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.
Idaho Drops Climate Change Language From K-12 Science Curriculum (EcoWatch) Lawmakers in Idaho have approved new K-12 science standards that do not reference the established science of climate change and the impact of human activity on the environment. The Feb. 9 vote from the House Education Committee came mostly down party lines. According to Idaho Ed News, 11 Republicans on the panel approved the proposed slate of science standards after five paragraphs* mentioning the topics were removed from the initial draft. The committee's three Democrats voted against removing the climate change language. (Econintersect: It is ironic that this happened just when another unprecedented heat wave returnes to the North Pole. See article above.) Republican Rep. Scott Syme said the initial draft of new state science standards did not teach "both sides of the debate." Omitted language includes:
"Ask questions to clarify evidence of the factors that have caused the rise in global temperatures over the past century," and "human activity is also having adverse impacts on biodiversity through overpopulation, overexploitation, habitat destruction, pollution, introduction of invasive species and climate change."
The Political Assassination of Michael Flynn (Bloomberg) For a White House that has such a casual and opportunistic relationship with the truth, it's strange that Flynn's "lie" to Pence would get him fired. It doesn't add up.
A better explanation here is that Flynn was just thrown under the bus. His tenure as national security adviser, the briefest in U.S. history, was rocky from the start. When Flynn was attacked in the media for his ties to Russia, he was not allowed by the White House to defend himself. Over the weekend, he was instructed not to speak to the press when he was in the fight for his political life. His staff was not even allowed to review the transcripts of his call to the Russian ambassador.
How Trump could trigger a massive wave of selling in the Treasury market (CNBC) In recent years, Treasury market volatility has come in the form of "tantrums" wrought by the Federal Reserve or other central banks. Now, that volatility could be spurred by the Trump administration. Hawkish foreign policy positions, coupled with looser domestic regulation, could create an avalanche of selling from two of the biggest Treasury buyers: big U.S. banks and China.
US delivers ultimatum over Nato spending (The Times) Donald Trump’s defence secretary has told Nato allies that they cannot take America’s commitment to aid their security for granted unless they are prepared to increase military spending to at least 2% of national income. James Mattis told Nato defence minsters in Brussels behind closed doors yesterday:
“No longer can the American taxpayer carry a disproportionate share of the defence of western values. Americans cannot care more for your children’s future security than you do. America will meet its responsibilities but if your nations do not want to see America moderate its commitment to this alliance each of your capitals needs to show support for our common defence."
90 Percent of New Power in Europe From Renewables (Climate Central) Renewable energy sources made up nearly nine-tenths of new power added to Europe’s electricity grids last year, in a sign of the continent’s rapid shift away from fossil fuels. But industry leaders said they were worried about the lack of political support beyond 2020, when binding EU renewable energy targets end.
Big five banks run up £100bn bill in bad loans and legal costs over the last five years (City A.M.) (Econintersect: The term 'conduct costs' refers to payments made by a bank in the settlement of regulatory decisions, litigation or fines. This is a particularly ironic term since many critics refer to fines and settlements being ineffective penalties, but merely being treated as a 'cost of doing business' - that's as in 'conducting business'.) The UK's big five banks, which report full-year results next week, have run up a bill of nearly £100 billion ($125 billion) over the last five years for a toxic mix of fines (graphic below) and bad loans, according to a new analysis. However, the era of sour loans and megafines that dwarf the banks' dividend payouts could finally be drawing to a close, eight years after the credit crunch. Russ Mould, investment director at AJ Bell which conducted the research said:
“The good news is that, unless there are any very nasty surprises when the banks report their full-year results next week, 2016’s forecast combined dividend payments are forecast to outstrip conduct costs for the first time since the first provisions were incurred back in 2011."
Former IMF boss Rodrigo Rato arrested in Madrid (The Telegraph) Rodrigo Rato, a former managing director of the IMF and top-level minister in the governments of Prime Minister José Mar'a Aznar, was arrested in Madrid on Thursday after the police and customs officials carried out a search of his home. Rato, who was already implicated in a judicial investigation into his stewardship of Bankia before the Spanish lender had to be bailed out to the tune of €22 billion (£16bn, $20 billlion), had reportedly become the focus of money-laundering and fraud accusations regarding his personal wealth. For more about the 'pain in Spain' (and in Europe), read Bankia Investigation Finds Links To Spain's Central Bank (Dirk Ehnts, GEI Opinion).
Political Risk to the Rescue as Sweden Abhors Krona Appreciation (Bloomberg) The risk to the global growth spreading from the U.S. administration and the potential for political upheaval in Europe are now providing cover for Swedish central bankers seeking to prevent a rapid krona appreciation. Policy makers in Stockholm on Wednesday delivered an unexpectedly dovish view on interest rates, citing “considerable political uncertainty abroad". They also held the main rate at a record low of minus 0.5%, left intact a bond-buying program and extended a warning that they stand ready to intervene in the currency markets.
Study finds deaths from air pollution in India rivals China (The Times of India) India's air now rivals China's as the world's deadliest, according to a new study published Tuesday amid warnings that efforts to curb pollution from coal will not yield results any time soon. India's notoriously poor air quality causes nearly 1.1 million premature deaths every year, almost on a par with China, concluded a joint report by two US-based health research institutes. But whereas deaths linked to air pollution in China have steadied in recent years, the rate has soared in India where smog readings in major cities routinely eclipse safe exposure levels.
From 'Made in China' to 'Made by China for China' (Bloomberg) China remains the biggest manufacturer on the planet, but most of what it makes stays at home and the vast majority of what it consumes is made there, too. These twin facts could confound any Donald Trump-led trade assault, according to Diana Choyleva, London-based chief economist at Enodo Economics. Of course, China remains deeply knitted into the global supply chain. "But the bulk of the value added is actually destined for China’s domestic market rather than abroad," Choyleva wrote in a recent note.
From Underdogs to Overheated: Chinese Banking Stocks Are Surging (Bloomberg) Chinese bank stocks have gone from cold to hot in a matter of days. Take Agricultural Bank of China Ltd. After falling by an annual average of 2.7% since its Hong Kong listing in 2010, the cooperative lender has climbed 14% in a blistering eight-day rally. Bank of China Ltd., priced well below the value of its net assets for the past 1 1/2 years, is now soaring to levels last seen in August 2015. The turnaround is all the more surprising given persistent concerns about bad debt levels and a perception the state-owned lenders place the country’s interests above those of shareholders.
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