Written by Econintersect
Early Bird Headlines 14 January 2019
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 Pacific markets fall as investors react to China’s trade data (CNBC) Asia Pacific markets started off the trading week mostly on the back foot as China’s disappointing trade data spooked investors. Major indexes in South Korea, China, Hong Kong and Singapore tumbled Monday afternoon. The market in Japan is closed for a public holiday. The U.S. dollar index traded higher at 95.615. Brent crude oil futures were at $59.78 per barrel at 0312 GMT, down $0.70 cents (1.2%) from their last close. U.S. West Texas Intermediate (WTI) crude futures were down $0.63 cents, or 1.2 %, $50.96 a barrel.
U.S.
- Trump losing battle to avoid blame for shutdown as day 23 rolls on (The Guardian) Donald Trump is losing the battle to avoid blame for the government shutdown, according to a new poll. The president has reportedly told advisers he thinks the 23-day partial closure of the US government, the longest ever, is a win for him.
ABC News and the Washington Post released a poll that followed trendswhen it showed 53% of respondents saying Trump and Republicans in Congress were to blame for the shutdown, with 29% blaming Democrats and 13% a combination. Support for building a border wall, the issue at the heart of the shutdown, increased to 42%, from 34% in January 2018.
- The data casualties of the federal government shutdown (Pew Research Center) The ongoing shutdown of large parts of the federal government – now at 18 days and counting – has left hundreds of thousands of federal workers either furloughed or working without pay indefinitely, reduced staffing at national parks to skeleton levels, and closed down popular museums. It’s also squeezed the daily flood of data from federal agencies down to a trickle, affecting everyone from investors and farmers to researchers and journalists.
- The Census Bureau has ceased most operations, other than planning for the 2020 count. That means, among other things, no November data on new home sales (which were supposed to come out Dec. 27), construction spending (Jan. 3), manufacturers’ shipments, inventories and orders (Jan. 7) and international trade (Jan. 8). Unlike previous shutdowns, however, the Census website is running, giving people access to previously published data. The Federal News Network reports that the bureau has six to eight weeks of “carryover funding” it can use for planning purposes, but should the shutdown last longer than that even that work would cease. Activities funded otherwise than by annual appropriations, such as those paid for by other agencies or “non-Federal entities,” may also be continuing.
- Like Census, the Bureau of Economic Analysis is part of the Commerce Department, and also has ceased operations for the duration. That could affect the bureau’s first estimates of fourth-quarter and full-year 2018 gross domestic product, which are supposed to be released on Jan. 30.
- The Bureau of Labor Statistics is fully operational, as it is part of the Labor Department (which was funded back in September). That means the inflation report for December, scheduled to be released Jan. 11, is on track, a spokesman told us. That also goes for the releases of detailed jobs and unemployment data for December (the national-level data came out Jan. 4, and data for states and metro areas typically follow a few weeks later). But plans for the January jobs report, data for which are supposed to be gathered next week, are still uncertain: The BLS conducts the payroll survey of employers itself, but the Current Population Survey (which generates the data used to calculate the unemployment rate) is a joint effort with the Census Bureau.
- The Agriculture Department’s main statistical offices, the National Agricultural Statistics Service and the Economic Research Service, are both closed. That means farmers will not have current data on global supply and demand for farm products, crop and livestock production estimates, and other agricultural economics matters. However, the Agricultural Marketing Service is continuing to provide market-price data for meat, grain, dairy products and other commodities.
- Although most employees of the Justice Department have been deemed essential and are still working (without pay), the office that includes the Bureau of Justice Statistics is an exception. That means data on crime, sentencing, prisons and other law enforcement topics aren’t being updated. (The bureau did, however issue a report on Jan. 8 about identity theft based on 2016 data.)
- The Bureau of Transportation Statistics, part of the Department of Transportation, had been operating normally except for the Office of Airline Information. However, a notice posted Tuesday said that, except for the Transportation Services Index for November (scheduled for release Jan. 9), all other statistical releases would be delayed due to the shutdown.
- Poll finds Trump’s approval rating at 44 percent amid shutdown (The Hill) President Trump’s approval rating is at 44% amid the ongoing government shutdown, according to a new The Hill-HarrisX Daily Poll. Trump’s most recent approval rating is down 3 points from 47% in December. The president’s total disapproval rating was at 56%, according to the survey.
- Trump’s weekend: new Russia questions, shutdown irritants (SFGate) Trump surprised his aides by deciding, with just a few hours’ notice, to call in to Jeanine Pirro’s show on Fox News on Saturday night to push back against coverage of his presidency on multiple fronts, particularly published reports about his approach toward Russia. Even then, the president avoided directly answering when Pirro asked whether he currently is or has ever worked for Russia. The question came after The New York Times reported that law enforcement officials began investigating, in 2017, whether Trump had been working on behalf of Russia against U.S. interests. The newspaper said the investigation came after the president’s firing of FBI Director James Comey. See next article.
- F.B.I. Opened Inquiry Into Whether Trump Was Secretly Working on Behalf of Russia (The New York Times) See also Trump Confronts the Prospect of a ‘Nonstop Political War’ for Survival. In the days after President Trump fired James B. Comey as F.B.I. director, law enforcement officials became so concerned by the president’s behavior that they began investigating whether he had been working on behalf of Russia against American interests, according to former law enforcement officials and others familiar with the investigation.
The inquiry carried explosive implications. Counterintelligence investigators had to consider whether the president’s own actions constituted a possible threat to national security. Agents also sought to determine whether Mr. Trump was knowingly working for Russia or had unwittingly fallen under Moscow’s influence.
The investigation the F.B.I. opened into Mr. Trump also had a criminal aspect, which has long been publicly known: whether his firing of Mr. Comey constituted obstruction of justice.
- Amazon Caused Donald Trump to Lose $400 Million in Net Worth, Says Forbes (Fortune) President Donald Trump’s net worth declined by more than $600 million in the past year, according to the Forbes 400 List of the richest people in America. However surprising Trump’s loss may be, the reason for it is even more unexpected. Trump’s real estate holdings, specifically those in New York City, have taken a big hit in the past year, as retail values are struggling in response to Amazon’s e-commerce gains accounting for about 2/3 of the president’s losses.
- SpaceX, the rocket company owned by Elon Musk, will lay off about 10% of its employees, the Los Angeles Times reported on Friday, citing an unnamed source.
- The company has more than 6,000 employees and has been working rapidly to build and start testing a prototype of its brand-new rocket system.
- 500 Passengers Are Now Sick on Royal Caribbean’s Oasis of the Seas Cruise Ship (Fortune) The number of passengers hit with a gastrointestinal illness on a Royal Caribbean International cruise ship has increased to nearly 500, a day after the company said 277 passengers on the Oasis of the Seas had initially fallen ill. Passengers started feeling sick after the cruise ship departed from Port Canaveral in Florida on Sunday, reported NBC News. The trip has been cut short and all passengers will get a refund due to the outbreak.
- Brux column: The economics of discrimination and racism (River Falls Journal) A retired economics professor explains the negative economic affects of racism (lowers GDP) as well as the social impacts (higher unemployment, poverty, infant mortality rates, and lower life expectancies). Of course the two economic and social affects are interrelated.
- Border apprehensions increased in 2018 – especially for migrant families (Pew Research) There were nearly 416,000 apprehensions at the U.S.-Mexico border in the first 11 months of 2018, the most in any January-November period since 2014, according to a Pew Research Center analysis of the most recent available data from U.S. Customs and Border Protection. The increase was driven in part by a dramatic spike in border apprehensions of family members in the fall of last year.
Despite the increase, the number of border apprehensions through the first 11 months of 2018 remained far below the levels throughout most of the 1980s, 1990s and 2000s, when around 1 million or more migrants were being apprehended each fiscal year.
- FACT CHECK: Trump, Illegal Immigration And Crime (NPR) See also Criminal Immigrants in Texas: Illegal Immigrant Conviction and Arrest Rates for Homicide, Sex Crimes, Larceny, and Other Crimes (Cato Institute). After days of damaging news stories about an administration policy that separated immigrant families at the Southern border, President Trump tried to change the narrative Friday. He spoke up for grieving family members who have lost loved ones at the hands of people in the country illegally.
Trump has frequently pointed to sympathetic crime victims to justify his get-tough policies at the Southern border. But experts say the president’s rhetoric overstates the threat posed by immigrants, who tend to commit crime at lower rates than people who are born in the United States.
UK
- With warning and EU letter, May tries to pull lawmakers behind Brexit deal (Reuters) Prime Minister Theresa May makes a last ditch effort to convince rebel lawmakers to back her Brexit divorce deal on Monday, warning that United Kingdom’s exit is now in peril before setting out new European Union assurances on the deal.
- Labour set to call vote to topple Theresa May’s government (The Guardian) Labour MPs have been told to prepare for Jeremy Corbyn to table a dramatic and immediate vote of no confidence in Theresa May’s government as early as Tuesday evening in an attempt to force a general election if – as expected – she suffers a heavy defeat this week on her Brexit deal.
Turkey
- Trump says he will ‘devastate Turkey economically’ if it attacks Kurds (The Guardian) Donald Trump has warned Turkey of economic devastation if it attacks Kurdish forces in the wake of the US troop pullout from Syria, while also urging the Kurds not to “provoke” Ankara. See also Turkish lira weakens after Trump comment on economic devastation.
Iran
- White House asked for options to strike Iran: source (Reuters) The White House’s national security team last fall asked the Pentagon to provide it with options for striking Iran after a group of militants aligned with Tehran fired mortars into an area in Baghdad that is home to the U.S. Embassy, a source familiar with the matter said on Sunday.
Malaysia
- Malaysian finance minister: It’s ‘reasonable’ to ask Goldman for $7.5 billion over 1MDB ‘agony’ (CNBC)
- Malaysian Finance Minister Lim Guan Eng says the $7.5 billion that his country is seeking from Goldman Sachs over the 1Malaysia Development Berhad scandal is an “extremely reasonable” amount.
- Lim cites the “agony” and “trauma” the country experienced as well as financial losses incurred from the disappearance of billions of dollars from the country’s 1MDB sovereign wealth fund.
Taiwan
- New Taiwan premier to keep old economics team: senior political source (Taiwan News) Taiwan’s new premier, Su Tseng-chang (蘇貞昌), will be keeping on the economics and finance team from the previous Cabinet, but will make changes in other ministries and departments, a senior political source said Friday. According to the source, the new premier’s first priority will be to boost Taiwan’s economy, and he has asked the four ministers who make up the team if they are willing to stay on their jobs.
China
- China’s exports shrink most in two years, raising risks to global economy (Reuters) China’s exports unexpectedly fell the most in two years in December, while imports also contracted, pointing to further weakness in the world’s second-largest economy in 2019 and deteriorating global demand. In contrast:
China’s politically-sensitive surplus with the U.S. widened by 17.2 percent to $323.32 billion last year, the highest on record going back to 2006, according to Reuters calculations based on customs data.
- China’s overseas investment into North America and Europe falls 73 percent in 2018, survey shows (CNBC)
- Chinese foreign direct investment into North America and Europe fell by 73 percent to a six-year low in 2018, Baker and McKenzie said.
- That’s as the United States tightened the security of deals and Chinese restrictions on outbound investment bit, the law firm said.
- Even after stripping out the effect of the $43 billion takeover of Syngenta by ChemChina in 2017, the underlying drop in deal volumes was 40 percent.
- The U.S. Government Is Warning Americans That If They Visit China They May Not Be Able to Return Home (Travel & Leisure) The US State Department has issued a travel advisory urging Americans to “exercise increased caution” when traveling to the People’s Republic of China. The State Department’s elevated travel advisory is out of concern that China may arbitrarily enforce local laws and detain US citizens without cause.
The advisory also indicates that US-Chinese citizens or Americans of Chinese heritage are especially vulnerable to “additional scrutiny and harassment.”
Canada
- China says detained former Canadian diplomat does not have diplomatic immunity (Reuters) Former Canadian diplomat Michael Kovrig, being held in China on suspicion of endangering national security, is not entitled to diplomatic immunity, China’s foreign ministry said on Monday.
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