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.
Brent crude and WTI: Oil hits fresh 2016 high on smaller-than-expected US crude stockpiles (City A.M.) Oil prices hit a fresh 2016 high today, after smaller-than-expected US crude stockpiles quelled oversupply fears sparked by an earlier estimate. Analysts, traders and commentators are keeping a close eye on oil data out of the US for signs that the market is starting to rebalance, with inventories being drawn down as shale gas producers are forced out by low prices. It was also helped by speculation that major oil producers will meet in Russia next month to thrash out a deal.
Bernanke's Obfuscation Continues: The Fed's $29 Trillion Bail-Out Of Wall Street (L. Randall Wray, The Huffington Post) Hat tip to Roger Erickson. LRW has contributed to GEI. Prof. Wray reviews the statements made for former Federal Reserve Chairman Ben Bernanke and the reports published by others that are in sharp disagreement with what Bernanke has represented. Wray cites one dispute that Bernanke had with a 2011 report by Bloomberg and finds the former Fed chief was "highly misleading and factually incorrect". The Bloomberg report concerned $7.77 trillion of Fed bank lending activity. See Bloomberg News Responds to Bernanke Criticism of Coverage (Bloomberg). Prof. Wray says that was only of several elements of a "fog of deceit" by the Fed. Prof. Wray provides an itemized accounting what he has found to be bail-out activities by the Fed, amounting to more than $29 trillion. See also next article, cited by Wray. Wray summarizes Bernanke's self-defense as follows:
As Bernanke notes, analyses of the bail-out variously put the total at $7.77 trillion (Bloomberg) to $16 trillion (GAO) or even $24 trillion. He argues that these reports make "egregious errors," in particular because they sum lending over-time. He also claims that these high figures likely include Fed facilities that were never utilized. Finally, he asserts that the Fed's bail-out bears no relation to government spending, such as that undertaken by Treasury.
Russia warns U.S. over naval incident as NATO tensions laid bare (Reuters, Yahoo! News) Hat tip to Sig Silber. Russia accused the United States on Wednesday of intimidation by sailing a U.S. naval destroyer close to Russia's border in the Baltics and warned that the Russian military would respond with "all necessary measures" to any future incidents. Speaking after a meeting between NATO envoys and Russia, their first in almost two years, Moscow's ambassador to NATO said the April 11 maritime incident showed there could be no improvement in ties until the U.S.-led alliance withdrew from Russia's borders.
China eyes Canada's Northwest Passage as fast shipping route via Arctic (abc.net.au) Hat tip to Rob Carter. China will encourage ships flying its flag to take the Northwest Passage via the Arctic Ocean, a route in waters that Canada claims as its own, to cut travel times between the Atlantic and Pacific oceans, a state-run newspaper said. Shorter shipping routes across the Arctic Ocean, a route opened up by global warming, would save Chinese companies time and money. For example, the journey from Shanghai to Hamburg via the Arctic route is 2,800 nautical miles shorter than going by the Suez Canal.
The 54% Rally in Steel Prices That Points to China's Rapid Shift (Bloomberg) Mills in China, which make about half the world's supply, have boosted output to an all-time high as property prices in bigger cities jumped and higher steel prices improved margins, reversing a squeeze from last year. Crude-steel production soared to 70.65 million tons in March, according to data last week.
House prices fall in most cities as foreign buyer interest declines (abc.net.au) The national median house price has fallen for two consecutive quarters for the first time in almost five years. Data from real estate marketing company Domain show a 0.5 per cent decline in the national median house price in the March quarter, backing up a December fall. The last time there were two consecutive negative quarters was June 2011, in the midst of a mild national housing slump at the end of a Reserve Bank rate rise cycle. Key points:
Only Melbourne and Hobart post March quarter house price gains
No cities post March quarter unit price gains
Foreign buyers account for 11.8 per cent of new home sales, 7.2 per cent established
Brazil loses millions of jobs amid political crisis (CNN Money) Brazil's economy is spiraling out of control as a political crisis is pushing the country's president towards impeachment. Between December and February, Brazil's unemployment rate shot up to 10.2%, according to government data published Wednesday. That's the same level the U.S. jobless rate had hit around the Great Recession in 2009. A year ago, Brazil's unemployment rate was at 7.4%, wages have fallen nearly 4% and inflation remains high.
Brazil's Rousseff going to U.N. over impeachment; cabinet in crisis (Reuters) Beleaguered Brazilian President Dilma Rousseff will travel to New York in a bid to rally international support against her impeachment, leaving behind a Cabinet paralyzed by political crisis as another minister defected on Wednesday. Rousseff aides said the leftist leader will attend a United Nations event on Friday in New York where she will denounce as illegal the attempt to impeach her, a process that could see her forced from office within weeks in a process she calls a "coup d'état without weapons". Energy Minister Eduardo Braga said he was quitting her government following orders from his centrist PMDB party, Rousseff's main coalition partner until it abandoned her last month to back her ouster. Rousseff's impeachment would end 13 years of rule by the leftist Workers Party. Nine of Rousseff's 31 cabinet members have resigned.
Ecuador quake deaths pass 500 with hundreds still missing (BBC News) The death toll from Saturday's devastating earthquake in Ecuador has risen to 570 and could increase by many more, authorities in the country say. Figures given by officials for the number of people missing ranged from 231 to 1,700. Thousands of people have been left homeless, making them vulnerable to dirty drinking water and disease. Meanwhile a new 6.2 magnitude quake struck off the Ecuadorean coast, the Pacific Tsunami Warning Center said. The quake was centred 70km (44 miles) west of Esmeraldas at a shallow depth of 10km.
Border agents discover longest US-Mexico tunnel yielding largest cache of cocaine (abc.net.au) United States federal agents have seized a ton of cocaine and seven tons of marijuana smuggled through a clandestine, 800-meter (1/2 mile) tunnel beneath the US-Mexico border, the longest yet unearthed in California, authorities said. Six people were arrested as authorities in San Diego moved in to shut down the tunnel, the 13th underground passageway discovered along California's border with Mexico since 2006.
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