Written by Econintersect
Early Bird Headlines 25 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
World Stock Market Heat Map (CNBC) Here are the changes for Friday 24 March:
Will OPEC’s decision to squeeze supply backfire? (The Indian Economist) TIE is an Econintersect content sharing partner. This article says:
OPEC was at its most powerful when the United States, the world’s largest oil consumer, relied on OPEC member states to meet its oil needs. Since the US shale boom increased US energy independence, OPEC can no longer threaten supply as it did during the 1970s. Now it simply risks squeezing itself out of the market.
It’s not just the US domestic market that has grown. If OPEC restricts supply, Canada can increase oil production from tar sands, and Brazil can bring on more deep-water oil production.
U.S.
The holiday is over: Amazon will collect sales taxes nationwide on April 1 (CNBC) Amazon, the online merchandise juggernaut, will collect sales taxes from all states with a sales tax starting April 1. Tax-free shopping will be over as of next month in Hawaii, Idaho, Maine and New Mexico, the four remaining holdouts. Since the beginning of this year, Amazon has added a number of states to its roster of jurisdictions where it collects sales taxes.
Tillerson Will Go to Rescheduled NATO Meeting After Criticism (Bloomberg) U.S. Secretary of State Rex Tillerson will attend a rescheduled meeting of the NATO alliance’s 28 foreign ministers after coming under fire for saying he would miss the event because it conflicted with his schedule. Tillerson will go to Brussels for a meeting of the 28-nation North Atlantic Treaty Organization on March 31 after a visit to Turkey the day before, the State Department said Friday. The meeting was originally set for April 5-6, and the State Department had initially said the U.S. would be represented by Undersecretary Tom Shannon. At issue is the country-by-country defense spending:
House Obamacare Repeal Collapse Raises Doubts on GOP Agenda (Bloomberg) House Republicans abandoned their efforts to repeal and partially replace Obamacare after President Donald Trump and Speaker Paul Ryan couldn’t wrangle enough votes, raising doubts about their ability to deliver on the rest of their agenda. Trump and Ryan together own the defeat of this health-care bill. Both had pledged to deliver on a seven-year GOP promise to undo the Affordable Care Act. Ryan struggled to win over his conference, but it was the do-or-die ultimatum that Trump delivered to House Republicans that forced the speaker to try to hold a vote before he knew he could win.
Simple math shows why passing the health bill was crucial for passing tax reform (CNBC) There are grave political risks for President Donald Trump now that the GOP health care bill is apparently dead. And its failure also creates a budget crunch that could make tax reform a whole lot harder to achieve. Here’s why:
The Congressional Budget Office estimates that government revenue will total $41.3 trillion over the next decade under current law. The latest version of the Republican plan to repeal and replace the Affordable Care Act would have reduced that income by nearly $1 trillion, because it would have gotten rid of taxes connected to Obamacare.
Right now, there are no calls to offset that lost money by finding other revenue sources – a task that is always politically charged. Instead, the now-dead GOP plan offset the reduction in revenue by cutting spending elsewhere.
Therefore, passing the GOP health care scheme would have reduced the amount of revenue the government needed from $41.3 trillion to $40.3 trillion – which is a much lower bar for Washington to clear.
The key thing to know is that the rhetoric around tax reform is very different from health care. House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady have both said they are committed to maintaining “revenue neutrality” – that is, they don’t want changes in the tax code to result in a change in government revenue. That would have been a lot easier to do if they were trying to hit a revenue goal of $40 trillion instead of $41 trillion.
Heritage Foundation Alum Critical of Transgender Rights to Lead HHS Civil Rights Office (Charles Ornstein, ProPublica) CO has contributed to GEI. The Trump administration has quietly appointed a Heritage Foundation staffer who has railed against civil rights protections for transgender patients as director of the federal agency charged with protecting the civil rights of all patients. Roger Severino has also actively opposed same-sex marriage and Planned Parenthood.
EU
The Eurozone and its unconventional run (The Indian Economist) TIE is an Econintersect content sharing partner. This article says ZIRP (zero interest rate policy) is a “locked-in” condition for the EU:
Among the affected countries, the Federal Reserve is the only central bank with the ability to hike its interest rate post the Great Recession. It is now putting pressure on the EU to follow the same to avoid capital transfers by the investors in search of better returns. For the EU, undertaking a normal and stable monetary policy in light of Brexit is not easy. With much more to come in future, the difficulty lies in relying on the current inflation climb. One cannot allow inflation to take hold as the EU hasn’t fully recovered to undergo a high inflation rate. It is now anticipated that EU will follow up with its unconventional outlook in the ensuing years until a strong evidence of stability is observed.
Speculaters Close Short Euro Positions (Twitter)
UK
What Comes Next After May Starts Brexit March 29: QuickTake Q&A (Bloomberg) Nine months after Britain voted to leave the European Union, Prime Minister Theresa May is planning to open divorce proceedings on March 29. The negotiations could turn “vicious“, according to Irish Prime Minister Enda Kenny. European Commission President Jean-Claude Juncker says they will be “very, very, very difficult“. Both the EU and the U.K. will have to determine what is and isn’t negotiable. This articles goes through the 16 major questions about what the formal Brexit process will entail.
France
France’s Le Pen says Putin embodies ‘new vision’ of world (The News) Hat tip to Sanjeev Kulkarni. France’s far-right presidential candidate Marine Le Pen said Russian President Vladimir Putin represents a “new vision” of the world, following her meeting with the Kremlin strongman in Moscow on Friday. The leader of the National Front far-right party told reporters:
“He represents a sovereign nation. I think he also represents a new vision. A new world has emerged in the past years. This is Vladimir Putin’s world, Donald Trump’s world in the United States, Mr (Narendra) Modi’s world in India. I think I am probably the one who shares with all these great nations a vision of cooperation and not one of subservience — a hawkish vision that has too often been expressed by the European Union.”
Turkey
Is Turkey rattled by Russian-Kurdish deal? (Al Monitor) Turkey’s plans to expand its Operation Euphrates Shield in northern Syria and isolate Kurdish forces in the region appear to be backfiring. As Turkey’s forces advance in Syria they have been encountering U.S. flags and now Russian flags as the Kurds continue to develop support in their fight against ISIS from both powers. Turkey has been using the war against ISIS to try to also suppress the Kurds, but they (Kurds) have been ‘building bridges’.
Iraq
Ancient palace emerges from under Mosul shrine destroyed by IS (Al Monitor) The capture of the shrine of the prophet Yunus in Mosul on Jan. 19 from the Islamic State (IS), whose fighters rigged the shrine and blew it up July 24, 2014, revealed the extent of the destruction inflicted by the militants, and on Feb. 28 archaeologists uncovered a palace beneath it, intact since 600 B.C. The palace highlights the significant historical value of the site, dating back to the Assyrian Empire, which began emerging hundreds of centuries before the Christian era.
Russia
OPEC Be Warned: Russia Battens Down the Hatches for Oil at $40 (Bloomberg) Perhaps the Bank of Russia knows something the world doesn’t. As the Organization of Petroleum Exporting Countries and its allies prepare to meet for a review of their production cuts this weekend, the central bank of the world’s biggest energy exporter is hunkering down for years of oil near $40 a barrel. The effectiveness of BoR actions is seen in the falling correlation of the ruble with the price of oil.
India
Bihar train attack suspect flees to Pak. from UAE (The Hindu) Shafi Sheikh, a suspected ISI agent who played key role in mobilising people in Nepal and India to plant explosives at a railway track in Bihar 20 November last year, is said to have fled to Pakistan from Dubai, where he had been staying, a senior Home Ministry official said.
Before India and Nepal (where he is wanted in a double murder case) could request the UAE authorities to seek Sheikh’s custody, he had already left for Pakistan.
Japan
Six years after Fukushima, much of Japan has lost faith in nuclear power (The Conversation) Six years have passed since the Fukushima nuclear disaster on March 11, 2011, but Japan is still dealing with its impacts. Decommissioning the damaged Fukushima Daiichi nuclear plant poses unprecedented technical challenges. More than 100,000 people were evacuated but only about 13% have returned home, although the government has announced that it is safe to return to some evacuation zones. Nuclear power was a cornerstone of Japan’s energy strategy for decades, until the Fukushima disaster. The current government wants to keep some nuclear reactors open, but has lost public support.
