Written by Econintersect
Early Bird Headlines 26 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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Special notice: This is an abbreviated issue of Early Bird due to staff traveling schedule. There will be no post for 27 April, as well.
Global
Stocks in Asia higher on back of solid US earnings; dollar/yen gains, Trump tax plans eyed (CNBC) Asian indexes traded higher on Wednesday, following the rise in U.S. indexes overnight on the back of strong earnings announcements and on expectations for U.S. President Donald Trump’s impending tax reforms. The dollar index traded at 98.792, off 99 handle seen earlier this week. Brent crude futures traded 0.12% lower at $52.04 a barrel while U.S. crude futures were down 0.2% at $49.46. Spot gold was mostly unchanged at $1,263.55 at 0322 GMT. Prices touched a low of 1,260.90 earlier in the session, the lowest since April 11. Bullion fell 0.9% on Tuesday, the biggest one-day decline since March 2.
U.S.
Mnuchin, Cohn expected to roll out Trump tax plan (The Hill) It appears President Trump will not roll out his tax plan in person. The administration is set to reveal its plan on Wednesday, with Secretary of the Treasury Steven Mnuchin and National Economic Director Gary Cohn scheduled to appear at the White House press briefing that afternoon.
Trump’s Tax Plan Said to Seek 10% Levy on Offshore Earnings (Bloomberg) President Donald Trump plans to propose a 10% on more than $2.6 trillion in earnings that U.S. companies have stockpiled offshore, said a White House official familiar with the president’s tax plans. Proceeds from the so-called “repatriation tax” would represent a one-time source of sorely needed revenue, which could offset some of the deep tax cuts Trump has proposed for businesses — or could be devoted toward popular, bipartisan initiatives, like infrastructure spending. Econintersect: ‘The Donald’ wants to “take care of himself”. He will propose cutting the top income tax rate on pass-through businesses — a category that includes mom-and-pop grocers, hedge funds and Trump’s own business empire — to 15%, down from 39.6%. Does this mean he intends to start paying taxes again?
Trump orders review of national monument sites (The Hill) President Trump on Wednesday will order the Interior Department to review 20 years’ worth of monument designations on federal land across the country. Interior Secretary Ryan Zinke told reporters he will consider whether monument designations at up to 40 sites should be “rescinded, resized or modified in order to better benefit our public lands.”
The order signals the beginning of a major review of federal land use and monument designations’ impact on employment and land access for industry groups, companies and individuals.
The order will ask Interior to suggest legislative fixes to the 110-year-old Antiquities Act, which gives presidents the power to set aside land for preservation with limited public input or formal review.
UK
Financial and professional services industry contributes £176bn to the UK economy (City A.M.) Financial and related professional services workers contribute 1.5 times more to the economy than the average UK employee, a new report today reveals.
Financial services employees contribute £79,500 gross value added (GVA), above the average of £52,000 across other sectors.
A report from TheCityUK today also reveals that the industry makes up 10.7 per cent of the UK economy, contributing £176bn in 2015.
Borrowing falls to lowest level since Brown years (The Times) Econintersect: We find it amazing that this is a celebration of recreating the condition that made Britain so vulnerable on the eve of th Great Financial Crisis. From The Times:
Government borrowing has dropped to its lowest level since the eve of the 2008 financial crisis, official figures revealed yesterday.
The annual shortfall in the public finances stands at £52 billion, down by £20 billion in the past year, according to the Office for National Statistics. At 2.6 per cent, the deficit is the smallest as a share of GDP for nine years.
The reduction in borrowing was a result of big increases in income and corporation tax receipts due to the strengthening economy as well as a series of one-off changes including the timing of a £1.8 billion contribution to the European Union, which was pushed back to this year.
The Office for Budget Responsibility, the government’s fiscal watchdog, has forecast that borrowing will rise again, to £58 billion, in 2017-18, however.
A progressive alliance is a once-in-a-generation chance that must be taken in election 2017 (The Conversation) This liberal commentator argues that only an alliance of opposing parties make sense as a Tory alternative in the forthcoming election.
Iraq
Wild boars rampage in Kirkuk leaving 3 Islamic State members dead (Iraqi News) Hat tip to Roger Erickson.
Three Islamic State militants died late Sunday when wild boars attacked them in southern Kirkuk, a local source was quoted saying.
The animals went on a rampage near a farmland in al-Rashad region, an Islamic State pocket 53 kilometers south of Kirkuk. They attacked the militants and left three killed, according to the source.
Alsumaria News quoted the source saying that “Daesh (Islamic State) militants took revenge at the pigs that attacked the farmland,” but did not clarify the method.
North Korea
Trump’s ‘Armada’ Sent to Deter Kim Can’t Shoot Down His Missiles (Bloomberg) The U.S. Navy flotilla sailing toward the Korean peninsula to deter Kim Jong Un’s regime lacks a key capability: It can’t shoot down ballistic missiles.
The USS Carl Vinson and the aircraft carrier’s accompanying destroyers and cruiser are expected to arrive in waters near the peninsula this week, carrying a full complement of weaponry, including scores of Tomahawk cruise and anti-ship missiles, radar-jamming aircraft and non-stealthy “Super Hornet” jets built by Boeing Co.
That firepower brings a lot to any fight, but the Navy’s lack of ballistic missile defense capability on the scene means the Trump administration’s high-profile show of force has a significant gap as it warns North Korea against another missile test and pressures it to back down from its nuclear program.
China
Is China on the verge of a banking crisis? (The Conversation) A variety of indicators suggest that China has come perilously close to a banking crisis. So far, the government has managed to keep things in check. A state-led debt restructuring indicates Chinese officials have learnt some of the lessons of the bad loan crisis faced by state banks in the 1990s. Tight control over banks and their senior personnel has long given China a ready-made platform to control its financial institutions. But controlling the effects of financial contagion is very different from the supply side policies that central planners have long relied on. Plus, unlike the 1990s when the problem mostly concerned poor lending practices, the roots of the current problems are more complex and concern both the asset and liability sides of bank balance sheets.
