Written by Econintersect
Early Bird Headlines 26 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
- Asia markets fall in morning trade as concerns over a US-China trade war rise (CNBC) Asian markets traded mostly lower on Monday, following a global sell-off late last week amid fears that rising tensions between the United States and China could lead to a full-blown trade war. The dollar index traded at 89.434, falling from levels above 90.3 in the previous week. Oil prices were mostly lower on Monday morning with U.S. crude down 0.17% at $65.77 a barrel. Global benchmark Brent traded near flat. Spot gold was flat at $1,346.62 at 0113 GMT.
- Nobel Prize-winning economist Robert Shiller warned that businesses could take a ‘wait and see’ approach to increased trade tensions between the U.S. and China.
- “It’s exactly those ‘wait and see’ attitudes that cause a recession,” he warned.
- “It’s just chaos: It will slow down development in the future if people think that this kind of thing is likely,” he told CNBC at the annual China Development forum in Beijing.
U.S.
- The March for Our Lives, explained (Vox) The march marked most dramatic and powerful show yet of teenage activism against gun violence in the wake of the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida. Close to a million students stood up and streamed out of classrooms across the country last week as part of the National School Walkout, which honored the victims of the Parkland shooting one month ago and called on lawmakers to pass gun control legislation. Another national school walkout is planned for April 20, the anniversary of the Columbine shooting. But the March for Our Lives signals that this renewed push for gun reform is gathering strength. It’s sign that this time might actually be different. See also next item.
- These Photos Show How Big the March For Our Lives Crowds Were Across The Country (Time) See also the preceding article. Hundreds of thousands of people showed up to participate in the March For Our Lives rallies that took place all across the country on Saturday. More than 830 demonstrations took place across the globe this weekend, according to Getty Images. The rallies drew huge crowds, with some estimates for the crowd size at the main march in Washington, D.C. as high as 800,000.
- Reports of Williams Heading to New York Fed Spur Backlash (Bloomberg) The Federal Reserve is facing a backlash over its lack of diversity in key positions after reports this weekend that John Williams, the current president of the San Francisco regional branch, is the front-runner to succeed William Dudley as head of the powerful New York Fed.
- Trump Hacked the Media Right Before Our Eyes (The New York Times) Conservative columnist Russ Douhat says it wasn’t Facebook or Russian bots that won the election for Donald Trump. It was the good old fashioned mainstream media:
The core Trump demographic might just have been Republicans who watched “The Apprentice,” who bought the fake news that his television program and its network sponsors gladly sold them. That was step one in the Trump hack of television media.
Step two was the use of his celebrity to turn news channels into infomercials for his campaign. Yes, his fame also boosted him on social media, but there you can partially blame algorithms and the unwisdom of crowds; with television news there were actual human beings, charged with exercising news judgment and inclined to posture as civic-minded actors when it suits them, making the decision to hand day after day of free coverage to Donald Trump’s rallies, outrages, feuds and personal attacks.
the business model of our news channels both assumes and heightens polarization, and that it was ripe for exploitation by a demagogue who was also a celebrity.
- Jimmy Carter: I would prefer Trump not be impeached (The Hill) Former President Carter said Sunday that he would prefer President Trump not be impeached, even if special counsel Robert Mueller’s investigation exposes wrongdoing on the part of the president. Carter told CBS‘s “Sunday Morning“ that he believes the oversight of Congress and the Supreme Court is enough to adequately check Trump’s actions in the White House, and removing the president would likely not be necessary.
- 4 winners and 4 losers from Congress’s massive $1.3 trillion spending package (Vox) Congress passed a $1.3 trillion spending bill – the omnibus – that will keep the government open through the end of September at 1 am Friday. This bill, a massive 2,323-page funding package with a huge increase in military and domestic spending is a clear bipartisan compromise, reflecting both Democratic and Republican priorities.
Winners:
- The Repupublican tax bill
- Funding for government data
- Federally funded research
- Tipped workers
Losers:
- Betsy DeVoss
- Conservatives
- Susan Collins
- Trump’s immigration agenda
- Stormy Daniels Speaks (60 Minutes) See also Five takeaways from Stormy Daniels’s big interview (The Hill) and What Americans Think About Presidential Scandals Like the Stormy Daniels Story Has Changed. But Not How You’d Expect (Time). The adult-film star and director is being threatened with financial ruin, but she wants to set the record straight about her alleged affair with Donald Trump.
EU
- The euro area’s deepening political divide (Voxeu.org) Hat tip to Yves Smith at Naked Capitalism. Princeton’s Visiting Professor in International Economic Policy at the Woodrow Wilson School, Ashoka Modi writes:
Two European elections – in Germany on 24 September 2017 and Italy on 4 March 2018 – warn that the peoples of Europe are drifting apart. Much of the recent deepening of these divisions can be traced to Europe’s single currency, the euro. This column argues that the political divide in Europe may now be hard to roll back absent a shift in focus to national priorities that pay urgent attention to the needs of those being left behind.
Germany​
- Germany’s Pivot From Russian Gas Will Be Costly (Oil Price) Hat tip to Yves Smith at Naked Capitalism. See also next article. More problems are mounting for Russia’s oil and gas sector. This time it’s coming from Germany, which until recently usually gave Russia’s energy sector more leeway than the U.S. or other allies. But now it seems that German Chancellor Angela Merkel has also had enough. On Monday, Bloomberg reported that Merkel’s government is seeking to build a liquefied natural gas (LNG) industry in Germany basically from scratch to reduce the nation’s dependence on supplies arriving by pipeline from Russia and Norway.
Using a Henry Hub gas price of $2.85/MMBtu as a base, Russian energy giant Gazprom recently estimated that adding processing and transportation costs, the price in Europe would reach $6/MMBtu – a steep markup.
Henry Hub gas prices are currently trading at $2.657/MMBtu. Over the last 52-week period U.S. gas has traded between $2.64/MMBtu and $3.82/MMBtu.
Russian gas sells for around $5/MMBtu in European markets. Moreover, Russian gas exporter Gazprom is also moving away from oil-indexation for gas prices to a European gas hub indexation, which will allow additional price savings and unfortunately for Germany – an incentive to stick with Russian gas, even if it’s geopolitically distasteful.
- Merkel Looks to LNG to Cut Germany’s Dependence on Russian Gas (Bloomberg) Angela Merkel’s government is seeking to build a liquefied natural gas industry in Germany basically from scratch to reduce the nation’s dependence on supplies arriving by pipeline from Russia and Norway. With gas reservoirs depleting from the U.K. to the Netherlands, Germany is becoming increasingly reliant on Russia for its energy needs at a time when political tensions are mounting with Vladimir Putin’s government in Moscow. See also preceding article.
Russia
- Who Will Stop the US-Russia Arms Race? (The Real News Network) As Trump faces heat for reportedly ignoring instructions to not congratulate newly re-elected Vladimir Putin, professor Stephen F. Cohen (NYU and Princeton) asks if anyone in Washington wants to stop the dangerous US-Russia arms race.
China
- Trump’s concerns about China are ‘legitimate,’ says former Obama trade official (CNBC) President Donald Trump’s White House has “legitimate” concerns underlying its controversial actions against China and the World Trade Organization, according to a former trade official. In fact, Beijing’s economic policies are undeniably a problem, according to Michael Froman, who served as U.S. Trade Representative during much of Barack Obama’s second term in the White House. Froman told CNBC Saturday at the annual China Development Forum:
“We can disagree with some of [Trump’s] tactics, but the concerns he’s raised abut China, and about the challenge that China’s state capitalist system poses to the global trading system are legitimate and real.”
- Mnuchin ‘Hopeful’ Truce Can Be Reached With China on Trade (Bloomberg) U.S. Treasury Secretary Steven Mnuchin said he’s optimistic that the U.S. can reach a agreement with China that will forestall the need to impose the tariffs that President Donald Trump has ordered on a least $50 billion of goods from that country.
- US-China trade deficit is set to keep on rising, Yale’s Stephen Roach says (CNBC)
- Economist Stephen Roach said America’s trade deficits “are going to get bigger in the years ahead.”
- The U.S. trade imbalance issue is fundamentally tied to the nation’s savings problem, he told CNBC at the annual China Development Forum.
- “When you don’t save and you want to spend and grow, you import surplus savings from abroad and you run these massive balance of payments and trade deficits to attract the foreign capital,” he explained.
