Written by Econintersect
Early Bird Headlines 26 March 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
- Stocks in Japan rebound following earlier tumble amid global growth worries (CNBC) Stocks in Japan bounced back partially on Tuesday after the previous day’s heavy losses as concerns over the global economy weighed on investor sentiment. The U.S. dollar index was lower at 96.559 after slipping from highs above 96.6 yesterday. Oil was up, see next article. Spot gold was down 0.2% at $1,319.86 per ounce as of 0426 GMT, after touching its highest since Feb. 28 at $1,324.33 in the previous session.
- Oil edges up on supply cuts, but recession fears cap market (Reuters) Oil prices edged up on Tuesday, lifted by supply cuts led by producer club OPEC and U.S. sanctions against Iran and Venezuela, but signs of a sharp economic slowdown and potentially even a recession kept markets from rising further.
Brent crude oil futures were at $67.33 per barrel at 0416 GMT, up 12 cents, or 0.2 percent, from their last close.
U.S. West Texas Intermediate (WTI) futures were at $59.26 per barrel, up 44 cents, or 0.8 percent, from their last settlement
U.S.
- Trump plots post-Mueller payback (The Hill) President Trump and his allies on Monday sought to exact political revenge on congressional Democrats and the news media, seizing momentum generated by the end of special counsel Robert Mueller’s Russia investigation. The clear signal from Team Trump is that they think they can go on offense by using Mueller’s findings to jam Democrats and juice Trump’s base in the lead-up to the 2020 presidential race.
- Democrats refuse to retreat on Trump legal issues despite Mueller disappointment (The Guardian) As Donald Trump declared victory following the conclusion of special counsel Robert Mueller’s investigation, Democrats showed no signs of backing down from the numerous legal questions encircling the president and his associates. The completion of the highly anticipated Mueller report prompted an intense debate in Washington over how to proceed as Democrats said a summary of its findings by the attorney general, William Barr, “raises as many questions as it answers”, even though it probably laid the issue of collusion with Russia firmly to rest. Since taking control of the House of Representatives in January, Democrats have launched an onslaught of investigations into the president, his administration and his family business.
- Justice Department sides with court ruling Obamacare invalid (The Hill) The Department of Justice (DOJ) on Monday announced that it is siding with a district court ruling that found the Affordable Care Act unconstitutional. The move is an escalation of the Trump administration’s legal battle against the health care law. The DOJ previously argued in court that the law’s pre-existing condition protections should be struck down. Now, the administration argues the entire law should be invalidated.
U.S. District Court Judge Reed O’Connor ruled in December that the Affordable Care Act’s individual mandate is unconstitutional and that the rest of law is therefore invalid.
- Stormy Daniels lawyer accused of extortion (BBC News) US lawyer Michael Avenatti, who represented porn star Stormy Daniels in her lawsuit against President Trump, has been arrested on fraud charges. Prosecutors say he tried to extort more than $20m (£15m) from Nike, threatening to use his profile to inflict reputational harm on the firm. In a separate case, the 48-year-old has been accused of embezzlement. A frequent guest on TV news and talk shows, Mr Avenatti emerged as a fierce critic of Donald Trump. At one point he said he was considering running for president himself in 2020.
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- Barr’s Startling and Unseemly Haste (The Atlantic) We cannot yet see the report that Special Counsel Robert Mueller submitted to Attorney General William Barr on Friday. But we can see its shadow in the four-page letter Barr sent to the chairs and ranking members of the House and Senate Judiciary Committees on Sunday afternoon. The letter will be touted as vindication by President Donald Trump and his supporters, but will do little to bridge the partisan divide over Mueller’s nearly two-year investigation, and will inspire more vociferous demands to release the entire report. See also AG Barr Letter To Congress.
- Bond market says not only is a recession coming, but the Fed will cut interest rates to stop it (CNBC)
- Fed funds futures were pointing to a quarter point in easing Monday, as traders said scary signals continued to emanate from the bond market.
- On Friday, there was a so-called inversion in the yield curve, meaning very short rates rose above longer 10-year note rates, a fairly reliable recession signal.
- Traders say the bond market may be overreacting, while stocks seem to be ignoring the recession warnings and fears the Fed will have to jump in with one or more rate cuts to stop the economy from rolling over.
- MMT Makes Democrats Curious Amid Debate on Health Care, Climate (Bloomberg) Expensive measures such as “Medicare for All” and the Green New Deal are among the issues facing the House Democrats who will weigh the fiscal aspects of the party’s most ambitious ideas now that they control the majority. But the rise of Modern Monetary Theory within the party has some lawmakers wondering whether it even matters whether those programs increase the deficit, as long as the country isn’t at risk of significant inflation.
EU
UK
- MPs back votes on Brexit alternatives (BBC News) MPs have voted to take control of the parliamentary timetable in an unprecedented move to try to find a majority for any Brexit option. The prime minister was dealt a fresh blow as the government was defeated by 329 votes to 302, setting up votes on Wednesday to find out what kind of Brexit has most support among MPs. Theresa May has said there is no guarantee she will abide by their wish. See also MPs vote to seize control of Brexit for a day (Reuters).
- The impact of the Brexit vote on the economy is now clear (London School of Economics and Political Science) Overall, the real economy shows signs of productivity and real wage stagnation, which has taken the UK much lower than other high-income countries since the Brexit referendum.
- Financial outcomes have shown mixed results, with the sterling down but the FTSE 250 continuing to perform relatively well since the referendum (London Stock Exchange 2019):
- UK’s GDP growth has slowed down. In broad macroeconomic terms, GDP growth in the UK has been low but remained positive since the referendum. Relative to G7 countries, however, the UK has slipped from having the highest growth rate in the G7 before the vote, to the lowest now (OBR 2018).
- Productivity has also suffered. The negative signs of economic health are confirmed by the outcomes in productivity stagnation.
- The sterling has depreciated and increased costs. The single biggest economic shock immediately after the referendum has been an unprecedented drop in the value of the pound.
- Purchasing power has gone down. On average, real wages have been flat since the referendum.
- Inflation has increased.
- Both inward and outward foreign direct investment (FDI) have dropped since the referendum.
Germany
- Town halls across Germany evacuated after threats: police (Reuters) Town halls in several German cities were evacuated on Tuesday after threats, in some cases bomb threats, were received by email overnight, a number of police forces said.
Israel
- Trump recognizes Golan Heights as Israeli, boosting Netanyahu and angering Syria (Reuters) U.S. President Donald Trump on Monday recognized Israel’s 1981 annexation of the Golan Heights in an election boost for visiting Israeli Prime Minister Benjamin Netanyahu, prompting a sharp response from Syria, which once held the strategic land.
India
- A Sampling of Public Opinion in India (Pew Research Center) This article contains 2 takeaways about public opinion in India that provide context about the public’s views leading up to the national elections. Here are three of the graphics:
North Korea
- South Korea’s unification minister nominee says North Korea can’t have nukes, prosperity (Reuters) South Korea’s nominee for unification minister said on Tuesday that North Korea cannot expect to achieve a prosperous economy and keep its weapons programs, as nuclear talks have stalled since the collapse of a U.S.-North Korea summit last month.
Mexico
- US-Mexico border wall: Pentagon authorises $1bn transfer (BBC News) The Pentagon has authorised the transfer of $1bn (£758m) to army engineers for new wall construction along the US-Mexico border. The funds are the first under the national emergency declared by President Donald Trump to bypass Congress and build the barrier he pledged during his election campaign. Democrats have protested against the move. The funds will be used to build about 57 miles (91km) of fencing.
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