Early Headlines: EU Politics Trumped Economics, US Heroin Deaths Quadruple, China Stock Crash Continues, IMF Warns Fed and More

Early Bird Headlines 08 July 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.

U.S.

• IMF: U.S. Economy at Risk of Stalling Next Year if Fed Raises Rates Prematurely (The Wall Street Journal) The IMF (International Monetary Fund), an expert at avoiding economic collapse (sarcasm regarding the pickle in Greece), has repeated its warning to the Fed not to raise rates this year.
• How Los Angeles Is Becoming a ‘Third World’ City (The New York Times) The insularity of the NYT shows in this piece (although it is apparently written by an LA native). The “Hoovervilles” of LA maybe more numerous than some other U.S. cities but they are a reflection of what is happening, to some degree, across the country.
  
• Heroin deaths have quadrupled in the past decade (The Washington Post) Primed by widespread use of prescription opioid pain-killers, heroin addiction and the rate of fatal overdoses have increased rapidly over the past decade, touching parts of society that previously were relatively unscathed, the Centers for Disease Control and Prevention reported Tuesday.

EU

• Greece, where European politics trumped economics (The Globe and Mail) Perhaps the current EU governments are loath to bail out Syriza, the radical left-wing Greek government, for fear that such a move may encourage the election of similar radical regimes in Europe.
• Greek austerity vote forces Europe to confront bigger issues than economics (Minn Post) Cooler heads eventually will prevail and something substantive will occur. When it does, regardless of whether Greece remains in the euro zone, the deal it makes with its European Union partners will not only be about the financial questions that are driving everyone mad. It probably will take into account geopolitical issues like refugees and relations with Russia, and also how it plays in Madrid.

Germany

• Thomas Piketty has wise words on German hypocrisy and how to solve the Greek debt crisis (Quartz) In a forthright interview with newspaper Die Zeit, Piketty pricks the balloon of Germany’s moral superiority and argues for a major debt conference to clear the continent of its debts. According to Piketty, Germany has a history filled with hypocrisy: They demand debts be paid to them but have never paid their own debts.
  

Greece

• Euro zone gives Greece until Sunday for debt deal (Reuters) Euro zone members have given Greece until the end of the week to come up with a proposal for sweeping reforms in return for loans that will keep the country from crashing out of Europe’s currency bloc and into economic ruin.
• More Than Economics at Stake in Greek Crisis (Barron’s) The Greek crisis now has the potential of morphing from an economic and financial quagmire to a humanitarian and geopolitical one. If all else fails, Russia or even China could step forward to bail out the leftist Athens regime instead of Europe and the West, putting this NATO member more closely aligned with these potential communist benefactors.
• Greek Crisis Explained With Game Theory (Hedge SPA, LinkedIn) It appears as if both sides are foolishly driving the Crisis into a potential lose-lose outcome. However, a game theory analysis may explain how both sides are “stuck” in the current equilibrium.
• Behind the scenes at the IMF on a fateful day in the Greek crisis (CIGI) Hat tip to Edward Harrison, Twitter.

What Brazil told the IMF in 2010 about Greek debt deflation, Euro bank bailout https://t.co/UCcQqfsr4Z pic.twitter.com/GR2Fd9i07Y

— Edward Harrison (@edwardnh) July 8, 2015

China

• China stocks slump again, more companies halt trading; Hong Kong also hit (Reuters) Wednesday morning trading on China was frantic. The panic in mainland markets is rippling across the border, knocking the Hong Kong market down more than 4%. Overseas-listed Chinese companies also slumped. The Shanghai Composite Index opened 7% lower, but erased some of the losses by midday, down 3.9%. The CSI300 Index of China’s biggest companies dropped 4.8%. On Wednesday, more than 500 China-listed firms announced trading halts, bringing the total number to around 1,300, almost half of China’s roughly 2,800 “A share” listed companies.

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