Written by John Lounsbury
Early Bird Headlines 26 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
- Emerging market debt crisis could be worse than the US subprime lending catastrophe (Arabian Money) The strength of the U.S. dollar versus major emerging market currencies right now threatens another debt crisis on the scale of the US subprime lending debacle that brought us the global financial crisis in autumn 2008, or even something worse. Emerging markets – principally the BRICS (Brazil, Russia, India, China and South Africa) – have borrowed incredibly large amounts of money denominated in US dollars over the past few years, with super-low interest rates tempting them to think that this was a no-can-lose position. Now they are making payments when their own currency is as much as 1/2 (or even less) the value per U.S. dollar than when they borrowed the money. The interest may be low (but effectively double what it was) but raising the principal for repayment is very dear.
U.S.
- Puerto Rico’s Bonds Overshadow Pension Fund Poised to Go Broke (Bloomberg) Puerto Rico’s $72 billion debt burden overshadows another financial threat to the Caribbean island: a government workers pension fund that’s set to go broke in five years. As Governor Alejandro Garcia Padilla prepares to push for bondholders to renegotiate debts he says the commonwealth can’t afford, he’s also contending with an estimated $30 billion shortfall in the Employees Retirement System. The pension, which covers 119,975 employees, as of June 2014 had just 0.7% of the assets needed to pay all the benefits that had been promised, a level unheard of among U.S. states.
- What one college discovered when it stopped accepting SAT/ACT scores (The Washington Post) Two major things: (1) they were dropped from the U.S. News & World Report College Rankings list; and (2) the quality of students admitted went up. But before they did this Hampshire College (Massachusetts) was one of the top ranked institutions for sending graduates on to post-graduate schools, so this is not some fly-by-night operation.
- Junk-Debt Investors Fight for Scraps as U.S. Shale Rout Deepens (Bloomberg) Investors in $158.2 million of Goodrich Petroleum Corp.’s debt agreed to take 47 cents on the dollar in exchange for stock warrants for some note holders and a lien on Goodrich’s oil acreage, according to a company statement today. That puts them second in line if the Houston-based company liquidates its assets in bankruptcy and pushes the remaining holders of $116.8 million in original bonds to the back of the pack.
Switzerland
- VW models sale halted in Switzerland (BBC News) Switzerland has temporarily banned the sale of Volkswagen (VW) diesel-engine models which could have devices capable of tricking emission tests. It said the move could affect 180,000 cars – not yet sold or registered – in the Euro5 emission category. This comes after VW, the biggest carmaker in the world, admitted cheating on emissions tests in the US.
Syria
- Syria crisis: US-trained rebels give equipment to al-Qaeda affiliate (BBC News) A group of US-trained Syrian rebels has handed over their vehicles and ammunition to fighters linked to al-Qaeda, the US military has admitted. It said one rebel unit had surrendered six pick-up trucks and ammunition to the al-Nusra Front this week – apparently to gain safe passage.
- U.S. to make new diplomatic push on Syria, talk to Iran: officials (Reuters) U.S. Secretary of State John Kerry will try to launch a new initiative for a political solution in Syria during meetings in New York in the next week, starting with talks with his Iranian counterpart on Saturday. After backing a United Nations peace process that has failed to end the Syrian conflict, Kerry will test several ideas for a new approach during the United Nations General Assembly in New York in the coming days.
Ukraine
- Ukraine crisis: Kiev bans Russian airlines’ flights (BBC News) Ukraine has said it will ban Russian airlines from flying into the country as part of sanctions over Moscow’s support for rebels in the east. Kiev said the measures would take effect on 25 October and would include major Russian airlines Aeroflot and Transaero. Russian transit overflights will also be banned if the planes carry military personnel or dual-use goods.
- Ukraine and West condemn rebel ban on foreign aid groups (Reuters) Ukraine and some of its Western allies condemned on Friday a decision by pro-Russian separatists to ban most foreign aid organizations from parts of rebel-held territory, saying the move violated the Minsk peace agreement. On Thursday, rebel officials of the so-called Luhansk People’s Republic (LNR) said they had refused accreditation to 10 out of 11 foreign humanitarian agencies, ordering them to leave LNR territory by Sept. 25. They said the reasons for the decision were “justified” without giving further details
Russia
- Flight MH17: Russia could face legal action over downing of jet over Ukraine (The Guardian) Countries whose nationals lost their lives when the Malaysia Airlines flight went down are gathering at the UN general assembly to discuss their options. Australia’s foreign minister, Julie Bishop, will meet with her counterparts from Belgium, Malaysia, the Netherlands and Ukraine on Tuesday (New York time) during the annual United Nations general assembly meeting. One of the proposals is for a tribunal similar to that established to prosecute Libyan suspects over the 1988 bombing of a Pan Am flight over Scotland. A report by the Dutch led-investigation team, set to be published on 13 October, is understood to include evidence the plane was brought down by a Russian-made Buk missile fired from separatist territory in eastern Ukraine. Russia has denied any involvement but in July used its veto power at the UN to block a resolution that would have formed a tribunal to bring the perpetrators to justice.
India
- ‘Digital India’ lags behind in world internet race (BBC News) India appears to be falling behind in the global race for mobile internet and broadband penetration, the latest UN figures show. India’s ranking on broadband penetration dropped to 131 in 2014 – lower by six places since the last year – according to a Unesco report covering 189 countries and titled “The State of Broadband 2015“. On mobile broadband subscriptions, India also slipped significantly as it stood at 155 in 2014 compared to 113 in 2013, far below neighbouring Sri Lanka and Nepal, which were ranked 126 and 115 respectively. The country has also climbed down by five places to 80 among 133 developing countries, despite some progress in terms of individual use of the internet, the report says.
China
- China Vows to Curb Commercial Hacking in Agreement With U.S. (Bloomberg) The U.S. and China announced agreement on broad anti-hacking principles aimed at stopping the theft of corporate trade secrets though President Barack Obama pointedly said he has not ruled out invoking sanctions for violators. After a morning of meetings with Chinese President Xi Jinping, Obama said the two governments pledged they won’t condone hacking to steal commercial secrets, a first step toward resolving one of the biggest disputes between the two countries.
Colombia
- Colombia on the Brink of Peace (Bloomberg) There are still months of negotiations ahead by for the first time in almost two decades the Colombian government and the Revolutionary Armed Forces of Colombia (FARC), the most fearsome guerrilla band in the Americas, are sitting at the same table.
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