Written by Econintersect
Early Bird Headlines 18 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 stocks trade higher, boosted by optimism in US-China trade talks (CNBC) Asia Pacific markets traded mostly higher on Friday as investors cheered a report saying American officials may be weighing the possibility of easing tariffs on China, in a bid to push forward trade talks. The U.S. dollar index last changed hands little changed at 96.050 as of 3:14 p.m. HK/SIN. International Brent crude oil futures were up %0.62 cents (1.01%) at $61.80 per barrel at 0955 GMT. Brent has risen about 2% this week, its third straight week of gains. U.S. West Texas Intermediate (WTI) crude futures were at $52.64 per barrel, up %0.57, or 1.09%. Spot gold was down 0.1% at $1,290.51 per ounce, while U.S. gold futures were down 0.2% at $1,290 per ounce.
- When Earth got pummeled (Science) Large asteroids have been striking Earth more than twice as often in the past 290 million years than in the previous 700 million years. But asteroids still only hit the planet on average every million at the most, and NASA’s list of potential crashes shows no strikes in the near future.
U.S.
- Trump fires back at Pelosi, cancels her foreign travel (The Hill) President Trump on Thursday hit back at Speaker Nancy Pelosi (D, CA) for warning she may postpone the State of the Union address by scrapping her planned trip overseas. In a letter to Pelosi, Trump told her that a congressional delegation trip she intended to take to Brussels, Egypt and Afghanistan, which he dismissed as a “public relations event,” is now “postponed.” See also What Trump Just Wrecked by Canceling Pelosi’s Trip to Afghanistan (The Daily Beast) and First lady flies on government jet after Trump postpones Pelosi trip to Afghanistan due to shutdown (CNBC)
- Tesla cuts 7% of its workforce to boost Model 3 production; Musk says ‘very difficult’ road ahead (CNBC)
- “Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Musk said
- This week, the company discontinued the cheapest versions of its Model S sedans and Model X SUVs and Musk said it would also ditch its customer referral program.
- Musk said Tesla faces “an extremely difficult challenge” in making its products a competitive alternative to traditional vehicles and energy products
- McConnell blocks bill to reopen most of government (The Hill) Senate Majority Leader Mitch McConnell (R, KY) blocked legislation on Thursday that would have reopened most of the federal government impacted by the partial shutdown. Sen. Tim Kaine (D, VA) tried to get consent to take up a House-passed bill that would reopen all agencies except the Department of Homeland Security (DHS), which is at the center of the shutdown fight. But McConnell objected. Any senator can stop a bill from coming up for a vote simply by objecting, and no reason need be given.
- US will ‘reinforce its leadership’ as the world’s top crude producer in 2019, IEA says (CNBC)
- The IEA report comes shortly after OPEC and non-OPEC producers officially implemented a fresh round of supply cuts.
- “While the other two giants voluntarily cut output, the U.S., already the biggest liquids supplier, will reinforce its leadership as the world’s number one crude producer,” the Paris-based group said Friday.
- Brent crude has fallen almost 30 percent since climbing to a peak of $86.29 in early October last year, while WTI is down more than 31 percent over the same period.
- William Barr and Why Democrats Shouldn’t Expect This Era to Be Anything Like Watergate (The New Yorker) Republicans and Democrats have completely different expectations of what Mueller will find. Graham made it clear that he remains skeptical of the F.B.I.’s actions in the Trump-Russia probe, and said that he expected Barr to ferret out law-enforcement officials who are politically biased against the President. He read out text messages sent between Peter Strzok and Lisa Page, former senior Bureau officials, which disparaged Trump, and asked Barr what he thought about them. “I was shocked when I saw them,” Barr replied. Graham then told the nominee, “We’re relying on you to clean this place up.” The Democrats, led by the ranking member, Dianne Feinstein, pressed Barr to promise that he would make Mueller’s full report available to Congress and the public. Barr’s reply was cautious:
“I am going to make as much information available as I can, consistent with the rules and regulations that are part of the special-counsel regulations.”
- Impeach Donald Trump (The Atlantic) According to this article, the president has mounted a concerted challenge to the separation of powers, to the rule of law, and to the civil liberties enshrined in our founding documents. He has purposefully inflamed America’s divisions. He has set himself against the American idea, the principle that all of us – of every race, gender, and creed – are created equal.
This is not a partisan judgment. Many of the president’s fiercest critics have emerged from within his own party. Even officials and observers who support his policies are appalled by his pronouncements, and those who have the most firsthand experience of governance are also the most alarmed by how Trump is governing.
- Harvard Business School: The U.S. Political System Has Been ‘Hijacked’ (The Intellectualist) A new case study by Harvard Business School asserts that U.S. politicians have rigged the system to such a degree that the U.S. is becoming a failed democracy. The authors of the case-study use the word ‘hijacked’ to describe what the political parties have done to governance in the United States. See also next article.
- United States Doesn’t Even Make Top 20 On Global Democracy Index (Common Dreams) A new index released this week offers a sobering look at how democracy is faring in the United States. According to the 2018 edition of The Economist Intelligence Unit‘s Democracy Index, the U.S. doesn’t even make the list of top 20 – its demonstrably “flawed democracy” notching it the 25th spot. The ranking is based on 60 indicators spanning five interrelated categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. Each category gets a 0-10 score, with the final score being the average of those five. See full report at The Economist.
- Lou Dobbs Accuses James Comey Of Being A Double Agent Of The Kremlin (The Intellectualist) Lou Dobbs wonders why former FBI Director James Comey wasn’t investigated for appearing to be a “double agent.” The Fox Business, who occasionally gets a Twitter shout out from the president, suggested former FBI Director James Comey was a double agent. Listen to his logic:
- Why Is Trump in a Joint Defense Agreement with Manafort if Guiliani Concedes Manafort May Have “Colluded”? (emptywheel) Marcy Wheeler gives her usually concise summary of a significant event:
Rudy Giuliani had yet another of his limited hangout meltdowns on CNN last night. (This threadhas the best summary I’ve seen until CNN posts a transcript.) In it, Rudy significantly moved his previous goalposts on “collusion,” by claiming that he had never said no one on the campaign had “colluded,” he had only made such claims about the President.
- President Trump Directed His Attorney To Lie To Congress About The Moscow Tower Project (BuzzFeed) President Donald Trump directed his longtime attorney Michael Cohen to lie to Congress about negotiations to build a Trump Tower in Moscow, according to two federal law enforcement officials involved in an investigation of the matter. Trump also supported a plan, set up by Cohen, to visit Russia during the presidential campaign, in order to personally meet President Vladimir Putin and jump-start the tower negotiations. “Make it happen,” the sources said Trump told Cohen. Trump received 10 personal updates from Michael Cohen on the matter.
​UK
- There’s Officially Nobody in Charge of Britain (Foreign Policy) Tuesday’s vote made clear that nobody is at the lead of an increasingly rickety and rudderless Parliament. After nearly seven hours of debate, Theresa May, the MP for Maidenhead who still technically bears the title of prime minister, lost the greatest meaningful vote by the greatest margin since the advent of the modern party system. A remarkable 432 MPs lined up against the withdrawal agreement she had reached with the EU, tossing Brexit into ever greater uncertainty. And now, whether Britain has left itself with no deal, no Brexit, or no prime minister remains to be seen.
- Theresa May’s Government Lives on – and So Does the Brexit Chaos (The New Yorker) How and when will it all end? On Thursday, the government announced that Parliament would debate and vote on May’s “Plan B” on Tuesday, January 29th. M.P.s who spoke with the Prime Minister said that she still thinks she can tweak her deal and win, but few people outside of Downing Street believe it. The E.U. has ruled out making any more significant concessions. Both major parties are horribly split. And when the pollsters present the British public with the three options on offer – a no-deal Brexit, a Brexit on May’s terms, or a decision to Remain – there is no clear majority for any of them.
- Corbyn could face string of resignations if he backs ‘people’s vote’ (The Guardian) Jeremy Corbyn could face up to a dozen resignations from the Labour frontbench if the party backs a second referendum as a way out of the Brexit crisis. A string of junior shadow ministers have told the Guardian they are strongly opposed to the idea of a second referendum, which they fear would expose Labour to a vicious backlash in leave-voting constituencies. The development follows another tense day of brinkmanship in Westminster between Theresa May and the Labour leader as they seek a way out of the crisis that has engulfed both major parties.
Germany
- ‘We will miss you’ – Germany pleads with the British to stay in EU (Reuters) German Chancellor Angela Merkel’s protege, CDU party leader Annegret Kramp-Karrenbauer, appealed to the British on Friday to stay in the European Union, saying her compatriots had not forgotten how Britain welcomed Germany back as a sovereign nation after World War Two.
​Sweden
- Social Democrat Lofven wins Swedish PM race as populists left in cold (Reuters) Sweden’s parliament handed Social Democrat leader Stefan Lofven a second term in office on Friday, ending more than four months of deadlock after an inconclusive election that had allowed a populist party to threaten the traditional balance of power.
Russia
- Russia’s Conventional Weapons Are Deadlier Than Its Nukes (Foreign Policy) See also next article. Withdrawing from the Intermediate-Range Nuclear Forces (INF) Treaty would take the United States one step forward and many steps back on international security. The INF Treaty is widely seen as one of the crowning achievements of arms control, banning the possession by two of the world’s leading powers of an entire class of nuclear weapons system. As such, the Trump administration’s declaration late last year that it might withdraw from the treaty has stoked fears of a new nuclear arms race.
- Germany: Russia can save INF if it stops violating the treaty (Reuters) German Foreign Minister Heiko Maas said on Friday that Russia could save the missile accord known as the Intermediate-range Nuclear Forces Treaty (INF) if it rid itself of treaty-violating cruise missiles.
North Korea
- North Korean envoy may meet Trump to discuss second summit (The Guardian) North Korea’s lead negotiator in nuclear diplomacy with the US is expected to hold talks with the secretary of state, Mike Pompeo, and could also meet President Donald Trump on Friday during a visit aimed at clearing the way for a second US-North Korea summit. Kim Yong-chol arrived in Washington on Thursday evening for his first visit since he came last June ahead of a landmark meeting between Trump and the North Korean leader, Kim Jong un, in Singapore. Efforts made since then to get Pyongyang to denuclearise appear to have stalled.
China
- Bank of China to issue country’s first perpetual bonds (Asia Times) The China Banking and Insurance Regulatory Commission has given the green light to the Bank of China (BOC) to issue no more than 40 billion yuan of perpetual bonds to boost banks’ capital adequacy, Yicai.com reported.
A perpetual bond is a bond with no maturity date, and issuing a perpetual is the main way for commercial banks to supplement their Tier 1 capital internationally. There is no precedent for this in China.
- A string of encouraging signals is making investors increasingly positive about China’s economy (CNBC)
- The prospect of a a U.S.-China trade deal and beefed up Chinese stimulus measures are leading to increased optimism about the world’s second-largest economy this year, experts say.
- Ken Peng, investment strategist at Citi Private Bank, sees “less worries about trade tensions” in 2019.
- Now is the time to increase exposure to China in anticipation of a deal, says Stefan Hofer, chief investment strategist at LGT Bank in Hong Kong
- Will China’s Currency Hit a Wall? (Council on Foreign Relations) Brad Setser says to worry about China’s slowing economy in 2019, not its balance of payments. Lots of data presented here, three of the many detailed graphics below:
​Australia
- Australia heatwave: overnight minimum of 35.9C in Noona sets new record (The Guardian) On the fifth day of record-breaking extreme weather, temperatures in parts of Victoria, ACT and NSW forecast to soar above 40C (104F), including in Sydney’s west. In the interior temperatures are reaching above 45C (113F).
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