Early Headlines: Invest in Cuba, Interest-Free Mortgages, Monster El Nino, New BRICS Development Bank, Greek Repays Arrears and More
Early Bird Headlines 21 July 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
- Monster El Niño Makes Record-Hot Year Look Inevitable (Bloomberg) This is a new kind of heat. In more than 135 years of global temperature data, four of the five hottest months on record all happened in 2015: February, March, May, and now June. This has been the hottest start to a year by far, according to data released today by the National Oceanic and Atmospheric Administration. The record heat is likely to continue as an already strong El Niño weather pattern in the Pacific Ocean continues to intensify, ripping more heat into the atmosphere. This monster El Niño may itself be on track to break records. Econintersect: Weather and climate economist Sig Silber follows global weather developments in a weekly feature GEI column. He is not sure a "monster El Nino" is actually in progress. He says more time is needed to determine how strong the current El Nino. See this week's article just published: 20 July 2015 Weather and Climate Report: NOAA Issues Seasonal Update - Monsoon Takes a Break.
- Investors See No Reason to Buy Gold (Bloomberg) Why buy gold? That's a question that's confounding some traders. The eight-day rout that's sent gold to a five-year low has some forecasters expecting more losses. Oversea-Chinese Banking Corp.'s Barnabas Gan, the most accurate forecaster of precious metals in rankings compiled by Bloomberg, predicts gold will reach $1,050 an ounce by December, a 5.2 percent drop from current levels. Econintersect: Morning trading in Asia again saw gold dip below $1100 ($1095 and change on three occasions) but was back up to #1102. as this is published. For the latest numbers see Investing.com.
- Interest-only mortgages: They're baaack (CNBC) They were the villains of the housing crash. Federal regulators called them toxic. Now interest-only mortgages are making a comeback, but these are not the loans of yesteryear or yester-housing booms. Underwriting standards for the deferred principal payment loans are quite restrictive.
- The Inside Tale of How 2 Killers Escaped a New York Prison (The New York Times, MSN News) How did the prisoners manage to work hours every night to set up their escape? The guards were sleeping.
- Repeated attempts to pass hate crime bill in South Carolina have failed (Al Jazeera) Bill in state legislature would increase penalties for crimes motivated by bias; three similar efforts did not pass. The Confederate flag may have come down but some other things still stand.
- EU falls short of migrant redistribution target (BBC News) EU ministers have fallen short of a target to agree the redistribution of 40,000 migrants who have arrived in Italy and Greece. At a meeting in Brussels they agreed to start the relocation of just over 32,000 in October. The allocation of the remainder will be decided by the end of the year, officials said. About 150,000 migrants fleeing war and poverty are estimated to have reached Europe so far this year. The majority have arrived in Greece and Italy where they are being looked after in overflowing camps. So nearly 80% of the migrants are on their own or in refugee camps.
- Krugman slams Greece, Germany slams Krugman (CNBC) Krugman is shocked that the Syriza government had no plan and Schauble questions Krugman's knowledge of the EU. Econintersect: Both men are posturing.
- Greek debt crisis: 2bn euro arrears repaid to IMF (BBC News) The International Monetary Fund (IMF) has confirmed that Greece has cleared overdue debt repayments of €2.05 billion (£1.4 billion) and is no longer in arrears. Greece also paid €4.2 billion owed to the ECB (European Central Bank). How did they do that? With money advanced by the ECB in a short-term loan.
- Tunisia’s Illiterate Democracy (Foreign Policy) Can democracy maintain an even keel in a country where some rural areas have illiteracy approaching 40% (60% among women)?
- China Protests U.S. Pacific Fleet Commander’s Spy-Plane Flight (Bloomberg) China renewed its protests over U.S. spy planes entering what it claims as territory after Admiral Scott Swift, commander of the U.S. Pacific Fleet' joined a surveillance flight over the disputed South China Sea. Adm. Swift went on the July 18 flight to witness the full range of capabilities of the P-8A Poseiden aircraft.
- Brics countries launch new development bank in Shanghai (BBC News) The Brics group of emerging economies on Tuesday launched its New Development Bank (NDB) in Shanghai. The bank is backed by Brazil, Russia, India, China and South Africa - collectively known as Brics countries. The NDB will lend money to developing countries to help finance infrastructure projects. The bank is seen as an alternative to the World Bank and the International Monetary Fund, although the group says it is not a rival. The bank is to start out with a capital of $50bn (£32bn) though the amount is to be doubled in the coming years. The biggest contributor will be the world's second largest economy China
- Japan demands China halt oil exploration in part of East China Sea (Reuters) Japan called on China on Tuesday to halt construction of oil-and-gas exploration platforms in the East China Sea close to waters claimed by both nations, concerned that Chinese drills could tap reservoirs that extend into Japanese territory.
- Four ways to invest in Cuba now (CNBC) Hat tip to Marvin Clark. Some ideas about what companies will profit as Cuba opens up to the outside.
- World’s Cheapest Bank Is Still Too Pricey for Analysts Expecting Fire Sale (Bloomberg) Banco do Brasil SA has always traded at a discount to its Brazilian peers. Now, it's the world's cheapest bank after the government started selling part of its stake. Banco do Brasil, controlled by the federal government, trades at 5.13 times forecasted earnings for the next 12 months. That's the lowest ratio among the world's top 100 banks by market value, which traded at an average of 11.4 times earnings on Monday.
- Seven prison workers charged in connection with 'El Chapo' escape (CNN) Seven people who worked in the maximum-security prison that held Joaquin "El Chapo" Guzman have been charged in connection with his escape. On Thursday, Mexico's interior minister said that on the night Guzman escaped, it took 18 minutes for guards to arrive at his cell after they lost sight of him on surveillance video.
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