Written by Econintersect
Early Bird Headlines 15 November 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
The Blood Feud That Drives the Middle East (Foreign Policy) Saudi Arabia and Iran’s struggle for power is tearing apart the Arab world, even as diplomats frantically try to negotiate a truce.
Clay Williams: Steeper decline curves and growing demand make this downturn different from the 1980s (Drilling Contractor) This article argues that the protracted downturn experienced by oil in the 1980s is not likely this time around because there are steeper decline curves associated with today’s wells, lower OPEC spare capacity and greater energy demand.
U.S.
Former Citibank CEO John Reed Confesses – -Repeal Of Glass-Steagall Was A Mistake (David Stockman’s Contra Corner) DS has contributed to GEI. Hat tip to John O’Donnell. The following are excerpts from a Financial Times article by former Bank of America president John Reed (full article – We Were Wrong About Universal Banking – Financial Times):
In America, the universal bank is a relatively new creation. It is 16 years to the day since the Glass-Steagall Act, a law enacted during the Great Depression that had the effect of banning universal banks, was repealed.
Glass-Steagall stipulated that traditional, relatively low-risk banking such as taking deposits and making loans could not be undertaken by the same institutions that were involved in higher risk investment banking activities, such as funding corporate acquisitions and trading securities.
As is now clear, traditional banking attracts one kind of talent, which is entirely different from the kinds drawn towards investment banking and trading. Traditional bankers tend to be extroverts, sociable people who are focused on longer term relationships. They are, in many important respects, risk averse. Investment bankers and their traders are more short termist. They are comfortable with, and many even seek out, risk and are more focused on immediate reward. In addition, investment banking organizations tend to organize and focus on products rather than customers. This creates fundamental differences in values.
As I have reflected about the years since 1999, I think the lessons of Glass-Steagall and its repeal suggest that the universal banking model is inherently unstable and unworkable. No amount of restructuring, management change or regulation is ever likely to change that.
50 years ago the Battle at Ia Drang began our war in Vietnam. What have we learned since then? (Fabius Maximus) FM has contributed to GEI. This is an excellent history lesson, one which many have not remembered in recent years.
When will a massive earthquake, tsunami hit the Pacific Northwest? (Al Jazeera) It’s been more than 300 years since a 9.0 earthquake hit the Cascadia subduction zone. The region is living on borrowed time.
S&P Buyback Index signaled 2000 and 2007 market crashes, signaling again? (CNBC) Hat tip to Grace Timmerman via Twitter. Stocks with big buyback programs are struggling this year, and according to one technician, a similar lag has previously preceded two market crashes.
EU
NATO’s Turn to Attack (Foreign Policy) There’s a time for soft power and playing the long game. But the attacks in Paris prove the Islamic State is overdue for eradication.
France
Paris Attacks: What We Know and Don’t Know (The New York Times, MSN News) Very thorough review of the situation in Paris.
South Korea
Anti-government rally in Seoul turns violent (Al Jazeera) Police used water canons on thousands protesting South Korean President Park Geun-hye’s labor and education policies. They were protesting against Park’s plans to make the labor market in South Korea more flexible by giving employers greater leeway in dismissing workers and her decision for a government-selected panel to write the high school history textbook.
Venezuela
This Land Was Your Land (Foreign Policy) In Venezuela, land redistribution is not just an ideological imperative – it’s how the regime rewards its friends and punishes its enemies.
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