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posted on 23 January 2018

Early Headlines: Asia Stocks Surge, Dollar Flat, Gold And Oil Up, Cryptos Down, GBP Up, Shutdown Ends, US 30Pct Tariff On Solar, US Gov Brain Drain, IRS Loses On Collections, BOJ Holds, And More

Written by Econintersect

Early Bird Headlines 23 January 2018

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, published Monday, Wednesday and Friday, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.

early-bird-301-180


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Global

asia.pac.2018.jan.23

  • Bitcoin, Ethereum, Ripple Price Drops Follow Routine Pattern (International Business Times) The cryptocurrency market is experiencing a notable price dip across the board. According toOnChainFX, bitcoin sold for around $10,709 on Monday morning while ether tokens went for a little more than $981. Both these prices represent more than an 8% price drop over the past 24 hours. Most cryptocurrencies are experiencing a similar decline, with tokens such as Ripple’s XRP plunging more than 13% over the past 24 hours. However, to put this all in perspective, OnChainFX still estimates XRP grew 477 percent over the past month while bitcoin and ether rose 85% and 215%, respectively. Many experts see this current slump as a temporary period of market correction.

However, traditional financial experts are becoming even more skeptical. Peter Boockvar, chief investment officer at Bleakley Advisory Group, told CNBC he wouldn’t be surprised if bitcoin dropped to $3,000 or even $1,000 this year. That would be the steepest drop in the history of blockchain technology, but it's not impossible.

U.S.

  • Trump signs funding bill, ending government shutdown (The Hill) President Trump has signed a stop-gap government funding bill, officially ending the three day-long government shutdown. Trump signed the bill Monday night after Senate Democrats struck a deal on legislation earlier in the day. See also Congress clears bill to end shutdown: Lawmakers voted 266-150 to reopen the federal government and extend funding through Feb. 8, as well as provide money for the Children’s Health Insurance Program (CHIP) for six years. Six Republicans voted "no," while 45 Democrats voted "yes" to pass the bill. Senators voted 81-18 to approve the stopgap spending measure.
  • The Democrats Relent (The Atlantic) The federal government will reopen on Tuesday after Senate Democrats accepted an offer from Majority Leader Mitch McConnell to end their filibuster of a stopgap spending bill.

In addition to reopening the government, the measure reauthorizes the Children’s Health Insurance Program for six years and delays implementation of several taxes under the Affordable Care Act. Aside from its shorter duration - three weeks instead of four - the continuing resolution is virtually identical to the bill Democrats rejected on Friday night, resulting in the shutdown.

  • Winners and losers of the government shutdown (The Washington Post) While no one really truly “wins" when the government shuts down - especially in the real world, where people's lives are tangibly affected - this two-day shutdown, which is on its way to ending after senators reached a deal, did have some clear political winners and losers. Two lists below, followed by a graphic showing public opinion before the deal was announced.

Winners:

  • Congressional Republicans
  • President Trump
  • Moderate Senators

Losers:

  • Democrats
  • Sen. Chuck Schumer (D, NY)
  • Dreamers

The move is a major blow for the $28 billion solar industry, which gets about 80 percent of its solar panel products from imports.

The Solar Energy Industries Association predicted the tariffs would increase prices and kill 23,000 jobs. The group represents manufacturers as well as installers, sellers and others in the field.

But the Trump administration has been gradually sidelining diplomats and other civil servants responsible for advocating and negotiating such penalties with foreign governments, a development that has sapped morale at the State Department and prompted a flight of critical sanctions experts from the U.S. diplomatic corps - a trend that could hamstring the administration’s ability to effectively craft sanctions in the future.

UK

  • UK pound climbs above $1.40 as Brexit mood improves (Financial Times) The pound has broken the psychological level of $1.40, securing its return to levels it traded in the run-up to the Brexit vote and establishing the UK currency as one of the strongest performers so far in 2018. While a lot of sterling’s gains this year are due to the general weakness of the US dollar, several analysts detect a more upbeat mood among investors regarding Brexit talks. Chart from Investing.com:

gbp.1.year.2018.jan.23

Japan

  • The Bank of Japan concluded its two-day monetary policy meeting on Tuesday
  • The central bank said it would keep interest rates steady
  • Assets invested in ETFs/ETPs listed in Japan increased by a record $102.53 billion during the year, to reach a new high of $275.84 billion.
  • According to the Central Bank of Japan, it owns approximately 75% of the assets of ETFs listed in Japan.
  • Year-to-date, through end of December 2017, ETFs and ETPs listed in Japan saw record net inflows of $52.62 Bn.

Click for large image.

North Korea

  • Limited Strikes on North Korea Would Be an Unlimited Disaster (Foreign Policy) Many commentators across the national security community, such as Edward Luttwak, Michael J. Green, Matthew Kroenig, Oriana Skylar Mastro, and others, have the same bright idea for how to get North Korean leader Kim Jong Un to swear off further ballistic missile and nuclear warhead testing: Punch him right in the metaphorical nose. The idea is that by hitting the right - and largely symbolic - target inside North Korea, we can find a sweet spot of escalation that’s light enough not to goad the North into a major war but painful enough to make them think twice about further testing of weapons of mass destruction. This author writes:

If the United States keeps operating under flawed assumptions about the North, it could lead to a strike that, at best, will not end North Korea’s WMD program and, at worst, might provoke an escalation that results in the first battlefield use of nuclear weapons since 1945. The in-between possibilities are equally unattractive: limited retaliations that threaten the United States and its allies, and target civilians and military alike? A wider war on the Korean peninsula? No war, but allies that are forced to re-evaluate their own security relationships in the wake of a massive U.S. miscalculation? None of these can be said to be in the United States’ best interest.

Most of all, we don’t have to take these risks at all. If the perception of Kim Jong Un is one of a rogue and irrational actor, then striking now is far more prudent because deterrence likely will not hold. Of course, everything we see indicates that Kim is rational. North Korea is absolutely deterrable. And since it is, striking based on a misplaced trust in our own power is a dangerous - and unnecessary - risk.

China

  • Jared Kushner is China's Trump Card (The New Yorker) The President’s son-in-law, despite his inexperience in diplomacy, became Beijing’s primary point of interest. Since the election, Beijing intelligence has targeted Kushner as a key asset.

Kushner’s once expansive role in the White House has narrowed, and he no longer meets frequently with Ambassador Cui. Still, by his own description, he is as confident as ever that his instincts, honed in the family business, can serve him, and the country, well. In the White House, he has a lofty but precarious status. Henry Kissinger, who had encouraged Kushner’s dialogue with Cui, described Kushner as occupying a “daunting role flying close to the sun."

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