Written by Econintersect
Early Bird Headlines 16 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
Asian shares extend gains as investor fears ease (Reuters) Asian shares extended gains on Tuesday as a combination of stabilizing Chinese markets, rebounding oil prices and solid U.S. consumption data prompted investors to look for bargains after last week’s rout. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 1.1%, with mainland China shares advancing 2.7% to three-week highs, helped by a surge in China’s bank lending to a record high. Japan’s Nikkei .N225 rose 0.2% after a 7.2% climb on Monday, recovering a sizable part of its 11% slump last week – its biggest since 2008. European shares were also expected to build on Monday’s strong start, with spreadbetters seeing both Germany’s and France’s .FCHI rising up to 0.7% and Britain’s FTSE .FTSE 0.4%.
Goldman Channels FDR’s `Nothing to Fear’ With Sell Gold Call (Bloomberg) Goldman Sachs Group Inc. says it’s time to bet against gold as bullion’s rally to the highest level in a year isn’t justified, backing the bearish call with a comment from a former U.S. leader in a report that was issued, appropriately enough, on Presidents’ Day. Prices tumbled. Gold will slump back to $1,100 an ounce in three months and $1,000 an ounce in 12 months, analysts including Jeffrey Currie and Max Layton wrote in the report that was dated Feb. 15 and received on Tuesday.
Live: Oil gains as Russia to meet OPEC members (CNBC) Rumors of a Saudi – Russian meeting are hot right know with Russia’s oil minister Alexander Valentinovich Novak now in Doha, according to Reuters.
U.S.
Texas judge disclosed details about Scalia’s health (Associated Press) Presidio County Judge Cinderela Guevara told The Associated Press on Monday she spoke with Scalia’s doctor on the day he was found dead in his room at a remote Texas ranch. She said the doctor told her that Scalia had a history of heart trouble, high blood pressure and was considered too weak to undergo surgery for a recent shoulder injury. Those details are seemingly at odds with recollections of friends who described Scalia as his usual, happy self during the days leading up to his death. News that the 79-year-old justice was in declining health may come as a surprise to the public, but unlike presidents, the high court’s members don’t provide regular health disclosures.
EU
The Never-Ending Story: Europe’s Banks Face a Frightening Future (Bloomberg) Since the fall of Lehman Brothers in September 2008, eight of Europe’s biggest banks have announced layoffs adding up to about 100,000 employees, paid $63 billion in legal penalties, and lost $420 billion in market value. In 2015, Deutsche Bank lost a record €6.8 billion ($7.6 billion). In mid-February the industry suffered an epic selloff as subzero interest rates, China’s slowdown, the oil crash, and looming regulatory and litigation costs triggered an outbreak of fear not seen since the fall of 2008. Just last year new CEOs took over at Barclays, Credit Suisse, Deutsche Bank, and Standard Chartered. Now they have to find a way to prosper in a marketplace that’s being reshaped simultaneously by strict new capital regulations and myriad financial technology startups that don’t have to abide by them.
Yanis Varoufakis: Are we experiencing the beginning of the end of the EU? (Yanis Varoufakis, Quora) A struggling banking system and the breakdown of free movement thoughout the EU (Schengen) are just two examples of the disintegration of European Union. Varoufakis feels the only salvation will be the implementation of a democratic gevernance to replace the current “authoritarianism and brute political will“.
UK
Shortage of homes means two thirds of Londoners will be renting by 2025, says PwC (City A.M.) London is on its way to becoming a city of renters, ending a century-long trend towards homeownership, new research reveals this morning. Over 60% of Londoners will be renting by 2025, up from 54% today, financial services giant PwC said. Only 41% of Londoners had to rent in 2000. Price rises for homes has far outpaced incomes. Asking prices for London homes rose by 10.5% in January compared with the same month last year.
“High prices are making homes in the capital unaffordable to most and could undo a century long trend towards rising home ownership rates – in just 25 years the city has been transformed to one where rental is becoming the norm – especially for younger people.”
David Cameron’s EU deal is – in legal terms – not worth the paper it’s printed on (City A.M.) Cameron has obtained promised changes but no new treaty implementing them. The European Court of Justice (ECJ) has made clear that the EU Treaties can only be changed by a new EU Treaty. That means the “promises” are not worth the paper they are written on.
EU referendum: Former Greek finance minister Yanis Varoufakis says UK will only vote to stay in the EU out of fear of the unknown (City A.M.) While he hopes it is not, former Greek finance minister Yanis Varoufakis fears that “we may be experiencing the European Union’s disintegration“. Writing in Quora, Varoufakis said that on a political level the disintegration of Europe is seen everywhere, citing the British referendum as one example. See article about this under EU heading.
Greece
Yanis Varoufakis: How is the Greek economy doing today? (Yanis Varoufakis, Quora) Two graphs below: 1) As posted by Vroufakis and 2) as annotated by Econintersect.
“Terribly, heartbreakingly badly.”
Syria
Deadly airstrikes destroy three hospitals, school in Syria (Al Jazeera) Attacks, blamed on Russian jets, leaves tens of thousands without access to medical services in war-torn Idlib province. At least 23 civilians were killed when missiles hit three hospitals and a school in rebel-held Syrian towns on Monday, residents said, as Russian-backed Syrian troops intensified their push toward the rebel stronghold of Aleppo. Fourteen people were killed in the town of Azaz near the Turkish border when missiles slammed into a school sheltering families fleeing the offensive and the children’s hospital
Russia
Trader Boast of 700% Gain Vouches for Ruble Rodeo Kremlin Hates (Bloomberg) Since the ruble was unshackled from a managed corridor in November 2014, it has become the world’s most volatile currency after Argentina’s peso as speculators seize on the selloff in oil, Russia’s biggest export. Price swings underscore the trouble central banks have controlling their currencies in the months following China’s shock devaluation of the yuan in August. A gauge of currency volatility climbed to the highest in four years last week.
China
China’s Stocks Rally Most This Month as New Lending Hits Record (Bloomberg) China’s stocks rose the most in two weeks, led by technology and industrial companies, after data showed the nation’s banks doled out a record amount of loans in January. The Shanghai Composite Index climbed 3% to 2,829.10 at 1:06 p.m., paring its decline this year to 20 percent. PetroChina Co. advanced 2%. New yuan lending jumped to 2.51 trillion yuan ($390 billion) last month, beating analyst estimates. Hong Kong’s Hang Seng China Enterprises Index extended Monday’s advance. The yuan weakened after having its biggest gain in more than a decade.
South Korea
S.Korea president takes tough stand on N.Korea (Al Jazeera) South Korean President Park Geun-hye pledged on Tuesday further “strong” measures against North Korea, after suspending operations at a jointly run industrial park as punishment for the North’s recent long-range rocket launch and nuclear test. North Korea’s recent actions, and threats to conduct more “extreme acts of provocation,” demonstrate that it has no interest in peace, Park said in a speech to parliament.
North Korea
Kim’s Nuclear Pursuit to Hasten Collapse of Regime, Park Warns (Bloomberg) Without international action, Kim can develop nuclear missiles, according to South Korean President Park Geun Hye. She told parliament that the world needs to stop North Korea’s “reckless run“:
“From now, the government will take powerful and practical measures to make North Korea’s regime come to the painful realization that nuclear development will not help it survive but only quicken its regime collapse.”
