Early Headlines: Kurds Deny Erdogan, Bankster Protection Racket Costs Exceed $300 B, China Overestimates GDP and More

Early Bird Headlines 08 June 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

• Banks’ post-crisis legal costs hit $300bn (Financial Times) The total cost of litigation aimed at a group of the biggest global banks since 2010 has broken the £200bn ($306bn) barrier, according to a new study that challenges assumptions that banks are through the worst of post-crisis reparations. The annual study, carried out by the UK-based CCP Research Foundation, uses regulatory notices, annual reports and other public disclosures to tally the cost of fighting claims of misconduct over rolling five-year periods. GEI News will report more on this later.
• Asian shares slip, China’s imports disappoint (Reuters) Weakening economic activity in China has suppressed imports and all Asian markets on Monday. Even Japan with a surprise jump in GDP (see GEI News) couldn’t close trading in the green.

U.S.

• Albany lawmakers under pressure to back anti-corruption law (Al Jazeera) After high-profile indictments, New York’s attorney general looks to reduce graft in most corrupt state in the nation.
• Reward offered in New York jail break ‘crisis’ (BBC News) The escape of two murderers from a maximum security jail in New York has been described as a “crisis situation” by the state’s governor. And it is a crisis in two nations as the Dannemora prison is just a few miles from the Canadian border.
  

UK

• Pro-Brexit ministers face Cameron ultimatum (Financial Times) David Cameron is to tell cabinet ministers they must quit the government if they want to campaign for Britain to leave the EU, as he prepares to face down hardline Conservative euroskeptics. Cameron intends to negotiate a new deal for Britain in a reformed EU.

Germany

• Deutsche Bank’s New Man Still Faces Existential Question (The Wall Street Journal) The co-chief executives (Anshu Jain and Jürgen Fitschen) are out at Deutsche Bank but the new single CEO, former UBS CFO John Cryan, has a huge challenge to get a functional rudder for this megabank.
• High Hopes for John Cryan, Deutsche Bank’s New Chief, Known for His Pragmatism (The New York Times) John Cryan, a former finance chief at UBS who Deutsche Bank said on Sunday would become the bank’s new chief executive, brings many qualities to the table, colleagues say. Mr. Cryan is smart, clinical and, perhaps most important, knows how to make big banks swallow bitter pills. In 2008, among the darkest days of the financial crisis, he took over as chief financial officer at UBS, which underwent a radical restructuring and went on to write off $50 billion. Econintersect: He may also need a vision for what the floundering bank should become.

Greece

• Subplots Cloud Greek Drama (Bloomberg View) Mohammed El Erian’s view is that the Greeks are devious.
  

Turkey

• Erdogan suffers Turkish poll blow as pro-Kurdish party gains (Financial Times) Turkey’s Islamist-rooted AK party lost its parliamentary majority after 13 years in power on Sunday night in a stunning blow to President Recep Tayyip Erdogan. The end of single-party rule in effect spells the end to Mr Erdogan’s campaign for a constitution-changing majority to boost his own powers. Sunday’s breakthrough won the leftwing Kurdish HDP some 79 seats and reduced the AKP’s ranks to about 258 seats – below the 276 needed for single-party majority government and far below the 330 seats Mr Erdogan needed to put constitutional changes to a referendum.

China

• US struggles for strategy to contain China’s island-building (Financial Times) China’s efforts to dredge new land on remote coral atolls in the South China Sea have left the US struggling to come up with a response. The countries in whose 200-mile limit waters China is encroaching have moved closer to the U.S. (Vietnam, Malaysia and Philippines) but Washington has no strategy for what to do and there is no concensus in the region.
• China growth data ‘overstated’ due to data error (Financial Times) China may have been inadvertently overstating its GDP by 1-2% due to the GDP deflator used. Other emerging market countries (including India) will have suffered the same error, according to a study by Capital Economics.

Mexico

• Mexico’s ruling party losing congressional seats (Al Jazeera) Despite losing seats, the PRI may gain a majority in a coalition with the Green Party, according to early returns. Mexican President Enrique Pena Nieto’s slim working majority in the lower house of Congress sat in the balance early on Monday after mid-term elections held amid widespread anger over corruption, gang violence and weak economic growth.
  

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