Written by Econintersect
Early Bird Headlines 08 April 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.
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Global
‘Angst’ over Syria not enough to keep oil above $50, John Kilduff says (CNBC) Oil rose Friday after the United States airstrike on Syria, but noted expert John Kilduff, the founder of Again Capital, doesn’t expect that to last. Usually in this type of situation, there is “the briefest of spikes” in crude prices but then they almost give back all the gains in the next day or two, he explained. Kilduff said in an interview Friday with “Closing Bell“:
“We are still in the middle of a glut of all gluts and I still see that ultimately weighing on prices. This is not enough angst to cause the prices to stay above $50.”
U.S.
White House frustrated by palace intrigue (The Hill) The White House is increasingly frustrated by the never-ending stream of stories about palace intrigue, warring internal factions and imminent staff shake-ups. Administration officials say these “false narratives” – which they say are driven by White House outsiders – make it more difficult to govern and dominate the news cycle at the expense of President Trump’s political victories.
McConnell’s shining moment (The Hill) Neil Gorsuch’s confirmation to the Supreme Court is a huge victory for Senate Majority Leader Mitch McConnell (R-Ky.), a frequent target of conservatives who saved Justice Antonin Scalia’s seat for the right. When Scalia died suddenly in February 2016, in seemed certain that then-President Obama would be able to tilt the court to the left with his third appointment. Instead, McConnell issued a statement within hours that essentially shut the door on an Obama appointment, stating “this vacancy should not be filled until we have a new president.”
The government reported a 4.5% unemployment rate, but here’s the realistic number (CNBC) The unemployment rate fell to 4.5 percent in March, according to the Labor Department. But relying on that one headline number as an indicator for the economy as a whole ignores important information just below the surface.
Each month on “Jobs Friday,” the Bureau of Labor Statistics releases a ton of economic data, each point providing its own perspective on the employment situation. Economists look past the official unemployment rate – that 4.5 percent figure, also known as the “U-3” – to other measures of jobs in this country.
One of those measures is the U-6 rate, which has a broader definition than the U-3 rate. In March, that figure fell three-tenths of a point to 8.9 percent.
The official unemployment rate is defined as “total employed, as a percent of the civilian labor force,” but doesn’t include a number of employment situations in which workers may find themselves. The U-6 rate is defined as all unemployed, “plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force.”
In other words: the unemployed, the underemployed and the discouraged.
Syria
Syrian jets take off from air base US missiles struck, according to Syrian observers (Reuters) Syrian warplanes took off from an air base which was hit by U.S. cruise missiles on Friday, and carried out air strikes on rebel-held areas in the eastern Homs countryside, the Syrian Observatory for Human Rights said. The U.S. Navy had fired dozens of missiles at the air base near Homs city in response to a chemical attack this week which Washington and its allies blamed on the Damascus government.
Seven Lessons From Trump’s Syria Strike (The Atlantic) Republican strategist David Frum does not think Trump’s missile move was the wisest course of action. He suggests that the GOP was correct in blocking a similar move by Obama and is critical of the Democrats for failing to oppose Trump’s action.
Russia
In Syria, Russia Falls Victim to Its Own Success (The Atlantic) The Kremlin has propped up Bashar al-Assad and now Moscow’s rogue client has destroyed the country’s ability to present itself as an indispensable arbiter in the conflict.
US probing: Did Russia take part in chem weapons attack? (Associated Press) The United States is looking into whether Russia participated in the Syrian chemical weapons attack that provoked President Donald Trump’s airstrikes against the Assad government, a revelation that could have dramatic implications for relations between Washington and Moscow. On Friday, senior U.S. military officials said a drone belonging to either Russia or Syria was seen hovering over the site of the chemical weapons attack after the assault earlier this week. Russia is one of Syria’s most important patrons and has long resisted U.S. efforts to push President Bashar Assad from power.
India
Iran Will Cut Benefits on Oil Sales to Indian State Refiners (Bloomberg) Iran will cut some benefits to Indian state-run refiners on crude purchases after the South Asian country decided to reduce the amount of oil it buys from the Persian Gulf nation, people with knowledge of the matter said. National Iranian Oil Co. will cut the credit period on crude oil sales to 60 days from 90 days for refiners such as Mangalore Refinery & Petrochemicals Ltd. and Indian Oil Corp., the people said, asking not be identified as the matter isn’t public yet. Iran will also reduce the discounts it offers on the shipping of crude to 60% from 80%, they added.
The lower incentives will make Iranian purchases costlier and less competitive in a world awash with crude oil where rivals such as Saudi Arabia and Iraq are seeking to expand their market share. Iran’s crude sales to India more than doubled in 2016 after the lifting of sanctions over its nuclear program. India is Iran’s second biggest customer and the emerging center of global oil demand.
India in turn, is using the supply glut to put pressure on Tehran for securing development rights to the Farzad-B gas field in the Persian Gulf, which was discovered by an Indian consortium led by ONGC Videsh Ltd. about a decade ago. Iran and India were aiming to conclude an agreement on developing the field by February. The South Asian nation, which stood by Iran during the sanctions, is seeking to invest as much as $20 billion in Iran’s energy industry and ports.
Japan
Japan’s Households Are Most Upbeat Since 1998 (Bloomberg) Japanese households are the most upbeat since at least 1998 as the labor market tightens and muted inflation boosts their purchasing power, a Bank of Japan survey found. The index for impression of livelihood rose to -32.4 in March, the highest on record dating to 1998, according to the quarterly survey released Friday. Sentiment toward income was at the highest on record dating to 2006 and confidence regarding employment stood at the second-highest level since 2006, the survey found. The data on rising confidence come as the BOJ prepares to convene a policy meeting later this month. It is widely expected to continue with its current aggressive easing program. Demographics have helped push the jobless rate down to 2.8%, though wage growth remains weak.
Japan Can Teach U.S. How to Overcome National Rot (Bloomberg) The U.S. is in a period of institutional sclerosis, and more people are noticing it. Even JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon is sounding the alarm. But it’s reasonable to ask whether, despite all its difficulties, the U.S. is still the proverbial best house in a bad neighborhood. Many other rich, industrialized nations are facing their own long-term dysfunction. Europe is politically paralyzed, and much of that region still suffers from high unemployment. If no one else has figured out how to beat sclerosis, maybe it’s inevitable? Maybe not. There is one large, developed country that has managed to mostly pull itself out of a long period of paralysis. That country is Japan. The discussion in this article centers on the strong employment statistics in Japan. See graphics below. Econintersect: Unfortunately a strong driving force in the Japanese numbers is the result of their population peakinf and starting to decline.
China
Beijing to release more land for 1.5 million homes: Xinhua (Investing.com) Investing.com is a content sharing partner of GEI. Beijing will release 6,000 hectares (14,020 acres or 23,16 square miles) of land by 2021 to fulfill market demand for 1.5 million residential housing units, the Xinhua news agency cited the city’s housing authority as saying late on Friday. The Beijing Municipal Commission of Urban Planning and Land and Resources Management said it would supply 1,200 hectares this year, which will be able to hold 300,000 units of residential housing. Of the land supplied over the next five years, 70% will be used to build homes that have property rights, while the remainder will be used for rental homes. A mix of state-owned and collectively-owned construction land will be used, the authority said. The government is hoping the added supply will reduce pressures that have produced soaring home prices.
Trump-Xi Summit’s Top Accomplishment: Getting to Know Each Other (Bloomberg) U.S. officials said President Donald Trump’s first meeting with Chinese President Xi Jinping this week was an opportunity for the leaders of the world’s two largest economies to get to know each other. That’s about all they appear to have accomplished after about 18 hours together at Trump’s Mar-a-Lago resort — a visit interrupted by a U.S. cruise-missile strike on Syria during dinner. There were no trade or investment deals announced, no agreement to contain North Korea’s nuclear ambitions, no plan to reduce tensions in the South China Sea.
