Written by John Lounsbury
Early Bird Headlines 05 September 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.
- Maybe Computers Weren’t to Blame for August’s Stock Selloff After All (Bloomberg) If your money manager is using a “quant fund strategy” then you may be the culprit (along with all the others invested with him). Risk parity – the “all-weather” investment strategy pioneered by Ray Dalio’s Bridgewater Associates – has been grabbing all sorts of attention in recent weeks, of the wrong kind. The strategy, in which funds tend to automatically adjust portfolios of bonds, stocks, and other assets in response to higher market volatility, has been blamed by some for exacerbating the recent selloff by shifting holdings into cash. But others think this is an bad rap, saying discretionary money managers, or (relatively) old-fashioned mutual fund and hedge fund managers, appear to have sold stocks to a far greater degree in recent weeks than quantitative-driven players such as risk parity managers. If this latter point is valid then all investors using money managers, mutual funds and hedge funds are to blame (except, of course, those invested in index funds which are required to remain fully invested no matter what).
- Why the U.S. Gets the Most Out of Cheap Oil (Bloomberg) Cheap oil should be good economic medicine for almost anybody who isn’t trying to sell the stuff. Yet only one country has been able to take full advantage of the 14-month collapse in the price of crude: the U.S. That is a result of the country’s relatively favorable credit after Fed money policy and fiscal deficits allowed private debt to shrink more than elsewhere in the world.
EU
- Austria, Germany to accept bused refugees (Al Jazeera) First group of refugees, exhausted from hours-long march to Western Europe, arrives in Austria. See also articles under Austria and Hungary, below.
Austria
- Austrians applaud as refugee buses arrive at border from Hungary (CNN) Austrians applauded as buses loaded with migrants pulled up on their border with Hungary early Saturday — and the exhausted passengers walked out toward them. Weary passengers clutched sleeping children and meager belongings as they exited the vehicle and walked on foot over the border to Austria. There, applause broke out among the Austrians gathered to welcome the convoys of buses with food. The Austrian Red Cross also provided medical supplies and warm blankets.
Hungary
- Hungary begins busing migrants to Austrian border (The Washington Post) After days of trying to stop the progression of refugees from Africa and the Middle East into Europe, Hungary’s leaders on Friday backed down from a confrontation with thousands of asylum-seekers, offering to bus the desperate migrants to the border with Austria.
Israel
- Egypt gas find sparks panic in Israel about Israeli reserves (Associated Press) Egypt’s new natural gas bonanza with the discovery of one of the world’s largest gas fields offshore in the Mediterranean is causing an uproar in Israel. Observers fear Israel may need to reassess everything it was thinking about a long-term energy plan that would have involved Egypt as both a customer and a partner for Israel’s off-shore gas fields. Now Egypt may have found its own independent energy solution.
Syria
- The Arab world’s wealthiest nations are doing next to nothing for Syria’s refugees (The Washington Post) In comparison to criticism of European countries for not accepting sufficient refugees from the Middle East, nothing is being said about Saudi Arabia and the wealthy Arab states along the Persian Gulf doing essentially nothing.
Saudi Arabia
- Saudi Arabia satisfied with Obama’s assurances on Iran deal (Reuters) Saudi Arabia is satisfied with assurances from U.S. President Barack Obama about the Iran nuclear deal and believes the agreement will contribute to security and stability in the Middle East, a senior Saudi official said on Friday. Saudi King Salman met with Obama at the White House on Friday.
Iraq
- Should the West Partition Iraq? (The Blaster) Thorough discussion and review of the nearly insurmountable barriers to the subdivision of Iraq into religiously defined states, usually identified as Shiastan, Sunnistan, and Kurdistan.
Russia
- Russia is condemning itself to repeat history (Reuters) Russia, flexing old imperial muscles, now sees history as a weapon in the neo-imperialist armory. President Vladimir Putin needs the past to be scrubbed clean of all possible embarrassments. That increases the likelihood that those past events will be repeated. Germany and Japan have come to terms with their past transgressions and have moved on to stable and prosperous societies. Russia is making the same path more improbable.
China
- China’s Zhou Kept Repeating the Bubble ‘Burst’ at G-20 Meeting (Bloomberg) Zhou Xiaochuan, governor of China’s central bank, couldn’t stop repeating to a G-20 gathering that a bubble in his country had “burst.” It came up about three times in his explanation Friday of what is going on with China’s stock market.
- China May Never Get Rich (Bloomberg View) Noah Smith argues that China’s property rights laws are a barrier to the country reaching the citizen wealth status of its advanced economy Asian neighbors South Korea, Japan and Taiwan.
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