Written by Econintersect
Early Bird Headlines 16 Oct 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 stocks mixed following overnight slide on Wall Street; oil prices fall (CNBC) Stocks in Asia were mixed on Tuesday, as Wall Street slipped overnight and amid geopolitical tensions between Saudi Arabia and the international community. The U.S. dollar index was lower at 95.156 in the afternoon, sliding from levels above 95.3 yesterday. The global benchmark Brent crude futures contract decreased 0.38% to $80.47 per barrel, while the U.S. crude futures contract fell 0.47% to $71.44 per barrel. Spot gold was little-changed at $1,226.11 an ounce at 0353 GMT.
U.S.
- Here is a map of the 142 Sears and Kmart stores set to close (CNBC) Sears Holdings plans to shutter 142 Kmart and Sears stores by the end of the year and begin liquidation sales shortly as it tries to emerge from bankruptcy court. The retailer currently has roughly 700 stores open.
- Talk of a US recession in 2020 is a little premature (CNBC) Is the fiscally turbocharged U.S. growth about to come to an end? We are certainly due for a recession. According to the National Bureau of Economic Research, the average economic cycle since 1945 has lasted about 58 months. This latest cycle, which started in March 2009, has now been going on for 115 months, just five months shorter than the longest period of economic growth on record (1991 to 2001).
And yet, the economy is growing at a robust pace of around 3 percent for 2018 and is set to grow at 2.5 percent in 2019 (according to IMF‘s latest world economic outlook): a moderation due to waning fiscal impulse and trade wars. But when does a late cycle economy transition into an economy that’s verging on a recession?
TS Lombard analyst Dario Perkins has highlighted the four conditions for a recession to occur: 1) accelerating inflation 2) a squeeze on corporate profits 3) tight monetary policy and 4) macroeconomic imbalances such as asset bubbles.
- President Trump raises more than $100 million for 2020 re-election (CNN) President Donald Trump has raised more than $100 million for a re-election battle that is more than two years away, giving him a massive financial advantage over a crowded field of potential Democratic contenders jockeying to challenge him in 2020.
The President raised more than $18 million during the July-to-September fundraising quarter through his campaign committee and the joint fundraising operations he maintains with the Republican National Committee, according to his campaign and filings Monday night with Federal Election Commission. That haul means his re-election effort’s war chest now exceeds $106 million.
- Trump denies offering $1 million for Warren DNA test, even though he did (The Hill) President Trump on Monday denied that he offered Sen. Elizabeth Warren (D, MA.) $1 million to take a test proving her Native American heritage, even though he did just that. Trump spoke after Warren responded to the president’s challenge and released the results of a DNA test showing she has a distant Native ancestor.
- Judge dismisses Stormy Daniels’ defamation lawsuit (CNN) In a big victory for President Trumpo, afederal judge has dismissed adult film star Stormy Daniels’ defamation lawsuit against the president.
- Let’s Be Like Japan (Lance Roberts, Real Investment Advice) LR is a regular contributor to GEI. There has been a lot of angst lately over the rise in interest rates and the question of whether the government will be able to continue to fund itself given the massive surge in the fiscal deficit since the beginning of the year. Well Japan has been doing it for decades. The process is called interest rate repression with financial asset inflation. See also next item. Click on either chart for large image.
- Slowing Total Debt Growth (Twitter) This was posted in response to preceding article.
UK
- May to address EU leaders as Tusk warns no-deal Brexit ‘more likely than ever’ (CNN) British Prime Minister Theresa May will face EU leaders Wednesday in a make-or-break summit, as European Council President Donald Tusk warned the UK is barreling towards a disastrous no-deal Brexit.
Talks over the weekend stalled, with the EU’s chief negotiator, Michel Barnier, saying “key issues are still open.” The sticking point remains the thorny issue of the Irish border. The European Union wants the UK to agree a “backstop” or fallback position that would ensure an open border between Northern Ireland, which will be outside the EU, and the Republic of Ireland, which will remain an EU member state.
- UK wage growth fastest for nearly 10 years (BBC News) Wages excluding bonuses rose by 3.1% in the three months to August, compared with a year ago, their fastest pace in nearly 10 years, official figures show. Over the same period, the inflation rate was 2.5%. The Office for National Statistics (ONS) also said that UK unemployment fell by 47,000 to 1.36 million in the three months to August. The unemployment rate remained unchanged at 4%. David Freeman, the ONS’s head of labour market, said:
“People’s regular monthly wage packets grew at their strongest rate in almost a decade, but, allowing for inflation, the growth was much more subdued. The number of people in work remained at a near-record high, while the unemployment rate was at its lowest since the mid-1970s.”
Germany​
- Germany well-prepared for all Brexit scenarios: German government official (Reuters) Germany is well-equipped for all Brexit scenarios, a government official said on Tuesday, adding that a swift Brexit deal would be best both for businesses and citizens. The official also said significant progress had been made in negotiations on Britain’s looming exit from the European Union and added that a so-called “backstop” for the Irish border in the exit agreement needed to be legally watertight.
- German carmakers have 50:50 chance of facing Detroit’s fate, VW says (Reuters) German carmakers only have a 50% chance of surviving as leading players in the auto industry unless they transform their businesses to meet new regulations and adapt supply chains, Volkswagen’s (VOWG_p.DE) chief executive said on Tuesday. German auto makers must learn to adapt to a world with tougher regulations, he said.
Italy
Iran
- Iran says range of its land-to-sea missiles increased to 700 km: Fars (Reuters) The range of Iranian land-to-sea ballistic missile has been increased to 700 km (435 miles), a senior military official said on Tuesday, as tensions rose between Iran and the United States over new sanctions.
India
- Indian weddings are known for their opulence, customs and traditions that are celebrated over several days – millions of couples get married in the country every year.
- Two Australian travel bloggers paid around $200 for a two-day invitation to attend an Indian wedding through a start-up called Join My Wedding.
- Wedding tourism is an up and coming trend in the tourism industry, according to one expert.
Korea
- Two Koreas, U.N. Command wrap up first session of talks on disarming border (Reuters) North and South Korea held their first three-way talks with the United Nations Command (UNC) on Tuesday to discuss ways to demilitarize the border as the neighbors push for peace, Seoul’s defense ministry said.
China
- Pessimism reigns as the U.S.-China trade war shows no sign of ending.
- Investors and economists are increasingly seeing tensions lasting into 2019 – and perhaps well beyond.
- The conflict is trying the patience of the global financial community.
- China claims inmates of ‘re-education camps’ are happier after imprisonment (CNN) China has fiercely defended an escalating crackdown in the far western province of Xinjiang as necessary for security, claiming inmates of “re-education camps” are happier following their imprisonment. International outrage has been growing over reports the Chinese government has forced as many as one million people into “re-education camps,” where former detainees say they were forced to endure intensive “brain washing” sessions including close study of Communist Party propaganda.
In the most vocal defense yet of the mass internment of the mostly Muslim Uyghur minority group, Shohrat Zakir, a high-ranking Xinjiang government official, told state media the Chinese government was fighting “terrorism and extremism” in its own way, and in accordance with United Nations resolutions.
Australia
- ‘Anti-white’ racism: Australia senators blame ‘error’ for vote (BBC News) The Australian government has said that an “administrative error” prompted 23 of its senators to vote for a motion which stated “it is OK to be white“. The motion by Pauline Hanson, leader of the anti-Islam One Nation party, also condemned “anti-white racism“. It was defeated 31-28 in a vote on Monday. Critics noted that the phrase “it’s OK to be white” has been associated with trolls and white supremacist groups.
PM Scott Morrison said the level of government support was “regrettable“.
Responding to a backlash on Tuesday, the government said its senators had misunderstood the motion due to an internal “process failure“.
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