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.
Nikkei advances more than 1% on yen weakness (CNBC) Japan's benchmark index rose more than 1% on Thursday as regional manufacturing surveys led by China beat expectations and on upbeat views a day after OPEC reached its first deal since 2008 to cut oil production. Most other Asia-Pacific markets were trading higher as well.
Global Bonds Suffer Worst Monthly Meltdown as $1.7 Trillion Lost (Bloomberg) The 30-year-old bull market in bonds looks to be ending with a bang. The Bloomberg Barclays Global Aggregate Total Return Index lost 4% in November, the deepest slump since the gauge’s inception in 1990. Gathering U.S. economic momentum and Donald Trump’s election win -- with promises of tax cuts and $1 trillion in infrastructure spending -- spurred investors to dump debt that was offering near-record-low yields and pile into stocks. Calling an end to the three-decade bond bull market is no longer looking like a fool’s errand.
Credit Suisse Said to Freeze Accounts in Search for U.S. Assets (Bloomberg) Credit Suisse Group AG has frozen dozens of accounts as it tries to determine if U.S. clients are hiding money from the Internal Revenue Service after the firm pledged to come clean about secret assets, according to a person familiar with the matter. The bank is looking at indicators such as phone numbers or powers of attorney to determine whether Americans are the true owners of accounts not disclosed to the IRS, according to the person, who wasn’t authorized to speak publicly about the matter. Any client activity on these accounts now requires approval by a group within Credit Suisse, the person said. The unusual move to freeze accounts came in the past week as the U.S. stepped up a Justice Department investigation into why Credit Suisse neglected to tell them about $200 million in assets held by an American client who pleaded guilty Nov. 4 to conspiring to defraud the IRS, according to several people familiar with the matter. The bank wants to show that any hidden accounts were a lapse in controls and not a criminal act, another person familiar with the matter said.
The No-BS Inside Guide to the Presidential Vote Recount (TruthOut.org) The main work of the recount hasn't a damn thing to do with finding out if the software programs for the voting machines have been hacked, whether by Putin's agents or some guy in a cave flipping your vote from Hillary to The Donald. The nasty little secret of US elections is that we don't count all the votes. In Wisconsin, Michigan and Pennsylvania -- and all over America -- there were a massive number of votes that were simply rejected, invalidated and spoiled; they were simply not counted. Officially, in a typical presidential election, at least three million votes end up rejected, often for picayune, absurd reasons. The rejects fall into three big categories: provisional ballots rejected, absentee and mail-in ballots invalidated and in-precinct votes "spoiled," spit out by a machine or thrown out by a human reader as unreadable or mismarked. So, as Robert Fitrakis, lead lawyer for the recount, tells me, their first job is to pull the votes out of the electoral dumpster -- and, one by one, make the case for counting a rejected provisional, absentee or "spoiled" ballot. Here is a key point from this article (see also next article):
Are machines calibrated with a Republican or Democratic bias? No, that's not how it works. But just as poor areas get the worst schools and hospitals, they also get the worst voting machines.
The key is an ugly statistic not taught in third-grade civics class: According to the US Civil Rights Commission, the chance your vote will be disqualified as "spoiled" is 900 percent more likely if you're Black than if you're white.
Growth for Whom? (Pavlina Tcherneva, Levy Institute) PT has contributed to GEI. Hat tip to Alice Marshall. What an explanation for the 2016 election? Rejection of a trend, exemplifies by this graphic:
How presidential recount, objections could unfold in Michigan (Detroit Free Press) The research result quoted in the previous article offers one reason Republicans would argue for a machine recount, rather than the hand recount requested by Jill Stein. Attorneys representing Trump said Monday they favor a machine recount, which they said would be more efficient than a hand recount. Econintersect: "Efficient" for Republicans means "less likely to show differences that might go against their candidate".
Gives multinational corporations with profits stashed offshore a tax cut of more than $550 billion.
Increases taxes on nearly 9 million families while reducing the top tax rate on the wealthy from about 40 percent to 33 percent.
Cuts taxes on hedge funds and other "pass-through" businesses by $900 billion -- personally benefiting Trump -- and allows high-wage employees to dodge another $600 billion.
Eliminates the estate tax to boost the inheritances of millionaires and billionaires -- which could give Trump's heirs a tax break of billions of dollars.
The Populism Perplex (Paul Krugman, The New York Times) Prof. Krugmn tries to explain why he doesn't understand what happened in the presidential election. Econintersect thinks he described what he doesn't understand well, but why,not so well.
Why Saudi Arabia surprised the skeptics with an OPEC deal (CNBC) Saudi Arabia wrangled OPEC ministers into a tougher-than-expected oil production deal - a maneuver critical for its own long-term plans. Wednesday's deal comes as Saudi Arabia is trying to remake its oil-dependent economy into one that is more diversified, under a plan it calls Vision 2030. A higher oil price would help boost revenues at a time when it has been running deficits and borrowing. The Saudi's were willing to take a big part of the production cut because oil price stability is critical for them now. There is one possible fly in the ointment: in order to make these production cuts work, not only must OPEC countries cut by 1.2 million barrells, non-OPEC producers will also have to reduce output by 600 million bpd, including 300 million by Russia. The status of willingness from those producers is not yet clear.
How a Syrian White Helmets Leader Played Western Media (AlterNet) The White Helmets are hardly a non-political organization. Funded heavily by the U.S. State Department and the British Foreign Office, the group operates only in areas in northern Syria controlled by an al Qaeda affiliate and their extremist allies - areas to which Western journalists have not had access. Given that the White Helmets work under the authority of those who hold the real power in east Aleppo and other opposition-controlled zones, the Western media’s reliance on this organization for information comes with serious risks of being manipulated.
A $3 trillion burden or a blessing: Beijing changes its attitude about its forex stockpile (CNBC) Two and half years ago when China's Premier Li Keqiang was visiting Kenya, he told journalists that the excessive amount of foreign exchange reserves "has become a very big burden" for Beijing because they distorted the country's domestic monetary policy. At that time, China had witnessed an almost unstoppable rise in the level of its foreign exchange reserves for more than a decade; it seemed that a big stockpile of foreign exchange would continue to increase to haunt Beijing. Few anticipated that China's reserves would hit an all-time peak the month after Li's comments - and even fewer would have expected that Beijing needed to worry about a fall in those same reserves so soon.
Colombian peace deal passed by Congress, ending 52-year war (Reuters) Colombia's Congress approved a new peace deal with FARC rebels late on Wednesday, despite objections from former President and now Senator Alvaro Uribe, who said it was still too lenient on the insurgents who have battled the government for 52 years. The agreement was approved in the lower house by 130-0, a day after the Senate ratified it 75-0. Lawmakers from Uribe's Democratic Center party left the floors of both houses in protest just before voting began. The ratification - and signing last week - begins a six-month countdown for the 7,000-strong FARC, which started as a rebellion fighting rural poverty, to abandon weapons and form a political party.
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