Written by Econintersect
Early Bird Headlines 19 March 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 trade mixed as markets await Fed meeting (CNBC) Asian markets were mixed on Monday, with Japan’s benchmark index trading below the flat line as the yen firmed. Investors also turned their attention to the Federal Reserve’s two-day policy meeting later in the week. The dollar index stood flat at 90.274. U.S. West Texas Intermediate (WTI) crude futures were at $62.02 a barrel at 0145 GMT, down $0.32 cents (0.5%) from their previous close. Brent crude futures were at $65.87 per barrel, down $0.34 cents, or 0.5%. Spot gold fell 0.2% to $1,310.31 per ounce at 0123 GMT.
U.S.
- Graham warns Trump: Firing Mueller would be ‘beginning of the end of his presidency’ (The Hill) See also Graham calls for Senate Judiciary hearing on McCabe firing. Sen. Lindsey Graham (R-S.C.) on Sunday warned of the consequences for President Trump if he tries to fire special counsel Robert Mueller. Graham was asked on CNN‘s “State of the Union” if he is worried Trump is preparing to order Mueller’s firing. Graham said:
“If he tried to do that, that would be the beginning of the end of his presidency, because we’re a rule of law nation. I think it’s very important he [Mueller] be allowed to do his job without interference and there are many Republicans who share my view,”
- Trump Aims Directly at Mueller in Ramped-Up Criticism of Probe (Bloomberg) See also Trump unrestrained in latest attacks of Mueller probe (The Hill). President Donald Trump made his most direct attack to date on the Justice Department’s investigation into Russian election meddling being led by Special Counsel Robert Mueller, the latest sign that a showdown may be brewing over the probe. Trump said early Sunday on Twitter:
“Why does the Mueller team have 13 hardened Democrats, some big Crooked Hillary supporters, and Zero Republicans. Does anyone think this is fair?”
- GOP immigration bill stirs tension among Hispanic conservatives (The Hill) A press event meant to tout conservative Hispanic support for a hard-line immigration bill instead brought into sharp relief the deep divisions among Latino Republicans on the issue. Rep. Bob Goodlatte (R-Va.), the chairman of the House Judiciary Committee and main sponsor of the Securing America’s Future Act, hosted the event Tuesday, inviting conservative Hispanic groups to speak in support of his bill, which would provide protections for so-called Dreamers. The legislation would also fund President Trump’s border wall, end the diversity visa lottery program, limit family-based visas, create a new, controversial agriculture guest worker program, allow the administration to withhold federal money from sanctuary cities and require employers to use the E-Verify program to check the immigration status of their workers.
The bill is unanimously opposed by House Democrats and does not yet have 218 votes from Republicans. Most Hispanic groups oppose it.
The main organizer of Goodlatte’s event, Alfonso Aguilar, the president of the Latino Partnership for Conservative Principles, said even he has misgivings about the bill.
- The Cambridge Analytica Scandal Is What Facebook-Powered Election Cheating Looks Like (Slate) The Trump campaign’s data firm got its hands on 50 million Facebook users’ information – and then reportedly lied about deleting it. In addituon to working on Facebook exploitation for the Trump campaign, Cambridge Analytica was also funded with $800,000 from Russia for work on exploiting Facebook. See also next article.
- Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach (The Guardian) See also Staff claim Cambridge Analytica ignored US ban on foreigners working on elections. A whistleblower has described how a firm linked to former Trump adviser Steve Bannon compiled user data to target American voters. Christopher Wylie, who worked with a Cambridge University academic to obtain the data, told the Observer:
“We exploited Facebook to harvest millions of people’s profiles. And built models to exploit what we knew about them and target their inner demons. That was the basis the entire company was built on.”
- Treasury Yield Convergence: When Might Perfect Flatness Arrive? (MISH Talk) Mish says that inflation is in the rear view mirror and if the Fed does raise rates 3 more times the yield curve coud go flat. All that has to happen is for longer rates to stay where they are. Mish writes:
The convergence point is approximately 2.72% in mid-2019.
I am quite sure that won’t happen in the 2019 timeframe, but it could easily happen this year.
All it would take is three rate hikes in 2018 with the rest of the curve not reacting.
That’s not my call, but the more aggressively the market prices in future rate hikes, the more likely it is.
If we get to that point, we will be on the verge of economic collapse.
EU
- In a trade war Germany is the weakest link (Financial Times) Steel tariffs are a side show – extra duty on car exports could devastate the EU:
The eurozone’s anti-crisis strategy since 2012 has been short-sighted, pushing the current account into a strong surplus and expecting the world to absorb it. It was a beggar-thy-neighbour strategy, more appropriate for small countries than the world’s second-largest economy. The reason why such a strategy is unsustainable is now becoming clear. It makes you vulnerable to protectionist action, such as the 25 per cent tariffs on steel and the 10 per cent tariffs on aluminium imposed by the US.
Germany is a large exporter of steel to the US, but steel is only a side show. The real issue is whether Mr Trump is going to follow up on his repeated threats by slapping tariffs on imported cars. The Brussels-based think-tank Bruegel calculated the effects of a hypothetical 35 per cent tariff hitting the European car industry – it comes up with a revenue loss estimate of €17bn a year. The overall economic impact would be higher because of network effects. The EU is not only hooked on exports but also on producing cars to sell to the world.
- Europe Depends on Russia (Twitter)
UK
- U.K. Wants Brexit Transition Locked in at Key Summit This Week (Bloomberg) Theresa May’s Brexit negotiators want to secure a written promise of a transition deal from the European Union at a key summit this week, to help reassure businesses that they will get the grace period they desperately want.
Michel Barnier, the EU’s chief Brexit negotiator, and David Davis, his British counterpart, are preparing to hold talks and a press conference in Brussels on Monday, according to people familiar with the matter. It’s a sign the two sides are on track to reach an agreement on a status-quo transition phase that will last until the end of 2020.
Businesses are likely to welcome the prospect of a deal in which the U.K. would continue to operate as if it were an EU member for 21 months after leaving — accepting migrants and staying in the single market and customs union, but not having a right to vote on the rules.
Germany​
- The Growth of Germany’s Muslim Population (Pew Research Center) Between 2010 and 2016, the number of Muslims living in Germany rose from 3.3 million (4.1% of the population) to nearly 5 million (6.1%), while the rest of the population shrank modestly from 77.1 million to 76.5 million.
Slovakia
- Murder and Protests Rock a Small European Nation (Bloomberg) An economic success story in central Europe for the eurozone, Slovakia is now being ravaged by civil unrest over rumors of corruption.
It started with the slaying of a young journalist and his fiancee at their home. Then came street protests not seen since the fall of the Iron Curtain. Now the future direction of another European country is at stake as a prime minister fights for his political life.
How quickly things have changed for Slovakia. A bastion of stability in a region dominated by nationalist governments at odds with the rest of the European Union, the country has been thrust into political turmoil.
Tens of thousands of people turned out again last week to demand the resignation of Prime Minister Robert Fico, who they blame for allowing rampant corruption. Interior Minister Robert Kalinak, a close ally of Fico, resigned on Monday before a key party in the governing coalition said it would push for an early election. It means a vote could come within months.
Russia
- Putin wins another six years at Russia’s helm in landslide victory (Reuters) Russian President Vladimir Putin won a landslide re-election victory on Sunday, extending his rule over the world’s largest country for another six years at a time when his ties with the West are on a hostile trajectory. In a widely expected outcome, the Central Election Commission, with just over 70% of the votes counted, announced that Putin, who has dominated the political landscape for the last 18 years, had won 75.9% of the vote. Turnout figures will be closely scrutinized. Early signs suggested turnout would exceed 60%.
- Russian Hackers Attacking U.S. Power Grid and Aviation, FBI Warns (Bloomberg)
U.S. officials warn of attacks, including on nuclear plants
Cyber-attacks underway since at least March 2016, U.S. says
China
- China elects new economic team as President Xi kicks off second term (Reuters) China elevated a key confidante of President Xi Jinping to one of the top positions in government on Monday as Beijing cracks down on riskier financing and a debt to reduce systemic risks to the world’s second-largest economy.
- Trump’s stimulus will make the deficit with China worse, not better, says Credit Suisse economist (CNBC)
- U.S. trade and current account deficits are set to widen, and that’s partly President Donald Trump’s own doing, said Credit Suisse’s chief economist, James Sweeney.
- Trump’s corporate tax cuts have spurred U.S. businesses to spend more, but capital goods that the firms are buying are from Asia because China is still the factory of the world, Sweeney said.
- The widening U.S. deficits are partly why Credit Suisse is bearish on the greenback, the economist said.
