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posted on 21 September 2016

Early Headlines: Asia Stocks Up, BoJ Eases, Yen Falls, Senate To Stay In Session, Record Setting Debate, Calif. Fire Most Expensive, China's Off-Book Stimulus And More

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Early Bird Headlines 21 September 2016

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.




  • Central-Bank Rescues Prove Profitable (The Wall Street Journal) Windfalls from stimulus measures have been a boon for many government budgets. From 2005 to 2015, the U.S. Federal Reserve sent roughly $700 billion in profits to the U.S. government, more than any other central bank. That included $117.2 billion in 2015, far higher than the $21.5 billion in 2005, three years before the financial crisis struck. In some countries, private investors can get in on the action and take a slice of central-banking profit. The central banks of Switzerland, Japan, Greece and Belgium are publicly listed, sharing their profits with private shareholders.

...most of the tales portraying the Islamic State as key players in the global supply of heroin are state-sponsored propaganda coming out of Russia. This story is pushed by Russian officials and media outlets because it makes America and Britain look bad. The Coalition's failure to suppress Afghanistan's poppy cultivation after invading in 2001 has led to bumper opium crops that, the story goes, not only fills IS' coffers, but creates what American and British politicians secretly yearn for: millions of heroin-addicted Russians. It's a load of baloney - long-established heroin trafficking routes bypass their territories - but if newspapers carry on printing it, people will soon believe it.


  • McConnell: Senate will delay vacation to override Obama veto (The Hill) Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday that the Senate will take up an expected veto override of legislation that lets families of 9/11 victims sue Saudi Arabia in U.S. courts before breaking for the elections. "Both of those we'll have to deal with before we depart," McConnell told reporters. He was referring to the veto override and a separate push to block a proposed arms sale to Saudi Arabia.

  • Ahmad Khan Rahami's father contacted FBI in 2014 over terrorism worry (The Guardian) New York and New Jersey terror suspect Ahmad Khan Rahami worked as an unarmed guard for a private security firm, the Associated Press reported. As well as working in his father's New Jersey chicken restaurant, Rahami had worked as a guard in the AP's own offices, spending two months as a night guard in an administration office in Cranbury, New Jersey, in 2011. Ahmad's father said he reported his son to the FBI two years ago. A law enforcement official told the Associated Press that the FBI looked into the matter, but that Mohammad Rahami later retracted his comment and said he meant that his son, Ahmad Khan Rahami, was hanging out with the wrong crowd, including gangs. This week Mohammad Rahami told The New York Times:

"Two years ago I go to the FBI because my son was doing really bad, OK? But they check almost two months, they say, 'He's OK, he's clean, he's not a terrorist.' I say OK. Now they say he is a terrorist. I say OK."

  • Trump-Clinton debate expected to shatter records (The Hill) The first presidential debate between Hillary Clinton and Donald Trump promises to be the most watched ever, with an audience that could exceed 100 million people, according to experts interviewed by The Hill. A debate with an audience that size would be something never seen before in U.S. politics and would be a figure close to what the Super Bowl gets.

  • California wildfire becomes costliest ever to fight at $200M (Associated Press) A wildfire burning for nearly two months on California's scenic Big Sur coast has surpassed $200 million in firefighting costs, becoming the costliest to fight in U.S. history, according to date released Monday. The cost includes only firefighting expenses, not the value of homes and other property destroyed.

  • The Pretense of "Thinking Globally" (Foundation for Economic Education) The author quotes Hayek (below) which curiously suggests that no improvements are warranted unless a deviation from previous performance or expectations occurs. Econintersect: We reject this thought categorically. Following that logic we would still use horses for transportation and communicate by pony express. Friedrich Hayek:

"So long as things continue as before, or at least as they were expected to, there arise no new problems requiring a decision, no need to form a new plan."

  1. Nobody died.

  2. They sure found the mystery bomber quickly and efficiently.

  3. Although experts say this type of thing is usually a group activity, no other persons of interest are being sought.

  4. Although experts say this type of thing is usually a group activity, no other persons of interest are being sought.

  5. The placement of these bombs wasn't very strategic.

  6. ISIS wants nothing to do with this one.

  7. It wasn't a very good bomb.

  8. Somehow, the bomber didn't really raise any eyebrows until now.

  9. What do we need to be distracted from?


  • Europe Is Facing a Fiscal Meltdown (Foundation for Economic Education) The author argues that austerity has not worked in Europe because it was imposed primarily with increased taxes and should have imposed more expenditure cuts. Econintersect: The author offers no proof that his prescription would produce growth - it appears to be a self-evident matter to him. Perhaps he would like to discuss how well expenditure cuts have worked in Greece?


  • Brexit could trigger crisis in care for older and disabled people (The Guardian) UK care sector's reliance on EU workers means they must be given right to remain in any future arrangements, charities say. Social services for older and disabled people face crisis because post-Brexit migration restrictions could cause a massive shortage of care workers, leading care organizations have said.


I am a Syrian refugee who was forced to leave my country. It was discovered that I had created an underground network to provide medical aid and supplies to the sick and wounded. The regime had ruled that what I was doing was against the law, so I fled. I took whatever I could fit in a rolling suitcase and nothing more. I now live in the greatest country in the world, and have just become a US citizen.

In the past year, more than 10,000 Syrian refugees, like me, found refuge in the US. However, there are those who are portraying this great humanitarian deed as a bad thing. They are calling for the United States to shut its doors to Syrians, who are fleeing unspeakable horrors of war and acts of daily terror. Those who would turn their backs on these innocent, desperate victims use scare tactics to gain support.

The latest one was an ad by the Trump campaign comparing Syrian refugees to poisonous candy, Skittles, in this case, but it's not the first time the analogy has been used. Last year, another reference was made to poisonous peanuts. Of course, the aim is to spread fear, with the ultimate goal of shutting our doors to those who need us most.

Turning away those fleeing war would mean disregarding the very values that made America the richest, most powerful nation in the world. We should be more afraid of losing our honor and virtue, than of helping these refugees, 80% of whom are women and children.


  • India, Pakistan tensions mount after attack in Kashmir (CNBC) Tensions between New Delhi and Islamabad are hitting a boiling point as the two point fingers at each other over Sunday's assault in Kashmir. But even as rhetoric gets heated, military escalation isn't expected - for now. Four gunmen stormed an Indian army brigade headquarters in the Indian-administered town of Uri, killing 18 soldiers on Sunday. Many called it the deadliest attack on security forces in nearly a decade. Nobody has claimed responsibility but Prime Minister Narendra Modi's government accused Pakistan of involvement, labeling it a terrorist state for supporting militants believed to be the perpetrators of Sunday's attack.


  • BoJ doubles down on easy monetary policy (Financial Times) The Bank of Japan has launched an unprecedented new kind of monetary easing as it set a cap on 10-year bond yields (at 0%) and vowed to overshoot its 2% inflation target on purpose. The BoJ kept interest rates on hold at minus 0.1 per cent - describing further rate cuts as a "possible option for additional easing". Markets reacted positively, with the yen losing 1% to ¥102.7 against the dollar, while Japan's broad benchmark Topix index was up 2.5% and the Nikkei 225 rallied 1.8%.


  • China's Tiangong-1 space station 'out of control' and will crash to Earth (The Guardian) China's first space station is expected to come crashing down to Earth next year, fuelling concerns that Chinese space authorities have lost control of the 8.5-tonne module. The Tiangong-1 or "Heavenly Palace" lab was described as a "potent political symbol" of China's growing power when it was launched in 2011 as part of an ambitious scientific push to turn China into a space superpower. China says "most parts" of the space vehicle will burn up in the atmosphere.

  • China local governments revive off-budget fiscal stimulus (Financial Times) China is backsliding on a pledge to impose fiscal discipline on local governments by phasing out borrowing through special-purpose vehicles that allow provinces, cities and counties to skirt restrictions on local debt. In landmark policy guidelines two years ago known as "Document 43", China's cabinet stated that borrowing by local government financing vehicles - investment companies owned by the government but ostensibly separate from the fiscal budget - "must not increase government debt". But after a dip in 2015, off-budget debt has returned this year. Net bond issuance by local government financing vehicles (LGFVs) hit Rmb1.07tn ($160bn) through late September, higher than the Rmb946bn issued for all of 2015, according to data from Wind Information. The resurgence reflects Chinese policymakers' efforts to boost the economy through quasi-fiscal spending on infrastructure by state-owned enterprises to buffer a slowdown in manufacturing investment by private groups. The International Monetary Fund estimates that China's "augmented" fiscal deficit - a figure that includes LGFV borrowing alongside central and local government bonds - will reach 10.1% of GDP in 2016, above the finance ministry's official deficit target of 3% for 2016.

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