will vote for the draft Brexit deal she is due to bring to parliament next month.

The DUP’s 10 MPs prop up the minority Conservative government in the House of Commons, but the party’s leader Arlene Foster has dismissed May’s Brexit draft as a “capitulation.”

“Well, we will see how every member of parliament is going to vote,” May said on LBC radio, when asked if the DUP would back her. “When this vote comes back every individual member of parliament will decide how they vote.”

During a 30-minute phone-in show, May also dodged the question of whether Tory MPs would be given a free vote on the deal, rather than being whipped into backing it, and she declined to comment on whether Cabinet Brexiter Michael Gove had been offered, and turned down, the vacant Brexit secretary role.

“He’s been doing a great job,” May said.

The prime minister — who faces a seemingly monumental challenge to get her deal through parliament, with Labour, the DUP, Liberal Democrats and numbers of both Remainers and Brexiters in her own party likely to reject it — remained resolute on the phone-in, where some callers accused her of failure and said she should stand down.

The final caller compared May to former Prime Minister Neville Chamberlain in having “appeased that foreign [EU] power,” but May reaffirmed that her deal was the best option for the country and there were areas in the negotiations where the EU had “given in to us” after the U.K. “held out.”

When quizzed about the controversial Irish backstop arrangement, however, May conceded: “I have some of those concerns myself.”

Ellen, a British woman living in Spain, called in to ask what would happen to U.K. citizens in the EU if May’s deal failed. May said she “would expect” EU countries to protect the rights of British citizens abroad just as she said EU citizens’ rights would be protected in the U.K.

Julie, who said she is disabled, called to ask for assurances that she would still be able to get the medicine she needs if the U.K. crashes out of the EU with no deal. May replied that the government was “looking at the relationship we have with the European Medicines Agency,” and went on to say that this is a “personal” issue for her, too, as she relies on insulin produced in Denmark to manage her type-1 diabetes.

Opinion: Undermining RBI In Name Of Public Interest Would Be A Real Shame

https://www.ndtv.com/business/opinion-undermining-rbi-in-name-of-public-interest-would-be-a-real-shame-1945851

Government and the central bank have had disagreements, but the relationship has never looked so irretrievably broken as it does now.

Before the global financial crisis, the finance ministry saw the Reserve Bank of India as an incompetent regulator, one that managed the state-dominated banking industry by keeping it puny and primitive.

In that view, Indian lenders didn’t know how to model risks, and a conservative central bank wasn’t letting them use credit derivatives to manage them. Pressure from Finance Minister P. Chidambaram to open up the banking industry to foreign competition almost led to the resignation of then RBI Governor Y. V. Reddy. The spat, which never became public, was soon overshadowed by the 2008 meltdown, when the central bank won global praise for its mistrust of high finance.

That reputation was in tatters by the time of the 2013 taper tantrum, when India was hit by massive capital outflows. Appointing the former IMF Chief Economist Raghuram Rajan as governor helped stabilize asset prices and mend the central bank’s reputation. But a change of government in 2014, followed by an acceptance of Rajan’s old recommendation to narrow the RBI’s policy remit to the single-minded pursuit of an inflation target, revived the campaign to chip away at the institution’s authority in other matters.

Rajan strongly opposed the idea of handing supervision of the government securities market to the stock-market regulator. He also resisted subjecting the central bank’s regulatory decisions to an appellate authority. Had he failed to do so, his successor Urjit Patel’s bank cleanup drive – which has included lending restrictions on 11 state-run lenders and the ouster of CEOs at a couple of non-state banks – would have been bogged down in an appeals process.

Not that Patel got a free pass. When stranded power companies challenged the central bank’s February order that banks take defaulted firms to the bankruptcy tribunal, a court asked the government to consider using Section 7 of the RBI Act to start a dialogue with the monetary authority. That article, which has never been triggered, says the government may (in the public interest) give directions to the central bank after consulting with it.

Emboldened by the court order, government officials began writing letters seeking Patel’s views on everything from nonperforming power-sector assets to lending restrictions on state-run banks and a liquidity squeeze following the bankruptcy of a systemically important infrastructure lender. They didn’t invoke Section 7, but to build pressure on the governor, they cited it anyway.

This overreach has led to a delicate moment in the institution’s 83-year history. In a speech about what happens when politicians toy with central-bank independence, RBI Deputy Governor Viral Acharya brought up Argentina in 2010. That annoyed the finance ministry. Just as in the Latin American example, New Delhi is bullying the central bank to transfer some of its resources to the government.

One way to recapitalize banks would be to prune the RBI’s balance sheet by $60 billion, and use the capital freed up in process, the government’s chief economic adviser suggested in early 2017. I wrote at the time that this wouldn’t sit well with investors: There were serious questions about the RBI’s independence following an ill-conceived demonetization adventure just a few months earlier.

What I didn’t realize then was that the bigger consequence of demonetization was to make voodoo economics chic. Although outlawing of 86 percent of India’s currency failed to yield a fiscal bonanza, media reports suggest the government still believes the central bank has $50 billion in excess capital.

Subhash Chandra Garg@SecretaryDEA Only proposal under discussion is to fix appropriate economic capital framework of RBI.

Fourteen years ago, when New Delhi wanted to take $5 billion a year for three years from the RBI’s foreign-exchange reserves for infrastructure, there was a lively debate, but nobody demanded the ouster of the central bank’s boss. It seems that policy-making in India, as elsewhere, has caught the Silicon Valley bug of moving fast and breaking things. There’s now open speculation that Patel may resign at an RBI board meeting Nov. 19.

The curmudgeonly RBI needs to do more to protect consumers and foster competition. But its reputation for honesty is a major asset in a country rife with corruption. And if $200 billion in bad loans keeps old doubts about the central bank’s competence alive, now at least it has the tools – such as a modern bankruptcy law – to act boldly. Why atrophy those newly acquired muscles? If inflation targeting succeeds in anchoring price expectations, the economy could operate with a permanently lower cost of capital.

For the avowedly pro-business government of Prime Minister Narendra Modi to lose sight of the benefits of such a shift (including a freer capital account) and lunge for the trite socialism of a state-directed credit binge is regressive.

Undermining the RBI in the name of the public interest, just when the institution finally has some capacity to serve the public, would be a real shame.

(Andy Mukherjee is a Bloomberg Gadfly columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.)

Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Back Into Balance

https://seekingalpha.com/article/4221167-back-balance

By Brad Tank, Chief Investment Officer – Fixed Income

Both the global economy and the U.S. Congress could be set for a new equilibrium in 2019.

A month ago, I was in Bali at the Annual Meeting of the International Monetary Fund (IMF) with our Chief Executive Officer George Walker, a big contingent of our emerging markets debt team, and a number of other senior colleagues. We value this event for insights into economic and development issues, of course, but also as a time to catch up with clients and partners from around the world all in one place. For me, it was also an opportunity to hit the road throughout Asia and really get my finger on the pulse there.

What I heard was enough to prepare me for the wave of selling that was to hit financial markets later in October. Sentiment in Asia was much darker than in Europe, and certainly darker than it is in the U.S. The IMF had revised its growth forecasts down immediately before its meetings, and it was a big theme of discussion there. In that part of the world, they have an acute sense of the global economic slowdown and the impact of the U.S.-China trade dispute.

Markets woke up to that in October. But there is a case to be made that this realization is good news for investors – evident, perhaps, in the steady rebound we’ve enjoyed so far in November. Moreover, the results of last week’s U.S. midterm elections arguably consolidated that good news.

New Equilibrium

The overwhelming impression I got in Asia is that investors think that Europe went into a slowdown this year, Asia is right behind it, and the U.S. will follow in 2019. On the face of it, that sounds like bad news.

Similarly, the analysts we heard do not expect the U.S.-China trade dispute to be a “NATFA 2.0”- a lot of bluster quickly followed by an outbreak of handshakes – simply because the issues involved are too large and complex. This impasse could take time to work out.

But the thing is, once those realities are discounted in market prices as they were in October, they become much less scary.

Yes, global growth is slowing – but it was faster and more synchronized in 2017 than at any time since the financial crisis. Yes, the U.S. is likely to join that slowdown in 2019 – but that could help to bring things back into synchronicity, curb U.S. inflation, let steam out of the dollar and allow the Federal Reserve to pause its rate hikes. Yes, tariffs are causing some harm – but it appears limited, and there are signs that the tide of the trade war may be turning.

All of that should make it easier for the business cycle to extend into 2020, and for markets to maintain their new equilibrium.

Divided

Investors appear to have concluded that the U.S. midterm election results support this scenario. Certainly, the Democratic Party taking back control of the House of Representatives did not derail the November bounce in equities and emerging market assets.

The stimulative impacts of last year’s corporate tax cuts have mostly worked their way through the system now, and a divided Congress makes a further inflationary shot in the arm highly unlikely. There is scope for some bipartisan agreement on infrastructure spending, but conservative fiscal hawks in the Senate are likely to keep a lid on those ambitions. The modest scale of Democratic gains and the continuing Republican majority in the Senate mean the White House still controls regulatory appointments and does not face a rollback of the changes it has already made. Markets have historically liked divided government, and if it also takes a little steam out of U.S. inflation, that is all for the good.

Congress generally has less scope to constrain the White House on trade, but in any case there is little reason or appetite for the House majority to block the new U.S.-Mexico-Canada Agreement, and with election season out of the way there may be more space for nuance in U.S.-China relations. The mood music has already improved markedly over recent days. It now seems possible that further tariffs could be taken off the table and piecemeal agreement might be reached on certain agricultural and manufactured goods.

I agree with Joe Amato that volatility is back and here to stay, for good reason. There are clear tail risks out there. The probability of President Trump being subject to multiple investigations, and potentially impeachment, is now higher. U.S. inflation and the strength of the dollar still bear watching. The freefall of the renminbi, despite China furiously selling its foreign exchange reserves, is cause for concern. There have been signs of exuberance in U.S. CCC rated bonds and leveraged loans.

Overall, however, the global economy may move back into more of a balance in 2019 – just as the branches of the U.S. legislature did last Tuesday.

What to Watch For

Tuesday, 11/13:
- Japan 3Q 2018 GDP (first estimate)
Wednesday, 11/14:
- U.S. Consumer Price Index
- Eurozone 3Q 2018 GDP (second estimate)
Thursday, 11/15:
Friday, 11/16:
- Eurozone Consumer Price Index

– Andrew White, Investment Strategy Group

Statistics on the Current State of the Market – as of November 9, 2018

Market Index	WTD	MTD	YTD
Equity
S&P 500 Index	2.2%	2.7%	5.7%
Russell 1000 Index	2.0%	2.6%	5.3%
Russell 1000 Growth Index	1.7%	2.2%	8.9%
Russell 1000 Value Index	2.3%	2.9%	1.4%
Russell 2000 Index	0.1%	2.6%	1.9%
MSCI World Index	1.4%	2.1%	0.2%
MSCI EAFE Index	0.2%	1.5%	-7.5%
MSCI Emerging Markets Index	-2.0%	2.1%	-13.6%
STOXX Europe 600	1.3%	2.4%	-7.9%
FTSE 100 Index	0.2%	-0.2%	-4.1%
TOPIX	0.9%	1.6%	-6.1%
CSI 300 Index	-3.7%	0.4%	-19.7%
Fixed Income & Currency
Citigroup 2-Year Treasury Index	0.0%	-0.0%	0.3%
Citigroup 10-Year Treasury Index	0.2%	-0.2%	-4.5%
Bloomberg Barclays Municipal Bond Index	0.2%	-0.1%	-1.1%
Bloomberg Barclays US Aggregate Bond Index	0.3%	-0.0%	-2.4%
Bloomberg Barclays Global Aggregate Index	-0.0%	-0.0%	-3.5%
S&P/LSTA U.S. Leveraged Loan 100 Index	0.1%	0.2%	4.0%
ICE BofA Merrill Lynch U.S. High Yield Index	0.1%	0.3%	1.1%
ICE BofA Merrill Lynch Global High Yield Index	0.1%	0.4%	-0.8%
JP Morgan EMBI Global Diversified Index	-0.0%	0.3%	-4.8%
JP Morgan GBI-EM Global Diversified Index	-0.1%	1.4%	-8.7%
U.S. Dollar per British Pounds	0.5%	2.0%	-3.7%
U.S. Dollar per Euro	-0.2%	0.2%	-5.5%
U.S. Dollar per Japanese Yen	-0.5%	-0.8%	-0.9%
Real & Alternative Assets
Alerian MLP Index	2.7%	2.9%	0.2%
FTSE EPRA/NAREIT North America Index	3.8%	3.0%	3.0%
FTSE EPRA/NAREIT Global Index	2.1%	2.8%	-2.1%
Bloomberg Commodity Index	-1.1%	-0.3%	-4.4%
Gold (NYM $/ozt) Continuous Future	-2.0%	-0.5%	-7.7%
Crude Oil (NYM $/bbl) Continuous Future	-4.7%	-7.8%	-0.4%

Source: FactSet, Neuberger Berman.

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AP FACT CHECK: Trumps rhetoric on voter fraud is…

https://www.dailymail.co.uk/wires/ap/article-6379237/AP-FACT-CHECK-Trumps-rhetoric-voter-fraud-misleading.html

WASHINGTON (AP) – Facing closely contested election races in Florida and Arizona, President Donald Trump is spreading misleading rhetoric regarding voting fraud.

He says votes are suspiciously appearing “out of the wilderness” in Arizona after Election Day to boost the Democratic candidate in the Senate race. It’s actually typical for the state to take additional days after an election to finish tabulating mail-in votes.

Trump also suggests that heavily Democratic counties in Florida may be improperly seeking to inflate the Democratic vote in the state’s Senate and governor races. There’s no evidence of that. The Florida state agencies charged with investigating potential fraud say no credible allegations exist.

Meanwhile, on the economy, Trump asserted that U.S. growth under his watch has been unprecedented. In fact, it was surpassed just four years ago during the Obama administration. He also minimized the trade threat from China and claims a U.S. steel industry renaissance that isn’t really happening.

A look at his claims, also covering health care and veterans:

FLORIDA ELECTIONS

President Donald Trump talks with reporters before departing for France on the South Lawn of the White House, Friday, Nov. 9, 2018, in Washington. (AP Photo/Evan Vucci)

TRUMP: “You mean they are just now finding votes in Florida and Georgia – but the Election was on Tuesday? Let’s blame the Russians and demand an immediate apology from President Putin!” – tweet Friday.

TRUMP: “Trying to STEAL two big elections in Florida! We are watching closely!” – tweet Saturday.

THE FACTS: He’s making baseless charges of “stealing” elections in Florida’s Senate and governor races, which headed for recounts due to razor-thin leads held by Republicans Rick Scott and Ron DeSantis, respectively.

It’s not uncommon for vote tallies to change in the days after the election as local officials process mailed and provisional ballots. In Florida, both Scott and DeSantis saw their leads dwindle in recent days as the Democratic strongholds of Palm Beach and Broward counties continued to count votes. That vote count concluded Saturday, leading to the Florida secretary of state’s order for recounts after the unofficial results in both races fell within the margin that by law triggers a review.

In the past two elections, in 2016 and 2014, Florida counted more than 99 percent of the vote on Election Day and in the early hours of the next day. In Broward, election officials updated vote totals for days after Election Day.

In alleging potential fraud, Scott, as outgoing governor, had said Thursday night that he was asking the Florida Department of Law Enforcement to investigate elections offices in Palm Beach and Broward. However, the agency said Friday there were no credible allegations of fraud and therefore, no investigation is active.

Scott’s campaign also filed a lawsuit asking that the Broward County supervisor of elections be ordered to turn over several records detailing the counting and collection of ballots cast. A judge Friday sided with Scott and ordered Broward’s election supervisor to release that voter information; the ruling did not address allegations of fraud.

The state’s election division, which Scott runs, said Saturday that its observers in Broward had seen “no evidence of criminal activity.”

Voting fraud in Florida and nationwide, in fact, is extremely rare. Trump often asserts that voter fraud is a significant issue, but has not provided evidence of consequential fraud.

After the 2016 election, Trump convened a commission to investigate potential voting fraud, after alleging repeatedly and without evidence that fraud cost him the popular vote. Trump won the Electoral College. But he disbanded the panel in January, blaming the decision on more than a dozen states that refused to comply with the commission’s demand for reams of personal voter data.

___

ARIZONA SENATE RACE

TRUMP: “Now in Arizona, all of a sudden, out of the wilderness, they find a lot of votes, and she’s – the other candidate is just winning by a hair.” – remarks to reporters Friday.

TRUMP: “Just out – in Arizona, SIGNATURES DON’T MATCH. Electoral corruption – Call for a new Election? We must protect our Democracy!” – tweet Friday.

THE FACTS: There is no evidence of anything unusual going on in the vote-counting in Arizona. Trump made the charges of “electoral corruption” and votes appearing “out of the wilderness” as Republican pessimism grew about Rep. Martha McSally’s prospects in the Senate race. However, Arizona normally takes more than a week to count its ballots, and no elected Republican officials in the state have cried foul. It’s possible that Democrat Kyrsten Sinema’s opponent, McSally, could jump back into the lead in the coming days. That wouldn’t be suspicious, either.

The vote count tends to take longer in Arizona because residents like to vote early, by mail, and a mailed-in ballot requires more work for elections officials.

State law requires the envelope to be sealed and signed, and for elections officials to match each signature to the one on file with the voter’s registration before even opening the envelope. In this election, that’s about 1.7 million individual signatures that had to be confirmed, one by one. A total of about 2.4 million votes were cast in Arizona.

The work piles up in the final days before the election as ballots flood in. Voters can also drop off sealed mail ballots on Election Day, adding to the pile. The state’s Republican secretary of state, Michele Reagan, added another reason: election security. To ensure against voter fraud, mail ballots dropped off Election Day – which totaled 320,000 – are double-checked with votes cast at the polls to confirm no one voted twice.

The GOP had filed a lawsuit seeking to stop Maricopa and Pima counties from contacting voters after Election Day about problems with the signatures on their mail ballots. But they, Democrats and the state’s counties settled the complaint Friday to essentially allow the rest of the state to follow the more lenient Maricopa and Pima standards. Those standards are what Trump seemed to complain about in his “signatures don’t match” tweet.

___

MIDTERM ELECTIONS

TRUMP, on the message taken from Tuesday’s elections: “I think the results that I’ve learned, and maybe confirm, I think people like me. I think people like the job I’m doing, frankly. Because if you look at every place I went to do a rally … and it was very hard to do it with people in Congress because there are just too many … but I did it with the Senate. I did it with (Kentucky Rep.) Andy Barr, as you know. And he won.” – news conference Wednesday.

THE FACTS: Trump is wrong to suggest that congressional candidates won in every state where he held a rally on their behalf.

Two Republicans who closely embraced Trump in their Senate races – Montana’s state auditor, Matt Rosendale, and West Virginia’s attorney general, Patrick Morrisey – lost to Democratic Sens. Jon Tester and Joe Manchin, respectively. Trump had visited Montana four times and West Virginia three times to rally voters. Also losing Tuesday were Republican Sen. Dean Heller of Nevada, defeated by Democratic Rep. Jacky Rosen, and Leah Vukmir, a GOP state lawmaker in Wisconsin who lost her Senate race to Democratic Sen. Tammy Baldwin. Trump campaigned for Heller in Nevada on Oct. 20 and for Vukmir in Wisconsin on Oct. 24.

In the House, Republican Rep. Jason Lewis lost his race in Minnesota to Democrat Angie Craig, whom he had defeated by 2 percentage points in 2016. Trump campaigned in Minnesota on Oct. 4 after Lewis invited Trump to appear for him.

___

TRUMP: “Fifty-five is the largest number of Republican senators in the last 100 years.” – news conference Wednesday.

THE FACTS: His party didn’t win 55 Senate seats Tuesday. Republicans held 55 seats in the Senate in 2005-2006, as well as 1997-2000, according to the Senate historian’s office.

After Tuesday’s elections, Republicans will hold a 51-46 edge, with races in Florida and Arizona too close to call. A special election in Mississippi has advanced to a runoff election on Nov. 27 between Republican Sen. Cindy Hyde-Smith and Democrat Mike Espy. That means 54 Republican seats if those three races all break the GOP’s way.

___

ECONOMY

TRUMP: “America is booming like never before. … In terms of GDP, we’re doing unbelievably.” – news conference Wednesday.

TRUMP, on his telephone conversation Tuesday night with House Democratic leader Nancy Pelosi: “We didn’t talk about impeaching. We didn’t talk about – what do you do? Do you impeach somebody because he created the greatest economic success in the history of our country?”

THE FACTS: The economy is healthy, but it’s not unbelievable or unprecedented. It’s also not clear what he means in claiming the nation’s “greatest economic success” ever.

The economy expanded at a 4.2 percent annual rate in the April-June quarter, then by 3.5 percent in the July-September quarter. Those are the best two quarters in just four years. Growth reached 5.1 percent in the second quarter of 2014, followed by 4.9 percent in the third quarter.

The economy has boomed much more dramatically in the past. In the late 1990s, growth topped 4 percent for four straight years. It reached 7.2 percent in 1984. The unemployment rate is now at an impressive 50-year low of 3.7 percent. But it remained below 4 percent for nearly four years in the late 1960s.

___

TRUMP: “And our steel industry is back. Our aluminum industry is starting to do really well. These are industries that were dead. Our miners are working again.” – news conference Wednesday.

THE FACTS: He’s exaggerating.

The steel industry has added jobs at a faster rate than the economy as a whole since Trump’s inauguration, though all the gains occurred before the administration imposed tariffs on steel imports in March. Still, the rebound has hardly restored steel to its former glory.

The United States has added 5,500 steel jobs since Trump entered the White House for a total of 86,500. Before the Great Recession, there were about 100,000 steel jobs. Aluminum factories have added 2,600 jobs since the inauguration for a total of 60,100. These are minor changes in an economy with almost 150 million jobs.

Meanwhile, not many miners are working again. Coal mining jobs have increased just 1,900 to 52,600 since Trump’s inauguration. That’s also a lot lower than the roughly 70,000 coal mining jobs that existed as recently as 2014.

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TRUMP: “China got rid of their ‘China ’25’ because I found it very insulting. I said that to them. I said, ‘China ’25’ is very insulting, because ‘China ’25’ means, in 2025, they’re going to take over, economically, the world. I said, ‘That’s not happening.'” – news conference Wednesday.

THE FACTS: There’s no evidence China has abandoned its economic plan. Trump is referring to China’s “Made in China 2025” plan, under which that country’s government aims to develop world-leading companies in robotics, semiconductors, electric vehicles and other advanced technologies. It’s a sore point between the two nations because the United States and other countries argue that China is using unfair tactics to achieve those aims, such as forcing U.S. companies to share technology and providing government subsidies.

Chinese officials have played down the plan in recent months because of the international criticism. But there’s little sign they have “gotten rid of” the plan. Because China sees the plan as a key step in the development of its economy, many observers worry they are unlikely to scale it back, which suggests U.S.-China trade fights aren’t going away anytime soon.

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VETERANS

TRUMP: “I’ve done more for the vets than any President has done, certainly in many, many decades, with Choice and with other things, as you know. …If you look at Choice – Choice alone – I mean, just take a look at what we’ve done with Choice.” – news conference Wednesday.

THE FACTS: He’s taking premature credit for improvements that will take years to see full effect in regards to the Veterans Choice program.

Trump signed legislation in June to expand the private-sector Choice program, which was first approved in 2014 during the Obama administration in the wake of a scandal at the Phoenix VA medical center in which some veterans died while waiting months for appointments. The current Choice program allows veterans to see doctors outside the VA system if they must wait more than 30 days for an appointment or drive more than 40 miles to a VA facility.

How much Choice will be expanded, however, will depend on yet-to-be-completed regulations that will determine eligibility for veterans as well as available money for the program. The Department of Veterans Affairs has yet to resolve long-term financing due to congressional budget caps that could put funding for VA or other domestic programs at risk of shortfalls next year.

Also important to the program’s success is an overhaul of the VA’s electronic medical records to allow seamless sharing of medical records with private physicians, a process expected to take up to 10 years. VA Secretary Robert Wilkie has said full implementation of the expanded Choice program is “years” away.

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HEALTH CARE

TRUMP, on keeping health premiums down and covering people with preexisting medical conditions: “What we’re doing, if you look at the Department of Labor also – (Health and Human Services) Secretary (Alex) Azar, what they’ve done. They’ve come up with some incredible health care plans, which is causing great competition and driving the prices right down.” – news conference Wednesday.

THE FACTS: He’s glossing over the limitations of his administration’s new health care options, which offer lower premiums than comprehensive plans such as the Affordable Care Act but also cover less. The availability of Trump’s short-term health plans also is not going to “drive down” prices of the Obama-era overhaul or comprehensive plans, but may increase premiums for robust coverage if fewer healthy people take it as a result.

Strictly speaking, the short-term and association health plans are not new. The Trump administration has broadened their potential reach, although some states may push back with restrictions.

Short-term plans don’t have to take people with medical conditions or provide benefits such as coverage for maternity, mental health, prescription drugs and substance abuse treatment. Association health plans do have to accept people with pre-existing medical conditions, but they don’t have to cover the full menu of 10 “essential” kinds of benefits required by Obamacare.

Gary Claxton of the nonpartisan Kaiser Family Foundation says short-term plans may turn out to be more costly than Trump administration officials suggest. The plans now cover up to 90 days, but if insurers expand them to offer up to 36 months’ coverage, the companies will be taking on more risk.

“You’ll have to pay more up front because there’s a longer time during which you could get sick,” Claxton said.

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Associated Press writers Nicholas Riccardi, Calvin Woodward, Alan Fram and Ricardo Alonso-Zaldivar contributed to this report.

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In this Nov. 7, 2018, photo, President Donald Trump speaks during a news conference in the East Room at the White House in Washington. (AP Photo/Manuel Balce Ceneta)