FBI gets cracking on Hillary’s new emails

washington — Federal investigators have secured a warrant to examine newly discovered emails related to Hillary Clinton’s private server, US media reported on Sunday, as a prominent Democrat accused FBI Director James Comey of breaking the law by trying to influence the election.

The warrant will allow the Federal Bureau of Investigation to examine the emails to see if they are relevant to its probe of the private email server used for government work by Clinton, the Democratic presidential nominee, while she was secretary of state from 2009 to 2013.

FBI officials were unavailable for comment on the status of their investigation. Reuters could not confirm that the search warrant had been issued.

Comey came under heavy pressure from Democrats to provide details of the emails, as Clinton allies worried the prolonged controversy could extend beyond the November 8 election and cast a shadow over a Clinton transition if she wins the White House. —

With the US presidential election on November 8, and a series of elections and other political decisions fast approaching in Europe, now is a good time to ask whether the global economy is in good enough shape to withstand another major negative shock. The answer, unfortunately, is that growth and employment around the world look fragile. A big adverse surprise – like the election of Donald Trump in the US – would likely cause the stock market to crash and plunge the world into recession.

There is always a great deal of insight in the International Monetary Fund’s semi-annual economic outlook, which is based on detailed data from around the world. And, because the latest version was published in early October, it is particularly relevant. Even if Donald Trump loses the US election, the frustration that fueled his campaign – and the rise of populists elsewhere – will persist. How can that frustration finally be quelled?

The most obvious dark cloud on the global horizon is Europe. The British issues are not helping, but the deeper issues continue to be related to the eurozone itself (Britain never adopted the euro). The headline growth number in Spain is somewhat encouraging, continuing to show some rebound. But the ongoing gloom about Italy – the third-largest eurozone economy, growing at less than 1 per cent per year – is a serious matter. Compounding these macroeconomic issues is the continuing pressure on eurozone banks. These banks have never fully recovered from earlier losses, and their equity capital levels remain low relative to international competitors (like the US) and to what investors regard as reasonable.

The bigger problem remains uncertainty about who is on the hook if a bank’s losses imply potential insolvency. These banks are clearly too big to fail – no European government in its right mind would allow a default on bank debt. But there is no agreement on how to share bank losses across countries. Taken as a whole, the eurozone has enough fiscal capacity to stand behind its banks. But, unfortunately, doing so is still a country-bycountry decision – the collective mechanisms for recapitalizing European banks remain partial and far too weak.

In fact, the impact of a Trump victory on the US could well be worse. Whereas British Prime Minister Theresa May’s government wants to close the UK’s borders to immigrants from the EU, it does want trade with the world. Trump, on the other hand, is determined to curtail imports through a variety of policies, all of which are well within the power of a president. He would not need congressional approval to slam the brakes on the US economy.

Even in the best of times, US policymakers often do not think enough about the impact of their actions on the rest of the world. Trump’s tradeled recession would tip Europe back into full-blown recession, which would likely precipitate a serious banking crisis. If this risk were not contained – and the probability of a European banking debacle is already disconcertingly high – there would be a further negative spiral. Either way, the effects on emerging markets and all lower-income countries would be dramatic.

Investors in the stock market currently regard a Trump presidency as a relatively low-probability development. But, while the precise consequences of bad policies are always hard to predict, if investors are wrong and Trump wins, we should expect a big markdown in expected future earnings for a wide range of stocks – and a likely crash in the broader market.

Investors in the stock market regard a Trump presidency as a relatively low-probability development