Early Headlines: Bloated Fed, WikiLeaks Releases Saudi Documents, Government Costs for Student Loans Could Go Up, New Mass Extinction, China Stocks Crash and More

Early Bird Headlines 20 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

• Terror attacks increased by a third in 2014, US says (BBC News) The U.S. State Department says the number of terrorist attacks around the world rose by a third in 2014 compared with the previous year.
• A new mass extinction could be underway, researchers say (CNN) “Could be” is the operative phrase – these things are notably hard to call.
  

U.S.

• A bloated US Federal Reserve prepares to shape up (Financial Times) The balance sheet should shrink to a more normal size after seven or eight years, Econintersect: Or maybe not. The only real reason the balance sheet would have to be shrunk would be to fight inflation. We don’t know if or when that will be a problem. Could be less than 7-8 years or could be much farther away. The Bank of Japan has not “shrunk” its balance sheet after more than 20 years of growth – it now owns $1.93 trillion of Japan’s national debt (18.4%) and is adding more every month. The Fed owns about 13% of the U.S. debt.
• Student-Loan Refinancing Boom Could Cost U.S. Taxpayers Billions (Bloomberg Business) Private financing sources are refinancing student loans of successful graduates at much lower rates than the original government backed loans carry. This leaves a residual pool of debt with a much higher rate of default. Bloomberg says this could “cost taxpayers billions” and “damage the credit quality of the government’s $1.2 trillion student-loan portfolio“.
• Repealing Obamacare Would Cost $353 Billion Over Next Decade (Bloomberg Politics) The CBO says there might be some partial offsets to the costs. But the number of uninsured would rise by about 19 million in 2016 and 24 million by 2020.
  

EU

• Greek debt: Merkel urges deal before Monday summit (BBC News) German Chancellor Angela Merkel has warned there must be a deal between Greece and its creditors ahead of Monday’s emergency EU summit. Otherwise, she said, the summit would not be able to make any decision.

Greece

• EU, Greece Pursue Quiet Diplomacy to Stave Off Default (Bloomberg) European Union leaders and Greece’s creditors head into a flurry of behind-the-scenes diplomacy ahead of high-level meetings to unlock aid for the nation flirting with default. The reporter on the video says that the “relationship between Varoufakis and his counterparts is completely broken“.

Saudi Arabia

• Saudis’ war effort struggles on three fronts (Al Monitor) The kingdom is now fighting ISIS in its own eastern provinces as well as “in the Levant”, plus on the third front they face the Iranian backed Yemeni insurgents.
• WikiLeaks Says It’s Leaking Over 500,000 Saudi Documents (The New York Times) If genuine, the documents would offer a rare glimpse into the inner workings of the notoriously opaque kingdom. They might also shed light on Riyadh’s longstanding regional rivalry with Iran, its support for Syrian rebels and Egypt’s military-backed government, and its opposition to an emerging international agreement on Tehran’s nuclear program.

Iraq

• From Omar to Hussain: Why Iraqis are changing their names (Al Monitor) As Baathists and Sunnis flee ISIS to move into Shiite controlled areas, many are changing their names to avoid harassment, persecution and, is some cases, death. Arab names have sectarian affiliations and in Shiite territories it is often prudent to have a Shiite affiliated name.

China

• Has bell rung on China’s bull run? (Reuters) Shanghai stocks were down 6% Friday and 13% for the week.

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