Written by John Lounsbury
Early Bird Headlines 11 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
How the rivalry between Russians and Turks shaped the world (The Washington Post) There is a long, profound history of unease between Russian and Turkish rulers. During the Cold War, Turkey was a heavily armed NATO bulwark in the shadow of the Soviet empire. And well before the advent of the U.S.S.R. and the modern Turkish republic, the jockeying between Russians and Turks had a huge impact on the political fate of a vast sweep of Europe and the Middle East. In the 18th and 19th centuries, the expansionist Russian empire and the Ottomans fought myriad wars. They largely resulted in Ottoman setbacks, with the Russians wresting control of the northern rim of the Black Sea and chipping away at Ottoman domains in Eastern Europe and the Balkans. The Crimean War, a bloody, brutal conflict in the 1850s, brought in an alliance of European powers in defense of the Ottomans and saw the continent’s first chilling encounter with the horrors of large-scale trench warfare. Econintersect: Will we soon see another Charge of the Light Brigade?
JPMorgan’s Chang Says Fed Rate Hike Would Help Emerging Markets (Bloomberg) A U.S. interest-rate boost would help emerging markets by reducing uncertainty that’s kept investors from taking on risk there, according to JPMorgan Chase & Co.’s global head of research, Joyce Chang.
Central bank cavalry can no longer save the world (Reuters) A report by the Group of Thirty, an international body led by former European Central Bank chief Jean-Claude Trichet, warned on Saturday that zero rates and money printing were not sufficient to revive economic growth and risked becoming semi-permanent measures. The report warned of “debt deflation” and falling asset prices.
U.S.
Flat Wages Add to Allure of the ‘Anti-Politician’ in Reliably Red States (The New York Times) It is an odd mismatch – flat wages seem to matter a lot to Republican voters, but Republican candidates are all but mum on the subject. Econintersect: Is the conservative electorate about to give up on the supply-side idea that rich people create jobs?
Larry Summers Cannot Save The Fed And Misspoke About Fed Capabilities (Talk Markets)
Larry Summers has spoken once again about secular stagnation on a Business Insider article entitled Larry Summers: the Global Economy Is in Serious Danger. Summers makes an excellent case for why things cannot remain as they are. He is right in saying that stimulus in the form of fiscal efforts is likely needed to expand the US economy.
But, there are two points that were contained in the article that make me not trust him anymore than I trusted him when I wrote the article Summers and Roubini Talk Negative Interest Rates, Sound Logic but Uncharted Waters.
First of all, I had mentioned that more than anything, Summers worries about and cares about the banks first. Every motive he has, to the best of my observation, revolves around what is good for the banks at that moment. It may not be a long term fix he has in mind, but he is bank first at least in the now.
So, it is no surprise that he says we should have fiscal stimulus to really put the economy on a path towards lift off. He may really want this for benefit to society, but he really mostly wants this because he says there is a shortage of treasury bonds. He says what others have been saying, that bond markets are telling us that there are not enough bonds. He wants more fiscal spending and resulting debt, in order to produce more bonds! That is for the banks, clearinghouses, and derivatives. That creation is for the financial system most of all. Summers doesn’t fear increased government debt as much as he fears the shortages of bonds.
Israel
Israeli jets hit targets in Gaza Strip (BBC News) Israel says its jets have hit two targets in the Gaza Strip. The targets were “Hamas weapon manufacturing facilities”, the Israeli military said, adding the strikes were in response to two rockets fired from Gaza into southern Israel. A woman and her young daughter in a nearby house were killed during the air raid, Palestinian officials said.
Turkey
Is civil war coming to Turkey? (Brookings) In the last few of weeks, not a day has gone by without reports of military personnel and police officers killed by Kurdistan Worker’s Party (PKK) attacks, civilians trapped in towns under curfew, and of Turkish Air Force raids on PKK hold-outs. Since the suicide bombing in Suruç on July 20, there have been at least 132 documented deaths of Turkish security personnel and hundreds of PKK fighters and civilians caught in the cross-fire. See next article.
At least 95 killed in twin bombings near train station in Turkey’s capital (CNN) Two powerful bombs believed carried by suicide bombers exploded at a peace rally near the main train station in Ankara on Saturday morning, killing at least 95 people and wounding 246 others in the deadliest attack in the Turkish capital in recent memory. Most of the victims were attending a lunchtime demonstration calling for an end to the renewed conflict between the Kurdistan Workers’ Party (PKK) and the Turkish government.
Afghanistan
Loud blast heard in Afghan capital, casualties feared (Reuters) A loud explosion rocked the center of the Afghan capital of Kabul on Sunday, an apparent suicide attack against a convoy of foreign troops, a security official said.
Australia
Chinese buyers account for 2 per cent of Australian home sales: new research (Domain) New research has cast doubt on claims that foreign investment is pushing up Australian house prices, indicating offshore Chinese purchases totaled just 2% of all transactions in 2014. The conclusion drawn in this article is that the housing bubble in Australia is largely a home-grown phenomenon. See also next article.
Canada
In North America’s Costliest City, Rich Chinese Take the Blame (Bloomberg) Vancouver, with its C$2.23 million ($1.7 million) average price tag for a detached home is playing an unusual role in the national election to be held Oct. 19. British Columbia is the only place where all four national parties are competitive — the Conservatives, Liberals, New Democrats and Greens — and, given the tightness of the race, its choices could spell the difference. As of now, the New Democrats and Liberals look likely to take some seats away from the Conservatives in the region, according to poll aggregator ThreeHundredEight.com. A factor in the election is the very high cost of housing in Vancouver and a significant driving force in the price rise has been the influx of Chinese wealth. So, indirectly, the Chinese might have a significant influence on next weekends Canadian national election. A similar assertion has been made about Australian home prices, but see previous article.
>>>>> Scroll down to view and make comments
