Early Headlines: Asia Stocks Mixed, Dollar Down, Oil, Gold And Yields All Up, GOP Wins Key House Seat, Health Ins. Coverage Declined, Xi In Trouble, Plus More - 23 Articles, 7graphics.

Early Bird Headlines 11 September 2019

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Key Articles

Global

Stocks in Asia mixed as investors await ECB interest rate decision; Apple suppliers mostly jump (CNBC) Shares in Asia were mixed on Wednesday as investors awaited the European central bank’s interest rate decision later in the week. The U.S. dollar index was last slightly lower at 98.383 after trading below 98.4 for much of this week. Brent crude futures added 0.77% to $62.86 per barrel, while U.S. crude futures gained 0.78% to $57.85 per barrel. Spot gold was up 0.3% at $1,490.27 per ounce, as of 0732 GMT. In the previous session, prices fell to their lowest since Aug. 13 at $1,483.90. Treasuries were slightly lower in price (yields ticked up).

U.S.

Trump claims credit in N. Carolina election win (Associated Press) See also Dan Bishop, North Carolina Republican, Narrowly Wins Special Election (The New York Times). President Donald Trump is taking credit for turning around a faltering Republican congressional candidate and hoisting him to victory in a North Carolina special election. Trump wrote on Twitter late Tuesday that Dan Bishop was down by 17 points three weeks ago, but after the 9th Congressional District candidate asked Trump for help, “we changed his strategy together.”

There’s no evidence from public polling that Bishop ever trailed Democrat Dan McCready by such a large margin. Private polls and campaign consultants had described the race as very close. Bishop’s victory margin was about 2% with nearly all precincts reporting.
The race was seen as a measure of popularity for Trump, who campaigned for Bishop on Monday in Fayetteville.

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Share of Americans With Health Insurance Declined in 2018 (The New York Times) The drop, despite a strong economy, was the first since 2009 and at least partly caused by efforts to weaken the Affordable Care Act. Fewer Americans are living in poverty but, for the first time in years, more of them lack health insurance. About 27.5 million people, or 8.5% of the population, lacked health insurance for all of 2018, up from 7.9% the year before, the Census Bureau reported Tuesday. It was the first increase since the Affordable Care Act passed in 2010. Even a lower poverty rate could not overcfome the damage done by Republican attacks on the program.

China

China’s President Is in Trouble (Geopolitical Futures) Hat tipo to Sig Silber. When Chinese President Xi Jinping came to power in China, he was seen as a decisive leader who could dominate Chinese institutions and guide China to a position of greatness. His enormous power was solidified with the removal of presidential term limits, while the anti-corruption purges initiated at his behest have reshaped the Communist Party. George Friedman says:

From my point of view, however, the imposition of a dictatorship in China was a sign of concern and insecurity within the Communist Party’s Central Committee. Dictators do not usually arise to preside over success. They emerge in times of trouble, taking or being given powers that allow them to impose their will to deal decisively with a country’s problems. Why would the Central Committee allow the office of the president to change so profoundly if things were going well?
A range of significant, if not yet existential, problems have emerged since Xi took office. The most important are economic. Since 2008, the Chinese economy has been struggling, and Xi’s first task was to try to stabilize it. There were many dimensions to China’s economic problems, but the core was that China was heavily dependent on exports. Many exporting countries may appear for a time to be powerful, surging into the global system with products priced to sell. The problem, however, is that they are utterly dependent on their customers and competitors to survive. In 2008, the appetite of China’s customers for exports dramatically contracted, and competitors arose who could undersell the Chinese.
Xi was bought in to deal with this problem, and he developed two strategies. The first was to increase domestic consumption. Much of China, however, is too poor to substitute for American and European demand, and attempts to finance domestic consumption led to a serious financial crisis. The second strategy was to shift from low-priced goods to high-tech items. Competing with Europe, the United States, Japan, South Korea and other well-established high-tech economies proved difficult. The weakness of China’s strategy caused the country to try to appear more powerful than it was. It launched the Belt and Road Initiative, which offered money to a host of countries for various infrastructure projects in an effort to assert itself as a global power. It has become far less significant than it was. Suspicion arose of China’s intentions, further hampering attempts to compete on high-tech projects, as the Huawei affair exemplifies.

More important, Xi was responsible for managing China’s relationship with its single-largest export customer, the United States. Under past U.S. administrations, the United States demanded that China open its economy to American goods and end currency manipulation, but previous Chinese presidents have managed to deflect such demands. The fact was, China couldn’t afford to open its economy, since its domestic market couldn’t support both Chinese production and foreign competition. And the need to maintain exports at high levels meant that China had to manage its currency in some way. Meetings with the United States were held, dinners consumed, toasts made and the Americans went home empty-handed.
Xi visited U.S. President Donald Trump soon after Trump took office and seemed to have left with the impression that prior strategies to manage the United States were sufficient. His assumption was wrong.