Written by Econintersect
Early Bird Headlines 02 February 2017
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 slip as Trump woes raise safe haven bids, dollar weaken (CNBC) Asian stocks came under pressure on Thursday as investors flooded into safe haven plays as the administration of President Donald Trump moves on fronts as diverse as Iran, global trade, immigration and the Supreme Court less than two weeks after taking office. While markets initially responded positively to a Trump presidency in hopes of pro-growth policies like tax cuts, several of his executive orders, such as the indefinite travel ban on visitors from seven Muslim-majority countries, have raised concerns. Spot gold, usually a safe-haven play, gained 0.58% to $1,216.22 per ounce. During Asian trade, U.S. crude fell 0.46% to $53.63 a barrel, as Brent crude dropped 0.35% to $56.60 after rising nearly 2% on Wednesday trading in the U.S.
Dollar Index Continues to Fall (Bloomberg) The Wednesday low has already been taken out.
U.S.
Republicans change rules so Democrats cannot block controversial Trump Cabinet picks (Independent) The Senate committee has approved President Donald Trump’s picks for Health and Treasury secretaries after majority Republicans suspended the panel’s rules. Republicans faced a second day of sitting in a half-empty hearing chamber as Democrats launched a boycott of Mr Trump’s cabinet nominees. The rule they suspended required at least one Democrat to be present for votes, amid the escalation in partisan tensions in the new Congress.
Red, blue states split over Trump’s ‘sanctuary city’ order (Associated Press) President Donald Trump’s promised crackdown on “sanctuary cities” has triggered divergent actions from blue and red states, revealing the deep national divide on immigration as some move to follow his order and others break with the U.S. government to protect immigrants in the country illegally. California, the nation’s largest state, is pushing for a statewide sanctuary that would prohibit law enforcement from cooperating with federal immigration authorities, while a fellow U.S.-Mexico border state, Texas, is seeking to withhold funding from cities with the policies.
Trump and Trade: Extreme Tactics in Search of a Point (The New York Times) The argument of this Op Ed is that there appears to be no apparent strategy or objective in the actions of the new president with regard to trade and undesirable outcomes from the resulting confusion are all too possible. Some excerpts:
John Mearsheimer, a noted political scientist at the University of Chicago, has long believed that China’s rise will not be peaceful. Tensions with the United States will simmer as the Asian giant expands its influence.
…
On Nov. 8, the odds of war with China got shorter.
War would be a uniquely bad idea. China, after all, has nuclear weapons. But perhaps what troubles the professor most is that Mr. Trump’s stand seems pointless. “One can justify provocative moves if they serve an important strategic goal,” Mr. Mearsheimer told me. “It is not clear what purpose these moves are designed to serve.”
And yet pointlessness is coming to define American foreign policy. Mr. Trump lacks an end game.
Security experts in the United States are baffled by Mr. Trump’s executive order abruptly barring entry by citizens from seven mostly Muslim countries, noting that it will ultimately put the security of the United States at risk by sending a uniform message of hostility to 1.6 billion followers of Islam.
How Deals Like Nafta Have Affected U.S. Trade (The New York Times) President Trump has said he would dismantle the North American Free Trade Agreement, or NAFTA, with Canada and Mexico. He has also taken aim at China for what he insists are unfair trade practices, threatening punitive tariffs. But American manufacturers depend heavily on a global supply chain, especially from Canada, China and Mexico, which leaves them vulnerable in a trade war. Total value of U.S. trade (imports plus exports) in 2015 (last year we have data) was $3.8 trillion. This is not a trifling sum.
UK
May faces Tory revolt after MPs back Brexit (The Times) Tory MPs are threatening to rebel over Brexit unless Theresa May guarantees the right of EU citizens to stay in Britain. MPs approved the first stage of the legislation to begin the Brexit process last night by 498 votes to 114, a government majority of 384. Forty-seven Labour MPs defied Jeremy Corbyn to vote against the bill, while two more shadow cabinet members resigned. One Conservative, Ken Clarke, voted against the legislation. Downing Street has been warned that a series of Tory rebellions are building before votes in the Commons next week on individual aspects of Brexit.
Ireland
Soros’s Foundation Fights Irish Bankers Over Home Foreclosures (Bloomberg) War crimes, attacks on media freedom in former communist states and prejudice against Europe’s Muslims. Now mortgages in Ireland have made it onto the ignominious list for George Soros’s campaigners. The billionaire investor’s Open Society Foundations is opening a new front in the fight against evictions as the legacy of one of the worst real-estate market crashes in history continues to haunt Ireland. About one in 10 Irish mortgages is in arrears, or 4.5 billion euros ($4.9 billion) of missed payments, and foreclosures tripled over the last five years.
Iraq
WTF Tweet Number One (Twitter) It is hard for us to figure out what the president is trying to accomplish here. Just communicate with his supporters? Looking for suggested courses of action? If the latter, we replied (second Twitter clip below). Click on either Twitter clip to view at that site.
Iran
US puts Iran ‘on notice’ after missile test, won’t elaborate (Associated Press) The White House issued a cryptic warning Wednesday that the U.S. will act against Iran unless it stops testing ballistic missiles and supporting Houthi rebels in Yemen, but declined to say what retaliatory actions the U.S. would pursue. Michael Flynn, President Donald Trump’s national security adviser, forcefully denounced Iran’s behavior in his first public remarks since Trump took office. He accused Iran of threatening U.S. allies and spreading instability throughout the Middle East while faulting the Obama administration for doing too little to stop the Islamic Republic. Flynn said from the White House podium:
“As of today, we are officially putting Iran on notice.”
India
Indian government survey says universal basic income could combat poverty (Independent) The Indian government has endorsed universal basic income (UBI) in an annual report. UBI is a “powerful idea” and would be more effective at combating poverty than existing state benefits, according to the country’s 2016-2017 Economic Survey. However if it were implemented now political challenges could “derail” UBI before it got off the ground, the survey found, suggesting the country is not yet ready for the scheme.
India Shares Rise to Three-Month High as Budget Keeps Tax Breaks (Bloomberg) Indian shares climbed after the government’s federal budget maintained the status-quo on tax breaks for equity investments, allaying investor concerns. The benchmark Sensex had its biggest budget-day gain since at least 2006 and closed at the highest level since October. Eighteen of the 30 Sensex members advanced as Maruti Suzuki India Ltd., India’s biggest carmaker by sales, rose 4.8% to a record closing price. Tata Consultancy Services Ltd. dropped 2.8%, leading a second day of decline for software exporters, on concerns that the change in U.S. work visa rules will increase wage costs and narrow profit margins.
Australia
No ‘G’day, mate’: On call with Australian prime minister, Trump badgers and brags (The Washington Post) Australian Prime Minister Malcolm Turnbull refused to comment. See also next item.
It should have been one of the most congenial calls for the new commander in chief – a conversation with the leader of Australia, one of America’s staunchest allies, at the end of a triumphant week.
Instead, President Trump blasted Australian Prime Minister Malcolm Turnbull over a refuÂgee agreement and boasted about the magnitude of his electoral college win, according to senior U.S. officials briefed on the Saturday exchange. Then, 25 minutes into what was expected to be an hour-long call, Trump abruptly ended it.
At one point, Trump informed Turnbull that he had spoken with four other world leaders that day – including Russian President VladiÂmir Putin – and that “this was the worst call by far.”
Another WTF Tweet (Twitter) The phone call between Trunbull and Trump took place on 28 January. Trump is not tweeting about the refugee issue until 10:55pm 01 February? Is it something he didn’t know about until the phone call was held? Is our president trying to change what he said on the phone call with a tweet? If not, what’s the point. If yes, it doubles the WTF.
Clean energy subsidies could be used to build new coal power plants, Scott Morrison says (abc.net.au) Australian Treasurer Scott Morrison will not rule out using money set aside in the Clean Energy Finance Corporation (CEFC) to fund a new generation of coal-fired power stations. Mr. Morrison’s statement came after Prime Minister Malcolm Turnbull claimed Australia had an obligation to be at the forefront of coal technology. Econintersect: But there seems to be a “post-truth” regime in Oz – see next article. Morrison said:
“Coal is a big part of the future under a Coalition Government and clearly that’s not the case under the alternative. It’s the Clean Energy Finance Corporation – it’s not the wind energy finance corporation.”
Electricity prices could double with new coal-fired stations, energy experts say (abc.net.au) Power prices for consumers could double, not fall, if new coal-fired power stations are built, according to energy experts. Speaking at the National Press Club yesterday, Prime Minister Malcolm Turnbull said clean coal power stations will play a part in ensuring lower electricity prices under a Coalition Government. However, key manufacturing and business lobby the Australian Industry Group and energy experts strongly disagree that coal would be cheaper or more reliable, for several reasons. Econintersect: Does it sound like the coal industry might have some special influence with the Turnbull government?
Mexico
Trump to Mexico: I might deploy troops into your country to take care of ‘bad hombres’ (CNBC) President Donald Trump threatened in a phone call with his Mexican counterpart to send U.S. troops to stop “bad hombres down there” unless the Mexican military does more to control them itself, according to an excerpt of a transcript of the conversation obtained by The Associated Press. The excerpt of the call did not make clear who exactly Trump considered “bad hombres“, drug cartels, immigrants, or both, or the tone and context of the remark, made in a Friday morning (last week) phone call between the leaders. It also did not contain Mexican President Enrique Pena Nieto’s response.
