Written by Econintersect
Early Bird Headlines 27 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 Asia mixed as concerns over global growth linger; US treasury yields ‘volatile’ (CNBC) Stocks in Asia were mixed on Wednesday as investor concerns over the outlook for the global economy lingered. The U.S. dollar index was higher at 96.897 after bouncing from lows below 96.6 yesterday. Brent crude futures contract adding 0.28% to $68.16 per barrel. U.S. crude futures, on the other hand, were slightly lower at $59.89 per barrel. Spot gold was up 0.1% at $1,316.09 per ounce as of 0419 GMT.
- Fed’s Daly says globalization is a key reason why inflation is so low (MarketWatch) San Francisco Fed president says she’s not ‘freaked out’ by yield-curve inversion. Globalization, at least in part, is the answer for why inflation remains low, said Mary Daly on Tuesday. In a speech to The Commonwealth Club in San Francisco, Daly said that both workers and businesses are finding it hard to set prices in the new global marketplace. For their part, workers have suffered from a loss of bargaining power, Daly said.
- World Trade is Flat Year-over-Year (Twitter) World trade growth is actually stronger now than for several months previously when it was in contraction.
U.S.
- Surprise Justice move on ObamaCare puts GOP in bind (The Hill) The Trump administration’s surprise call for the courts to strike down ObamaCare upended Capitol Hill on Tuesday, putting Republicans in a bind while giving Democrats new talking points on one of their favorite issues for the 2020 elections. GOP lawmakers for the most part were reluctant to even talk about the Justice Department’s decision to call for all of ObamaCare to be struck down in a court filing. See also Trump admin made ObamaCare move despite objection from key officials: report.
- Comey says he finds Mueller’s obstruction decision ‘confusing’ (The Hill) Former FBI Director James Comey said Tuesday that he found it “confusing” that special counsel Robert Mueller decided not to determine whether President Trump was guilty of obstruction of justice. Comey said:
“I have great faith in Bob Mueller, but I just can’t tell from the letter why didn’t he decide these questions when the entire rationale for a special counsel is to make sure the politicals aren’t making the key charging decisions.”
“The notion that obstruction cases are somehow undermined by the absence of proof of an underlying crime, that is not my experience in 40 years of doing this, nor is it the Department of Justice’s tradition. Obstruction crimes matter without regard to what you prove about the underlying crime.”
- Trump slams media for coverage of investigations into ‘all time favorite duly elected President’ (The Hill) Presdent Trump tore into the media over its coverage of special counsel Robert Mueller’s investigation, which concluded without sufficient evidence that the president’s campaign had colluded with Russia during the 2016 election.:
- The Trump Contagion (Project Syndicate) Opinion piece by Jeffrey D. Sachs, Bandy X. Lee ,and Ruth Ben-Ghiat doesn’t pull punches. Excerpts:
What makes the Mueller claim especially disastrous is the reality of tacit collusion staring us in the face. Trump ran his 2016 campaign while secretly trying to score a real-estate mega-deal in Moscow (and, as usual, lying about it to the public). He publicly opined on canceling sanctions against Russia while pursuing this deal.
US President Donald Trump’s growing rages may partly be the result of cognitive decline, suggested, for example, by his deteriorating ability to form complete sentences, use complex words, and maintain a coherent train of thought. What is certain is that Trump is putting the world at risk.
Trump’s worldview is echoed by white extremists around the world. Data show a surge in hate crimes in the US since the day after his election, including a doubling in the number of killings by white supremacists, as well as widespread schoolyard bullying in his name and a record number of mass shootings and gun murders.
- FAA to tighten oversight of aircraft construction, official says (MarketWatch) The Federal Aviation Administration plans to significantly revamp its oversight of airplane construction this summer after questions were raised about how it manages inspections done by the industry, according to testimony prepared for a Senate subcommittee hearing on Wednesday. The agency is under increasing scrutiny for its flight approval of the Boeing 737 Max jet. Two of the jets have crashed in the past six months in Indonesia and Ethiopia with deadly consequences, and investigators are examining the role of flight-control software that Boeing designed to prevent aerodynamic stalls.
- Yield Curve Could Be Indicating Recession Just in Time for Election (Twitter) But the declaration might not come for another 6-12 months after it starts.
- Not A Single Senate Democrat Votes “For” Green New Deal (Zero Hedge) The Republicans brought a bill to a vote Tuesday which was mostly a collection of goals for mitigating climate change rather than a fully formed plan of action. This was an attempt to get Democrats on the record regarding what is called “The Green New Deal”, a least at a philosiophical level. Not a single Democrat voted for it. Instead, in the vote which was blocked late on Tuesday with a vote of 0-57, 43 Democrats voted merely “present”. Here is an excerpt from this article:
The vote was the first of many attempts by Republicans to force (socialist, MMT) supporters of the Green New Deal to come into the spotlight and suffer the public scrutiny. The proposal – mostly a collection of goals for mitigating climate change rather than a fully formed plan of action – which according to some would cost north of $100 trillion and would require the launch of helicopter money, also known as “MMT”, has been a favorite target for criticism by McConnell and Republicans ever since freshman Representative Alexandria Ocasio-Cortez of New York and Senator Ed Markey of Massachusetts rolled it out in February.
EU
- European Top Economies Expansion Streak Ended at 19 Quarters (Bloomberg) Italy’s recession ended a growth period for the four largest European economies.
- France Approaching Italy in Debt (Twitter)
UK
- May expected to offer her job for Brexit deal as parliament tries multiple choice (Reuters) British Prime Minister Theresa May is expected on Wednesday to indicate a date for quitting as the price for getting her twice-defeated Brexit deal ratified, while parliament tries to select its own alternative from a multiple-choice list of options.
Austria
- Austria’s Kurz confirms link between Christchurch attacker and Identitarian Movement (Reuters) Austrian Chancellor Sebastian Kurz on Wednesday confirmed that there was a financial link between the man who killed 50 people in mass shootings in Christchurch, New Zealand and the far-right Identitarian Movement in Austria.
Italy
- Italy Can’t Tighten Fiscal Stance More Amid Recession, Tria Says (Bloomberg) Italy can’t afford to raise taxes or cut public spending now because it would worsen the economic prospects of a country that has slipped back into recession, the nation’s finance chief said. (See also Italy Suffers Recession Alone in Economic, Political Isolation for graphics below.)
Italy’s debt equals 132.1 percent of economic output, the second-highest in the euro region after Greece. In December, the populist government in Rome reached a deal with the European Commission for this year’s budget, after revising down the deficit target and the forecast for economic growth. Since then, data showed that the nation entered a technical recession after contracting for two straight quarters.
Afghanistan
- In U.S. pursuit of peace talks, perilous rift opens with Afghan leader (Reuters) Washington’s relationship with Afghan President Ashraf Ghani appears increasingly at risk of permanent damage, the consequence of a U.S. policy shift that has so far excluded his government from talks with the Taliban and of his own determination to retain power and manage peace efforts himself.
China
- The latest China Beige Book report released Wednesday found “an unmistakable first-quarter recovery“ in China driven by increased credit.
- Reports of corporate borrowing in the first three months of this year reached the highest point since the middle of 2013, said the report, based on a survey of more than 3,300 Chinese businesses.
- However, the cost of that borrowing increased, with bank loan rates rising, according to the report.
- “They’re going to have to subsidize the rates if they want this to continue,” Leland Miller, chief executive officer of China Beige Book, tells CNBC.
- Airbus Signs $35 billion Deal with China (Twitter) Looks like a consequence of the Boeing crashes?
Canada
- Canada Might Nix Trump’s NAFTA Deal Unless He Stops Steel Tariffs (Zero Hedge) With much fanfare Trump has bragged about the USMCA replacement for NAFTA. Canada still has not ratified that agreement, and perhaps won’t at all. The Wall Street Journal reports Canada Links Trade-Deal Approval to Steel Tariffs. But it is not just Canada that is threatening the agreement – the Democrats may dump it also. See New Nafta Is Threatened by Partisan Split Over Enforcement (The Wall Street Journal).
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