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 stocks trade mixed as China export data disappoints (CNBC) Chinese shares slid on Friday as investors digested China's underwhelming exports for December and disappointing full-year trade figures. See details under China, later below. The greenback was up against a basket of currencies to trade at 101.4, compared to levels as low as 100.72 on Thursday in the U.S. Oil prices gained during Asian trade, with U.S. crude futures up 0.19% to $53.11 a barrel, and global benchmark Brent inching up 0.2% to $56.12.
Hunt for dirt had life of its own (The Times) Donald Trump described the dossier of claims against him that went public this week as a smear of falsehoods worthy of the Gestapo. Yet the report, with its unsubstantiated accounts of lurid sex acts in bugged Moscow hotel rooms and business deals dangled as bribes, was a product of the habitat in which he now lives - the cut-throat world of US politics.
In September 2015 a rich Republican donor who opposed Mr Trump’s presidential campaign is understood to have paid Fusion GPS, a Washington investigations firm founded by Glenn Simpson, a former Wall Street Journal journalist, to scrutinise Mr Trump’s businesses. The mission: to search for incriminating material, preferably damaging enough to disqualify him from the presidential primary.
Democrats can’t win until they recognize how bad Obama’s financial policies were (The Washington Post) Hat tip to Roger Erickson. Obama had opportunities to help the working class, and he passed them up. Two key elements characterized the kind of domestic political economy the administration pursued: The first was the foreclosure crisis and the subsequent bank bailouts. The resulting policy framework of Tim Geithner’s Treasury Department was, in effect, a wholesale attack on the American home (the main store of middle-class wealth) in favor of concentrated financial power. The second was the administration’s pro-monopoly policies, which crushed the rural areas that in 2016 lost voter turnout and swung to Donald Trump. Obama didn’t cause the financial panic, and he is only partially responsible for the bailouts, as most of them were passed before he was elected. But financial collapses, while bad for the country, are opportunities for elected leaders to reorganize our culture. Franklin Roosevelt took a frozen banking system and created the New Deal. Ronald Reaganused the sharp recession of the early 1980s to seriously damage unions. In January 2009, Obama had overwhelming Democratic majorities in Congress, $350 billion of no-strings-attached bailout money and enormous legal latitude. What did he do to reshape a country on its back?
First, he saved the financial system. ... Rather than forcing some burden-sharing between banks and homeowners through bankruptcy reform or debt relief, Obama prioritized creditor rights, placing most of the burden on borrowers. This kept big banks functional and ensured that financiers would maintain their positions in the recovery.
Second, Obama’s administration let big-bank executives off the hook for their roles in the crisis.
Third, Obama enabled and encouraged roughly 9 million foreclosures. This was Geithner’s explicit policy at Treasury. The Obama administration put together a foreclosure program that it marketed as a way to help homeowners, but when Elizabeth Warren, then chairman of the Congressional Oversight Panel, grilled Geithner on why the program wasn’t stopping foreclosures, he said that really wasn’t the point. The program, in his view, was working. “We estimate that they can handle 10 million foreclosures, over time," Geithner said - referring to the banks. “This program will help foam the runway for them." For Geithner, the most productive economic policy was to get banks back to business as usual.
US visa-free residency for Cubans ends (BBC News) President Barack Obama has ended the longstanding policy that grants residency to Cubans who arrive in the US without visas. The 20-year-old policy allows Cuban migrants who reach US soil to become legal permanent residents after a year. In exchange, Havana has agreed to start accepting Cubans who are turned away or deported from the US. Many Cubans in the US say Washington is rewarding a regime which has failed to address human rights concerns. But President Obama is trying to continue the thawing of relations with Cuba in his final days of office. He said:
"With this change we will continue to welcome Cubans as we welcome immigrants from other nations, consistent with our laws."
The Curse of Underwater Cars (5 Min. Forecast) Nearly one-third of vehicles with a lien on them now carry “negative equity", to use the industry term. Little wonder when people trade in a vehicle on which they still owe money… and roll over the outstanding balance into a loan on a new vehicle.
Merkel Presses for EU Defense Boost as U.S. Support May Falter (Bloomberg) German Chancellor Angela Merkel said Europe needs to do more to ensure its security, citing uncertainty about U.S. post-World War II guarantees eight days before Donald Trump’s inauguration as president. Faced with a global refugee crisis and terror attacks in France, Germany and elsewhere, the European Union would be “naive" to rely on others as global risks threaten the EU’s stability, Merkel said Thursday in a speech in Brussels.
European judges will rule Britain for years (The Times) Britain will remain under the rule of European courts well into the 2020s, a key EU leader has said. Joseph Muscat, prime minister of Malta, which holds the EU presidency, said that the European Court of Justice (ECJ) would have to continue “dishing out judgments" if the UK wanted transitional arrangements to allow important sectors to adapt. This process is expected to take at least five years after the formal divorce from the EU, which is expected in 2019.
Gaps in net household incomes are falling, according to the IFS (City A.M.) Inequality in net household incomes has declined over the last 20 years according to a new report from the Institute for Fiscal Studies - the second set of figures this week to reveal a narrowing gap between Brits at the top and bottom of the scale. Published this morning, the IFS numbers record household incomes calculated after benefits and taxes, and reveal steadily falling inequality. The IFS figures match recent findings from the Office for National Statistics, which earlier this week reported real incomes for the poorest fifth of households increasing by £700 last year, while incomes in the richest households fell £1,000.
Saudis cut oil output to lowest in two years, pledge further reductions (Reuters) Saudi Arabia has cut oil output to its lowest in almost two years, its energy minister said on Thursday, as the world's largest oil exporter leads OPEC's drive to eradicate a global glut and prop up prices. Energy Minister Khalid al-Falih said output had fallen below 10 million barrels per day - more than it had promised as part of a global output cut deal between OPEC and non-OPEC producers. Such levels were last seen in February 2015, when Riyadh began to steeply raise production to deal a blow to U.S. shale oil producers, effectively becoming the architect of a prolonged oil price crash. See next item.
Syrian army says Israel fires rockets at air base near Damascus (Reuters) Syrian army command said on Friday that Israeli artillery fired rockets at a major military airbase outside Damascus, and warned Israel of repercussions for what it called a "flagrant" attack. Explosions were heard in the capital, and residents in the southwest suburbs saw a large plume of smoke rising from the area, while video footage downloaded on social media showed flames leaping from parts of Mezzah military airport's compound. Syrian state television quoted the army as saying several rockets were fired from an area near the Sea of Galilee in northern Israel just after midnight which landed in the compound of the airbase, used by President Bashar al-Assad's elite Republican Guards.
Despite promises, govt. dawdles on allowances to Central forces (The Hindu) For over a decade now, the Central police forces deployed in areas affected by Left Wing Extremism have been demanding a special allowance, considering the high-risk duties they perform in these areas. The demand is yet to be fulfilled despite announcements made by Union Home Minister Rajnath Singh. The government, however, convened a meeting on the various allowances for the jawans, after two videos on the conditions of para-military personnel went viral on social media in short succession.
China posts worst export fall since 2009 as fears of U.S. trade war loom (Reuters) China's massive export engine sputtered for the second year in a row in 2016, with shipments falling in the face of persistently weak global demand and officials voicing fears of a trade war with the United States that is clouding the outlook for 2017. In one week, China's leaders will see if President-elect Donald Trump makes good on a campaign pledge to brand Beijing a currency manipulator on his first day in office, and starts to follow up on a threat to slap high tariffs on Chinese goods. Even if the Trump administration takes no concrete action immediately, analysts say the specter of deteriorating U.S.-China trade and political ties is likely to weigh on the confidence of exporters and investors worldwide. The world's largest trading nation posted gloomy data on Friday, with 2016 exports falling 7.7% and imports down 5.5%. The export drop was the second annual decline in a row and the worst since the depths of the global crisis in 2009.
China's 2016 coal imports jump 25 percent: customs (Reuters) China's coal imports dipped slightly in December from the previous month but were still up more than 50% from a year ago at 26.84 million tonnes, official customs data showed on Friday. For 2016, China's coal imports rose 25.2% from a year earlier to 255.5 million tonnes, reflecting China's campaign to reduce overcapacity in the domestic coal sector. December imports were just below November's 26.97 million tonnes, after Beijing eased curbs on production in November in a bid to boost winter supplies and ease volatile prices. Analysts have forecast that the pace of coal imports could slow in 2017 as the restart of domestic coal mines dampens demand for imports.
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