Written by Econintersect
Early Bird Headlines 10 February 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
Asia stocks drop as bank concerns smoulder, yen stands tall (Reuters) Asian stocks fell on Wednesday on growing concerns about the health of the world’s banks, particularly in Europe, pushing investors into safer assets such as the yen, which stood near a 15-month high versus the dollar. Spreadbetters expected the pessimism to carry over into Europe, forecasting a slightly lower open for Britain’s FTSE .FTSE, Germany’s DAX .GDAXI and France’s CAC .FCHI. Japan’s Nikkei .N225, which tumbled more than 5% Tuesday, suffered another bruising session and slid to a 16-month low. The Nikkei was last down 4% with falling bank shares and a stronger yen continuing to take a toll on sentiment. Australian stocks touched a 2-1/2-year trough and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 0.4%. The Chinese markets are closed this week for the Lunar New Year holidays.
Immigration helps poor countries more than foreign aid (City A.M.) Foreign aid should slashed and replaced with a more liberal immigration system, a Westminster think tank has said today. In a new report the Adam Smith Institute (ASI) said allowing people to move to the UK from poor countries to work could boost their income 20 to 30 times. The report also argues that “doling out billions in foreign aid risks propping up corrupt kleptocratic governments while having little impact on development“. Money sent back to home countries by foreign workers dwarfs state aid budgets and is better targeted, the ASI said.
Latest rumour of gravitational waves is probably true this time (New Scientist) Gravitational waves are ripples in space-time predicted by Einstein’s theory of general relativity. It tells us that massive objects like black holes and neutron stars warp space-time around themselves, and when two such behemoths collide, the distortions ripple outward at the speed of light. Although we are pretty confident this happens, the waves themselves have never been directly measured. That may be about to change. For months, rumours of the detection of a gravitational wave signal by LIGO, the Laser Interferometer Gravitational-Wave Observatory, have spread on Twitter. With a press conference planned for Thursday, 11 February, they are building to a crescendo.
U.S.
Supreme Court blocks Obama carbon emissions plan (Al Jazeera) A divided Supreme Court agreed Tuesday to halt enforcement of President Barack Obama’s sweeping plan to address climate change until after legal challenges are resolved. The surprise move is a blow to the administration and a victory for the coalition of 27 mostly Republican-led states and industry opponents that call the regulations “an unprecedented power grab.” By temporarily freezing the rule the high court’s order signals that opponents have made a strong argument against the plan, which aims to stave off the worst predicted impacts of climate change by reducing carbon dioxide emissions at existing power plants by about one-third by 2030. A federal appeals court last month refused to put it on hold. The ruling Tuesday means that the Obama plan will not be resolved until after he leaves office. If a Republican is elected president then the entire question will likely become moot.
Outsiders sweep to victory in New Hampshire (CNN) Donald Trump and Bernie Sanders won their respective New Hampshire primaries by huge margins. But that was expected. The emergence of John Kasich ahead of the rest of the Republican field was perhaps the most significant development. Econintersect: With the savior image of Marco Rubio now tarnished, will Kasich become the great Republican establishment hope?
New Hampshire primary election results (The Washington Post) Latent results, delegate counts, maps, fund raising, and history on a graphically rich page.
ISIS leader admits to being funded by the US (Australian National Review) Hat tip to Rob Carter. This reports cites evidence that U.S. funds intended to support anti-Assad rebels has been finding its way into ISIS hands. Econintersect: We have seen other reports from credible sources that U.S. weaponry has fallen into ISIS hands, both in Syria and in Iraq. But several other stories we have read on this website appear to have no credible basis and we caution that information obtained here should be carefully researched.
UK
London rents grow at slowest pace in nearly two years (City A.M.) Greater London rents rose at their slowest rate in almost two years in January, according to research released today by HomeLet, suggesting that prices in the capital may have reached their peak. But, even though London rent increases may have slowed, but rentsy are still nearly twice the average for the rest of the UK.
In the EU debate we should be wary of apocalyptic predictions (City A.M.) In the past week or so, CitiBank and Goldman Sachs have come out in what is seemingly a coordinated effort to ignite a wave of fear about what Brexit might mean for the UK economy. The author here is a Conservative writer who questions apocalypse.
Germany
Deutsche mulls multibillion bond buyback (Financial Times) Deutsche Bank is considering buying back several billion euros of its debt, as Germany’s biggest bank steps up efforts to shore up the tumbling value of its securities against the backdrop of a broader rout of financial stocks.
Investors aren’t convinced that Deutsche Bank is “rock-solid” (City A.M.) Deutsche Bank’s share price fell below its 2009 low yesterday (Tuesday, after the German lender moved to reassure both staff and investors that it was “absolutely rock solid”. Last night the bank contacted investors to say it had “sufficent” reserves to pay for its AT1 securities after shares dropped almost 10% over concerns about its capital buffers, especially in light of ongoing global volatility. Last week Deutsche Bank revealed a full-year loss of €6.8 billion (£5.1 billion). Monday morning, co-chief executive John Cryan published an open letter to staff, saying that they should tell clients: “Deutsche Bank remains absolutely rock-solid, given our strong capital and risk position“. Here is what investors think:
Morocco
World’s largest concentrated solar plant switches on in the Sahara (CNN) Morocco has switched on what will be the world’s largest concentrated solar power plant. When fully operational in 2018 it will produce enough electricity for more than 1 million homes. But, unlike PV solar (uses photo-voltaic cells), this plant will produce electricity all night long and on stormy day. The solar plant, called the Noor complex, uses concentrating solar power (CSP) which is more expensive to install than the widely used photo-voltaic panels, but unlike them, enables the storage of energy for nights and cloudy days. Mirrors focus the sun’s light and heat up a liquid, which, when mixed with water, reaches around 400 degree Celsius. The steam produced from this process drives a turbine and generates electrical power.
India
Man killed by meteorite in India, say government officials (Fox News) Authorities in India say that a small object that plunged from the sky and killed a man on Saturday was a meteorite. The Tamil Nadu government said that the meteorite crashed into an engineering college in Vellore in Southern India, killing one man and injuring three others.
Japan
Japan Bond Yield Slides Below Zero and Stocks Fall (The New York Times) On Tuesday, the yield on Japanese 10-year bonds, the benchmark of government borrowing, dropped to zero for the first time. They quickly fell into negative territory, meaning some investors were buying bonds despite knowing that if they held them until maturity, they would come away with less money than they paid. Thus Japan joins Switzerland and some other European nations with negative yields on government debt.
Brazil
Kenya could pull out of Rio Olympics due to Zika concerns (CNBC) Kenya could pull out of this year’s Rio Olympics due to concerns over the Zika virus outbreak in Brazil, the head of Kenya’s Olympics committee said on Tuesday. Kenya boasts some of the best middle and long-distance runners in the world and the East African nation topped the medals table at the 2015 World athletics championships. Meanwhile the United States Olympic Committee told U.S. sports federations that athletes and staff concerned for their health over the Zika virus should consider not going to the Rio 2016 Olympic Games in August.
