Written by John Lounsbury
Early Bird Headlines 09 October 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
Global stocks eye biggest rally in four years on Fed relief (Reuters) World stocks rose on Friday, putting them on course for their biggest weekly rise in four years after minutes of the Federal Reserve’s last policy meeting showed the U.S. central bank is in no rush to raise interest rates. Investors’ relief that the Fed probably won’t move until some time next year saw them take on more risk across the board, with commodities and emerging market assets also recovering some of their recent heavy losses. Brent crude oil was headed for its biggest rise since 2009.
Fed awaiting evidence global chill not knocking U.S. off track (Reuters) The U.S. Federal Reserve thought the economy was close to warranting an interest rate hike in September but policymakers wanted firmer evidence a global economic slowdown was not knocking America off course. For detailed analysis see GEI‘s 17 September 2015 FOMC Meeting Minutes: The Deer In the Headlights – When To Raise the Federal Funds Rate.
Most major economies weakening, eurozone stable: OECD (The Business Times) Growth seems to be easing off in most of the world’s major economies, including the United States and more notably in China, the Paris-based Organisation for Economic Co-operation and Development said on Thursday. Among bright spots, the euro zone as a whole remained stable at 100.7, with Germany, its largest economy, also steady at 100.0. France’s reading rose to 100.8 from 100.7 and Italy’s to 101.0 from 100.9.
Global US dollar recession creates ill wind for emerging markets (Financial Times) IMF is forecasting the largest annual shrinkage in world growth, measured in US dollars, since records began in 1960
U.S.
Closing a Hospital, and Fearing for the Future (The New York Times) A total of 58 rural hospitals have closed in the United States since 2010, according to one research program, and many more could soon join the list because of declining reimbursements, growing regulatory burdens and shrinking rural populations that result in an older, sicker pool of patients. See 57 Rural Hospital Closures: January 2010 – Present (University of North Carolina). One more hospital just closed after the UNC report was released.
Republicans in chaos as favorite quits speaker race (Reuters) Republicans in Washington faced a sudden leadership vacuum when the front-runner to take control of the House of Representatives, Kevin McCarthy, dropped out of the race. See also Tea Party wave that lifted Republicans threatens to engulf them.
EU
No place left to die on Greece’s Lesbos for refugees lost at sea (Reuters) Buried beneath low mounds of earth, facing Mecca, lay Afghan, Iraqi and Syrian refugees who drowned this summer in the Aegean Sea trying to reach Europe in flimsy inflatable boats. Now there is no room left in the narrow plot of land in the pauper’s section of St. Panteleimon cemetery. No one can say where the next bodies will be buried.
A new exodus? Europe fears more Syrians will start leaving Turkey (Al Jazeera) The EU has pledged $1.1 billion to help Ankara cope with the flood of refugees, but some say it’s too little, too late.
UK
City jobs hit a peak: Financial services push employment boom to all time high (City A.M.) Financial services are powering a dramatic boom in jobs growth, with employment in the City now at an all time high, according to a major new report. At the end of June this year there were a record 729,000 people employed in financial and professional services in London, a 2.2% increase over 2014
India
Coffee Day eyes $1 billion valuation with biggest Indian IPO in 3 years (The Economic Times) India’s Coffee Day Enterprises Ltd, which runs the nation’s biggest coffee chain, said it is eyeing a valuation of as much as 67.5 billion rupees ($1.04 billion) based on the issue price of its initial public offering next week that will be the biggest in the local market in nearly three years.
Sensex rallies over 300 points; Nifty reclaims 8200 levels (The Economic Times) The S&P BSE Sensex surged over 300 points in trade on Friday tracking Asian markets, which were trading higher after US Federal Reserve minutes confirmed that the central bank is in no hurry to hike interest rates this year. The Sensex faded a little before the market close. As can be seen in the chart below from Investing.com the market has recovered to the middle of the gap down in August. This is a critical juncture – gaps are filled in most counter moves and then become support going forward. If the current rally stalls here and pulls back that is generally a very bearish sign. Click on chart for latest live streaming data from Investing.com.
This lake in India is straight out of a horror movie (news.com.au) Hat tips to Roger Erickson and Sanjeev Kulkarni. Chemical contamination is so bad on Bellandur Lake in Bangalore, India that it foams over onto surrounding land and roadways. It is also polluted with sewage so the foam smells terrible as well. From time to time the lake actually self-ignites.
China
A new study has warned that a third of all men currently under the age of 20 in China will eventually die prematurely if they do not give up smoking.
The research, published in The Lancet medical journal, says two-thirds of men in China now start to smoke before 20.
Around half of those men will die from the habit, it concludes.
The scientists conducted two nationwide studies, 15 years apart, covering hundreds of thousands of people.
In 2010, around one million people in China died from tobacco usage. But researchers say that if current trends continue, that will double to two million people – mostly men – dying every year by 2030, making it a “growing epidemic of premature death”.
If You Thought China’s Equity Bubble Was Scary, Check Out Bonds (Bloomberg) Hat tip to John O’Donnell. As a rout in Chinese stocks this year erased $5 trillion of value, investors fled for safety in the nation’s red-hot corporate bond market. They may have just moved from one bubble to another. So says Commerzbank AG, which puts the chance of a crash by year-end at 20 percent, up from almost zero in June. One of the growing risk factors is increasing investor leveraging to buy more bonds. Deleveraging often doesn’t unwind in an orderly fashion.
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