Written by Econintersect
Early Bird Headlines 18 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
Asian equities extend losses amid US political risk, with Nikkei weighed by stronger yen (CNBC) Asian equities lost ground on Thursday, while U.S. futures meandered, amid U.S. political turmoil accelerated with the appointment of a special counsel to take over the investigation into Russia’s involvement in the U.S. presidential election last year. The dollar index was at 97.657 at 2:28 p.m. HK/SIN, off levels over 98 on Wednesday and down from levels over 99 last week. Brent crude futures were down $0.21, or 0.4%, from their last close at $52 per barrel at 0148 GMT. U.S. West Texas Intermediate (WTI) crude futures were at $48.88, down $0.19, or 0.4%. Spot gold was flat at $1,260.61 per ounce by 0345 GMT, after earlier touching its strongest since May 1 at $1,263.02. It rose about 2% on Wednesday in its biggest one-day percentage gain since June last year. U.S. gold futures were up 0.2% at $1,260.90 an ounce.
World’s 500 Richest People Lose $35 Billion From Trump Turmoil (Bloomberg) The world’s richest people lost $35 billion Wednesday when global equity markets were rocked by political turmoil in the U.S., according to the Bloomberg Billionaires Index. But thay only lost what had made Monday and Tuesday.
U.S.
Justice names special counsel for Russia investigation (The Hill) The Justice Department has appointed former FBI Director Robert Mueller as special counsel to investigate Russia’s involvement in the U.S. presidential election. Mueller, a former prosecutor who served a 12-year term at the helm of the bureau, has accepted the position, according to Deputy Attorney General Rod Rosenstein.
Analysis | Republicans just got what they didn’t want: A special counsel (The Washington Post) For all the fallout from the damning news surrounding President Trump this past week, Republicans calling for more investigations was not one of them.
As the world learned that Trump suddenly fired his FBI director, as the world learned the president told state secrets to the Russians, as the world learned that the fired FBI director said the president asked him to drop the FBI’s investigation into one of the president’s allies, the vast majority of Republicans in Congress didn’t budge.
No, they didn’t think a special counsel was necessary. No, they didn’t think there would need to be any other kind of independent investigations. The ones going on in Congress (and the leaderless FBI) were sufficient enough, thank you.
Study: House ObamaCare bill cuts $43B in Medicaid funds for children (The Hill) The House GOP’s ObamaCare replacement bill would result in a cut of $43 billion over 10 years in funding for Medicaid coverage of children, according to a new study. The study from the consulting firm Avalere finds that the cuts to coverage for non-disabled children would come as a result of a new cap on Medicaid payments that the bill would impose, known as a per capita cap.
France
French unemployment falls to lowest since eurozone crisis (Financial Times) France’s troublesome unemployment rate has fallen to the lowest level since the depths of the eurozone crisis, with an impressive monthly drop from 10% to 9.6% in March.
Abu Dhabi Fund Plans $1.7 Billion Paris Properties Sale (Bloomberg) The Abu Dhabi Investment Authority, one of the world’s largest sovereign-wealth funds, is seeking offers for Paris office buildings valued at 1.5 billion euros ($1.7 billion) to cash in on increased investor appetite for French assets, according to three people with knowledge of the matter.
Turkey
Flynn delayed ISIS attack plan that Turkey opposed: report (The Hill) Former national security adviser Michael Flynn pushed to delay a plan to retake ISIS stronghold Raqqa that Turkey opposed, according to a new report. See Flynn stopped military plan Turkey opposed – after being paid as its agent (McClatchy)
Saudi Arabia
Saudi Arabia, OPEC, Shale and Game Theory (ECONOMISMS) Brad Parkes says Saudi Arabia has the wrong strategy. Changing could destroy the oil competition and stop competitive technologies like electric cars and solar power that are reducing demand for pol.
Japan
Japan Q1 provisional GDP shows fifth straight quarterly gain at faster pace than expected (CNBC) Japan on Thursday said first quarter GDP rose a more than expected 0.5% on quarter and 2.2% at an annual pace. A poll ahead of the data by Reuters showed analysts expected a 0.4% quarterly gain and a 1.7% annual pace. The data showed the fifth straight quarter of growth and the fastest pace since the first quarter of 2016.
Dollar Claws Back Losses as Trump Seeks to Limit Comey Turmoil (Bloomberg) The dollar eked out gains against most of the Group-of-10 peers but pressure from the U.S. political turmoil remained evident as it swung between gains and losses against the yen. The greenback is recovering a tad as Mueller named as special counsel.
China
China Creates Own Insurance Monster (Bloomberg) For the last several years, China has allowed smaller insurance companies to flourish in the interests of creating competition for industry heavyweights such as China Life Insurance Co. and Ping An Insurance Co. Authorities wanted to shake-up the population’s save at all costs mentality and at the same time, encourage investment in areas other than the nation’s oftentimes volatile stock market.
Sales of universal life products — short-term, high-yielding investments that include a small insurance component — boomed, with newer market entrants like Anbang Insurance Group Co., Huaxia Life Insurance Co. and Foresea Life Insurance Co. the main issuers. To fulfill the heady returns promised, those firms embarked on highly leveraged acquisitions, from hotels in New York to insurance assets in South Korea and Belgium.
Debt levels spiraled and before long, Beijing started to take steps to rectify the situation. In February, the China Insurance Regulatory Commission banned the chairman of Foresea Life from the industry for a decade, two months after it barred the company from selling all universal life products, indefinitely. It then prohibited Foresea Life from applying to sell new policies of any kind for three months.
Now, Foresea Life is warning of mass defaults and social unrest unless the nation’s insurance regulator lifts that new-policy sale ban, according to a letter seen by the Financial Times.
China Yield Curve Keeps Inverting (Twitter) In the U.S. an inverted yield curve is almost always accompanied by or followed by a recession.