Written by Econintersect
Early Bird Headlines 14 August 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.
Please share this article – Go to very top of page, right hand side for social media buttons.
Global
- Most Asian indexes gain after Japan GDP beats expectations; China data disappoints (CNBC) The Nikkei 225 fell nearly 1 percent despite second-quarter Japan GDP surprising to the upside as investors in Asia digested the release of a barrage of China data on Monday. The dollar index stood slightly lower at 93.073 at 10:09 a.m. HK/SIN. Brent crude was off 0.15% at $52.02 a barrel and U.S. crude shed 0.04% to trade at $48.80. Spot gold was down 0.2% at $1,286.10 per ounce at 0102 GMT, after marking its highest since June 7 at $1,291.86 an ounce in the previous session. U.S. gold futures for December delivery fell 0.13% to $1,292.3 per ounce.
U.S.
- How Trump’s paranoid White House sees ‘deep state’ enemies on all sides (The Guardian) Internal document shows the ‘alt-right’ Steve Bannon wing of the administration’s fervent belief that America is at risk from ‘the Opposition’ – a cabal of bankers, globalists, the media and even Republican leaders.
An extraordinary memo by a former national security official contains a list of Donald Trump’s perceived enemies within, offering an insight into paranoia gripping the White House.
The author, Rich Higgins, was ousted last month by the national security adviser, HR McMaster. But the president reportedly saw the memo when it was passed to him by his son, Donald Trump Jr, and was said to be “furious” at Higgins’s forced departure.
- Linking trade and geopolitics is a lose-lose for America (CNBC) This author argues that the U.S. pays dearly by linking geopolitics with trade:
- Don’t mix things up: Consider trade issues on their own merits
- Multilateral rules are fine, but use reciprocity to avoid serious trade injury
- Only a strong economy will keep Washington as a global center of gravity
- US Launches Quiet Crackdown On Cryptocurrencies (Zero Hedge)
While all eyes were distracted with the Trump-demeaning headlines of the foreign sanctions bill, few spotted the hidden mandate that foreign governments monitor cryptocurrency circulations as a measure to combat “illicit finance trends” in an effort to “combat terrorism.”
- Dr. Seuss in 1941 (Twitter)
EU
- Blocked in the Balkans: the refugees that Europe won’t allow in (The Guardian) Many of Serbia’s 7,600 refugees had hoped to live elsewhere in the EU but are now trying to adapt to life in the Balkans which may last for years.
Finland
- Signs of Wage Growth Start to Appear in Euro Zone’s North (Bloomberg) If Mario Draghi, the president of the European Central Bank, is looking for signs of wage growth, he might find comfort in Finland. After delivering the euro zone’s fastest pace of economic growth in the first quarter, Finnish workers have had enough belt-tightening and are now demanding pay rises they say are only fair given the rebound in exports.
Finns have put in longer hours and given up bank holidays in response to government demands. Their efforts helped drag the Nordic region’s only euro member out of a three-year recession. Now, a sense of entitlement is spreading, setting the stage for what are likely to be the toughest wage negotiations the country has seen in years.
Germany
- Drunken American beaten up for giving Nazi salute in Germany (The Guardian) A drunken American tourist has been beaten up in the German city of Dresden after he repeatedly raised his arm to give the Nazi salute, police said. The 41-year-old man, who was lightly injured in the attack, was being investigated for violating the law against the use of symbols from banned organisations, Dresden police said in a statement. The assailant, who has not been found, faces charges of causing bodily harm.
- Based on German Economic Data the ECB Rate Should Be 7% (Twitter) Econintersect: NAIRU (non-accelerating inflation rate of employment) appears to have joined the ranks of myths.
India
- Calling the Chinese Bully’s Bluff (Project Syndicate) The more power China has accumulated, the more it has attempted to achieve its foreign-policy objectives with bluff, bluster, and bullying. But, as its Himalayan border standoff with India’s military continues, the limits of this approach are becoming increasingly apparent.
The current standoff began in mid-June, when Bhutan, a close ally of India, discovered the People’s Liberation Army trying to extend a road through Doklam, a high-altitude plateau in the Himalayas that belongs to Bhutan, but is claimed by China. India, which guarantees tiny Bhutan’s security, quickly sent troops and equipment to halt the construction, asserting that the road – which would overlook the point where Tibet, Bhutan, and the Indian state of Sikkim meet – threatened its own security.
Since then, China’s leaders have been warning India almost daily to back down or face military reprisals. China’s defense ministry has threatened to teach India a “bitter lesson,” vowing that any conflict would inflict “greater losses” than the Sino-Indian War of 1962, when China invaded India during a Himalayan border dispute and inflicted major damage within a few weeks. Likewise, China’s foreign ministry has unleashed a torrent of vitriol intended to intimidate India into submission.
Despite all of this, India’s government, led by Prime Minister Narendra Modi, has kept its cool, refusing to respond to any Chinese threat, much less withdraw its forces. As China’s warmongering has continued, its true colors have become increasingly vivid. It is now clear that China is attempting to use psychological warfare (“psywar”) to advance its strategic objectives – to “win without fighting,” as the ancient Chinese military theorist Sun Tzu recommended.
Japan
- Japan beats forecasts with 4% annualised GDP growth (Financial Times) A surging stock market and a renewed “wealth effect” helped push the Japanese economy to its sixth consecutive quarter of growth – the longest unbroken streak in more than a decade and a possible lifeline for the foundering “Abenomics” revival program. According to a preliminary estimate from the cabinet office, Japan’s gross domestic product grew an annualised 4% – higher than the market’s 2.5% median expectations and a strong improvement on the revised 1.5% annualised figure for the quarter to March. Propelled by a combination of consumer and capital spending, quarter-on-quarter GDP rose 1 per cent in the second quarter, up from a revised 0.4% rise in the previous quarter and well ahead of economists’ median forecast of 0.6%.
China
- Trump plans to make China very angry at the worst possible time (Business Insider) De-escalating tensions with North Korea while ratcheting them up with China probably won’t work. On Monday President Trump is expected to to sign a memo that will initiate an investigation into intellectual property violations of American companies coming from China.
There is a wrong way and a right way to do this, and Trump plans on doing it the wrong way – by dredging up an outdated trade measure from 1974.
It is a measure that will anger China’s leadership at a delicate time, a time when the US is trying to cool tensions with North Korea. China is the isolated nation’s most powerful ally and economic benefactor.
- China’s Economic Growth Dials Back (Bloomberg) China’s economy showed further signs of entering a second-half slowdown, as curbs on property, excess borrowing and industrial overcapacity began to bite.
- Industrial output rose 6.4 percent from a year earlier in July, versus a median projection of 7.1 percent and June’s 7.6 percent
- Retail sales expanded 10.4 percent from a year earlier, compared with a projection of 10.8 percent and 11 percent in June
- Fixed-asset investment in urban areas rose 8.3 percent from a year earlier in the first seven months, versus a forecast 8.6 percent rise
