Written by Econintersect
Early Bird Headlines 01 May 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
- Australia, Japan trade higher as RBA leaves its cash rate on hold (CNBC) Markets in Australia and Japan traded mostly higher on Tuesday while many Asian markets were shut for a public holiday. The U.S. dollar index last traded up at 91.891 at 2:14 p.m. HK/SIN. U.S. crude gained 0.13% to $68.66 a barrel at 2:16 p.m. HK/SIN while global benchmark Brent added 0.11% to $74.77. Spot gold fell 0.1% to $1,314.00 per ounce at 0106 GMT.
U.S.
- What Mueller Wants to Ask Trump About Obstruction, and What It Means (The New York Times) The special counsel, Robert S. Mueller III, recently provided President Trump’s lawyers a list of questions he wants answered in an interview. The New York Times obtained the list; here are the questions, along with the context and significance of each. The questions fall into categories based on four broad subjects. They are not quoted verbatim, and some were condensed.
Econintersect: These are basically “what did you know” and “when did you know it” questions. These would be very difficult to answer without risk of perjury (if under oath, which the President might not be without a subpoena). So declining the interview and then having to answer a subpoena might create greater jeopardy.
- Exclusive: Pence’s doctor alerted WH aides about Ronny Jackson concerns last fall (CNN) Vice President Mike Pence’s physician privately raised alarms within the White House last fall that President Donald Trump’s doctor may have violated federal privacy protections for a key patient — Pence’s wife, Karen — and intimidated the vice president’s doctor during angry confrontations over the episode. The previously unreported incident is the first sign that serious concerns about Ronny Jackson’s conduct had reached the highest levels of the White House as far back as September — months before White House aides furiously defended Jackson’s professionalism, insisted he had been thoroughly vetted and argued allegations of misconduct amounted to unsubstantiated rumors.
- Federal program meant to help flood victims spends millions fighting claims (CBS News) About $3 billion dollars a year goes into the fedreal flood insurance program. A small fraction of that is paid out for flood damage. A lot goes for subcontacted administration of claims and for fees to lawyers who litigate against claimants.
- Michael Cohen Hit With New Taxi Taxes, Owes New York $282,000 (Bloomberg) Michael Cohen, already under pressure from a federal criminal investigation into his business and financial dealings, has been hit this month with more than $185,000 in new state warrants for unpaid taxes on his taxicab companies. Added to his previous tab, that brings the total to $282,000 owed to New York state by 16 taxi medallion-holding companies owned by Cohen or members of his family.
- Democrats need to stop believing this myth about Trump’s base (CNN) Itwas not economic suffering that drove support from Democrats to Trump. A new study found that white, Christian, male voters were attracted to Trump out of fear that their social status keeps dwindling. Trump’s focused on identity politics much more than economic issues define the president’s base. See Status threat, not economic hardship, explains the 2016 presidential vote (Proceedings of the National Academy of Sciences).
- Impeachment looms large in White House midterm plans (The Hill) President Trump wants to step up efforts to protect Republican control of the House in hopes of avoiding an impeachment debate and congressional investigations if Democrats seize the chamber, according to GOP sources. A source familiar with strategy talks about protecting the House majority said:
“It is super important to the White House and really the whole White House is very focused on it.”
- American Wage Growth is Waking Up (Twitter)
- America is staring down a debt crisis – and there’s one place to look for early signs of trouble (Business Insider)
- The US budget and current account deficits raise the risk of a debt crisis, Deutsche Bank said in a recent note.
- The Treasury Department is expected next week to announce a second increase this year in the size of its note and bond auctions to fund government spending.
- Foreign demand for Treasurys has recently weakened, Deutsche Bank observed, although the US still enjoys the advantage of owning the world’s reserve currency of choice.
EU
- U.S. Extends Steel Tariffs Relief for EU and Other Allies (Bloomberg) President Donald Trump will delay imposing steel and aluminum tariffs on the European Union, Mexico and Canada until June 1 as he finalizes deals with them, the White House said in a statement. The administration has reached agreements-in-principle with Argentina, Australia and Brazil, according to the statement, which the White House released late Monday night. See also Trump pushes back tariff exemptions but Europe is still not happy (CNBC)
Syria
- Israeli Military Attacks Iranian Backed Syrian Bases (The Real News Network) Col. Larry Wilkerson:
Israel does not want to end the war in Syria, it is in their interest to keep this war going, and to keep the Iran Nuclear Deal from succeeding.
Iran
- Iran’s supreme leader: US ‘feet must be cut off’ (CNN) Iran’s most powerful political and religious figure said the United States’ “feet must be cut off” in the Middle East as US Secretary of State Mike Pompeo renewed his criticism of Tehran in his tour of the region. Ali Khamenei, Iran’s Supreme Leader, accused the US of stoking tension between Iran and Saudi Arabia. He said in atweet Monday:
“Wherever US entered, it created instability, brought misery to people; that’s why US’s feet must be cut off from West Asia; US must exit this region.”
Afghanistan
- In private chat with senator, Trump hints at policy shift in Afghanistan – and a return to isolationism (The Washington Post) In the days leading up to a key vote last week over the fate of his nominee for secretary of state, President Trump found a way to win over one of the biggest skeptics in the Senate. Sen. Rand Paul (Ky.), a rare isolationist Republican, was signaling that he would oppose Trump’s pick, then-CIA Director Mike Pompeo, a hawkish former congressman who had backed the Iraq War.
But the more Trump and Paul spoke, including three calls last Monday, the more assured Paul became that the president was moving back toward the non-interventionist world view that Trump had championed on the campaign trail. The conversations left Paul with a particularly enticing notion: that Trump was prepared to end the war in Afghanistan.
North Korea
- Why Is North Korea Shutting Down Its Nuclear Test Site? (Live Science) One important reason is that the nuclear test site my no longer be usable. From this article:
repeated nuclear blasts can weaken the rock around underground nuclear test sites, eventually making them unsafe or unusable – which might have happened with North Korea’s preferred testing grounds.
South Korea
- South Korea’s exports in April declined for the first time in 18 months, as global demand softens and concerns are raised about the country’s trade outlook.
- As exports fell and imports increased, the country saw a trade surplus of $6.6 billion, slightly below $6.8 billion from the previous month.
China
- Why Can’t China Make Semiconductors? (Bloomberg) China is currently the world’s biggest chip market, but it manufactures only 16% of the semiconductors it uses domestically. It imports about $200 billion worth annually — a value exceeding its oil imports. To cultivate a domestic industry, the government has slashed taxes for chip makers and plans to invest as much as $32 billion to become a world leader in design and manufacturing. Yet as history shows, spending won’t be enough.
perhaps the biggest long-term challenge for China is technology acquisition. Though the government would like to develop an industry from the ground up, its best efforts are still one or two generations behind the U.S. A logical solution would be to buy technology from American companies or form partnerships with them. That’s the route taken by cutting-edge firms in Japan, South Korea and Taiwan.
Yet China can’t do the same. Its efforts to purchase American semiconductor companies (often at huge premiums) are regularly blocked for security reasons. Japan, South Korea and Taiwan have put Chinese acquisitions under similar scrutiny.
- China Keeps Currency Base Stable (The Daily Shot) The People’s Bank of China is using bank lending facilities to keep the monetary base stable.
Mexico
- Nearly 200 migrants await chance for asylum in standoff at southern border (CBS News) After a month-long trek through Central America, nearly 200 migrants have set up an encampment in Tijuana, Mexico. They’re waiting to ask for asylum despite U.S. Customs and Border Protection (CBP) announcing the San Ysidro port is at capacity.
