Written by Econintersect
Early Bird Headlines 16 December 2016
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 trade higher; yuan midpoint at lowest level in eight years (CNBC) Asian shares turned positive on Friday as currency swings captured attention with the yuan midpoint fixed at its lowest against the dollar since May 2008 and Japan stocks up slightly on recent yen weakness. The People Bank of China set the daily yuan mid-point fix at 6.9508 versus its last close at 6.9478. The yuan fetched 6.9466 per dollar as of 3:10 pm HK/SIN. Chinese policymakers have been rushing to curb capital outflows and spending foreign exchange reserve to support the yuan, after the Fed raised rates and the dollar hit 14-year highs. China’s foreign exchange reserves fell more-than-expected to a six-year low of $3.05 trillion in November. The dollar rallied and oil prices shrugged off the stronger greenback to trade higher. U.S. crude oil futures were up 0.57% at $51.20 a barrel, while Brent futures rose 0.48% at $54.28. A stronger dollar would generally weigh on demand for the dollar-denominated crude.
U.S.
G.O.P. Plans to Replace Health Care Law With ‘Universal Access’ (The New York Times) House Republicans, responding to criticism that repealing the Affordable Care Act would leave millions without health insurance, said on Thursday that their goal in replacing President Obama’s health law was to guarantee “universal access” to health care and coverage, not necessarily to ensure that everyone actually has insurance. But they apparently don’t kniw what it is they will do. The Times says Republicans have not settled on the details or the timing of their replacement plan. The House speaker, Paul D. Ryan of Wisconsin, portrays repeal of the law not as an ideological crusade, but as a form of urgently needed relief.
Obama promises retaliation against Russia over hacking during US election (The Guardian) Outgoing president says US will respond to cyberattacks by Moscow ‘at a time and place of our choosing’, as Donald Trump rejects reports of interference. According to extracts of an interview due to air on National Public Radio on Friday morning, the US president said he was waiting for a final report he has ordered into a range of Russian hacking attacks, but promised there would be a response. See following 4 articles.
Donald Trump Response to Charges of Russian Hacking (Twitter)
Why Didn’t Obama Do More About Russian Election Hack? (CNBC) The Obama administration didn’t respond more forcefully to Russian hacking before the presidential election because they didn’t want to appear to be interfering in the election and they thought that Hillary Clinton was going to win and a potential cyber war with Russia wasn’t worth it, multiple high-level government officials told NBC News.
WaPo Does It Again: CIA “Secret” Assessment Discredited By Top US Spy Agency, FBI And CIA Itself (Mint Press News) Hat tip to Roger Erickson. The Washington Post’s recent story, which claimed that a “secret” CIA report found evidence Russia interfered in the US election to help Trump, has now been discredited by the Director of National Intelligence, the FBI, and multiple CIA sources. Last Friday, a Washington Post article entitled “Secret CIA Assessment Says Russia was Trying to Help Trump Win White House” cited a “secret” CIA report which allegedly found evidence that Russia interfered in the US election on behalf of President-Elect Donald Trump. However, numerous other agencies in the US intelligence community, including multiple sources within the CIA, have discredited the “secret assessment” in recent days. This past Friday, a senior FBI counterintelligence official met with a bipartisan group of lawmakers and told them that the agency did not agree with the CIA’s assertion, calling them “fuzzy” and “ambiguous“, as no concrete proof of the allegations exists. The Washington Post later admitted this, saying that the difference of opinion between their “secret” CIA sources and the FBI is that the FBI “wants facts and tangible evidence to prove something” while the CIA is “more comfortable drawing inferences,” or, in other words, passing off assumptions as facts.
Amazon, ‘The Washington Post’ and That $600 MIllion CIA Contract (The Nation) Hat tip to Roger Erickson. It’s been a rough couple days for The Washington Post. Word emerged that hackers invaded its internal system – for a few days, no less – all of its staffers had to change their passwords as the company tried to figure out how much data had been compromised.  Meanwhile, a petition campaign was launched related to news that Amazon, under the Post’s new owner, Jeff Bezos, recently secured a $600 million contract from the CIA. That’s at least twice what Bezos paid for the Post this year. Bezos recently disclosed that the company’s Web-services business is building a “private cloud” for the CIA to use for its data needs. Critics charge that, at a minimum, the Post needs to disclose its CIA link whenever it reports on the agency. Over 15,000 have signed the petition this week hosted by RootsAction.
US election was hacked ‘on Putin’s command’ (The Times) Thursday night U.S. intelligence agents told The Times that President Putin was personally involved in a Russian-led hacking campaign during the American election as part of a vendetta against Hillary Clinton. The CIA claims that Russian hackers targeted emails of American individuals and institutions in an attempt to sway the election in Mr Trump’s favour.
Intel analysis shows Putin approved election hacking (CNN) A US official familiar with the US intelligence assessment of the Russia election-related hacking said the understanding is that the operation was carried out with sophisticated hacking tools, the equivalent of those used by the US National Security Agency. The use of the advanced tools suggests Russian President Vladimir Putin was involved in the hacks, a person familiar with the matter said, adding that it was more than a US intelligence assumption at this point. But neither of the sources said they knew of specific intelligence that directly ties Putin to the attack. US officials briefed on the investigation say the hacking has continued largely unabated since last month’s election, and President Barack Obama on Thursday vowed to take action against Russia.
Econintersect note It is becoming increasingly difficult to determine what is fake news and what is real news. The call from President Obama for an investigation seems appropriate, but whether it can find definitive results seems questionable at this point. Sometimes one wonders if what we see is fake news about fake news.
EU
How Eastern Europe is best placed to hit the ground running after a hard Brexit (The Conversation) Britain has a number of bilateral treaties with Eastern European countries that will remain after Brexit.
Euro reaches lowest level against dollar since 2003 (City A.M.) The euro has hit its lowest point since 2003 against the dollar as the Federal Reserve’s plans for tightening add further momentum to greenback’s surge since the election of Donald Trump as US President. The euro/dollar spot exchange rate hit a low of $1.0395 in the US morning trade, a fall of over one per cent. Meanwhile, the pound fell against the dollar by 1.13% to lows of $1.2412 at the time of publication. Graphic below from Trading Economics, annotated by Econintersect:
UK
A £50bn Brexit bill could face the UK before it leaves the EU, according to the European Commission’s chief negotiator, Michel Barnier (City A.M.) It could cost the UK £50bn to extricate itself from the EU if the European Commission’s chief negotiator has his way. Michel Barnier has indicated to multiple parties in the negotiation that the UK will have to pay between €50 billion and €60 billion (£50 billion, $62 billion) in money still owed from earlier commitments, according to reports by Sky News. Conservative MEP Daniel Hannan – one of the leading campaigners for Brexit – dismissed Barnier’s reported position as posturing.
Italy
Why EU rules risk making Italy’s banking crisis a whole lot worse (The Conversation) Problems at Monte dei Paschi and UniCredit are bad enough without bail-in rules to contend with. In the wake of the Italian constitutional referendum, the country’s banking crisis is going from bad to worse. The European Central Bank (ECB)‘s decision to refuse an extension to Banca Monte dei Paschi di Siena to raise €5 billion (£4.2 billion) has left the country’s third-largest bank facing a government bailout that looks likely to inflict severe pain on many ordinary Italian savers. As if that were not enough, Italy’s biggest bank, UniCredit, announced a restructuring plan that requires a capital raising of €13 billion in the first three months of next year. Given the torrid time Monte dei Paschi has had trying to find sufficient private backing, will UniCredit need help from the Italian taxpayer, too?
Italy reportedly set to spend 15 billion euros propping up the banking sector (CNBC) This a breaking news story. Click on title for updates.
India
Centre disputes RBI’s deposit count (The Hindu) The Finance Ministry on Thursday said the Rs. 12.44 lakh crore ($190 billion) figure reported by the Reserve Bank of India as the amount having been deposited in banks since the 08 November demonetisation announcement could be inflated due to double-counting. Shaktikanta Das, Secretary, Department of Economic Affairs, said:
“The total quantum of low-denomination notes which the RBI normally supplies in a year, three times of that has been supplied in the last five weeks.”
China
Beijing says friendly Sino-US ties rely on one-China policy (South China Morning Post) Washington is being warned over its Taiwan stance after president-elect hints at making a course change. Beijing said on Monday that its ties with the United States would be jeopardised if Washington did not stick to its stance that Taiwan is part of China. Those who seek to damage the “one China” principle and harm China’s core interests are “lifting a rock only to drop it on their feet“, Chinese Foreign Minister Wang Yi said in comments carried on the Foreign Ministry’s website.
Brazil
A ‘Stonehenge,’ and a Mystery, in the Amazon (The New York Times) Discoveries of pre-European structures in the rain forest are changing how the remote Amazon jungle might have appeared a millennia and more ago. Some scholars now assert that the world’s largest tropical rain forest was far less “Edenic” than previously imagined, and that the Amazon supported a population of as many as 10 million or more people before the epidemics and large-scale slaughter put into motion by European colonizers.
