Written by Econintersect
Early Bird Headlines 16 February 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 stocks rise after US gains; many markets closed for Lunar New Year (CNBC) Asian equities ended mixed on the last day of the week, but trading in the region was subdued with many markets shut for the Lunar New Year holiday. The dollar index lost about 0.4% to 88.253, the lowest since December 2014. The index was on track to lose more than 2% on the week in its largest decline since February 2016. U.S. crude for March delivery was up $0.16, or 0.3%, at $61.50 a barrel by 0200 GMT. Brent crude was up $0.26, or 0.4%, at $64.59. Spot gold rose 0.4% to $1,358.74 an ounce at 0429 GMT.
- Bitcoin climbed back above $10,000 Thursday for the first time in two weeks and some analysts see the psychologically key level as a trigger for new buyers to come into the market.
- In the week around Thanksgiving, Coinbase added about 300,000 users, helping send bitcoin from around $8,000 to $10,000.
- For UK-based online trading platform eToro, user growth slowed down through the end of January – which was when bitcoin began dropping significantly. But the rate of withdrawals has not increased, indicating that users were not selling out and that demand from new customers may have helped previous price gains.
U.S.
- The End of Free Money for the U.S. Government (Bloomberg) For most of the past decade, fixed-income investors have effectively been telling the U.S. government: Borrow more money! Please! A simple quantitative measure of this sentiment has been the yield on inflation-indexed five-year Treasury bonds (aka Treasury Inflation-Protected Securities, or TIPS), which has been below 1% since September 2009 and spent much of the time since then in negative territory. See first graphic below. Yes, investors have been paying the U.S. government to take their money. This author thinks that is about to end. {Econintersect: The Bank of Japan has not allowed that to happen there. They have simply bought as much government debt as necesssary to keep rates low. And the japanese economy is the strongest it has been in more than 20 years.}
- Senate rejects Trump immigration plan (The Hill) The Senate rejected legislation based on President Trump’s framework for an immigration deal in a 39-60 vote on Thursday, leaving an uncertain path forward for Congress with nearly a million immigrants sheltered by an Obama-era program facing the prospect of deportation. The measure spearheaded by Sen. Chuck Grassley (R-Iowa) needed 60 votes to clear a filibuster, but failed to meet the mark. 46 Democrats and 14 Republicans voted NO. See also White House blames ‘Schumer Democrats’ for defeat of Trump immigration plan.
- States to Get Classified Briefings on 2018 Election Threats (Bloomberg) With the threat of Russian interference continuing to loom over American elections, U.S. intelligence authorities are arming state officials with classified updates on risks to their electoral systems ahead of this year’s midterm races.
Election officials from all 50 states will receive classified briefings on Friday and Sunday, the Office of the Director of National Intelligence said in a statement on Thursday. The Department of Homeland Security and the Federal Bureau of Investigation will join in the sessions.
- Nothing in the Constitution Prevents Sensible Gun Rules (Bloomberg) In 2008 the SCOTUS issued a decision which ruled the constitution guaranteed the individual right to own guns. But that decision did not decree that the governemnt had no rights to limit that privilege. In a crucial sentence, Justice Scalia wrote for the 5-4 majority:
“Nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms.”
- The Dollar Spirals Down, Hits Lowest Point Since 2014 (Wolf Street) The US dollar has dropped 2.0% in the past five days, 2.4% over the past month, 4.1% year-to-date, 5.3% over the past three months, and 9.4 % over the past 12 months, according to the WSJ Dollar Index. At 82.47, the index is at the lowest level since December 25, 2014:
- Cracks Appear in Credit Funds as Investors Head for the Exit (Bloomberg) There is a bit of “run on the bank”. Global bond funds saw the fifth-largest week of redemptions ever last week, amid expectations of higher interest rates, according to Bank of America Merrill Lynch, citing EPFR Global fund flow data.
Overall, $14.1 billion was pulled from debt funds, with $10.9 billion taken from high-yield bonds alone, the second highest outflow on record. Investment-grade bond funds weren’t spared, with $2 billion of redemptions ending a 59-week streak of inflows, the bank said in a report covering the week to Feb. 14.
- U.S. Gun Control Policy (Twitter)
Nigeria
- Nigeria Buys Spot Gasoline Cargoes to Stem Two-Month Fuel Shortage (Bloomberg) Although Nigeria is Africa’s top oil producer, it currently imports almost all of its refined fuel needs because its refineries operate at a fraction of their capacity due to lack of maintenance and aging equipment. The nation imported about 250,000 barrels a day of gasoline during the period from November 2016 to November 2017, according to data on the NNPC’s website. Currently the shortfall is about 625,000 barrels of gasoline per day and the country is selling oil at a discount to get the fuel.
India
- China-India border tension: Satellite imagery shows Doklam plateau build-up (BBC News) This is an area of interim borders and unsettled claims. While tensions have calmed since the last stand-off on the Doklam plateau, along the Line of Actual Control (LAC) which ended in August of last year, both sides are continuing to build up their ground forces in this inhospitable terrain.
The plateau, which lies at a junction between China, the north-eastern Indian state of Sikkim and the Himalayan kingdom of Bhutan, is currently disputed between Beijing and Bhutan. India supports Bhutan’s claim over it.
China
Donald Trump blasted deal during the presidential campaign
Chicago exchange wanted to become a hub for Chinese stocks
Deal would’ve given 29% of the company to a China-based shareholder
- Mapping out China’s Belt and Road Initiative (CNBC) Go to article to see detailed animated maps. China’s Belt and Road Initiative aims to connect Asia, Europe, the Middle East and Africa with a vast logistics and transport network, using roads, ports, railway tracks, pipelines, airports, transnational electric grids and even fiber optic lines.
Widely seen as an attempt by China to construct a massive, multi-national zone of economic and political influence that has Beijing at its core, the plan at one point included 65 countries, which together accounted for one-third of global GDP and 60 percent of the world’s population, or 4.5 billion people, according to Oxford Economics.
- A Chinese Casino Has Conquered a Piece of America (Bloomberg) Construction workers have been maimed and killed. Millions have been paid to the governor’s family to create an impossibly lucrative gambling operation. And all this is happening on U.S. soil, in Saipan, in the Northern Mariana Islands. This is a U.S. territory in th western pacific. The largest island in the territory is more well known thn Saipan, Guam.
Mexico
- Mexican Views of the U.S. Turn Sharply Negative (Pew Research Center) More Mexicans view the United States unfavorably than at any time in the past decade and a half. Nearly two-thirds of Mexicans (65%) express a negative opinion of the U.S., more than double the share two years ago (29%). Mexicans’ opinions about the economic relationship with their country’s northern neighbor are also deteriorating, though less dramatically: 55% now say economic ties between Mexico and the U.S. are good for their country, down from 70% in 2013.
