Written by Econintersect
Early Bird Headlines 18 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
U.S.
Trump’s In-Laws May Put Fannie Mae, Freddie Mac in Tough Spot (Bloomberg) Jared Kushner relinquished control of his family’s multibillion-dollar real-estate business in January to eliminate conflicts of interest when he became a top White House adviser to his father-in-law, President Donald Trump. Yet Kushner Cos. has apartment buildings from New Jersey to Maryland with more than $500 million in government-backed mortgages financed by Fannie Mae and Freddie Mac. That could put officials at those agencies in an awkward spot: If Kushner Cos. applies for a new loan, or wants to refinance, would Freddie turn them down? If Kushner Cos. fails to comply with the terms of a loan, will Fannie seek to foreclose on a property owned by the president’s in-laws? David Reiss, a professor at Brooklyn Law School who has written about issues related to Fannie and Freddie, says:
“It clearly represents a conflict-of-interest because the government or the president can take actions that would benefit his family.”
Raining On The Gas Market’s Parade (Bloomberg) Natural gas and hydroelectricity compete head to head when it comes to their shares of power output in the Pacific states and recently heavy rainfall has hydroelectric facilties humming.
Pizzagate: Podesta pedo perps and Clinton’s international child sex trafficking ring exposed (Signs of the Times) Econintersect: We usually try to post links to things with what appears to be factual content. In this case we cannot make any judgment about factual content, but it is a rant of astounding proportions and suggest you read it at your own peril.
Climate doubter Pruitt takes EPA reins as Trump targets regulations (Reuters) The U.S. Senate confirmed President Donald Trump’s pick to run the Environmental Protection Agency on Friday over the objections of Democrats and environmentalists worried he will gut the agency, as the administration readies executive orders to ease regulation on drillers and miners. The installation of Scott Pruitt, who sued the agency he intends to lead more than a dozen times as Oklahoma attorney general, reinforces expectations on both sides of the political divide that America will cede its position as a leader in the global fight on climate change. Senators voted 52-46 to approve Pruitt, who was sworn in later on Friday afternoon at the White House. Only one Republican, Senator Susan Collins of Maine, voted against him. Two Democrats from energy-producing states, Joe Manchin of West Virginia and Heidi Heitkamp of North Dakota, voted for his confirmation.
Student Debt in America Has Hit a New Record (Bloomberg) Total U.S. student debt hit a record $1.31 trillion last year, the 18th consecutive year Americans’ education debt rose, according to the Federal Reserve Bank of New York. Close to one-quarter of student debtors whose bills have come due are either in default or at least 90 days late on their required monthly payments, New York Fed data suggest. Delinquencies have remained stubbornly high, despite attempts by the former Obama administration to make loan payments more affordable. The federal government owns or guarantees more than 90 percent of all student debt. See also U.S. household debt jumps to near crisis-era record -NY Fed survey (Reuters).
UK
Gilts Asleep at the Inflation Wheel (Bloomberg) U.K inflation accelerated modestly in January to 1.8% from 1.6%, data Tuesday showed. The rate was less than economists had forecast — a big drag came from the massive 4.2% monthly decline in clothing prices. So for the bond markets it’s a case of nothing to see here, please move along? Not so fast, as producers’ input prices zoomed up to a staggering 20.5% yearly pace. (Econintersect: A big driver of that rise is the 87% increase in oil YoY.)
Greece
How do you say deja vu in Greek? (Reuters) There are differences this time from two years ago when a battery of “last chance” meetings over a new bailout brought Greece to the brink of bankruptcy and default – and threatened the euro zone with its first dropout. When the ministers have their regular meeting on Monday there will be little brinkmanship or fear of failure. For one thing, a bailout is already in place – the argument this time is about compliance and future targets in order to get another tranche of money. Indeed, some euro zone officials have been briefing privately that Greece has enough money to see it through for now, even if it fails to get the next tranche of bailout funds by the July deadline for paying back as much as 7.5 billion euros of debt falling due. Econintersect: The EU “troica” started to “rescue” Greece with austerity in 2010. The country had a debt to GDP ratio of 127% at the end of 2009; today it is more than 40% higher, near 180%. Over that time GDP has declined by about the same amount (a little over 40%), so the debt situation is almost unchanged, but the Greek people are much poorer and the means to reduce the debt are significantly lowered. This is insanity.
South Korea
South Korea’s Chaebol Troubles (Bloomberg) In recent months Korean conglomerates have come under increasing criticism from ordinary South Koreans who are questioning the consolidation of wealth among a handful of families and the stifling effect they have on small businesses and startups. The influence-peddling scandal that led to the impeachment of the country’s president is also triggering calls for sweeping reforms that would end the long perceived cozy relationship between the chaebol and the government. Will the arrest of Samsung Group’s de facto head Jay Y. Lee be the final straw?
China
China says policies unaffected by Trump plan to bring factories back to U.S. (Reuters) China is closely following U.S. President Donald Trump’s plans to create more domestic jobs by encouraging U.S. companies to bring home or “reshore” their overseas production, but the government will not change its overall strategy, Industry Minister Miao Wei said on Friday. He said China would continue to encourage foreign enterprises to invest in China while at the same time encouraging domestic firms to go overseas.
China Futures Volume Surges as Brokers Climb on Looser Curbs (Bloomberg) Trading in Chinese stock-index futures almost doubled after regulators loosened curbs on the contracts, the latest sign of Beijing’s relaxed grip on markets as shares recover from their 2015 crash. More than 11,600 March contracts on the CSI 300 Index changed hands on Friday, up from the 6,333 average over the past five trading sessions. Shares of Chinese brokerages advanced on the prospect of higher commissions, with Citic Securities Co. rising 1.2% in Hong Kong. The China Financial Futures Exchange announced relaxed position limits, lower fees and reduced margin requirements on Thursday, confirming a Bloomberg News report on the plans last month.
Canada
Nine people flee U.S. border patrol to seek asylum in Canada (Reuters) Nine asylum-seekers, including four children, barely made it across the Canadian border on Friday as a U.S. border patrol officer tried to stop them and a Reuters photographer captured the scene. As a U.S. Customs and Border Patrol officer seized their passports and questioned a man in the front passenger seat of a taxi that had pulled up to the border in Champlain, New York, four adults and four young children fled the cab and ran to Royal Canadian Mounted Police on the other side. One by one they scrambled across the snowy gully separating the two countries. RCMP officers watching from the other side helped them up, lifting the younger children and asking a woman, who leaned on her fellow passenger as she walked, if she needed medical care.
