Written by Econintersect
Early Bird Headlines 15 March 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 markets fall as traders turn cautious after recent rally (CNBC) Asia markets lost ground Tuesday, tracking U.S. equities’ weak performance overnight, with some analysts saying traders are turning more cautious after the recent rally.
If Oil Prices Have Hit Bottom, the Top May Not Be Too Far Away (Bloomberg) The top of the oil market may be closer than you think. With Brent futures having bounced back to $40 a barrel, the International Energy Agency sees “light at the end of the tunnel,” and Goldman Sachs Group Inc. is spotting “green shoots.” Even so, many analysts warn that, like the failed rally last year, this recovery will sputter once prices go high enough to keep U.S. crude flowing and shale output is `extremely responsive’ to price gains.
Oil Falls From Three-Month High as Iran Refuses to Join Freeze (Bloomberg) Oil dropped from a three-month high as Iran said it would raise output to pre-sanctions levels before joining talks to freeze production. Iranian output surged 187,000 barrels a day in February, according to OPEC.
A universal basic income is an old idea with modern appeal (Financial Times) The author of this article says that “developed countries have to reform their welfare states to adapt to technological upheavals“. He quotes Andy Stern, author of a book coming out this year (Raising the Floor: How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream):
“We built a whole social infrastructure based on the concept of a job, and that concept does not work any more.”
U.S.
The Real Reason Middle America Should Be Angry (Washington Monthly) The author claims that the decline of many U.S. cities and smaller communities is not the action of the free market, but just the opposite. He asserts that the removal of the anti-trust and anti-monopoly regulations enacted starting over 100 years ago and continuing until the 1960s has destroyed the free market and created a situation where “economic opportunity isn’t disbursed but consolidated, in which fewer cities – and fewer Americans – get a fair chance to compete“.
Vermont legislature on track to be first in U.S. to legalize marijuana (Reuters) Liberal-leaning Vermont could become the first U.S. state to legalize recreational marijuana use through legislation, rather than by voter initiative, in a move that advocates for the drug say could speed its acceptance across the nation. State representatives this month are set to take up a bill passed by the state Senate in February that would allow adults over 21 to purchase and smoke the drug beginning in 2018.
UK
Humiliation: Former energy secretary slams government (City A.M.) Former energy secretary under Margaret Thatcher, Lord David Howell, has ripped into the government’s energy policy, saying that Britain has fallen into a “humiliating” position. He says that fossil fuels are being phased out before nuclear and green energy will be able to fill the gap.
What the UK will wake up to if it votes for Brexit (maybe) (City A.M.) Berenberg has issued a stark warning of what the UK will face the day after voting for a Brexit in the 23 June referendum. The short-term impact could be serious, the group’s economists have warned, with a “sharp rise in uncertainty” likely to damage both business and household confidence. Possible events: A recession; higher BoE rates to support the pound; David Cameron leaves office; increased likelihood that Scotland would leave the UK; and reduced trade.
Germany
Merkel firm on refugee stance (The Nation) German Chancellor Angela Merkel stood firm Monday on her liberal refugee policy, despite a drubbing in regional elections described as a “debacle” in which disgruntled voters turned to the anti-migrant AfD. Merkel’s Christian Democratic Union (CDU) was at the receiving end of voter anger, suffering defeats in two out of three states in Sunday’s elections – including traditional stronghold Baden-Wuerttemberg. The stinging result for the conservative CDU was accompanied by a surge in backing for the right-wing populist Alternative for Germany (AfD), which had sparked outrage by suggesting police may have to shoot at migrants to stop them entering the country.
German politics enters an age of fragmentation (Financial Times) The anti-refugee and anti-establishment Alternative für Deutschland‘s strong performance in three states which voted on Sunday – Baden-Wurttemberg, Rhineland-Palatinate and Saxony-Anhalt – was the best by any populist rightwing movement since 1945. Germany has become susceptible to a virus that has gripped France, the Netherlands, Sweden and Britain, but the historical parallel to the rise of the Nazis in the 1930s is misplaced. Postwar Germany has overcome its fascist past, according to this article.
Syria
Putin’s Shock Plan to Pull Troops From Syria Puts Pressure on Assad (Bloomberg) Russia said it’s started preparations to return military forces from Syria after President Vladimir Putin ordered the withdrawal in a surprise move that puts pressure on the regime of Bashar al-Assad and opposition groups to reach a peace deal at talks in Geneva.
China
Why Is Change So Hard for China? (Bloomberg) Because the government is fixated on control and appearances. Top officials may say they want to slash the overcapacity that’s dragging down the economy, but subordinates know the best way to get ahead is by meeting growth targets. Provinces that depend on steel, shipbuilding and coal companies for public revenue are already pushing back against plans to shrink those industries. Entrepreneurs don’t want to admit failure any more than officials do. Even in good years, the U.S. economy sees something in the range of 50,000 bankruptcies annually. China had barely 41,000 in the decade between 2003 and 2012, according to one study. Such numbers hardly suggest a system that actively addresses problems.
North Korea
Kim Jong Un reveals plan for 5th North Korea nuclear bomb test (First Post) Hat tip to Rob Carter. Kim Jong Un has announced plans for a fifth North Korean nuclear bomb test, less than two weeks after the UN Security Council passed new sanctions over Pyongyang’s recent tests of nuclear and ballistic missile technology.
Brazil
Former Brazil president Lula ‘to become minister’ (BBC News) Former Brazilian leader Luiz Inacio Lula da Silva has accepted a key ministerial role in President Dilma Rousseff’s government, media reports say. Members of the governing Workers’ Party say his appointment will strengthen her beleaguered administration. In becoming a minister, Lula will also have some legal protection. Last week, prosecutors requested his arrest in a money laundering inquiry over a luxury sea-front penthouse. The popular former president has denied any wrongdoing and says the claims are politically motivated.
