Written by Econintersect
Early Bird Headlines 01 May 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
Markets in Japan and Australia close higher as energy names struggle for gains (CNBC) Markets in Japan and Australia finished slightly higher on Monday, with several major exchanges closed for a Labor Day public holiday. The dollar index traded at 99.17 at 2:06 p.m. HK/SIN, after climbing from an earlier low of 98.95. U.S. oil was down 0.14% at $49.26 a barrel at 2:05 p.m. HK/SIN on Monday.
Climate change could drive coastal food webs to collapse (The Conversation) Coastal marine food webs could be in danger of collapse as a result of rising carbon dioxide levels, according to our new research. The study shows that although species such as algae will receive a boost, the positive effects are likely to be cancelled out by the increased stress to species further up the food chain such as predatory fish.
Food webs are essentially networks of species that interact with each other. The connection between them can stabilise systems, for instance by preventing particular species from becoming too common, thereby encouraging the presence of a wide range of species.
These pathways can be quite stable, but they are vulnerable to ocean warming and acidification. Such food webs are therefore sensitive to changing climates, through potential changes both to plant growth (bottom-up effects) and to predator abundance and behaviour (top-down effects).
U.S.
Congress strikes deal on funding for 2017 to avoid shutdown (The Hill) Congressional negotiators have signed off on a deal to fund the government through September, avoiding a shutdown of federal agencies over a dispute on President Trump’s border wall and other issues, according to two senior congressional aides. The legislation does not provide funding for construction of a wall along the U.S.-Mexico border or eliminate money for so-called sanctuary cities that do not fully cooperate with federal immigration law, according to a summary provided by a senior congressional aide. Nor does it cut funding for Planned Parenthood. These are major victories for Senate Democratic Leader Charles Schumer (N.Y.) and House Democratic Leader Nancy Pelosi (Calif.), who threatened to block the bill over such poison-pill riders. However, see next article.
Forget Trump – the Democrats’ first 100 days have been awful (Business Insider) What do the Democrats have to show for these first months of the Trump era? Little. Trump’s defeats have not come at the Democrats’ hands. Those setbacks have been self-inflicted (over-the-top tweets, hastily written policies, few sub-cabinet nominations) or have come from the judiciary (the travel ban, the sanctuary cities order) or from Republican infighting (health care).
Deregulation, Keystone pipeline, immigration enforcement – Democrats have been powerless to stop them.
Chuck Schumer slow-walked Trump’s nominations as best he could. In fact his obstruction was unprecedented. But the cabinet is filling up, the national security team in place. On the Supreme Court, Schumer miscalculated royally. He forced an end to the filibuster for judicial appointments, yet lost anyway. If another appointment opens this summer, and the Republicans hold together, the Democrats will have zero ability to prevent the Court from moving right. No matter what he says in public, Schumer can’t possibly think that a success.
Kasich finds it hard to rule out 2020 (The Hill) Ohio Gov. John Kasich returned to the national spotlight this week with criticism for the GOP and President Trump, raising questions about the former Republican presidential candidate’s political future. It’s clear that the governor wants to distinguish his brand of conservatism from Trump’s, a point the governor made repeatedly during a presidential bid that saw him become the last option in the primary for “#NeverTrump” Republicans. But what’s less clear now is what comes next for the governor, whose term expires in early 2019. While Trump may embody the opposite of Kasich’s school of conservative politics, Kasich’s options are limited as long as Trump sits in the Oval Office.
Are American Debt Slaves Getting in Trouble Again? (Wolf Street) The American economy depends on consumers (AKA debt slaves), but they may be reaching the breaking point. In addition to $1.4 trillion in student loans debt, $1.1 trillion in auto loans, and still loads of motgage debt, credit card debt is discussed in the excerpt below. One especially astounding figure is “45% of Americans that have debt spend up to half of their monthly income on debt repayment“.
American consumers are holding $1 trillion in revolving credit, mostly in credit card debt. So how well is this segment of consumer debt holding up?
Synchrony Financial – GE’s spin-off that issues credit cards for Walmart and Amazon – disclosed on Friday that, despite assurances to the contrary just three months ago, net charge-off would rise to at least 5% this year. Its shares plunged 16% and are down 27% year-to-date.
Credit-card specialist Capital One disclosed in its Q1 earnings report last week that provisions for credit losses rose to $2 billion, with net charge-offs jumping 28% year-over-year to $1.5 billion.
Synchrony, Capital One, and Discover – a gauge of how well over-indebted consumers are managing to hang on – have together increased their Q1 provisions for bad loans by 36% year-over-year. So this is happening.
EU
India
SAARC satellite to be launched on May 5 (The Hindu) The “South Asia satellite” being built by India for use by countries of the South Asian Association for Regional Cooperation (SAARC) region will be launched on May 5. This was announced by Prime Minister Narendra Modi in his Mann ki Batt radio address on Sunday in which he said the capacities of the satellite and the facilities it provides “will go a long way in addressing South Asia’s economic and developmental priorities.”
Afghanistan
Afghan Deaths Soar to Highest on Record as U.S. Weighs Strategy (Bloomberg) Almost sixteen years after the U.S.-backed ouster of the Taliban, Afghanistan remains in the grip of a war with “shockingly high” death rates among security forces and a record number of casualties among civilians, according to the U.S. government watchdog monitoring the country’s reconstruction efforts. Civilian casualties rose to 11,418 last year, the highest since the United Nations began keeping records in 2009. In the first six weeks of this year, 807 Afghan soldiers were killed, John Sopko, the U.S. special inspector general for Afghanistan reconstruction, said in a quarterly report to Congress issued late Sunday.
The Obama White House announced in July that 8,400 U.S. troops would remain in Afghanistan into this year rather than cutting the force to 5,500 as originally planned. Now, that number could increase by several thousand if Trump is persuaded by his generals to send more troops.
Japan
Sony Sees Highest Profit Since 1998 (Bloomberg) Sony Corp.’s recovery is nearly complete, with the electronics maker targeting its highest annual operating profit in two decades. Continued dominance in gaming and strong growth in phone-camera chips will translate into operating profit of 500 billion yen ($4.5 billion) for the fiscal year through March 2018, the Tokyo-based company reported Friday. That was in line with the 507 billion yen average projection by analysts.
Japan Labor Shortage Prompts Shift to Hiring Permanent Workers (Bloomberg) Japan’s tightest labor market in decades shows signs of reversing a long shift toward the hiring of temporary workers. The number of full-time, permanent workers is rising for the first time since the global financial crisis, outpacing growth in temporary jobs over the past two years. Junko Sakuyama, Tokyo-based senior economist at Dai-ichi Life Research Institute said:
“The labor shortage has become so bad that companies can’t fill openings only with part-timers.”
South Korea
U.S. to South Korea: We’ll pay for missile defense system (for now) (CNN) After President Trump set off a furor over who should pay for a U.S. missile defense system that’s being installed in South Korea, his national security chief said Washington will pick up the check. For the time being, at least. White House national security adviser Lt. Gen. H.R. McMaster told his South Korean counterpart that the U.S. would continue to bear the cost of the system, according to a statement Sunday from the office of the South Korean president. McMaster was responding to the controversy Trump stirred up last week with South Korea, a key U.S. ally in Asia. “I informed South Korea it would be appropriate if they pay” for the Terminal High Altitude Area Defense (THAAD) system, Trump said in an interview with Reuters on Thursday. “That’s a billion-dollar system.”
Australia
Chinese Investment in Australia Surges 11.7% as Deals Hit Record (Bloomberg) Chinese investment in Australia surged 11.7% last year to A$15.4 billion ($11.5 billion) amid booming demand for agricultural assets and infrastructure, according to a report released Monday. The inflow of Chinese capital is highest since 2008. A record 103 deals were signed with Chinese companies in 2016, with 76% of those reached with private firms, KPMG and the University of Sydney said in the report Demystifying Chinese Investment in Australia.
Four ways an Australian housing bubble could burst (The Conversation) There’s been quite a bit of speculation over whether Australia has a property market bubble – where house prices are over-inflated compared to a benchmark – and when it might burst. According to housing experts, there’s at least four scenarios where this could happen. Australia could see a property bubble burst due to:
