Written by Econintersect
Early Bird Headlines 15 January 2015
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.
Global
Asia stocks hit 3-1/2-year lows as oil, China worries take toll (Reuters) Asian stocks slumped to 3-1/2-year lows on Friday as brief gains earlier in the session gave way to renewed pressure on oil prices and disappointing Chinese data, ratcheting up investor concerns about the global economy. MSCI’s broadest index of Asia-Pacific shares outside Japan declined 0.7% to the lowest level since June 2012, and was on track for a loss of 3.2% for the week. Japan’s Nikkei also reversed earlier advances to close down 0.5%, extending losses for the week to 3.1%. Chinese stocks dropped again, entering a new bear market – see more later, below.
Why the commodities crunch could hurt stability in Latin America (The Conversation) Much of Latin America has seen an unusually long period of relative political stability since the early 2000s. With the exception of Cuba, democratically elected governments seem embedded throughout the region. The political rules of the game largely seem to be followed. But all that could be ended with a prolonged commodity slump woth the region so dependent of that sector.
U.S.
Trump and Clinton tax plans scare Wall Street (Financial Times) Leading candidates on both parties are bashing investment partnerships using the tax break on “carried interest” profits. This highlights a desire to woo voters struggling in an economy that some feel is rigged in favour of the wealthy.
The Grand Canyon’s Sexual Harassment Problem (Outside) River trips have long been a venue for partying, but a new federal report illuminates a darker trend of sexual harassment that has persisted for years. The report, spurred by a letter sent by 13 alleged victims to Interior Secretary Sally Jewell, cited some 35 incidents spanning 15 years. And though it doesn’t name the subjects of its investigation, the report focused on three former and one current Park Service employees, identifying them only as Boatman 1, Boatman 2, Boatman 3, and Supervisor 1.
G.E. Is Moving Headquarters to Boston and Itself Into the Digital Era (The New York Times) G.E. is moving its headquarters from its longtime sprawling suburban home in Fairfield, Conn., to the high-tech environs of Boston. This is part of the company’s efforts to increase its business in high tech, especially software.
Top 10 Big Cities for Economic Growth: 2015 (ThinkAdvisor) Draw a line west along the North Carolina-Virginia border and then north along the Mississippi. You have enclosed an area that has none of the top 10 cities for economic growth.
EU
EU opens debate on China trade status; U.S. neutral (Reuters) The European Commission will consult industry and its trade partners in response to Beijing’s demand that trade barriers against it be relaxed, opening a politically charged debate on Wednesday that will shape future ties with China. The European Union’s 28 commissioners discussed for the first time the issue of granting China “market economy status” from December, which Beijing says is its right 15 years after it joined the World Trade Organisation. That status would make it harder for Europe to impose anti-dumping duties on Chinese goods sold at knock-down prices, changing the criteria for determining a fair price.
UK
EU referendum: Osborne slammed for lack of contingency plans for Brexit (City A.M.) The government has come under fire for not making contingency plans for a possible Brexit. The criticism came after chancellor George Osborne told BBC 2 Newsnight that the Treasury is not planning for Brexit. Instead of a plan, he said his department is “100 per cent now focused on achieving the renegotiation… That is where the resources of the Treasury are deployed“. Prime Minister David Cameron had said earlier he was not taking steps to prepare departments for Brexit. Labour MP Wes Streeting of the Treasury Select Committee told City A.M.:
“I want the Prime Minister to succeed in his renegotiation efforts and leading the campaign to stay in the EU. What I can’t comprehend is Osborne’s failure to put in place contingency planning for an exit vote. He owes it to the country to give us a clear idea of what an ‘exit’ vote would mean and plan for that scenario.”
Indonesia
Q&A: why did terror hit Jakarta’s streets – and what happens next? (The Conversation) Explosions and gunfire on Thursday left seven people dead in Jakarta. The blasts and gunfight between Indonesian police and the suspected attackers took place near the busy Sarinah shopping mall in central Jakarta. Indonesian President Joko Widodo spoke of “acts of terror“. This was not a new pattern. Since 2000, Islamic hardliners in Indonesia have carried out several high-profile bombing attacks. Notably, the Bali bombings in 2002 killed 202 people. This article suggests that the government should recruit returned jihadists who are disillusioned with that movement to address the domestic terrorism problem from within.
India
Looks Like No More Rate Cuts for Reserve Bank of India Soon (Walter Kurtz, Sober Look, Twitter)
Chart: India’s wholesale deflation ends as the rupee weakens; no more rate cuts for the RBI in the near-term – pic.twitter.com/m6nDEyFtMo
– SoberLook.com (@SoberLook) January 15, 2016
China
China Stocks Enter Bear Market as State-Fueled Rally Evaporates (Bloomberg) Chinese stocks fell back into a bear market, wiping out gains from an unprecedented state rescue campaign as investors lose confidence in government efforts to manage the country’s markets and economy. The Shanghai Composite Index sank 3.5% at the close, falling more than 20% from its December high and sinking below its low during the depths of a $5 trillion rout in August.
Amazon could be moving into the $350B ocean freight market (USA Today) Amazon’s Chinese affiliate, Amazon China, has registered with the U.S. Federal Maritime Commission to become a licensed ocean freight forwarder. The filing was spotted Wednesday by Flexport, a San Francisco-based freight forwarder for consumer product makers. This follows major moves into trucking and air freight by the company over the last two years.
China income inequality among world’s worst (Financial Times) Communist China has one of the world’s highest levels of income inequality, with the richest 1 per cent of households owning a third of the country’s wealth, a report from Peking University has found. The poorest 25% of Chinese households own just 1% of the country’s total wealth, the study found. More from the article:
China’s Gini coefficient for income, a widely used measure of inequality, was 0.49 in 2012, according to the report. The World Bank considers a coefficient above 0.40 to represent severe income inequality.
Among the world’s 25 largest countries by population for which the World Bank tracks Gini data, only South Africa and Brazil are higher at 0.63 and 0.53, respectively. The figure for the US is 0.41, while Germany is 0.3.
