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posted on 05 December 2015

Early Headlines: Iron Ore At New Low, Rich Cause Climate Change, US Trade Deficit Widens, Barclays Slashes More Jobs, Japan's Odd Fiscal Policy, Hong Kong Housing Bubble And More

Written by Econintersect

Early Bird Headlines 05 December 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.



  • Glencore, BHP Billiton, Anglo American share price: Miners suffer as iron ore falls to fresh 10-year low (City A.M.) Iron ore prices fell to a fresh 10-year low today, amid concerns falling demand from its biggest consumer would add to a global glut in the steelmaking raw material. It came after industry consultancy Custeel said more steel mills in China's Shanxi province have halted production due to shrinking demand and shortage of cash. Spot iron ore prices fell to a fresh 10-year low below $40 a tonne, and are set for their steepest weekly decline in five months. This means its fallen 7.4% for the week, the steepest slide since declining almost eight per cent in early July. Falling iron oil prices reverberated through the FTSE's mining sector, which was down 138.04 points, or 1.79%, at 7,581.33 points Friday afternoon.

  • The Latest Attack on Climate Science (The New York Times) The New York Times Editorial Board criticizes the actions of Representative Lamar Smith (R, TX), chairman of the House Committee on Science, Space and Technology, who is accusing the agency of rushing data to publication, and is demanding access to the internal communications of its employees. The Times says:

What's especially disturbing about this attack is that it appears based on a fundamental misunderstanding of how science operates: The re-examination of previous conclusions, which Mr. Smith casts as nefarious, is merely an example of the scientific method at work.

NOAA says there is no truth to the allegations that the study's conclusions were politically influenced, or that the paper was rushed, noting that it was subjected to strict peer review before publication. The decision of when to publish the paper rested with Science, not with NOAA.

The authors of the paper have made their data publicly available. If Mr. Smith or anyone else wishes to critique the quality of their science, they do not need a subpoena to do so.

  • Richest 10% are causing climate change, study finds (World Economic Forum) Fifty percent of the world's carbon emissions are produced by the world's richest 10%, while the poorest half - 3.5 billion people - are responsible for a mere 10%. This is according to a new report by Oxfam, which also found that the richest 1% of the world's population emit 175 times more carbon than those living in the bottom 10%.


  • Trade Gap Unexpectedly Widens on Drop in U.S. Exports (Bloomberg) The U.S. trade deficit unexpectedly widened in October as weaker foreign orders for U.S. goods and services outweighed a cooling in imports. The gap increased 3.4% to $43.9 billion from a revised $42.5 billion in September that was larger than previously estimated, Economists surveyed by Bloomberg had expected a deficit of $40.5 billion.

  • Chicago police reports differ from video of teen's shooting (Associated Press) Hundreds of pages of documents released by Chicago officials show police officers depicting a starkly contrasting narrative to squad car video footage showing a white officer shooting a black teenager 16 times. The video, which led to days of protests and the firing of Chicago's police superintendent, shows 17-year-old Laquan McDonald veering away from officers down a four-lane street in October 2014 before he was fatally shot. The video shows officer Jason Van Dyke opening fire from close range and continuing to fire after McDonald crumples to the ground and then barely moves. But several officers, including Van Dyke, who is now charged with first degree murder, filed official reports after the incident describing McDonald as aggressively approaching officers while armed with a knife, according to reports released late Friday.


Barclays is planning to cut another 20 per cent of jobs at its investment bank, it has been reported.

The bank has already announced 7,000 job cuts at its investment bank, but these are thought to be on top of that. Last year it slashed 2,500 jobs, and expects to make a similar number of redundancies this year.

However, the latest round are thought to be on top of that, Bloomberg reported today. It is understood the cuts will be heavily weighted towards Asia, where investment banks have struggled in recent months.


  • Bank of France trims French growth, inflation estimates (Reuters, CNBC) France will see growth accelerate gradually in the coming years from 1.2% this year, although not as fast as previously estimated, the Bank of France forecast on Friday. The euro zone's second-biggest economy is on course to grow 1.4% in 2016 and 1.6% in 2017, the central bank estimated, trimming its forecasts from 1.8% and 1.9% respectively six months ago.


  • Palestine's Abortion Problem (Foreign Policy) Around 40% of women in the West Bank have had at least one abortion, though the procedure remains illegal in Palestine. So guess where they go.



  • Iraq demands Turkish troops withdraw from near Mosul (BBC News) The Iraqi government has demanded that Turkey withdraw troops it sent to an area near the northern city of Mosul. The move was a "serious breach of Iraqi sovereignty" Prime Minister Haider al-Abadi's office said in a statement. About 150 Turkish soldiers have been deployed near in the town of Bashiqa to


"Russia is in a war with terrorists that can only be won by joining with the other great powers of the world, Putin said. The treachery of false friends will never be forgotten. Only united will the nation overcome the challenges at hand. For a long time, Russia has been on the front line of the fight against terror. It's a fight for freedom, truth, and justice - for the lives of our people and the future of all civilization. In the fight against terrorism, Russia has demonstrated the utmost responsibility and leadership."


  • Tokyo to slash debt dependence in fiscal 2016 (Nikkei Asian Review) Japan's fiscal 2016 budget looks to be the least reliant on debt in nine years, as expanding tax revenue lets Tokyo continue to cut bond issuance even while spending more. Econintersect: This sounds like an idiots formula: Take more money out of the economy to make it grow. See next article.

  • Japan's Solution Is to Raise Wages by 10 Percent (Peterson Institute for International Economics) Japan needs inflation, and more inflation than the 0.5 percent achieved with its quantitative easing (QE) program. The need is not for the usual countercyclical reasons, even if the economy is flirting with technical recession. Rather, the country needs meaningful positive inflation for reasons of fiscal stability. Public debt, even on a net basis, is very high at 160 percent of GDP. Even a small adverse shock could cause unsustainable debt dynamics - such as debt service payments spiraling up to consume much of the government budget. And yet the Japanese government continues to increase taxes which have the opposite effect. See previous article.


  • 5 Myths About Chinese Investment in Africa (Foreign Policy) Xi Jinping just announced billions of dollars worth of aid and financing for Africa. Here's why the Chinese president is sure to be misunderstood. China is in Africa for far more than extraction of natural resources.

  • Hong Kong housing bubble threatens to bust (Macro Business) Hong Kong home sales sank last month to a record low as an imminent interest rate hike in the U.S. this month scared away prospective buyers.



  • Cambodians Deserve Better (The New York Times) Hat tip to Rob Carter. This Op Ed alleges that Cambodia's government violently suppresses the opposition Cambodia National Rescue Party, C.N.R.P.


  • Canada October Trade Deficit Exceeds All Forecasts on Exports (Bloomberg) Canada's merchandise trade deficit widened in October as exports fell for a third straight month. The deficit was C$2.76 billion ($2.07 billion), Statistics Canada said Friday from Ottawa. That exceeded the highest estimate of C$2.3 billion in a Bloomberg News economist survey with 17 responses. The agency also boosted the September deficit figure to C$2.32 billion from C$1.73 billion. Shipments to the U.S., Canada's largest trading partner, declined 2.8%.

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