Written by Econintersect
Early Bird Headlines 30 January 2018
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, published Monday, Wednesday and Friday, 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 shares decline on softer Wall Street lead; dollar edges up (CNBC) Asian indexes traded lower Tuesday, tracking declines seen on Wall Street in the previous session. The dollar index traded at 89.553 3:15 p.m. HK/SIN, climbing from an earlier low of 89.312. U.S. West Texas Intermediate crude slid 1.02% to trade at $64.89 per barrel. Brent crude futures shed 0.71% to trade at $68.97. Spot gold was down 0.3% at $1,335.93 per ounce at 0311 GMT after Monday’s 0.7 percent drop, while U.S. gold futures were 0.4% lower at $1,334.20 per ounce.
- Global Credit to Equity Rotation (Thee Daily Shot) Is this an indication of a credit-to-equity rotation of just ‘idle’ capital flowing into the stock market?
- We’re getting closer to completing the energy transition (World Economic Forum) Today, the global energy scene is in a state of flux, with a series of large-scale shifts transforming the outlook for the global energy sector. These shifts include technological advances – as seen with the rapidly falling costs for solar PV or the US shale revolution – as well as economic, demographic and policy changes as China moves to a new economic model and a cleaner energy mix, and as India accounts for an ever-larger share of the global growth in demand.
U.S.
- House Intel votes to make Nunes memo public (The Hill) The House Intelligence Committee on Monday evening voted to make public a GOP-crafted memo alleging what some Republicans say are “shocking” surveillance abuses at the Department of Justice (DOJ). At the same time, the committee voted against making public a Democrat-drafted countermemo.
While the panel voted to release that memo to the entire House, Republicans expressed concern that publicly releasing the minority memo would damage sensitive intelligence sources and methods, according to Rep. Adam Schiff (D-Calif.), the committee’s ranking member.
Both votes – to release the GOP memo and withhold the Democratic one – were along party lines.
- Can Trump Fire the Special Counsel? Not Directly (Bloomberg)
1. Can a president fire a special counsel?
Not directly. Special counsels answer to the Justice Department official who appoints them. Usually that means the attorney general. In Mueller’s case, it’s the deputy attorney general, Rod Rosenstein. That’s because Attorney General Jeff Sessions, having advised and supported Trump’s 2016 campaign, recused himself from overseeing the inquiry.
2. So only Rosenstein can fire Mueller?
Technically correct, and only upon finding “misconduct, dereliction of duty, incapacity, conflict of interest” or “other good cause.” Rosenstein has said, as recently as Dec. 13, that he sees no such reason to dismiss Mueller.
- Dems block 20-week abortion ban (The Hill) Democrats blocked a bill on Monday that would ban most abortions after 20 weeks, a blow to anti-abortion groups that considered its passage a top priority for Congress in 2018. The bill, authored by Sen. Lindsey Graham (R-S.C.), was unable to get the 60 votes necessary to end a filibuster and proceed to a vote, meaning the bill is effectively dead in the upper chamber.
The bill failed with a 51-46 vote. Sens. Lisa Murkowski (R-Alaska) and Susan Collins (R-Maine) were among those who voted “no.” Alabama Sen. Doug Jones (D), who recently won in a special election against Republican candidate Roy Moore, also voted “no.”
Graham’s bill had little chance of passing the Senate, where Republicans hold a slim 51-49 majority. It sailed through the House on a party-line vote, 237-189, in October.
- New Dept of Justice Guidelines Will Stymie Whistleblowers (Jerri-Lynn Sofield, Naked Capitalism) Earlier this month, the Department of Justice (DoJ) quietly floated a new policy that will stymie whistleblowers. As reported by The Wall Street Journal in U.S. Looks Toward Gatekeeper’s Role on Whistleblower Claims:
The Justice Department urged its lawyers to weed out meritless cases from the hundreds of suits brought on its behalf under an anti-fraud law called the False Claims Act.
Justice Department attorneys should consider using a provision in the False Claims Act that lets the department ask a judge to dismiss claims, even if the whistleblower who brought the case wants to go ahead, according to an internal memo dated Jan. 10 from Michael D. Granston, director of the commercial litigation branch of the Civil Division.
EU
- European Commission says it will act “swiftly and appropriately” over Trump’s tariff threat (City A.M.) The European Commission has fired a warning shot over US President Donald Trump’s veiled threat of a trade war, saying it will react “swiftly and appropriately” to any change in trade measures. During an interview with ITV‘s Piers Morgan last night, Trump said he’d had …
“… a lot of problems with the European Union, and it may morph into something from that standpoint, from a trade standpoint. We cannot get our products in. It’s very, very tough. And yet they send their products to us – no taxes, very little taxes. It’s very unfair…. and I think it will turn out to be very much to their detriment.”
UK
- Sorry, homeowners: London is now officially a “buyer’s market” (City A.M.) London’s housing market is at a critical point, new figures have revealed, with heavy discounting by homeowners desperate to sell their properties tipping the capital into a buyer’s market. The average home in London is now sold at four per cent below its original asking price, up from just 0.5% in 2014, the closely-watched Hometrack Cities Index showed. In some parts of the capital, discounting has risen as high as 10%. The figures suggested a widening gap between house price growth in London, which reached just 1.8% between December 2016 and December 2017, and the rest of the UK, where growth was 4.4%.
- Brexit: Britons favour second referendum by 16-point margin – poll (The Guardian) See also next article. Voters support the idea of holding a second EU referendum by a 16-point margin, according to one of the largest nationwide opinion polls since the Brexit vote. The ICM survey, conducted as part of a Guardian reporting project, found 47% of people would favour having a final say on Brexit once the terms of the UK’s departure are known, while 34% oppose reopening the question.
Excluding the roughly one-fifth who do not have a view gives a lead of 58% to 42% for a second referendum, showing rising interest in the idea as concern grows over the direction of recent negotiations.
The increased backing has come from both sides of the debate, with one-quarter of leave voters in favour of having another referendum on the final deal.
- Government Brexit analysis says UK will be worse off under all scenarios (City A.M.) The government’s latest analysis of Brexit’s impact concluded the UK will be worse off under every scenario modelled, according to reports. Entitled “EU Exit Analysis – Cross Whitehall Briefing“, the draft assessment was dated this month. Reported by Buzzfeed, under a comprehensive free trade agreement with the EU economic growth would be 5% lower over the next 15 years compared with current forecasts, the analysis concluded. A “no deal” Brexit – with Britain reverting to World Trade Organisation (WTO) rules – would see growth 8% over the same period. Continued access to the single-market by way of membership of the European Economic Area would be comparatively better, with growth 2% lower. Each scenario assumes the UK will strike a trade deal with the US.
Russia
- US accuses 100 Russian businessmen of Kremlin ties (Financial Times) The US Treasury has published a sweeping new report, declaring roughly 100 Russian businessmen to be Kremlin-linked members of the Russian elite, a move that is likely to spark a fierce response from Moscow. The report contains the names of virtually every senior member of Vladimir Putin’s presidential administration – down to Mr Putin’s spokesman Dmitry Peskov – as well as the heads of Russia’s state agencies and state-run corporations and high-profile mayors, governors and MPs.
India
- India last week announced plans to inject nearly $14 billion into 20 public sector banks in return for them implementing a series of reforms.
- But Srikanth Vadlamani, a vice president and senior credit officer at Moody’s, said the latest government attempt to rescue troubled banks falls “far short of what is really required.”
- Other analysts said India has to reconsider whether it needs so many state-owned banks because their dominance has led to a “lack of dynamism” in the country’s finance industry.
- ‘India’s spending on science below economic capacity,’ says Economic Survey (The Hindu) India currently spends far below its economic capacity on research, according to a chapter in the Economic Survey. India spent only 0.5% of its Gross Domestic Product (GDP) on research and development in 2015.
In comparison, China and the U.S. spent 1% and 2.5%, when their per capita GDP were similar to that of India. Currently China’s GDP is five times and the U.S.’ about eight times that of India.
There were more than 100,000 people with PhDs, who were born in India but now live and work outside (more than 91,000 in the U.S. alone).
North Korea
- North Korea’s reported downsizing of its annual winter military exercises is seen as largely a public relations stunt.
- A Wall Street Journal report Monday said the exercises “are less extensive than usual,” possibly due to the impact of sanctions.
- Pyongyang is “trying to act on its best behavior for the Olympics,” said a U.S. defense analyst.
- Regardless, some U.S. military experts deemed the North Korean move a positive development.
China
- How China Benefits from African Debt (Mauldin Economics) The level of debt owed by African governments in countries such as Kenya, Uganda, Mozambique, and Tanzania has increased markedly since the 2008 financial crisis. Problematic though sub-Saharan African debt may be, debt levels vary country by country and therefore mitigate the possibility of a continent-wide crisis. Still, widespread default could create opportunities for outside powers that covet the region’s natural resources.
“… while its current indebtedness may not shape the course of international affairs directly, it may, in fact, benefit China. Defaulting on their debt would cause foreign investment to dry up. China’s willingness to accept repayment in commodities would leave it as one of the few remaining options for countries struggling to build infrastructure. Beijing could, therefore, drive as hard a bargain as it wanted. China will continue to mine Africa for its resource needs. The only thing that will constrain its behavior in that regard is its own capital needs.”
Chile
- Chile creates five national parks over 10m acres in historic act of conservation (The Guardian) Chile has created five sprawling national parks to preserve vast tracts of Patagonia – the culmination of more than two decades of land acquisition by the US philanthropists Doug Tompkins and Kristine McDivitt Tompkins and the largest donation of private land to government in South America. The five parks, spanning 10.3m acres, were signed into law on Monday by Chile’s president Michelle Bachelet, launching a new 17-park route that stretches down the southern spine of Chile to Cape Horn. Econintersect: This acreage is the same as that of the 6 largest U.S. National Parks in the lower 48.
Cuba
- 19 American citizens report symptoms suffered by diplomats in Cuba (CBS News) The State Department says 19 American travellers who visited Cuba have reported symptoms similar to those suffered by U.S. diplomats, following a travel warning for the country posted in September.These cases are separate from the at least 24 American embassy personnel and their family members who have reported a range of symptoms from attacks that began in November 2016, according to U.S. officials. The September 29 travel warning said the victims have suffered “ear complaints, hearing loss, dizziness, headache, fatigue, cognitive issues, and difficulty sleeping.” Medical documents reviewed by CBS News show diagnoses of concussions as well.