Written by Econintersect
Early Bird Headlines 22 June 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 mixed amid trade and economic concerns; Nikkei drops 1% (CNBC) Major Asian markets were a mixed picture on Friday, following losses seen on Wall Street amid investor concerns about the trade dispute between the U.S. and China. The dollar index was steady at 94.823. Brent crude oil futures were at $73.78 per barrel at 0502 GMT, up $0.73 (1%). U.S. West Texas Intermediate (WTI) crude futures were at $66.26 a barrel, up $0.72 cents, or 1.1%. Spot gold was little changed at $1,267.38 an ounce, as of 0304 GMT. In the prior session, the bullion touched $1,260.84, its lowest since Dec. 19, 2017.
U.S.
- Federal judge rules that CFPB’s structure is unconstitutional (CNN) U.S. District Judge Loretta Preska in Manhattan objected to the CFPB’s setup as an independent agency with a single director who can be fired by the president only for cause, not at will. In January, a federal appeals court in Washington said that structure is legal. Preska said she disagreed.
The immediate effect of the ruling appears to be limited. It means the CFPB can’t be party to a lawsuit about a company accused of scamming 9/11 first responders. The New York attorney general, who was also a plaintiff, can move forward with the case.
But the judge’s decision adds fodder to the political fight over the independence of the CFPB, which was established after the financial crisis to safeguard Americans against predatory financial institutions.
- U.S. Top Court Lets States Force Online Retailers to Collect Sales Tax (Investopedia) States may force online retailers to collect potentially billions of dollars in sales taxes, the U.S. Supreme Court said in a major ruling on Thursday that undercut an advantage many e-commerce companies have enjoyed over brick-and-mortar rivals. In a 5-4 ruling upholding a South Dakota law challenged by Wayfair Inc, Overstock.com Inc and Newegg Inc, the justices overturned a 1992 high court precedent that had barred states from requiring businesses with no “physical presence” there, like out-of-state online retailers, to collect sales taxes.
Shares of online retailers fell sharply following the ruling, which opened the door to a new revenue stream to fill state coffers – up to $13 billion annually, according to a federal report.
- House GOP leaders push immigration vote to next week (The Hill) House GOP leaders in a surprise move Thursday night pushed back a vote on a compromise immigration bill until next week, underscoring the difficulty they’re facing in winning votes – and how the stakes have been raised by the crisis at the border. The decision to delay the vote, which had already been postponed from Thursday to Friday, followed a two-hour conference meeting designed to brief members on the measure’s contents.
Lawmakers, many of them worried about backing a measure that conservatives have described as providing amnesty to some undocumented workers, had complained that they didn’t have enough time to read and digest the nearly 300-page bill rolled out late Tuesday night.
- Despite Trump order, border child separations could go on: legal experts (Reuters) The much-vilified U.S. policy of separating children from parents who illegally cross the U.S.-Mexico border could continue under certain circumstances because of ambiguous language in President Donald Trump’s order meant to end the practice, legal experts said.
- Handcuffs, assaults, and drugs called ‘vitamins’: Children allege grave abuse at migrant detention facilities (CNN) Immigration attorneys working directly with migrant children say some of the facilities provide the best care they can, given the circumstances. And a huge shelter in Brownsville, Texas, which opened its doors for a media tour last week, appeared to be clean and well-staffed at the time. But dozens of court documents describe overloaded and secretive shelters, treatment centers and secure detention facilities for undocumented minors, which at their worst have allegedly been home to neglect, assault and other horrific abuse. See also Enforce the Border – Humanely (The Atlantic)
- The depressing predictability of the immigration debate (CNN) Immigration legislation is caught between the same old Scylla and Charybdis that has dashed past legislation to pieces: Moderates unhappy about the massive spending on a debatably useful border wall and conservatives opposed to the idea of providing “amnesty” to people in the country illegally (DACA “Dreamers”).
- Social Security Accounting (The Daily Shot) The Social Security program had a cash deficit each year since 2009. The deficit was masked by interest income – until now.
EU
- Europe Is In Crisis, Though It Is Not Making The Headlines (Credit Writedowns) The crisis is that the political center continues to weaken even though Europe, at least on paper, is enjoying a broad economic expansion. The populist-nationalist forces are coalescing around the immigration, refugees, and asylum. It, more than Italian politics, is the disruptive force that is threatening the political status quo. Faced with rising AfD in the German state of Bavaria, Merkel’s sister party, the CSU is trying to force a stronger stance against asylum seekers.
Polls consistently show that a majority in nearly every member wants to stay in the euro. The political will to maintain the union seems as strong as ever, and even the new Italian finance minister has unabashedly endorsed it. Merkel and Macron recognize that to preserve the union, more not less integration is needed.
Greece
- Greece is now due to successfully end its third financial program, which came into force in 2015, on August 20.
- Athens has been under the help of European creditors since 2010.
- Friday’s deal includes a 10-year extension in maturities related to the second bailout program as well as a 10-year deferral on interest payments.
Israel
- Sara Netanyahu, wife of Israeli Prime Minister, charged with fraud (CNN) The wife of Israeli Prime Minister Benjamin Netanyahu was charged with fraud and breach of trust Thursday over the alleged misuse of state funds at the couple’s official residence. In a case known as the “Meals Ordering Affair,” prosecutors say Sara Netanyahu used state money to pay for $100,000 worth of meals at the prime minister’s residence, according to an indictment filed in Jerusalem’s magistrate’s court on Thursday.
Sara Netanyahu also illegally paid approximately $10,000 for private chefs, prosecutors said.
The charges carry a maximum sentence of 8 years in prison.
Her lawyers slammed the indictment, describing it as “false and hallucinatory”.
South Korea
- North and South Korea discuss reunion meetings for divided families (Reuters) Delegations from North and South Korea met on Friday for talks to arrange the first reunions in about three years for families separated by the Korean War, with the Red Cross paving the way.
China
- A full-blown trade war between America and China looks likely (The Economist) It is becoming increasingly likely that the phoney trade war between America and China will develop into the real thing. On June 15th the Trump administration published two lists of Chinese products it plans to hit with tariffs of 25%, worth $50bn in 2018. The first will come into force on July 6th. The Chinese snapped back with their own list, laying out a retaliation of equal size. Then on June 18th President Donald Trump directed Robert Lighthizer, the United States Trade Representative (USTR), to draw up a further list of products worth $200bn that would face tariffs of 10%, and threatened yet another, covering an additional $200bn of goods, if the Chinese retaliated again. At least some of these tough words will probably turn into deeds. Both sides can expect to take casualties.
China regards the first round of American tariffs as a unilateral violation of global trading rules. It has lodged a complaint at the World Trade Organisation (WTO). But Mr Trump’s team maintains that China started the conflict, by stealing America’s intellectual property and engaging in unfair industrial policy. Once tariffs have been imposed, the rights and wrongs – and even the role of the WTO itself in the dispute – could be forgotten.
- Chinese media says U.S. has ‘delusions’ as impact of trade war spreads (Reuters) U.S. protectionism is self-defeating and a “symptom of paranoid delusions” that must not distract China from its path to modernization, Chinese state media said on Friday as Beijing kept up with its war of words with Washington over trade.
- Trump Is Actually Right About Chinese Trade (Credit Writedowns) China’s economic emergence as the global trading power it has become has damaged western economies. For details see Import Competition and the Great US Employment Sag of the 2000s (University of Chicago) and The Surprisingly Swift Decline of US Manufacturing Employment (American Economic Association).
- China Investment (The Daily Shot) Fixed asset investment growth has been slowing.
