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.
Cosmic carve-up: Law and plunder on the final frontier (New Scientist) China wants to mine the moon. U.S. companies want to mine asteroids as well as the moon. But there is no law governing how this can happen in an orderly fashion. The risks and potential rewards are astronomical, but the whole enterprise is blasting off into a legal void. That could spell trouble on a cosmic scale. Subscription required to read the full article.
Is the economy shortening Americans' lives? (CBS News) It has long been known that high-income people in the U.S. tend to live longer than those lower down the income ladder. But a growing body of research shows that millions of Americans are, for the first time in more than a century, seeing their life expectancy slip. And, while the reasons for that decline are complex and not yet fully understood, the contours of an explanation are starting to take shape: Despair is shortening their lives.
Fed's Bullard sticks with single U.S. interest rate hike view (Reuters) The Federal Reserve should be in no rush to raise U.S. interest rates despite a surge in June hiring, St. Louis Fed President James Bullard said on Tuesday, sticking with his view that the central bank may need only a single rate hike for years to come. Indeed he said he expects trend job creation to slow in coming months, a normal development as the economy approaches full employment that is consistent with his view the U.S. is locked in a low growth, low inflation and low unemployment rut for the foreseeable future. See also next article.
Financial stability should not become Fed's third mandate: Mester (Reuters) Maintaining stability in financial markets should not be an explicit goal for the Federal Reserve, which should use interest rates to head off a crisis only if more precise and better-suited tools fail, a top Fed official said on Tuesday. However, Cleveland Fed President Loretta Mester said that the Fed's key price stability and maximum employment goals usually align with its desire for a stable financial sector. She added:
"If our macroprudential tools proved to be inadequate and financial stability risks continued to grow, I believe monetary policy should be on the table as a possible defense."
EU to Push Basel on Impact of Bank Leverage, Liquidity Rules (Bloomberg) The European Union will push global bank regulators to ease key elements of a planned rule revamp, including leverage and liquidity standards, according to EU financial-services chief Jonathan Hill, who steps down this week. Under Hill, the EU opened up the entire financial rule book for review, including contentious issues such as a cap on bankers' bonuses. In response, the industry registered concerns about the impact of global rules on capital, trade finance, market liquidity and access to clearing, Hill said in his "swan-song" speech in Brussels on Tuesday.
Retail inflation edges up to 22-month high of 5.77% (Business Standard) Retail inflation inched up to a 22-month high level of 5.77% in June on increase in food prices including that of key kitchen staples like vegetables and cereals. With inflation remaining at an elevated level and above the 5% mark, Reserve Bank's next monetary policy review in August would be keenly watched as inflation targetting has been the main objective of the RBI.
Cairn slaps $5.6bn claim on govt. for 'loss of value' (The Hindu) Hat tip to Sanjeev Kulkarni. British oil and gas explorer Cairn Energy has raised a $5.6 billion compensation demand from the Indian government for a breach in an investment treaty arising out of the retrospective tax demand of Rs. 29,047 crore on an internal reorganisation of Cairn's India unit. See also next article.
How to End India's Tax Terrorism (Bloomberg) Hat tip to Sanjeev Kulkarni who suggests Modi could have saved money by honoring his campaign pledge to end India's retroactive tax claims (laws passed to assess new taxes on activities in earlier years).
Exclusive: Japan government to cut inflation forecasts, gloomier on outlook than BOJ (Reuters) Japan's government is expected to cut its consumer inflation forecast for the current fiscal year and produce an estimate for fiscal 2017 that is much lower than the central bank's 2% target, government sources told Reuters on Tuesday. The gloomy government assessment may add to market doubts over the Bank of Japan's optimistic price forecasts and step up pressure on the central bank to expand stimulus this month as it struggles to fend off deflationary risks. In draft forecasts to be finalized at a cabinet meeting on Wednesday, the government projects consumer inflation of 0.4% for the current fiscal year ending in March 2017, down from 1.2% projected in January, the sources said.
Japanese exporters hurt by strong yen, threatening a fragile economy (The Business Times) Japanese Prime Minister Shinzo Abe may have won a landslide victory in weekend elections but the strong yen is threatening to spoil the party as it undermines his economic stimulus policies by hurting the earnings of the nation's exporters and companies who have big overseas operations. If it continues to strengthen significantly, the yen would discourage domestic capital spending by exporters and inflict severe damage on a fragile economy, policymakers and analysts warn. Regarded as a safe haven at times of market turmoil such as that caused by Britain's vote to leave the European Union, the yen has strengthened to around 103 to the US dollar and 114 yen versus the euro, above 105 yen and 120 yen - the respective average rates on which Japan's big automakers base their budget for the current financial year.
Foreign direct investment (FDI) into the Chinese mainland rose 9.7 percent year on year to 15.23 billion U.S. dollars in June, the Ministry of Commerce said on Tuesday.
This compared with a 1-percent decline registered in May.
In the first half of 2016, FDI, which excludes investment in the financial sector, rose 5.1 percent year on year to 69.42 billion dollars, with the growth rate accelerating from 3.8 percent registered in the first five months, the ministry said.
The service sector attracted 48.94 billion dollars of FDI in H1, 8 percent more than in the same period of last year and representing 70.4 percent of the total.
FDI into the manufacturing sector declined 2.8 percent during the same period to 19.53 billion dollars, accounting for 28.3 percent of the total.
Among China's major investors, FDI from the United States soared 136 percent year on year in the first half, while that from Britain rose 105.3 percent.
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