Written by Econintersect
Early Bird Headlines 03 May 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 markets mostly up, with Australia shares jumping as RBA cuts rates (CNBC) Asian stocks mostly gained on Tuesday, despite disappointing data from China, with Australia’s shares climbing and its dollar falling after the Reserve Bank of Australia cut interest rates unexpectedly. The RBA cut its benchmark rate by 25 basis points to a record low 1.75%, noting that inflation data are unexpectedly low and that it is less concerned by the risk low rates pose to the housing market. A majority of economists polled by Reuters had expected no change. The Nikkei declined sharply as the yen continued climbing against the dollar.
Two Sigma Co-Founder `Very Worried’ Machines Will Take Jobs (Bloomberg) David Siegel, co-founder of $35 billion quantitative hedge fund firm Two Sigma, says he’s “very worried” that machines could soon cost large swaths of the workforce their jobs. Econintersect: If no one is working (and therefore not earning) who will buy what the machines produce?
New Oil Price Forecast: Oil is Rising Even Faster than I Expected (Kent Moors, Oil & Energy Investor) KM contributes to GEI. Kent is rasing his June price expectations to $42-$45 a barrel oil price in New York and a $48-$50 a barrel in London. He expects that to be the floor, not the average price. He thinks oil will be higher than that in the second half of the year.
Experts Call Craig Wright a ‘Con Man’ and ‘Fishy’ for Claiming He Created Bitcoin (The Daily Beast) Craig Wright, an Australian computer scientist and businessman, boldly claimed on Monday to be the anonymous inventor behind the world’s most famous cryptocurrency, Bitcoin, promising to put an end to one of the most persistent and bedeviling mysteries on the Internet. Experts called “bullshit” almost immediately. See also Craig Wright’s claims to be Satoshi Nakamoto come under fire (The Economist).
Curtains for Trans Pacific Trade Deal? Greenpeace Leak Exposes Corporate Takeover (Informed Comment) Hat tip to Doomstead Diner. Confirming that the TransAtlantic Trade and Investment Partnership amounts to “a huge transfer of power from people to big business,” Greenpeace Netherlands on Monday leaked 248 secret pages of the controversial trade deal between the U.S. and EU, exposing how environmental regulations, climate protections, and consumer rights are being “bartered away behind closed doors“. The documents represent roughly two-thirds of the latest negotiating text, according to Greenpeace, and on some topics offer for the first time the position of the United States.
Did Scientists Stumble on a Battery that Lasts Forever? (The Smithsonian) Hat tip to Roger Erickson. The discovery that could lead to ultra-long-life batteries happened by serendipity, as have so many other monumental scientific discoveries in the past. A team of researchers led by Reginald Penner, chair of the University of California at Irvine’s chemistry department, had been studying nanowires, tiny conductive wires that show great promise for use in batteries. The problem is nanowires are fragile and generally begin to fray and crack after a certain number of charging cycles. One day, Mya Le Thai, a PhD candidate in Penner’s lab, decided on a whim to switch the liquid electrolyte surrounding the nanowire assembly with a gel version. Since then it has been cyclically recharging and so far has gone beyond 30,000 cycles. This is far beyond the life of conventional batteries.
U.S.
Stagnant Wages: Americans Can’t Or Won’t Compete? (Peter Morici, Talk Markets) Prof. Morici says that Americans must cut their safety nets (“Medicaid, Obamacare subsidies and income support programs“) to compete with Asian workers that have few safety nets or machines that have none at all. Econintersect: E-e-e-ech !
Hillary Clinton Hears Wrath of Coal Supporters in West Virginia (The New York Times, MSN News) Hillary Clinton came to campaign in coal country – and she had her feet held to the fire. As Mrs. Clinton stepped onto the sidewalk on Monday to tour a health and wellness center here, a crowd of protesters stood in the rain, many of them holding signs supporting the leading Republican candidate, Donald J. Trump, and chanted, “Go home!” Later, when Mrs. Clinton sat down with residents to discuss health care and other issues affecting the community and coal miners in particular, the chants of the protesters outside could still be heard. Econintersect: Same problem was experienced by buggywhip manufacturing workers when the automobile took over transportation.
Apple’s Losing Streak Is Nearing Historic Levels (Bloomberg) So far in 2016, Apple Inc. is the dog of the Dow. After an underwhelming earnings report led to the shares’ worst week since January 2013, Apple stock extended its losses to kick off May, closing down 0.18% on Monday. The benchmark index’s laggard has declined by nearly 11% so far this year heading into Tuesday’s session. Bespoke Investment Group notes that Monday’s negative close marks eight straight sessions in the red for Apple – something that last happened in July 1998, and has now happened only four times in the company’s history.
EU
What is the European Commission’s problem with Google and Android? (The Conversation) Is Google restraining trade by bundling apps that run on its open source Android system? The author thinks that U.S. law and regulations in the EU may vary of how that question is answered.
UK
One more survey that shows the living wage and Brexit fears are hitting hiring (City A.M.) Brexit fears and the introduction of the national living wage are holding down pay and stopping firms from taking on staff, the latest jobs report from Adzuna suggests. The online recruiters said that advertised salaries for vacancies in the UK stood at £33,815 in March – down 2% on last year – while the total number of jobs that were up for grabs was 1.16m – the same number as in February. Vacancies in the retail sector were down 7% in the month before the national living wage – a £7.20 an hour minimum wage for all workers over the age of 25 – came into force. A number of companies, particularly in the food and drinks industry such as Caffe Nero and Zizzi, have cut staff perks such as free lunches in order to pay the living wage.
In or out of the EU, Britain faces more Scottish upheaval (The Conversation) As the EU referendum campaign gathers momentum, polls show the UK almost evenly divided on the merits of staying in and pulling out. In Scotland, however, the Remain option is clearly in the lead at this stage. This asks some intriguing questions about what will happen after June 23 as the Scottish and European issues have become so deeply entwined. Almost all the possible scenarios seem set to increase constitutional tensions. The view of Europe is starkly different in Scotland from that in England.
France
Is This Frenchman Running ISIS Terror Networks in the West? (The Daily Beast) A French national who allegedly conceived and planned last November’s horrific terror attacks in Paris has been promoted to a top position in the so-called Islamic State’s foreign intelligence branch, according to a former ISIS intelligence operative who has since defected. Abu Suleyman al-Firansi, the nom de guerre of this rising star in terrorist ranks, is believed to be the first West European ever to attain such an elite rank in ISIS – an indication of the emphasis the group is putting on attacks in the West and its reliance on people with European backgrounds to spearhead them. His precise role and identity are a matter of debate in Western intelligence and counter-terror circles. But French and other U.S. officials who asked not to be named have confirmed his importance to the organization.
Germany
Volkswagen, emissions and the ‘crisis spiral’ (The Conversation) The author says that tThe event that triggered the Volkswagen emissions scandal – which saw the group admitting that it had allowed “cheat” devices to be used in US emissions tests – was just the start of the downfall of one of the world’s largest car manufacturers. The costs for VW for the corrections and penalties will remove money from R&D and cause “cost savings” to be imposed on suppliers, all accelerating a deathly spiral of declining innovation and quality. He is skeptical that VW can successfully navigate this minefield and climb back to its place as a respected car manufacturer.
Draghi returns fire over Berlin’s ECB attacks (Financial Times) Mario Draghi has hit back at German criticism of the European Central Bank’s interest rate policy, saying low borrowing costs were symptomatic of a glut in global savings for which Germany was partly to blame. The ECB president’s argument on Monday is a new line of defense against strong objections from German politicians, bankers and the media over the ECB’s decision to lower its benchmark main refinancing rate to zero. The ECB also has a deposit rate of minus 0.4 per cent, which works as a tax on lenders’ reserves held at the central bank.
Turkey
Migrant crisis: EU ‘to grant Turkey visa-free travel’ (BBC News) The European Commission will grant Turkey conditional approval for visa-free travel within the EU’s Schengen area, sources have told the BBC. The move is part of a deal in which Turkey has agreed to take back migrants who have crossed the Aegean to Greece. But Turkey must still meet EU criteria, BBC Europe Editor Katya Adler says, and the deal must be approved by the European Parliament and member states. The EU fears that without a visa deal, Turkey will not control migration.
Iran
Europe’s Banks Are Staying Out of Iran (Bloomberg) European companies flocking back to Iran are doing so without their favored lenders at their side. Less than two years after BNP Paribas SA agreed to pay a record $9 billion U.S. fine in part for dealings with Iran, many of the continent’s biggest banks remain unwilling to go anywhere near Iran-related business for fear that they will run afoul of remaining U.S. sanctions on the country. That’s opened the way for Chinese and Persian Gulf lenders, as well as European institutions such as Belgium’s KBC Groep NV, to grab a slice of the business of funding companies’ investments in Iran.
Russia
NATO weighs four battalions in Eastern states to deter Russia: U.S. (Reuters) The NATO alliance is weighing rotating four battalions of troops through Eastern member states, U.S. Defense Secretary Ash Carter said on Monday, in the latest proposal by allies to guard against aggressive behavior by Russia. The Baltic states – Estonia, Latvia and Lithuania – which joined NATO in 2004, have requested greater presence of the alliance, fearing a threat from Russia after it annexed the Crimea peninsula from Ukraine in 2014.
India
India smartphone market up 23% amid flat global growth (The Hindu) India smartphone market grew 23% in the first quarter of 2016, surpassing the U.S. to become the second largest country in terms of users, even as sales remained flat globally, research firm Counterpoint said. India now trails only China in smartphone users.
Japan
Yen rally gains strength (The Star Online) The yen’s world-beating rally against the dollar looks to be gathering momentum, as central bank inaction on both sides of the Pacific Ocean leaves inflation expectations to drive the exchange rate. Japan’s currency extended its climb to an 18-month high Monday after Bank of Japan Governor Haruhiko Kuroda refrained from adding to stimulus on Thursday. That took its gain this year to 13%, the most among developed-market peers.
China
China Caixin April manufacturing PMI 49.4 vs 49.7 in March (CNBC) Activity in China’s manufacturing sector unexpectedly declined further in April, a private survey showed Tuesday, reviving doubts over the health of the world’s second-largest economy. The Caixin Manufacturing Purchasing Managers’ Index (PMI) fell to 49.4 in April from 49.7 in March, according to Markit, which compiles the index. A reading above 50 indicates expansion; one below indicates contraction. Economists polled by Reuters had forecast a reading of 49.9. The Caixin PMI, which focuses on smaller and medium-sized enterprises, was last in expansionary territory in February 2015. The official PMI, which targets larger companies, printed at 50.2 in April, the second successive month of expansion, figures released over the weekend showed.
