Written by Econintersect
Early Bird Headlines 01 March 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 mostly higher as traders listen for clues in Trump’s address to US Congress (CNBC) Asia markets were mostly higher Wednesday morning, shrugging off modest U.S. losses from Tuesday, as traders focused on President Donald Trump’s address to the U.S. Congress. Trump is giving his first address to a joint session of Congress, where the market will be listening closely for clues or details regarding the administration’s plans on tax reform, deregulation and other proposed policies. The dollar index climbed to 101.39 at 10:20 a.m. HK/SIN on Wednesday, up from levels near 100.8 earlier in the week. West Texas Intermediate crude futures gained $0.11, or 0.2%, to $54.12 a barrel by 0415 GMT and Brent crude added $0.15, or 0.3%, to $56.66. Spot gold had dropped 0.5% to $1,244.93 per ounce by 0345 GMT. The metal hit its highest since Nov. 11 at $1,263.80 on Feb. 27. U.S. gold futures fell 0.8% to $1,243.60.
U.S.
Trump speech signals shift: ‘Time for small thinking is behind us’ (The Hill) President Donald Trump’s bold promises have been sidetracked by fights with the press, his critics in Congress and even people from the entertainment industry – many of which have taken place over the president’s favorite social media tool, Twitter. Many of those spats have been over trivial issues. For example, Trump spent the first two days of his presidency bickering with the media of size of his inaugural crowd. On Tuesday night. Trump signaled a desire to move past that stage of his presidency to focus instead on fulfilling some of his biggest campaign pledges. Econintersect: After trying the “Easy” button for 39 days, the president will now see if the “Reset” button works better.
Trump and health care: President gives Congress five principles for Obamacare replacement (CNBC) President Donald Trump on Tuesday urged Democrats to work with Republicans in Congress to repeal and replace the Affordable Care Act, which he claimed, yet again, is a “disaster“. Trump’s request, which he made twice during his first address to Congress, came as he laid out five key measures he wants lawmakers to adopt in replacement legislation for Obamacare.
Ensuring people with pre-existing health conditions are guaranteed “access” to health insurance, “and that we have a stable transition for Americans currently enrolled in the health-care exchanges.
Giving people who buy their own health coverage tax credits and expanded health savings accounts to help pay for their coverage, as well as flexibility about the design of their plans.
Give states “the resources and flexibility” in their Medicaid programs “to make sure no one is left out.” Medicaid covers primarily poor people.
Legal reforms to protect doctors and patients “from unnecessary costs” that drive up insurance costs, and to bring down the price of high-cost drugs.
Creating a national insurance marketplace that allows insurers to sell health plans across state lines.
U.S. President Donald Trump full speech to Congress (YouTube) The president starts speaking at 23:26.
Former Kentucky governor says Republicans want to ‘rip’ insurance away from millions (CNBC) Former Kentucky Gov. Steve Beshear defended the Affordable Care Act on Tuesday after President Donald Trump’s slamming of the health care law in his first speech to a joint session of Congress. In the Democratic response that followed Trump’s address, Beshear argued that Republicans “seem determined to rip affordable health insurance away from millions of Americans who need it.” Beshear criticized Republican efforts to repeal and replace the law, known as Obamacare, and their proposed solutions to replace it.
“Does the Affordable Care Act need some repairs? Sure it does. But so far, every Republican idea to “replace” the Affordable Care Act would reduce the number of Americans covered, despite promises to the contrary.”
Axelrod: Trump will get a bump in polls from speech (The Hill) President Obama’s former political adviser David Axelrod predicted Tuesday that President Trump would get at least a short-term bounce in the polls from his well-received address to a joint session of Congress.
Trump just said something truly unexpected on immigration (CNBC) Before President Donald Trump’s speech to a Joint Session of Congress Tuesday night, several advance reports said he would use part of the address to offer some kind of compromise on immigration. That didn’t happen. Instead, President Trump repeated his calls for a border wall, warnings about criminals crossing that border, and touching stories about Americans killed by illegal immigrants. But then he said something truly unexpected; he made a call for returning American immigration policy to a merit-based selection process. And that’s something we haven’t had in more than 50 years. He made an economic and class-based argument for this policy:
“Switching away from this current system of lower-skilled immigration, and instead adopting a merit-based system, will have many benefits: It will save countless dollars, raise workers’ wages, and help struggling families – including immigrant families – enter the middle class.”
Treasury’s Mnuchin Says Wants ‘Very Significant’ Tax Reform Passed By August (Financial Advisor) U.S. Treasury Secretary Steven Mnuchin said last Thursday that he wants to see “very significant” tax reform passed before Congress’ August recess, but the Trump administration is still studying the merits of a proposed border tax system. Mnuchin told CNBC in his first television interview since taking office last week:
“We are committed to pass tax reform, it will be very significant, it’s going to be focused on middle-income tax cuts, simplification and making the business tax competitive with the rest of the world. We want to get this done by the August recess,”
How Facts Fail: Argentina’s Cautionary Tale for the Trump Era (Investopedia) The Kirchner’s in Argentina destroyed one of the best economic statistics organizations in the world. This author worries that President Trump might do the same for the U.S. Bureau of labor Statistics (BLS).
In an email to Investopedia on January 17, a spokeswoman for the Bureau of Labor Statistics, the division of the Labor Department responsible for collecting inflation and employment data, let it be known in the strongest possible terms that the agency responsible for collecting and publishing statistics on inflation and employment would not give in to political pressure. Nor is there any evidence that such pressure exists.
Yet Trump has given those who depend on BLS data cause for concern. In late September he called the agency’s headline unemployment (U3) rate – 4.9% at the time – “such a phony number.” To be fair, many economists agree that the metric misleads by excluding the disabled, discouraged and underemployed. But even the U6 rate, which accounts for these groups, was only 9.7% when Trump spoke. Obtaining the 42% rate he cited requires counting students, housewives, voluntary part-time workers, early retirees and many others as “unemployed.”
How a GOP Health-Care Plan Could Leave Rural Areas Devoid of Coverage (The Atlantic) The devil’s always in the details, but if the details of a new 100-page leaked draft of a House Republican plan to repeal Obamacare are too dense to parse, here’s a brief snapshot, according to this author: Millions of people in rural areas where it’s already hardest to find doctors might no longer be able to afford health insurance in a few years.
Col. Wilkerson: Trump’s Proposed $54 Billion Increase in the Military Budget Not for National Security (Yves Smith, Naked Capitalism) Former Chief of Staff for Secretary of State Colin Powell says that the $54 billion increase in the Trump defense budget has little to do with defense and much to do with enriching the MICC (military industrial congressional complex). Video from The Real News Network:
Bonds Signal Warning on Trump Stimulus (Investopedia) Bond prices rising in tandem with stocks, as they have been lately, is a potentially big warning sign that investors are losing faith in President Trump‘s proposed stimulus plans, according to the Wall Street Journal. Investors and analysts point to a major change from just a few months ago when investors were buying stocks and selling bonds in anticipation of accelerated economic growth and inflation following Trump’s victory, known as the “reflation trade.” Chart below is interst rate for the 10-year treasury.
Israel
Israel removes settlers from homes on private Palestinian land (Reuters) Israeli police began removing settlers and hundreds of supporters on Tuesday from nine houses built illegally on privately owned Palestinian land in the occupied West Bank. Police carried some of the settlers and protesters out of the red-roofed structures in the settlement of Ofra, while others walked out, escorted by officers. Israel’s Supreme Court has ordered the demolition of nine buildings in the settlement of more than 3,000 people after finding that those homes were constructed on land where Palestinians proved ownership. Such judicial rulings upholding Palestinian property rights have riled Israel’s right-wing, as it promotes plans to expand construction in settlements built on occupied territory Palestinians seek for a state.
Iraq
New Trump immigration order will remove Iraq from list of banned countries: AP (Reuters) President Donald Trump’s new immigration order will remove Iraq from the list of countries whose citizens face a temporary U.S. travel ban, the Associated Press reported on Tuesday, citing unnamed U.S. officials. Four officials say the decision follows pressure from the Pentagon and State Department, the AP reported. They had urged the White House to reconsider Iraq’s inclusion given its key role in fighting the Islamic State group, it added. Trump is expected to sign the new order on Wednesday. An earlier order was blocked by federal courts.
Iraqi army effectively cut last main exit road out of Mosul (Reuters) U.S.-backed Iraqi army units shut the last main exit out of the Islamic State group’s stronghold in western Mosul, controlling access to the city from the northwest, a general and residents there said on Wednesday. The army’s 9th armored division is within a kilometer of Mosul’s “Syria Gate”, the northwestern entrance of the city, a general from the unit told Reuters by telephone. The road links Mosul to Tal Afar, another Islamic State stronghold 60 km (40 miles) to the west, and then to the Syrian border.
Iraqi officers find Islamic State members hidden among refugees fleeing Mosul (Reuters) A few hundred men who had scurried across front lines in a refugee exodus from Mosul sat on the ground in neat rows before an Iraqi intelligence officer who scanned the crowd for hidden militants. The officer pulled a teenager onto a raised platform and asked the group if he belonged to Islamic State (IS). Muffled groans were followed by nods and muttered comments. The youth was then dragged off to a pickup truck and his arms tied behind his back. He confessed to a three-month membership in IS and spending a week in a training camp, but said he had only been a cook and never carried a weapon.
Japan
Japan accelerates wind power development as govt support pays off: study (Reuters) With a month to go this fiscal year, Japan’s installation of new wind power capacity in 2016-17 is set to come in almost double that of the previous 12 months, propelled by higher tariffs guaranteed by Tokyo and a rising number of offshore wind farms. Japan is set to add 300 megawatts of wind capacity – enough to power more than 100,000 average homes – in the 12 months through March, Japan’s Wind Power Association said in a study released late last month. Some 157 megawatts of wind power were installed in the previous year. The agency didn’t estimate how much has been invested in the new turbines, but the figures underline the pace of wind power’s development in Japan since the Fukushima nuclear disaster in 2011 triggered a drive to develop new energy sources.
Australia
Australia Avoids Recession as Household Spending, Mining Boost Economy (Bloomberg) A surge in commodity prices and increased consumer spending produced GDP growth of 1.1% for the fourth quarter of 2016, completing Australia’s 25the year without a recession. See also next article.
The Great Aussie Growth Comeback May Not Be So Great After All (Bloomberg) Australia’s smashing growth (see preceding article) may not be quite as good as it seems. While commodity pices may not go back down further dramatic rise is also not likely. Perhaps prices may remain as strong as they are for all of 2017 and keep the country comfortably away from recession. But the recent trends of reduced saving indicate there is not a lot of room for consumer spending to increase further.
