Written by Econintersect
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Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary “reading list” which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for “reading list” items are gratefully reviewed, although sometimes space limits the number included.
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Topics today include:​
- World Markets Update
- Volatility Floored
- People Lie To Themselves About Julian Assange To Justify His Persecution
- Subprime Chaos: The Auto Bubble’s Bursting And It’s Worse Than 2008
- Consumers Skip More High-Rate Auto Payments Than During Crisis
- Emissions of Ozone-Destroying Chemical Mysteriously Rising
- Which Americans Have the Highest Tax Bills in the Country?
- Fiscal and Monetary Policy in Emerging Markets
- House rejects farm bill as conservatives revolt
- Farm bill revolt could fuel Dreamer push
- Exclusive: 40% in U.S. can’t afford middle-class basics
- Ten dead after shooting at Texas high school
- Trump on Texas school shooting: ‘This has been going on too long in our country’
- There has been, on average, 1 school shooting every week this year
- CapEx Surged in 1Q 2018, But …
- Trump urged postmaster general to double rates on Amazon: report
- Trump picks Wilkie to lead VA in surprise announcement
- Territorial Acquisitions of USA
- How the Euro Trade Went Long and Wrong
- Ex-spy Sergei Skripal discharged after poisoning
- As Germany prepares for NATO crisis-response role, its military readiness is ‘abysmal’
- Who Holds Italian Debt?
- Domestic Distribution of Italian Debt
- Turkey’s Economic Rout Continues
- India is freaking out about rising oil prices
- India, not China, will lead future demand for energy
- U.S., China talks focus on cutting trade deficit, China denies $200 billion target
- Trump economic adviser Kudlow says China ‘meeting many of our demands’ on trade
- Exclusive: In run-up to Venezuelan vote, more soldiers dissent and desert
- U.S. targets four individuals, three companies in Venezuela sanctions move
- And More
Articles about events, conflicts and disease around the world
Global
- Fiscal and Monetary Policy in Emerging Markets (The Daily Shot) Here is BMI’s EM policy transition matrix.
U.S.
- House rejects farm bill as conservatives revolt (The Hill) See also next article. House conservatives tanked a GOP farm bill on Friday over an intraparty feud over immigration, delivering a stunning blow to Republican leaders as they try to find a path forward on immigration.
In a 198-213 vote, GOP conservatives essentially joined Democrats in rejecting the measure, which would have introduced tougher work requirements for the Supplemental Nutrition Assistance Program (SNAP) that were a priority for Speaker Paul Ryan (R-Wis.).
- Farm bill revolt could fuel Dreamer push (The Hill) Republican immigration reformers said Friday’s defeat of the GOP farm bill will generate more support for the upstart effort to force House action on “Dreamer” legislation. Rep. Jeff Denham (R-Calif.), a leading voice in the effort to revive the Deferred Action for Childhood Arrivals (DACA) program, said the conservatives who opposed the farm bill essentially reneged on an agreement with GOP leaders to lend their farm bill support in return for promised action next month on a conservative immigration proposal.
Twenty-nine Republicans opposed the GOP agriculture proposal Friday morning – many of them members of the conservative House Freedom Caucus – sinking the bill and delivering an embarrassing defeat to Speaker Paul Ryan (R-Wis.) and his leadership team.
- Exclusive: 40% in U.S. can’t afford middle-class basics (Axios) Hat tip to Jesse Colombo. At a time of rock-bottom joblessness, high corporate profits and a booming stock market, more than 40% of U.S. households cannot pay the basics of a middle-class lifestyle – rent, transportation, child care and a cellphone (called the “Alice” level), according to a new study. Many, but not all, of these disadvantaged live in rural areas.
- Ten dead after shooting at Texas high school (The Hill) See also next article. Nine students and one teacher were killed at a Texas high school on Friday when a gunman entered the school armed with two guns and improvised explosives. Texas police say one suspect is in custody and another person of interest has been detained in the investigation into the attack that occurred at Santa Fe High School, not far outside Houston.
The attacker allegedly used a .38 revolver and a shotgun acquired from his father in the shooting, which sent 10 others to area hospitals with mostly gunshot wounds, according to police.
The Associated Press and CNN, citing unnamed law enforcement sources, identified the suspect as 17-year-old Santa Fe High School student Dimitrios Pagourtzis. A search of the suspect’s home and a vehicle nearby conducted by police turned up further devices, including a molotov cocktail.
- Trump on Texas school shooting: ‘This has been going on too long in our country’ (CNN) President Donald Trump said Friday that mass shootings have been “going on too long in our country” as he offered his first public remarks on the school shooting in Santa Fe, Texas. See also There has been, on average, 1 school shooting every week this year.
- CapEx Surged in 1Q 2018, But … (The Daily Shot) CapEx at the largest US companies has picked up this quarter. However, given the sectors involved, the business investment isn’t fully reflected in capital goods orders (which have been lackluster lately).
- Trump urged postmaster general to double rates on Amazon: report (The Hill) (Econintersect: In our opinion the president would like to damage Amazon for personal reasons and cripple the Post Office for political ones.) The president has reportedly urged the U.S. postmaster general to double shipping rates for Amazon.com and other companies amid months of his continued criticism that the online retailer is costing the Postal Service “billions” of dollars in revenue.
Trump has personally met with Postmaster General Megan Brennan multiple times since 2017 to petition her for a hike on rates for Amazon and other firms that ship packages, The Washington Post reported Friday, citing officials familiar with the conversations.
The president’s demands came despite counsel from close advisers and top Postal Service employees that Amazon, the largest shipper of packages through USPS, actually helps keep it afloat financially.
- Trump picks Wilkie to lead VA in surprise announcement (Stars and Stripes) President Donald Trump announced Friday his intent to nominate Robert Wilkie as the next secretary for the Department of Veterans Affairs. Wilkie has been serving in the role in an interim basis since March 28. Trump made the surprise announcement during a public speech Friday morning at the White House about prisons and the criminal justice system. He said Wilkie, 55, has done an “incredible job” at the VA. Wilkie was at the event. Trump said:
“I’ll be informing him in a little while – he doesn’t know this yet – that we’re going to be putting his name up for nomination to be secretary of the veterans administration.”
- Territorial Acquisitions of USA (Reddit) Not shown on this map:
- Alaska, purchased from Russia 1867.
- Hawaii, became a kingdom in 1810, an independent republic in 1894, joined the U.S. 1898
- Puerto Rico, ceded by Spain 1898.
- Guam, ceded by Spain 1898.
- American Samoa, treaty with Germany 1899.
EU
- How the Euro Trade Went Long and Wrong (Twitter)
UK
- Ex-spy Sergei Skripal discharged after poisoning (BBC News) Russian ex-spy Sergei Skripal has been discharged from hospital, two months after being poisoned with a nerve agent in Salisbury. The 66-year-old was found slumped on a park bench in the city on 4 March, with his daughter Yulia. They were taken to Salisbury District Hospital’s intensive care unit, where they were stabilised after being exposed to Novichok. Ms Skripal was released on 9 April and was moved to a secure location. It is not known whether Mr Skripal has been taken to the same location as his daughter.
Germany
- As Germany prepares for NATO crisis-response role, its military readiness is ‘abysmal’ (Stars and Stripes) Hat tip to Roger Erickson. Germany’s military is virtually undeployable and security experts say it is too weak to meet its obligations to its allies, as it prepares to assume command of NATO’s crisis response force next year. Pressure on Berlin is mounting after a series of revelations has exposed the German military as one of the least combat ready in NATO, despite its economic heft.
Italy
- Who Holds Italian Debt? (Twitter) Much more Italian debt is held inside the country that for other Eurozone states, except for Greece. An Italian debt jubilee will cost Italians more than others unless there is an unlikely result that only foreigners will forgive debt. See also next article.
- Domestic Distribution of Italian Debt (Twitter) Only a limited amount of Italian debt is held outside Italy’s financial institutions.
Turkey
- Turkey’s Economic Rout Continues (Twitter)
India
- India is freaking out about rising oil prices (CNN) A spike in oil prices has the world’s third largest consumer of energy worried. India is seeking assurances from Saudi Arabia, OPEC’s biggest producer, that oil prices will remain “stable and moderate,” its government said in a statement on Friday. Energy minister Dharmendra Pradhan spoke with Saudi oil minister Khalid Al-Falih late on Thursday to
“express his concern about rising prices and its negative impact on consumers and the Indian economy.”
- India, not China, will lead future demand for energy (CNN) China is hungry for energy. But India is even hungrier. India will need more additional energy to fuel its economy between now and 2040 than any other country, according to OPEC. It’s the first time that India has topped China as the primary driver of energy demand. While India has captured the top spot, the cartel said the shift if more about changes in China. OPEC said in its World Oil Outlook 2040:
“This change in the leading position is primarily the result of the downward revisions made for China… rather than a more positive outlook for India.”
China
- U.S., China talks focus on cutting trade deficit, China denies $200 billion target (Reuters) U.S. President Donald Trump said on Friday he was determined to stop China from “taking our jobs, taking our money” as U.S. and Chinese negotiators met for a second day to try to avert a tariff war and find ways to boost U.S. exports to China. China earlier denied assertions from U.S. officials on Thursday night that Beijing had offered a package of concessions and goods purchases aimed at reducing the U.S. trade deficit with China by as much as $200 billion. See also Trump economic adviser Kudlow says China ‘meeting many of our demands’ on trade.
Venezuela
- Exclusive: In run-up to Venezuelan vote, more soldiers dissent and desert (Reuters) Arrests for rebellion and desertion are rising sharply in Venezuela’s armed forces, a mainstay of President Nicolas Maduro’s Socialist government, amid discontent within the ranks at food shortages and dwindling salaries, according to documents and interviews with army personnel.
- U.S. targets four individuals, three companies in Venezuela sanctions move (Reuters) The U.S. Treasury imposed sanctions on four Venezuelans and three Florida-based companies under a program meant to pressure Caracas over what the United States sees as its heavy-handed tactics to suppress political opposition.
Other Scientific, Health, Political, Economics, and Business Items of Note – plus Miscellanea
- World Markets Update (Advisor Perspectives) Jill Mislinski reports:
Six of eight indexes on our world watch list have posted gains through Monday, May 14, 2018. The top performer this year is Hong Kong’s Hang Seng with a gain of 5.42%. In second is India’s BSE SENSEX with a gain of 5.16%. In third is France’s CAC 40 with a gain of 4.29%. Coming in last is Shanghai’s SSE with a loss of 4.03%.
- Volatility Floored (The Lyons Share) Hat tip to Lance Roberts. The VIX may struggle to move much lower than current levels – and may signal limitations to further stock market gains. The VIX did finally break above its post-2015 Down trendline in late January/early February of this year. After its subsequent spike into early February, the VIX settled back down. Where did it find support? Right on the top of the broken post-2015 Down trendline on March 9. While it was bouncing firmly off of that support, stocks were, at the same time, stalling out, eventually turning back down to test its February correction lows.
Following the VIX’s bump up in volatility into April, it has settled back down again. And presently, as stocks have bounced again, we find the VIX once again nearing a test of that broken post-2015 Down trendline.
As it did in March, the trendline may provide nearby support for the VIX. If successful, that may also serve as a signal that further upside in stocks may be tough to come by in the near-term.
- People Lie To Themselves About Julian Assange To Justify His Persecution(Medium) Rogue journalist Caitlin Johnstone writes:
There is so much cognitive dissonance around this one gangly Australian not so much for the things that he has done, but for what his existence means. If our institutions were as trustworthy and just as we pretend they are, there would be no such phenomenon as Julian Assange. His reason for rising to notoriety wouldn’t exist, his publications would be redundant, and his persecution wouldn’t occur. If we really lived in a free and democratic society with a transparent and open government, he would have nothing to leak and no one would care if he did anyway, because our institutions would operate as advertised.
- Subprime Chaos: The Auto Bubble’s Bursting And It’s Worse Than 2008(Palisade Research) Hat tip to Lance Roberts. Last week, used car prices had their biggest drop since 2009 – directly after the financial market meltdown of 2008. And right now, the auto market is showing signs of incredible worry. Delinquent subprime auto-loans are higher than they were in the last recession. See also Consumers Skip More High-Rate Auto Payments Than During Crisis (Bloomberg).
- Emissions of Ozone-Destroying Chemical Mysteriously Rising (EcoWatch) A new study from the National Oceanic and Atmospheric Administration (NOAA) shows an “unexpected and persistent increase” in global emissions of an ozone-depleting chemical even though an international treaty forced production to completely halt by 2010. NOAA scientists suggest that emissions are most likely from new, unreported production from an unidentified source in eastern Asia.
Chlorofluorocarbons, or CFCs, were once found in countless products, including air-conditioning, refrigeration and aerosol-spray propellants. However, it was discovered they caused a giant hole in the ozone layer, which shields the sun’s dangerous ultraviolet radiation from reaching Earth’s surface.
CFCs – including the second most abundant ozone destroyer, CFC-11 – were banned under the landmark Montreal Protocol of 1987, and since then parts of the ozone layer have been slowly recovering. (See video below.)
- Which Americans Have the Highest Tax Bills in the Country? (HowMuch.net) This is a kluge of avareage and median values. From HowMuch.net:
We compiled the data from GoBankingRates, which analyzed a few different sources to figure out the average tax burdens for each state. These included the 2016 Census Bureau American Community Survey for median household income levels, Zillow’s median home value and property tax information, the American Petroleum Institute’s average gas consumption figures, the Tax Foundation’s numbers of state sales tax rates, and Gallup’s estimates for average daily spending. We sliced and diced all this data to represent each state as a pie chart where each piece corresponds to the weight of each category of taxation. We then sized each pie chart based on the total taxes paid.
Top Five States with the Lowest Total Tax Burdens
- West Virginia: $8,600
- Mississippi: $8,800
- Montana: $9,500
- Arkansas: $9,700
- Kentucky: $9,800
Top Five States with the Highest Total Tax Burdens
- New Jersey: $22,800
- Connecticut: $20,700
- Massachusetts: $20,100
- Washington, DC: $20,00
- Maryland: $19,600
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