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.
Asian shares consolidate gains after rally; Fed, BOJ awaited (Reuters) Asian shares fell on Tuesday after a four-week rally ran out of steam as investors took cover ahead of central bank meetings in the United States and Japan later in the week, while disappointing U.S. home sales weighed on the dollar. European markets were set to open flat to lower, with earnings from major companies such as Deutsche Bank < DBKGn.DE> and Novartis (NOVN.VX) in focus. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.7%.
Electricity death spiral edges closer (Macro Business) The electricity "death spiral" has, for a long time, been a key risk facing electricity generators/distributors globally. The "death spiral" arises when demand for power declines, due in part to customers taking up solar, leading to higher prices to cover fixed network costs. That is, the more people that take-up solar power, the faster decline in electricity demand, and the more fixed costs must be spread over a smaller volume of electricity, raising costs for everyone else. Econintersect: What is missing from this discussion is the fact that electricity is produced by solar farms at a lower cost than from rooftops. That advantage is projected to continue (possibly even increase) going forward.
The Budget Deal To End All Obama Budget Deals Is Here. Read The Details. (The Huffington Post) Just before midnight on Monday, congressional lawmakers and the White House tentatively agreed on a major budget deal that would end such standoffs in the Obama presidency and solve a potentially catastrophic debt default coming within days. Under the arrangement detailed by congressional aides, the debt limit, predicted to be hit on Nov. 3, would be extended into March 2017 -- well into the next president's term. Additionally, over the next two years, government spending would rise $80 billion above the caps that sequestration currently allows. That money would be doled out evenly between defense and non-defense accounts, with $50 billion budgeted for the first year and $30 billion for the second. Econintersect: This will slightly reduce the probability of a recession starting soon, even though the deal is partially offset by cuts elsewhere. Not reducing the probability of recession are cuts to reimbursements to Medicare doctors and savings in disability benefit expenses.
U.S. Natural Gas Heads Toward $2 as Stockpiles Near Record (Bloomberg) U.S. natural gas extended its decline toward $2 per million British thermal units as a glut of the power-plant and heating fuel nears a record. Unusually warm weather for this time of year is threatening to crimp gas demand just as caverns and reservoirs are filling up with supplies. Money managers raised bearish gas bets last week to an all-time high. Prices haven't fallen below $2 since since April 2012. Tim Evans, an energy analyst at Citi Futures Perspective in New York, said in a phone interview on Monday that gas reaching $2"
"... definitely pressures the producers to cut back on investment, to cut back on drilling and leave a little bit of gas in the ground for later. In terms of the big-picture, boom-or-bust cycle, we are in the bust phase."
Migrant crisis: Merkel upbeat on integration despite tensions (BBC News) Chancellor Angela Merkel has tried to reassure Germans that the country can integrate the many refugees putting local authorities under pressure. "There are very, very many, but there are 80 million of us," she told residents of Nuremberg, Bavaria. "We can and will manage this integration." She urged Germans to get to know the newcomers "as much as possible". In Freiberg, eastern Germany, several hundred demonstrators tried to block buses carrying migrants late on Sunday.
DBS expects Taiwan to show third-quarter economic contraction (Taipei Times) Taiwan is expected to report an economic contraction in the past quarter due to worse-than-expected export performance amid slowing global demand, DBS Bank Ltd of Singapore said. GDP for the July-to-September period is likely to have contracted by 0.3% from a year earlier, falling from its earlier forecast of a 0.6% increase.
Singapore Sept factory output declines 4.8%, worse than forecast (The Business Times) Industrial output declined 4.8% year-on-year in September, falling more than the market's expectations. Apart from the biomedical manufacturing and chemicals clusters, all clusters posted a drop in production. Facxtory output would have fallen by a whopping 10.2% except for a huge 26.3% increase for biomedical manufacturing. The electronics cluster, which retains the largest weight of 33.4% on the index, stayed in contraction mode in September. Production shrank 8.6%t, dragged down by a 12% decline in semiconductor output.
Growth led by domestic consumption to continue in Q4 (Pulse Business News Korea) The South Korean economy will continue its path to a recovery driven by the private sector and domestic consumption in the fourth quarter after the GDP growth in the third quarter clawed back to the 1 percent range for the first time in six quarters, the Ministry of Strategy and Finance said in a statement released on Sunday. Strong domestic demand is expected to more than compensate for falling exports.
Zero deposit loans for Chinese investors to spur Australian property market (Financial Review) One of China's biggest financial institutions is offering zero-deposit home loans for off-the-plan apartments in Melbourne and the Gold Coast, a practice at odds with efforts by Australian regulators to tighten lending standards and cool the bubbly Australian property market. The banking division of PingAn Insurance, which has a listing in Hong Kong, was touting the loans to Chinese investors at a conference in Shanghai last week.
Trudeau Is Less Liberal Than You Think (The Daily Beast) The new Prime Minister is very pro-oil and that will disappoint carbon-hating liberals. But on economics he is following the liberal line with plans for deficits devoted to infrastructure. And he will be less beligerant on climate change issues on the international stage than was his predecessor.
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