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.
Feds move to throw out ObamaCare lawsuits (The Hill) The Obama administration is seeking to toss out a pair of high-profile healthcare lawsuits in which insurers claim they are owed millions of dollars under the Affordable Care Act. The two insurers, Moda Healthcare and BlueCross BlueShield of North Carolina, have sued the federal government over a combined $338 million in ObamaCare payments they argue are overdue. Both lawsuits involve a piece of the Affordable Care Act intended to reduce risks in the new marketplace known as the “risk corridors" program. Though the funding program became law as part of ObamaCare in 2010, Republicans in Congress have since passed budget rules that restrict those payments, resulting in a major shortfall. The Justice Department filed motions to dismiss both lawsuits on Friday, arguing that the federal government isn’t responsible for those payments at all because of the subsequent legislation passed into law.
If Europe's centre-left clings to discredited ideas, it will die (The Guardian) The center-left is still clinging to the failed ideas of neoliberalism and a free-market model that doesn't work, according to the author (Paul Mason). Mason cites the Hungarian-American historian Karl Polanyi as an influential thinker who should be a guidepost to centrist thinking. Polanyi argued that capitalism consists of a “double movement" - "the push for free markets and the pushback against them, to regulate them in the interests of society". The center-left has abandoned the pushback. But, says Mason:
"Most socialist elites and bureaucracies in Europe ... are attuned to running a capitalism that does not work, and seem incapable of imagining any other future."
Plan for UK military to opt out of convention on human rights (The Guardian) Controversial plans for the military to opt out from the European convention on human rights (ECHR) during future conflicts will be introduced by ministers, to see off what the prime minister described as an “industry of vexatious claims" against soldiers. The long-mooted idea will be announced on Tuesday at the Conservative party conference by Theresa May and the defense secretary, Michael Fallon, although it was immediately criticized by human rights groups who said it was based on a false narrative of spurious lawsuits.
Two senior Eurosceptic politicians from the continent have suggested the UK could keep Single Market membership (City A.M.) Two Eurosceptic politicians from the continent have argued Britain should be able to retain Single Market membership, and warned Europe's leaders seeking a deal to "punish" the UK for its referendum vote. Finland's foreign minister and a Flemish MEP both backed Theresa May's ambitions for free trade with EU members at the Conservative party conference in Birmingham. Finn Timo Soini and Belgian Sander Looners are part of the European Conservatives and Reformists Group, led by London MEP Syed Kamall. Soini said today that both the EU and the UK would suffer if European politicians seek to deter other members from leaving by pushing for a severe settlement.
Closing the Book on Nuclear Power Isn’t Easy: QuickTake Q&A (Bloomberg) Germany is showing that leaving the atomic-power game is harder than it sounds. Following the 2011 disaster at Japan’s Fukushima plant, Germany’s government decided to exit nuclear power generation. It’s negotiating with reactor operators over the costs of decommissioning plants and the lingering liability for nuclear waste. About 14% of the electricity produced in Germany came from reactors in 2015. The country’s eight remaining nuclear plants have to be shut down before the end of 2022. Nine others have been shuttered since 2011.
Deutsche Bank and the global financial crisis (Defend Democracy Press) Berlin made an alliance with world finance in 2009-10, in order to punish Greece, discipline European periphery and impose upon all Europe a “dictatorship of the markets". Now it is paying also the price. This article also suggests that the U.S. proposed penalty of $14 billion for mortgage securities misdeeds leading up to the financial crisis may have also been timed when it was because of the EU claim of a €13 billion ($14.5 billion) back tax bill against Apple. This article claims that there is a connection between the boom in financial assets and the stagnation of the goods and services economy:
The contradiction between booming financial markets and intractable slump in the underlying economy is assuming an ever more explosive form. Notwithstanding the illusion that money can simply beget more money through speculation and central bank stimulus, financial assets represent, in the final analysis, a claim on the wealth produced in the real economy.
For decades, financial assets were roughly equivalent in size to global gross domestic product. But the rise of fictionalization, starting in the 1980s, led to a situation where, by the time of the 2008 crisis, these assets were more than 360 percent of global GDP. This ratio has only increased since then as a result of the extraordinary monetary policies - the pumping of trillions of dollars into the financial system and ultra-low and even negative interest rates - adopted by the world’s major central banks.
Putin suspends nuclear pact, raising stakes in row with Washington (Reuters) Russian President Vladimir Putin on Monday suspended a treaty with Washington on cleaning up weapons-grade plutonium, signaling he is willing to use nuclear disarmament as a new bargaining chip in disputes with the United States over Ukraine and Syria. Starting in the last years of the Cold War, Russia and the United States signed a series of accords to reduce the size of their nuclear arsenals, agreements that have so far survived intact despite a souring of U.S.-Russian relations under Putin. But on Monday, Putin issued a decree suspending an agreement, concluded in 2000, which bound the two sides to dispose of surplus plutonium originally intended for use in nuclear weapons.
US suspends talks with Russia over Syria (CNN) The US announced Monday it is "suspending its participation in bilateral channels with Russia" that had come about as part of the short-lived cessation of hostilities in Syria. "This is not a decision that was taken lightly", State Department spokesman John Kirby said in a statement announcing the suspension. White House Press Secretary Josh Earnest told reporters Monday while addressing the decision:
"Everybody's patience with Russia has run out. Russia had lost credibility by making a series of commitments without any indication they were committed to following them. Russia and its Syrian regime allies are trying to bomb civilian populations into submission."
Putin's close friend: Donald Trump will be next U.S. president (Reuters) One of Vladimir Putin's closest friends said on Thursday he believed Donald Trump would be the next president of the United States and that Western leaders were no match for the Russian president. Sergei Roldugin, a childhood friend of Putin's and godfather to his eldest daughter, made international headlines earlier this year after his name featured in the leaked Panama Papers as the owner of a sprawling network of offshore accounts.
Stocks Glitter More Than Gold in India as Mutual Fund Flows Soar (Bloomberg) Optimism that slowing inflation may prompt the central bank to lower interest rates from a five-year low is also pulling investors toward stocks. The optimism among Indian investors contrasts with skepticism from savers elsewhere. Inflows into Japan’s stock funds fell in July to the lowest since November 2012, and stayed near that level in August, data from the Investment Trusts Association in Japan show. Almost $90 billion was pulled from U.S. mutual and exchange-traded funds for the year through August, even as the S&P 500 Index gained almost 20% from a February low, according to data compiled by Investment Company Institute and Bloomberg.
"Difficulties facing China's foreign trade are not short term, the downward pressure on foreign trade is still big and uncertain and unstable factors are increasing. We cannot be blindly optimistic about China's imports and exports and the situation is still complex and grim."
Chinese Gasoline Heads to New York for First Time in Nine Years (Bloomberg) Chinese gasoline will reach the U.S. East Coast for the first time in nine years as a surge in New York prices helps ease a glut in Asia. Trafigura Group Pte. is said to be shipping about 375,000 barrels of gasoline to New York from China and Hong Kong aboard the tanker Marylebone, according to a person familiar with the delivery who asked not to be named. The ship delivered Korean alkylate in Houston for the trading company last week before continuing on to the Northeast, U.S. Customs data show. Prices jumped after a Sept. 9 spill on the Colonial Pipeline choked off normal shipments to New York, attracting additional supplies, said Andy Lipow, president of of Lipow Oil Associates in Houston. Weak demand in China has spurred gasoline exports and the newly expanded Panama Canal makes the U.S. East Coast very accessible.
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