Written by Econintersect
Early Bird Headlines 08 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 markets under pressure, China posts monthly trade deficit in yuan terms (CNBC) Asian equities were mostly in the red on Wednesday amid mounting geopolitical risks in the region and rising expectations that the Federal Reserve would tighten monetary policy next week. The dollar remained was steady against a basket of currencies, trading at 101.76 at 3:12 pm HK/SIN. U.S. crude fell 0.66% to $52.80 a barrel, while global benchmark Brent crude was 0.57% at $55.60. Gold prices inched up on Wednesday, but remained near four-week lows hit in the previous session.
U.S.
GOP’s Obamacare replacement bill: Here are the winners and losers (CNBC) The new GOP health care plan replaces income based subsidies with age based tax credits; lowers the costs on average for the young; and raises costs on average for older people. Here’s how the tax credit amounts would change for an older enrollee in a high cost market like Mobile, Alabama, according to an analysis by the Kaiser Family Foundation:
The GOP’s Obamacare Replacement Is Just a Gigantic Tax on Women (The Daily Beast) The new GOP healthcare bill is coming in for some harsh criticism. This article is one of those:
As policy analysts wade their way through the 123-page bill in an attempt to glean its exact ins and outs, one thing is clear: this bill is not kind to women. In fact, portions of it read as though Republican lawmakers deliberately set out to make having female reproductive parts even more of an expensive headache than it already is. The AHCA contains several ways in which low-income women could be further encumbered with higher healthcare costs and fewer choices.
Fed to make sequential hikes until ‘something breaks,’ Gundlach says (CNBC) Jeffrey Gundlach, chief executive officer at DoubleLine Capital, said on Tuesday he expects the Federal Reserve to begin a campaign this month of “old school” sequential interest rate hikes until “something breaks,” such as a U.S. recession. Gundlach, who oversees more than $101 billion at Los Angeles-based DoubleLine, said U.S. economic data support a rate increase as soon as the next Fed policy meeting on March 14-15, and further rises this year, after a series of false starts in 2015 and 2016.
Trump versus the intelligence agencies – we’ve seen it all before (The Conversation) History is littered with the debris of the all too often abusive relationship between the intelligence community and those in power. In theory, intelligence agencies are meant to be objective, free from political bias and to speak truth to power. They perform two tasks: providing intelligence assessments to shape policy and implementing government decisions. But there have been occassions of ‘espionage’ by intllignece agencies against their leaders, some recounted here. The author concludes:
Whether claims of dirty tricks are true remains open to question but they upset the delicate intelligence-policymaker relationship. Past examples from Britain, the US and Israel show that even the suggestion that intelligence agencies are trying to undermine the government cause significant problems. History does not bode well for President Trump. Expect more problems in the future.
UK
A forecast for a bounce in the UK’s GDP has put a spring in Philip Hammond’s step ahead of his first Budget (City A.M.) Chancellor Philip Hammond will today give an upbeat assessment on the future of the British economy in his debut Budget, as the Organisation for Economic Co-operation and Development (OECD) becomes the latest body to upgrade its UK growth forecasts. The influential Paris-based OECD yesterday said UK GDP growth will reach 1.6% this year, up from its previous prediction of 1.0%. The revision is the largest across the major economies surveyed by the OECD.
How Brexit could break devolution (The Conversation) Under the EU, the four major sections of the UK, Scotland, Wales, Northern Ireland, and England have ‘devolved’ from a cohesive set of UK ‘rules’ to work under the EU. Brexit will bring the question of how to reinstate UK institutions. Failures in these efforts could lead to future independence referendums for some or all of the four ‘parts of the kingdom’. Another Scottish referendum is already beung talked about,
Austerity isn’t working for everyone – especially women (The Conversation) Women have borne the brunt of government austerity policies since 2010.
Cuts hit women harder because women are more likely to use public services, and more likely to work in the public sector. They are more likely to do the unpaid work to compensate for cuts in services – such as caring for children or older family members – with consequences for their own employment and earnings. Benefits and tax credits constitute a larger share of women’s incomes due to their care-giving roles. Plus, it is indirectly detrimental for women, as caring causes greater risk of poverty over the course of someone’s life. Therefore, rolling back the welfare state will reduce efforts to achieve gender equality.
Germany
Germany’s Industrial Output Rebounds Led by Jump in Investment (Bloomberg) German industrial production rebounded in January, reaffirming the country’s favorable economic outlook after factory orders slumped the most in eight years. Output, adjusted for seasonal swings and inflation, rose 2.8% from December, when it dropped a revised 2.4%, the Economy Ministry in Berlin said on Wednesday. The volatile indicator’s reading compares with a median estimate for a 2.7% increase in a Bloomberg survey. Production was unchanged from a year earlier.
The data come on the back of report on Tuesday showing factory orders plunged at the steepest pace since 2009 amid markedly below-average demand for big-ticket items. While the slump serves as a reminder that Germany isn’t immune to risks, the ministry said a revival of manufacturing can still be expected. Last month, the Bundesbank predicted growth would pickup at the start of 2017, supported by domestic demand and a stronger global outlook.
Syria
U.S., Russia Counter Erdogan in Syria as Kurds Get Shield (Bloomberg) The U.S. and Russia have found themselves teaming up for the first time in the war in Syria — against a country both call an ally: Turkey. In Manbij, a town in northern Syria about 40 kilometers (25 miles) from the Turkish border, U.S. and Russia moved this week to effectively block a drive by Turkey to seize it. A U.S. deployment and a Russian-brokered deal with Syrian forces created buffer zones that headed off any Turkish drive against the Kurdish forces — seen by Washington as key allies against Islamic State, though Turkey views them as terrorists — who now hold the town. As the outside powers fighting in Syria step up the fight to crush Islamic State, the battle is laying bare their often-conflicting loyalties. With all sides pushing into terrorist-held territory, the potential for clashes between the players is rising.
India
The Big Reform India Needs Most (Bloomberg) Prime Minister Narendra Modi has reason to be wary of ambitious reforms to India’s economy, given the fraught rollout of his plan to ban 500- and 1,000-rupee notes overnight. For his country to reach its true economic potential, however, he will need to do something about India’s ailing state banks. These institutions, which account for more than 70 percent of lending in India, are in no immediate danger of collapse. But they’ve become a huge drag on the economy. Stressed assets now make up nearly 17% of all loans in India, worst among the world’s major economies.
India’s oil boom: Growing into role as No. 1 in global demand (CNBC) India is moving into position to be the biggest driver of global oil demand growth, and it is seeking new investment in its own energy industry. India’s energy minister announced a new round of bidding for upstream and downstream investments on Monday. Shri Dharmendra Pradhan, the country’s minister of petroleum and natural gas, speaking at the annual CERAWeek conference in Houston, said in prepared remarks:
“We want to increase our production. We want to invite investment. I must tell you there was never a better time to be in India. I encourage both existing and new players to come forward and avail the opportunity.”
Japan
Japan Is Poised for Its Longest Run of GDP Growth in a Decade (Bloomberg) Global tailwinds look set to sustain Japan’s modest recovery in 2017, as exports prop up an economy that’s still struggling to stoke domestic demand. Wednesday’s upward revision of gross domestic product in the final three months of last year sets the scene for a fifth-straight period of growth — the longest streak since the six quarters of gains to mid-2006. See Japan’s 4Q Growth Raised to 1.2% as Exports Drive Investment.
China
China posts first trade deficit in three years as imports surge (South China Morning Post) China has reported a trade deficit for February, but January and February combined had a surplus of ¥293.65 billion ($42 billion). Imports surged to ¥886.68 billion yuan (US$128.5 billion) in February (45% increase y-o-y), while exports rose just 4.2% from a year earlier to ¥826.32 billion yuan, leaving a trade deficit of ¥60.36 billion yuan, the General Administration of Customs said on Wednesday. The last time China reported a trade deficit was in February 2014 when the imports exceeded exports by US$31.5 billion. Econintersect: There is a possibility that false invoicing was responsible for the apparent surge for imports. This has been used in the past as a way to avoid capital controls and transfer money out of China.
Venezuela
Venezuela’s bad relationship with the United States just got worse (CNBC) Venezuela and the United States haven’t had the best relationship recently. This week, it got worse. The Treasury Department blacklisted Venezuelan Vice President Tareck El Aissami on Monday, saying he oversaw or “partially owned” narcotics shipments of more than 1,000 kilograms (2,204 pounds) from Venezuela, some of which ended up in Mexico and the U.S.
