Written by Econintersect
Early Bird Headlines 16 November 2016
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 higher as investors eye dollar direction (CNBC) Asian equities were mostly higher Wednesday, following the stronger finish on Wall Street and a rise in oil prices overnight. Oil prices rallied nearly 6% Tuesday on renewed hopes of an Organization of Petroleum Exporting Countries (OPEC) output cut deal. During Asian trade, U.S. crude futures were up 0.55% at $46.05 a barrel and Brent futures climbed 0.66% to $47.26.
Trump and Brexit: are these really revolutions on the right? (The Conversation) By dismissing the votes in June and November as simple “dissatisfaction” the political elites face a long walk in the wilderness. Similarly, if Trump and the Brexiteers ignore the specific wants and needs of their supporters, instead favoring their own political agenda, they will find that their support will ebb away as quickly as it did for their political opponents. Democracy cannot be dismissed by anyone because you don’t like the result, and that applies to Trump and Brexit backers just as much as anyone else.
Era of fossil fuels is far from over and Paris agreement is not enough: IEA (CNBC) The world’s reliance on fossil fuels is far from over, despite investments in renewables and international deals to fight climate change, the International Energy Agency said Wednesday. Though international agreements are expected to cut energy-related carbon emissions from an average of 650 million tons per year since 2000 to around 150 million tons per year in 2040, the IEA said that current efforts aren’t strong enough. The IEA said in its new world energy report:
“While this (reduction) is a significant achievement, it is far from enough to avoid the worst impact of climate change as it would only limit the rise in average global temperatures to 2.7 (degrees Celsius) by 2100.”
U.S.
Goldman President Cohn Says Risk Is Rising From Stronger Dollar (Bloomberg) The strengthening U.S. dollar poses a growing threat to U.S. manufacturers by making imported products more competitive, Goldman Sachs Group Inc. President Gary Cohn said. The dollar, which rose to a five-month high against the yen Tuesday, will be particularly troublesome for U.S. automakers by making foreign cars cheaper for U.S. consumers, Cohn said in an interview on CNBC.
Overcapacity, competition to weigh on U.S. airfares in 2017: report (Reuters) U.S. airfares are expected to fall in 2017 amid overcapacity and stiff competition between budget carriers and legacy airlines, according to an American Express report on the travel industry. Short-haul economy fares are expected to drop 3%, while long-haul business class fares may see a 1.5% decline in the United States, the American Express Global Business Travel report said. However, higher ancillary fees will help offset lower fares in North America as airlines continue to look for new revenue sources, the report added. For months, lower fuel costs have allowed airlines to add flights that would have been unprofitable when oil prices were high. With seats for sale growing faster than the pool of passengers to buy them, fares for U.S. flights have fallen.
3 NYC luxury buildings to drop Trump name (CNN) Three Trump Place rental apartment buildings along the Hudson River will be renamed with just their street addresses — 140, 160 and 180 Riverside Blvd. — sometime this week. The move comes after a group of residents started a petition before the election to take the name down. The petition was started by Linda Gottlieb, along with her husband and a neighbor. She said:
“It’s a small victory but it feels good. But how can anything take the sting out of the horror we’re in?” … “it doesn’t get bluer than the Upper West Side of Manhattan.”
Ted Cruz Considered by Trump for Attorney General (Bloomberg) President-elect Donald Trump is considering nominating Texas Senator Ted Cruz to serve as U.S. attorney general, according to a person familiar with the matter. Cruz, 45, was at Trump Tower in New York on Tuesday. When approached by reporters on his way out, Cruz said the election was a mandate for change but didn’t say he was under consideration for a job. Cruz unsuccessfully sought the Republican presidential nomination. He and Trump were at odds during the primary, viciously attacking one another. Trump nicknamed Cruz “Lyin’ Ted.” Cruz didn’t endorse Trump during a speech at the Republican National Convention in Cleveland. In September, relations between the two men seemed to improve when Cruz said he would vote for Trump.
Fed Rate-Hike Odds Approach 100% in Anticipation of Trumpenomics (Bloomberg) Analysts spent early November warning a Trump victory in the U.S. presidential election would make the Federal Reserve less likely to raise interest rates. What happened instead is that it made a December increase almost a certainty. Traders assign about a 94% probability, the highest level this year, to a Fed boost at its final meeting for the year on Dec. 13-14, futures contracts indicate. Trump’s spending plans are driving speculation the Fed will pick up its pace of rate increases as inflation expectations climb.
Glenn Beck: The alt-right is truly terrifying (CNN) Nationally syndicated radio host Glenn Beck said Tuesday that the alt-right movement is “truly terrifying“, adding that while leading Breitbart News, Stephen Bannon gave a voice to white nationalists. See also Documentary Of The Week: Stephen Bannon Explains America’s Problems
UK
‘Chaos’ and confusion over plans for Brexit (The Times) Brexit poses an “existential threat” to operations in some Whitehall departments, according to warnings highlighted by a leading think tank. The Institute for Government said that Theresa May’s “secretive approach” was hampering preparations to leave the EU. The think tank, which has close ties to the civil service, cautioned that the Brexit process appeared “chaotic and dysfunctional” to some outsiders.
Google’s still committed to the UK after Brexit promising major investment (City A.M.) Google remains committed to the UK the tech company’s top boss has said, with its headcount set to nearly double in the coming years as it goes ahead with plans for a new £1 billion headquarters.
Greece
Greece economy rallies while Germany stutters but restraint still required (The Conversation) Finally, some good news from Greece. It appears that the long-running contraction of the country’s economy has finally halted and there is some hope it has begun to enjoy modest growth. There is no reason for too much elation just yet as the Greek public finances remain problematic. Even after three bailouts the Greek state labours under a heavy debt burden that will remain well over 170% of GDP for the foreseeable future.
Saudi Arabia
Saudi Arabia warns Trump on blocking oil imports (CNBC) Saudi Arabia has warned Donald Trump that the incoming U.S. president will risk the health of his country’s economy if he acts on his election promises to block oil imports. In a sign of the difficulties Mr Trump faces over his campaign pledges to create “complete American energy independence” from “our foes and the oil cartels“, Saudi Arabia’s energy minister pointedly reminded the president-elect that the U.S. “benefits more than anybody else from global free trade“, adding, “energy is the lifeblood of the global economy“.
South Korea
South Korea’s president is facing an uncertain future of protest and scrutiny (The Conversation) The government there has been led by President Park Geun-hye for the past four years. A leading member of the conservative Saenuri party, she also happens to be the daughter of Park Chung-hee, the head of the country’s Cold War military dictatorship. In stark contrast to her father, Park is considered a rather demure figure, reliant on her aides to formulate and implement policy. But her government was suddenly thrown into a full-blown crisis that has brought about a total paralysis of her presidency. In October 2016 files on a discarded laptop revealed that a friend of the president (who held no public office) had been given access to confidential policy documents and briefings, provided political advice, and edited her speeches. The friend and confidante in question was Choi Soon-sil, who also happens to be the daughter of another famous South Korean man – cult leader Choi Tae-min, founder of the Church of Eternal Life.
China
Another Financial Warning Sign Is Flashing in China (Bloomberg) Add another credit indicator to the financial warning signs flashing in China. The adjusted loan-to-deposit ratio, which includes a range of off-balance sheet items and is an indicator of the banking system’s ability to weather stress, climbed to 80% as of June 30, according to S&P Global Ratings. For some smaller lenders, the ratio has already topped 100%, S&P estimates. S&P’s adjusted measure is rising much faster than the official loan-to-deposit ratio as banks pile into off-balance sheet lending, sidestepping government efforts to rein in credit. At the current pace, overall credit could surpass deposits on an adjusted basis within a few years — a level that would give China little leeway to stave off financial turmoil, S&P says.
