Written by Econintersect
Early Bird Headlines 27 January 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
Asian stocks struggle as oil falters, China weakens (Reuters) Asian stocks held near the day’s lows on Wednesday as a relapse in oil prices and fresh drops in Chinese stocks made sentiment even more fragile before a U.S. Federal Reserve policy statement due later. European shares are expected to have a mixed start. Spreadbetters are expecting Britain’s FTSE and France’s CAC 40 to to open flat to slightly higher and Germany’s DAX to open broadly unchanged.
The World’s Favorite New Tax Haven Is the United States (Bloomberg) They are calling the U.S. the new Switzerland. Shifting money from offshore secrecy havens to the U.S. has become a brisk business for Rothschild & Co. One Turkish client is moving assets from the Bahamas to Nevada.
U.S.
One dead as FBI arrests Oregon occupation leader and others (Reuters) The leader of an armed occupation at a federal wildlife refuge in Oregon and others were arrested on Tuesday after shots were fired during a traffic stop, leaving one person dead and another wounded, the FBI said. Protesters were still occupying the remote Malheur National Wildlife Refuge in eastern Oregon after leader Ammon Bundy’s arrest and the Federal Bureau of Investigation was setting up a perimeter with the hopes of a peaceful resolution, a law enforcement official told Reuters. A total of eight people were arrested in two states. The takeover at Malheur that started Jan. 2 is the latest flare-up in the so-called Sagebrush Rebellion, a decades-old conflict over the U.S. government’s control of millions acres of land in the West. Several media outlets, including the Oregonian and CNN, reported that law enforcement sources said LaVoy Finicum was killed. Finicum, a rancher who acted as a spokesman for the occupiers, told NBC News earlier this month that he would rather die than be arrested.
Wall Street Declares War on Bernie Sanders (William K. Black, New Economic Perspectives) WKB contributes to GEI. Class warfare is coming out of the shadows.
Trump pulls out of Republican debate in Iowa (Reuters) U.S. Republican presidential hopeful Donald Trump withdrew on Tuesday from a debate with party rivals this week out of anger at host Fox News (FOXA.O), leaving the last encounter before Iowa’s pivotal nominating contest without the front-runner. During the news conference before he addressed a large crowd in Marshalltown, Iowa, Trump expressed irritation that Fox News planned to leave in place as a moderator the anchor Megyn Kelly, whose questioning of Trump at a debate last August angered him.
Tim Cook: We’re Seeing ‘Extreme Conditions Unlike Anything We’ve Experienced Before’ in the Global Economy (Bloomberg) What’s keeping the CEO of a company that just reported the most profitable quarter in history up at night? For Apple Inc.’s Tim Cook, it’s the “economic challenges all over the world“. How bad is it? See Apple Forecasts First Sales Drop Since 2003 on iPhone Slowdown (Bloomberg).
EU
German Wage Moderation and the Eurozone Crisis: A Critical Analysis (INET) The author argues that a serious mistake has been made in trying to solve a financial crisis by exercising variables within the real economy while not imposing remediation on the financial sector.
India
India less vulnerable to external shocks: S&P (The Hindu) Indian economy is less vulnerable to external shocks as it is mainly driven by household consumption and government spending, and not dependent on hot money which can move out quickly, Standard & Poor’s Rating Services said today. The US-based rating agency expects the current account deficit (CAD), which is the difference between inflow and outflow of foreign exchange, to remain at a modest level of 1.4% at the end of current fiscal and would continue at similar level till 2018.
South Korea
S. Korea’s GDP grows 2.6% for full 2015, slowest in three years (Pulse) South Korea’s economy expanded 2.6% last year, the slowest pace since 2.3% growth in 2012 due to the double whammy of sluggish domestic and external demand, said the central bank Tuesday.
S. Korean exports losing competitive edge against Chinese goods: report (Yonhap News Agency) South Korean products are losing their competitiveness against Chinese goods that could reduce their outbound shipments down the road, a central bank report said Tuesday. According to the report by the Bank of Korea, the competitiveness of South Korean products somewhat improved over the 2005-2013 period, but that the rate of improvement in Chinese goods, partly measured in terms of global market share, outpaced that of South Korean products. South Korean exports to China are especially vulnerable.
China
Wider China-Hong Kong Discrepancy Revives Fake Trade Doubts (Bloomberg) The gap between China’s reported exports to Hong Kong and the shipments registered by the territory widened in December, suggesting currency-market swings may have spurred a fresh round of fake trade invoicing. It has been a recurring suspicion that China’s exporters inflate actual trade numbers to cover money laundering operations.
China stats bureau chief said no basis for yuan depreciation (The Business Times) China’s statistics bureau said on Tuesday that there was no basis for yuan depreciation given China’s solid economic fundamentals. Wang Baoan, chief of the National Bureau of Statistics, told a briefing that stronger dollar and downward pressure in China’s economy contributed to recent moves in yuan exchange rate. He said that capital outflows would strengthen China’s international position and there was no reason to worry about stock market volatility.
The massive reversal in China’s capital flows in one chart! (Twitter)
The massive reversal in #China‘s capital flows in one chart! via @sobata416 pic.twitter.com/ikUcPjzBKD
– jeroen blokland (@jsblokland) January 26, 2016
Taiwan
Taiwan to punish nine banks on yuan derivative business (The Business Times) Taiwan’s Financial Supervisory Commission (FSC) said it will punish nine banks for inappropriately selling yuan derivative product to clients, in its latest effort to prevent further defaults. Local banks have been forced to realise the losses stemming from client-traded target redemption forward (TRF). The yuan’s sharp depreciation this month has turned against their clients as they had bet the currency would rise. Banks included Citibank, Standard Chartered, Cathay Bank, CTBC Bank, Taipei Fubon Bank and Bank Sinopac will be punished, the FSC said in a statement late on Tuesday, without offering details of the punishment.
TIER downgrades GDP growth (Taipei Times) The Taiwan Institute of Economic Research (TIER, å°ç£ç¶“æ¿Ÿç ”ç©¶é™¢) yesterday cut its forecast for GDP growth this year from 1.84% to 1.53%, saying the nation’s export-reliant economy has yet to hit rock bottom, as indicated by disappointing bellwethers. Exports might expand a mild 2.02% this year from last year, while imports could increase 2.6%, the TIER report said.