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.
The World Economy's Winners and Losers in 2015 (Bloomberg) While developed countries haven't fared too badly in 2015, the biggest winners mentioned include, Iceland, Ireland, China, India, Vietnam and Tanzania. The biggest losers: Russia and Brazil.
Low and behold (The Economist) Inflation in America and Europe should indeed pick up from its present, near-zero state as the big declines in energy prices at the turn of 2015 drop out of the headline rate. But a glut in the supply of crude means that oil prices are falling again. If debt is receding as a problem in rich countries, it looms larger in emerging markets, where overcapacity brought on by binge-borrowing exerts a downward force on prices. There is inflation in commodity-exporting countries, such as Brazil, whose currencies have been trashed. But global inflation is a tug-of-war between bottlenecks in parts of the rich world and imported deflation from emerging markets, and the enduring fall or stagnation of prices looks set to dominate for a while yet (see article). Indeed, this "lowflation" means that three aspects of the world economy are worth watching in 2016: Saudi Arabia, China and the strange combination of increasing employment and falling commodity prices in the developed world. But the best part of this article is a quote from John Kenneth Galbraith:
"Econiomists don't forecast because they know, said J.K. Galbraith; they forecast because they're asked."
Click on headline to watch video, which would not display properly in this article.
Midwest Flooding Might Make the Oil Glut Worse (Bloomberg) The worst flooding across the U.S. Midwest in four years has shut some oil pipelines and terminals near St. Louis, potentially swelling a glut of crude and extending this year's price slide. Five miles of the Mississippi River and 50 miles of the Illinois River have been shut, according to the U.S. Coast Guard website. The flooding is the worst since May 2011, when rising water on the Mississippi and its tributaries threatened refinery and chemical operations and disrupted shipping. This will further build the stores at the Cushing, Oklahoma hub.
California officials upbeat about snowpack, but long-range prospects are unknown (Los Angeles Times) Over the last several weeks, snowboarders and skiers alike have reveled in what seems to be bountiful Sierra Nevada snow. All that powder has enabled even weary state water officials to express some optimism, a feeling buoyed Wednesday when surveyors took their first manual measurement of the Sierra snowpack and found more than 54 inches. But for all of the excitement, the state's broader drought outlook remains uncertain. Although there was about twice as much water in the state's snow as there was on the same day last year, and five times as much as the year before that, it still just amounts to an average total. See graph below. Others are reporting the California snowpack (may be over a larger area than the Sierra measurments) as significantly above normal. See Official: California snowpack at 136% of normal (Associated Press, CNBC).
European capitals tighten security ahead of New Year celebrations (BBC News) Security is being stepped up in major European cities ahead of New Year celebrations, with officials wary of possible terror plots. New Year fireworks and festivities have been canceled in the Belgian capital Brussels because of an alert. Extra measures will also be in place in cities including Paris, London, Berlin and Moscow. Meanwhile in Turkey, security services say they have thwarted a major plot to attack celebrations in Ankara.
Corruption in Ukraine is so bad, a Nigerian prince would be embarrassed (Reuters) Over $12 billion per year disappears from the Ukrainian budget, according to an adviser to Ukraine's National Anti-Corruption Bureau. And in its most recent review of global graft, anti-corruption watchdog Transparency International ranked Ukraine 142 out of 174 countries on its Corruption Perceptions Index - below countries such as Uganda, Nicaragua and Nigeria. Ordinary Ukrainians also endure paying petty bribes in all areas of life. From vehicle registration, to getting their children into kindergarten, to obtaining needed medicine, everything connected to government has a price.
Wild ride: China markets by the numbers (CNBC) The Shanghai Composite hit 2,850 points - its lowest level of the year - on August 26, marking a 45% loss over roughly three months. But that market is closing in on a near double digit increase for the year today (up 9.8% for 2015 as of noon).
China refutes U.S. comments regarding market economy status (Xinhuanet) Chinese Foreign Ministry spokesperson Lu Kang said that his country "refuted" recent U.S. comments warning Europe against granting China market economy status, saying China has been living up to its World Trade Organization (WTO) obligations. He was responding to a question regarding a Financial Times report, which said Washington has warned Brussels against granting China market economy status as it could hamper efforts to prevent Chinese companies flooding U.S. and European markets with unfairly cheap goods.
As Taiwan polls loom, China warns of new challenges ahead (Associated Press) China is warning of a serious disruption of ties with Taiwan as the island's voters appear set to elect a new president with a far more skeptical view of dealings with Beijing. Director of the Cabinet's Taiwan Affairs Office Zhang Zhijun says in a New Year's greeting Thursday that "complex changes" are appearing and the two sides face "new challenges". Zhang says the sides should treasure the peace and progress made in recent years and not wait until they're gone to realize their value. Democratic Progressive Party candidate Tsai Ing-wen is favored to win the self-governing island's Jan. 16 presidential election and has been leading in polls the pro-China Nationalists, who have held the office since 2008.
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