Early Headlines: China Stocks Down Again, Brazil Panics, Australian Bubble In Dumb, Refugees To “Freeze” In Place, Greek Deadlock, Russian Air Base In Syria And More

Written by John Lounsbury

Early Bird Headlines 14 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.

Global

• How did the Western Roman empire collapse? (Quora) We in the West normally consider the Fall of Rome and North Africa to the Vandals from 439 to 476 AD to mark the end of the Roman Empire. But it persisted and prospered for another thousand years in the East, capital in Constantinople. In fact, from the time of Christ forward the economic strength of the Roman Empire was in the East. The decline of the West was due as much to the economic rise of the East as to any other factor.

• The Next Genocide (The New York Times) Hat tip to Roger Erickson. The next “holocaust” may be mass starvations as food resources are concentrated in the hands of a few, compounded by varying weather patterns due to climate change. The NYT column concludes:

It is not difficult to imagine ethnic mass murder in Africa, which has already happened; or the triumph of a violent totalitarian strain of Islamism in the parched Middle East; or a Chinese play for resources in Africa or Russia or Eastern Europe that involves removing the people already living there; or a growing global ecological panic if America abandons climate science or the European Union falls apart.

Today we confront the same crucial choice between science and ideology that Germans once faced. Will we accept empirical evidence and support new energy technologies, or allow a wave of ecological panic to spread across the world?

Denying science imperils the future by summoning the ghosts of the past.

U.S.

• Is The U.S. Economy Going To Crash This Year? (Ky Trang Ho, Forbes) KTH has contributed to GEI. Perennial doom and gloom pundits abound. KTH reviews how poorly this class has performed over the past several years and reports opinions of three “experts” who cast a collective level of skepticism on habitual prognosticators.

• Poll: 43 percent of Republicans believe Obama is a Muslim (The Hill) A CNN/ORC poll out Sunday finds that while the vast majority of Americans believe, correctly, the Obama was born in the United States, there remains a solid subset of people (20%) who still believe he is foreign-born. And not too many less than half of all Republicans (43%) believe that Obama is Muslim.

EU

• The borders go up (City A.M.) A razorwire curtain has descended across the face of Europe as military forces are being martialed to manage the invading hords. The volumes of refugees has kept increasing with new records set each of the last several days. These masses will now be huddled in place as the freezing nights of autumn soon descend on their muddy confines.

UK

• Yes, Corbyn’s far left shadow chancellor is a joke – but the threat he poses is all too real (City A.M.) The joke (and the threat): Public infrastructure bank, Glass-Staegall-like banking regulation and higher taxes on top incomes.

Greece

• Candidates try to break Greek poll deadlock (City A.M.) Prime Minister Alexis Tsipras and opposition leader Vangelis Meimarakis traded blows in a TV debate last night, the outcome of which could prove decisive in a close election race. Sunday’s snap election in Greece is shaping up to be a close affair, with polls showing both main parties are neck-and-neck. One recent poll conducted by Public Issue for Avgi newspaper showed both parties’ ratings on 31%.

Syria

• Pentagon: Russia may be setting up air base in Syria (Al Jazeera) US welcomes Russian help in international efforts against ISIL, but says Moscow’s military intentions in Syria unclear. Russia has moved a steady stream of troops and equipment into Syria in moves that could presage the creation of an air base.

China

• China Stocks Post Biggest Two-Day Loss in Three Weeks on Economy (Bloomberg) China’s stocks fell for the steepest two-day loss in three weeks amid concern investors will continue to pull funds from the nation’s equities as data show a deepening economic slowdown. The Shanghai Composite Index dropped 2.6% to 3,032.68 at 1:06 p.m., led by material and industrial shares. The two-day loss now stands at 5.3%.

Australia

• Malcolm Turnbull Is Sworn In as Australia’s New Prime Minister (The Wall Street Journal) The Goldman Sachs alumnus became prime minister after replacing outgoing PM Tony Abbott as head of the Liberal Party. Econintersect: The Australian Liberal Party is conservative. Think of the connection to the laissez-faire philosophy of neo-liberal economists, a conservative political economic ideology.

• Turnbull inherits an economy battered by global headwinds (The Conversation) Reduced ideology and more pragmatism are needed, and “acknowledging the economic problems Australia is currently facing“.
  

  Overly optimistic forecasts – such as those in the last budget, which involved a doubling of productivity growth and a long-term elevation in the terms of trade – perform a disservice to good government.

  A plan to return the budget to balance needs to be based on a realistic reading of our current circumstances.

• Can PM Turnbull pop the bubble in dumb? (Macro Business) Econintersect: See preceeding article to understand what is meant by “liberalism” here.

Malcolm Turnbull is the right man to lead Australia, right now. Why? Because he is committed to the right values of economic liberalism to repair the economy and second, as well as more importantly, is capable of persuading people of what it will take to do it.

On the first point many readers will be dismayed that a Goldman Sachs alumnus has risen to the office of Prime Minister. This will feed fears that he is a member of that global school of vampire squids that seeks only to benefit a financialised economy. It may be so, only time will tell, but I council you to be patient.

Brazil

• A Panicked Brazil Promises Billions In Austerity, Does 180 On Budget After Downgrade (Zero Hedge) Hat tip to Roger Erickson and to Tom Hickey, Mike Norman Economics)

Exactly two weeks after conceding that a primary surplus was no longer in the cards after budget data in July came in meaningfully worse than expected, Brazil is scrambling to restore some semblance of confidence in the government’s ability to close a yawning budget gap by implementing austerity even as political turmoil has made embattled FinMin Joaquim Levy’s life a living hell of late.

On the heels of a painful S&P downgrade, Brazil now says it plans to enact some BRL26 billion in primary spending cuts for the 2016 budget on the way to achieving in a primary surplus that amounts to 0.7% of GDP.

• Not junk, not great (The Economist) The columnist is not buying the downgrade and thinks it will have minimal effect on Brazil. But this was written before the “panic” described in the preceding article.