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 give up early gains; Nikkei turns negative as yen strengthens (CNBC) Asia markets gave up early modest gains on Friday, with the Japanese market slipping after the yen strengthened briefly during the session. The benchmark Nikkei 225 was down 0.07%, erasing earlier gains of more than 0.4%, while the Topix shed 0.10 %, retracing gains of more than 0.3%. The Japanese yen briefly strengthened to as high as 99.84 against the dollar, before retreating to levels near 100.21. On Thursday, the yen climbed as high as 99.62 during Asian hours.
The U.S. Recovery Is Not What It Seems (Bloomberg) Narayana Kocherlakota, former president of the Federal Reserve Bank of Minneapolis, says that the U.S. has done better than other developed economies over the last 10 years, but only slightly ahead of Japan and UK for GDP growth over the last 10 years on a per capita basis. The U.S. population is growing faster than the UK and Japan's population is shrinking. And employment recoveries in those two countries have outstripped the U.S. as well. Kocherlakota says the U.S. monetary policies have not been significantly more effective than the UK or Japan and the Fed should be rethinking what to do next. See also A Physics Lesson for Central Bankers.
Trump Regret Marks New Phase of Campaign (Bloomberg) It's a new Donald Trump, reconsidering what he says and reading from a teleprompter. In his first speech since reorganizing his presidential campaign that he has "regret" for some of his rhetoric that has caused "personal pain". Mr.Trump did not indicate ant specific incident that he might be referring to.
Justice Department Plans to Stop Using Private Prisons (Mother Jones) Hat tip to Scott Baker at OpEdNews.com. The Department of Justice will stop contracting with private prisons, the department announced Thursday morning. About 12% of federal prisoners are housed in private prisons. The announcement comes after a Mother Jones investigation found serious deficiencies at a private prison in Louisiana. After Part 1 video ends Part 2 will start and so on through Part 5.
The Civilian Labor Force, Unemployment Claims and the Business Cycle (Advisor Perspectives dshort.com) Based on Unemployment Claims data for the past 50 years, it should be at al least more than 7 months until the next recession starts and could be more than 22 months. Both the initial and continuing unemployment claims have bottomed well before a recession starts (ignoring the unusual double-dip recessions of 1980-1982). Both metrics are still declining in 2016.
Reflating Japan: Time to Get Unconventional? (IMF Working Paper) This paper argues for increased fiscal stimulus but with both monetary and fiscal policies embedded in long-term frameworks that deal with uncertainty and anchor private sector expectations about the behavior of inflation and public debt, over the long run. Second, the authors propose, to add incomes policy. Such a program helped end deflation in the United States in the 1930s.
U.N. Sanctions Fail to Cool Chinese Ardor to Invest in North Korean Businesses (Radio Free Asia) Despite U.N.-imposed financial sanctions, many North Koreans are benefiting from an injection of Chinese cash that sources say is helping underwrite business in Sinuiju city that range from a taxi service to high-rise apartment complexes. Sinuiju lies across the Yalu River from Dandong, China, and is the epicenter of North Korea's international trade, both legal and illegal. China is North Korea's only formal major ally, and accounts for more than two-thirds of the country's trade. A Chinese businessman who manages a sewing factory in the city told RFA's Korean Service:
"There are many businesses in which Chinese people invest in Sinuiju, which are not widely known to the outside world. Chinese investment in North Korean businesses are made regardless of U.N. sanctions against the country," .
China says navy carries out drills in Sea of Japan (Reuters) China's navy has carried out drills in the Sea of Japan, the Chinese military's official newspaper said on Friday, describing the exercises as routine and done in accordance with international law and practice. The Chinese navy has increasingly been exercising in waters far from home as it seeks to hone its operational abilities. Last year, five Chinese ships carried out exercises in international waters in the Bering Sea off Alaska.
Julius Baer analyst sees opportunities in despised China market (CNBC) Foreigners may be avoiding China's stock market in droves, but it has offered up interesting opportunities, said Mark Matthews, head of research for Asia at Julius Baer. China's markets have stumbled since the start of the year, with the Shanghai composite down nearly 13% so far this year, even as U.S. stock indexes have been tapping record highs.
U.S. says sorry as swimmers leave Brazil to jeers (Reuters) Two U.S. Olympic swimmers flew home from Brazil on Thursday after a local crowd jeered them, calling them "liars" and "fakes", and police accused them of fabricating a story about being robbed at gunpoint during the Rio Games. Their departure marked what the U.S. Olympic team hopes will be the closing stages of an incident that has embarrassed the host city, angered the police and government, unleashed a storm on social media, and dominated news coverage of South America's first Olympics. The U.S. Olympic Committee (USOC) issued an apology after the departure of Gunnar Bentz and Jack Conger, who were among four U.S. swimmers shown to have lied about being stopped by gunmen posing as police in the early hours of Sunday. It confirmed police accusations, including that one of the swimmers had vandalized the gas station after the group stopped there to use the bathroom during a taxi ride back to the Athletes' Village from a late-night party in the city. After days of standing by the swimmers' story, the USOC backed up other police evidence, including a security video showing the swimmers in an argument with staff at the Shell service station. The USOC that the guards allowed the swimmers to leave once some cash had been handed over:
"An argument ensued between the athletes and two armed gas station security staff, who displayed their weapons, ordered the athletes from their vehicle and demanded the athletes provide a monetary payment."
Mexico says police executed 22 on ranch, in 'grave' rights abuse (Reuters) Mexican police arbitrarily executed nearly two dozen suspected gang members on a ranch last year, the government's National Human Rights Commission said on Thursday, one of the worst abuses by security forces in a decade of grisly drug violence. In May last year, federal police ambushed suspected members of the Jalisco New Generation Cartel (JNG) holed up at Rancho El Sol near the small town of Tanhuato in the violent western state of Michoacan and killed 42 men. Only one policeman died in the fight, in which police backed by a Black Hawk helicopter attacked the cartel, a kill rate way higher than international norms, but not uncommon in Mexico's drug war. Only one injury was reported. The one-sided toll was one of the highest since President Enrique Pena Nieto took office in 2012, pledging to end years violence.
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