Early Bird Headlines 16 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
- Subsidies at 16 Times Carbon Prices Stymie Pollution Curbs (Bloomberg) Carbon permit markets can’t work because fossil fuel subidies ($115 per metric ton of CO2) simply overwhelm the $7 average cost of a permit in the carbon markets.
- To Solve Liquidity Drought, Investors Try to be Future(s) Perfect (The Wall Street Journal) Volumes in futures markets have risen in recent years as U.S. Treasury volumes have declined. From January 2011 when the ratio of futures/cash was just above 0.50, the ratio reacjed as high 0.75 in late 2014. Treasury securities are traditionally one of the most liquid “cash” markets but fewer are being issued every year (declining deficits) and the Fed is holding a couple of trillion dollars in Treasuries on its balance sheet (so they are not available for market use).
- Asia-Pacific Wealth Overtakes Europe’s (Bloomberg) The Asia-Pacific region recorded the fastest growth in wealth last year, with China alone minting a million new millionaires .
- Pope calls for action on climate change in draft encyclical (Reuters) Pope Francis makes an urgent call for protection of the planet and repeats his view that global warming is mostly man-made in his keenly awaited encyclical, according to a draft published by an Italian magazine on Monday.
U.S.
- U.S. Will Still Have Double China’s Per Capita Income by 2061 (Bloomberg) A study by the Federal Reserve Bank of Minneapolis found China’s income per person will grow by two to three times the U.S. pace over the next half century. But that pace will still leave income levels in China at half those of the U.S., underscoring the gap between the world’s two biggest economies.
- House Republicans and White House Try to Revive Trade Bill Stalled by Democrats (The New York Times) Congressional Republican leaders and White House officials on Monday explored ways to resurrect trade legislation that stalled last week when House Democrats objected and dealt President Obama an embarrassing defeat at the hands of his own party.
EU
- Exclusive: China to extend economic diplomacy to EU infrastructure fund (Reuters) China will pledge a multi-billion dollar investment in Europe’s new infrastructure fund at a summit on June 29 in Brussels, according to a draft communique seen by Reuters – Beijing’s latest round of checkbook diplomacy to win greater influence.
- Mediterranean migrants: EU to discuss quota plan (BBC News) The EU is still struggling to determine how to handle tens of thousands of refugees from Africa and the Middle East.
Greece
- Greece, creditors dig in after debt talks founder (Reuters) Greece and its creditors hardened their stances on Monday after the collapse of talks aimed at preventing a default and possible euro exit, prompting Germany’s EU commissioner to say the time had come to prepare for a “state of emergency”.
- Defiant Tsipras accuses creditors of ‘pillaging’ Greece (Financial Times) Alexis Tsipras, the Greek prime minister, vowed not to give in to demands made by his country’s international creditors, accusing them of “pillaging” Greece for the past five years and insisting it was now up to them to propose a new rescue plan to save Athens from bankruptcy. For a comparison of what Greece has put forward and what the creditors have proposed see Some of the Greek proposals for saving money (Financial Times).
China
- China has adequate fiscal space to accommodate local gov’ts debt risks: Moody’s (Reuters) China has adequate fiscal headroom to absorb local government contingent liabilities, a recent report by Moody’s Investors Service said. As higher levels of local government off-budget investment financing pose a challenge to China’s fiscal position, such debt levels are relatively moderate and can be absorbed over time by the sovereign’s balance sheet, said Moody’s.
- Real Cost of Chinese Stocks Dwarfs 2007 Bubble (Bloomberg) Chinese stocks are getting a lot more expensive than the benchmark Shanghai Composite Index suggests – 94% of Chinese stocks trade at higher valuations than the index, a consequence of its heavy weighting toward low-priced banks.
- China says about to finish some land reclamation in South China Sea (Reuters) Have they proven their point – that if they want to build islands in the South China sea they can do it?
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