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.
Asia markets close mixed; Hong Kong shares tumble (CNBC) Asian markets closed mixed on Thursday as investors digested remarks from Federal Reserve Chair Janet Yellen and oil remained volatile. Hong Kong's Hang Seng index, which resumed trading today after being shut from Monday through Wednesday for the Lunar New Year holiday, tumbled 4.25% to levels not seen since mid-2012. In South Korea, the Kospi re-opened lower after its three-day holiday, and finished the session down 56.25 points, or 2.93%.
What's holding back the world economy? (The Guardian) QE and low interest rates have disproportionately created wealth in the financial sector and inflated asset bubbles. It has done little for the real economy. The rules of the market need to be rewritten, according to Nobel Laureate Joseph Stiglitz. Econintersect: In other words, money must be directed to the real economy, not just the financial sandbox.
The Mining Industry Makes Oil Giants Look Great (Bloomberg) The mining industry that's wiped out more than $1.4 trillion of shareholder value around the globe. The industry's 73% plunge from a 2011 peak is far beyond the oil industry's 49% loss during the same time. Meanwhile gold is showing some signs of life, rising almost 10% in the last four weeks.
It'll Take More Than an Oil Rally to Restart Shale Boom (Bloomberg) Explorers in U.S. oil fields stung by the quick rise and fall in the market last year are expected to move cautiously when crude prices begin to climb again. Bill Thomas, chief executive at EOG Resources Inc., the largest landholder in Texas's Eagle Ford shale formation, told attendees at an industry conference in Houston on Wednesday that his company won't start boosting output the first time oil hits $60 a barrel.
The CBO has been providing excessively high inflation forecasts. Those have the effect of increasing government borrowing costs and over time leading to a budgetary feedback loop of rising interest costs constituting a bigger and bigger percent of spending.
Now one can argue that forecasters are often wrong. But one expects them to learn from their experience. But the CBO has been wrong for years, and always in the same manner. One can thus no longer charitably call this an error. It's a well-established institutional bias.
Inside Janet Yellen's Testimony on Negative Rates (Bloomberg)
German Industrial Production Unexpectedly Fell in December (Bloomberg) German industrial production unexpectedly fell for a second month in December, a sign that a slowdown in major export markets is holding back factory activity despite strong domestic demand. Output, adjusted for seasonal swings and inflation, fell 1.2% from November, when it declined by a revised 0.1%.
Report on Syria conflict finds 11.5% of population killed or injured (The Guardian) The Syrian Centre for Policy Research says 470,000 deaths is twice UN's figure with 'human development ruined' after 45% of population has been displaced. Econintersect: A similar proportional tragedy in India or China would have more than 100 million deaths in either country and around 500 million displaced (again in each country). For the U.S, the figures would be around 37 million dead and more than 140 million displaced.
Russia, pressed to end Syria bombing, proposes March truce (Reuters) World powers pressed Russia on Wednesday to stop bombing around Aleppo in support of a Syrian government offensive to recapture the city and a Western official said Moscow had presented a proposal envisaging a truce in three weeks' time. Secretary of State John Kerry is pushing for a ceasefire immediately and more aid access to Aleppo, where rebel-held areas are being cut off and the United Nations has warned a new humanitarian disaster could be on the way.
"I am concerned about Ukraine's slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking. Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported programme can continue and be successful. Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history. It is vital that Ukraine's leadership acts now to put the country back on a promising path of reform."
Bass Says China Bank Losses May Top 400% of Subprime Crisis (Bloomberg) Kyle Bass, the hedge fund manager who successfully bet against mortgages during the subprime crisis, said China's banking system may see losses of more than four times those suffered by U.S. banks during the last crisis. Should the Chinese banking system lose 10% of its assets because of nonperforming loans, the nation's banks will see about $3.5 trillion in equity vanish.
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