Written by John Lounsbury
Early Bird Headlines 22 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
- Asia shares rise, dollar firm on Fed, ECB views (Reuters) Asian shares rose on Tuesday and the dollar held steady as U.S. markets bounced back and the European Central Bank said it was prepared to ease monetary policy further. European markets are seen steady, with financial spread betters expecting Britain’s FTSE 100 .FTSE and France’s CAC 40 .FCHI to open flat and Germany’s DAX .GDAXI to start the day up 0.1%. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.4% at 0039 EDT. Australia advanced 0.3% and South Korea .KS11 almost 1%, but most southeast Asian markets retreated. Japanese markets are shut through Wednesday.
- The world’s superpowers store an enormous stockpile of oil in secure caverns and tankers (BBC News) A whole host of countries have poured billions of dollars into developing vast oil storage facilities and more are on the way. But what are these reserves – and why would anyone want to bury oil back into the ground in the first place? The strategy is an outgrowth of the 1973 Arab oil embargo when much of the world suffered from extreme shortages as a result. The U.S. has 700 million barrels of oil stored underground in salt caverns in the U.S. SPR (Strategic Petroleum Reserve); Japan has 500 million barrels stored mostly above ground; and China is building similar reserves.
- US pharmaceutical company defends 5,000% price increase (BBC News) Turing Pharmaceuticals acquired the rights to Daraprim, a 62-year-old medication used by Aids patients, in August. Turing then increased the price of the drug from $13.50 (£8.70) to $750. The production cost of the medication is about $1 per dose. The justification offered is that the additional income will fund new drug research.
U.S.
- Coal Under Siege Offers `Red Hot’ Bargains to Willing Buyers (Bloomberg) Mines that produce 80% of America’s coal are either for sale for a song or in bankruptcy. And sometimes the song is so bad it is worth exactly nothing – see next article.
- Mines in America’s Coal Country Just Sold for a Total of Nothing (Bloomberg) Booth Energy Group’s Cambrian Coal Corp. paid $0 up front for a Teco Energy Inc. unit that controls a collection of surface and underground mines, a company statement Monday shows. Teco said it may receive $60 million should coal prices reach “certain levels” over the next five years. Bargain-basement coal deals are proliferating as producers bail out of an industry stuck in its worst downturn in decades. Miners are facing a slowing global economy, escalating competition from cheap natural gas and mounting environmental and mining regulations. In February, West Virginia businessman Jim Justice paid Russia’s OAO Mechel$5 million and assumed some debt to buy back operations that he had sold to the company in 2009 for $568 million.
UK
- Osborne Puts It All On Red (City A.M.) Chancellor George Osborne wants a tighter connection between Shanghai and London. Unfazed by August’s market shocks, and the authoritarian response from Beijing, Osborne will say at the Shanghai Stock Exchange today:
“Whatever the headlines, regardless of the challenges, we shouldn’t be running away from China.”
- Lifetime earnings point to much greater level of equality in Britain (City A.M.) A new study says that when lifetime earnings are measured there is much less income inequality than looking at single year data. Econintersect: There are two possible reasons for this: (1) The working poor toil for wages many more years, on average, than do those with much higher incomes; and (2) some very high incomes are collected only for a relatively small number of years. For example, someone who earns £20,000 per annum for 50 years has the same lifetime income as someone who earns £100,000 per annum for 10 years or £1 million for 1 year. The article discusses implications for public policy:
The finding has important implications for public policy. In a single year, 64 per cent of people pay more in tax than they receive in benefits, yet over the course of a lifetime, 93 per cent pay more in tax than they receive in benefits.
“The existing tax and benefit system, assessed largely against circumstances in the current year, doesn’t do especially well at redistributing resources towards the lifetime poor. Targeting lifetime redistribution more effectively may require new policies that take longer-run circumstances into account,” said Jonathan Shaw, a senior IFS research economist.
Germany
- Can Germany Beat the U.S. to the Industrial Internet? (Bloomberg) Germany wants to lead the world into the age of internet-run factories. But there may be serious competition from U.S. Silicon Valley tech firms like Apple or Google.
Greece
- Greece’s banks could still tip the fragile country into disaster (City A.M.) Capital controls in place to prevent capital flight which would bring down Greek banks are crippling the economy, according to this article. The very actions necessary to prevent the banks from collapsing will result in increased business failures which will cause bank failures from bad debt. Is saving the Greek banks a sisyphean task?
Libya
- UN envoy announces landmark peace plan for Libya (Al Jazeera) Bernardino Leon says text finalized at marathon talks in Morocco aimed at solving Libya’s crisis.
China
- China’s Slowdown Doesn’t Look So Bad in Data From Alibaba, Baidu (Bloomberg) Data culled from China’s most-used search engine, biggest online outlet and main bank-card network are signaling stabilization in the nation’s economy. Three alternative indicators suggest less of a deceleration in the world’s second-largest economy, and reduced risk of a hard landing.
- China turns to Islamic finance to expand economic clout (Reuters) Islamic finance is gaining prominence as a channel for China to expand its economic influence abroad as banks strengthen ties with Muslim-majority countries and Chinese companies start to tap offshore pools of Islamic funds. With a Muslim population of about 20 million, China has little reason to develop Islamic banking at home. But there are powerful reasons for it to get involved in the sector overseas. China wants to build stronger trade ties with Asian countries under its “One Belt, One Road” strategy to rebuild Silk Road trade links with Asia and Europe. The network will include the world’s main centers of Islamic finance, the Middle East and Southeast Asia, where sharia-compliant assets account for as much as a quarter of total banking assets.
>>>>> Scroll down to view and make comments
