Weekend News Items. By John Ellis.
1. Iran abruptly raised gasoline prices as much as 300 percent early Friday and imposed a strict rationing system, and within hours protests erupted across the country with angry crowds calling for the ouster of President Hassan Rouhani. The new energy policy appeared to be the latest attempt by the Islamic Republic to manage an economic crisis worsened by American sanctions that have sharply reduced oil exports. Mr. Rouhani said at a speech a day earlier that Iran faced a deficit amounting to nearly two-thirds of its annual $45 billion budget.By Friday night, large crowds had gathered in major cities including Shiraz, Mashhad, Ahwaz and Bandar Abbas, as well as in a range of smaller working class towns. In some places the protests turned violent, according to videos posted on social media showing riot police officers spraying tear gas in one confrontation and smashing vehicle windshields in another. Like their counterparts in Lebanon and Iraq, the protests in Iran on Friday were set off by economic anxiety, but some quickly assumed an antigovernment tone. (via The New York Times)
2. Soldiers from the Chinese army have been deployed for the first time in more than five months of civil unrest in Hong Kong, as dozens marched from their Kowloon garrison on Saturday to help clear roadblocks. It was also the first time in more than a year that the People Liberation’s Army local garrison had been involved in public community work. In October last year, more than 400 soldiers were also sent in batches to Hong Kong’s country parks to help remove trees felled during Typhoon Mangkhut a month earlier. The soldiers, mostly in green T-shirts and black shorts, and carrying red buckets, ran out of the PLA’s Kowloon Tong barracks at about 4pm to clear obstacles on Renfrew Road, near Baptist University’s campus. (via South China Morning Post)
3. Banks across Lebanon have shut their doors this week to protect employees from angry customers demanding their dollars. So that anger has been redirected at the A.T.M.s outside, which are also refusing to give out dollars regardless of how much customers have in their accounts. American dollars — long used in tandem with the Lebanese pound — have grown scarce because worries over the political turmoil have caused more people to try to withdraw their money. So employers have struggled to pay salaries, tenants to pay rent, and traders to pay for goods and services from abroad. Relief appears remote, analysts and economists say; the underlying problems have been building for so long that they can only be fixed through long-term policies that are likely to cause pain. And putting such initiatives in place would require a strong government, which Lebanon lacks. (via The New York Times)
4. Israel has carried out new strikes on Gaza after rockets were fired overnight from the Palestinian enclave, breaking a shaky truce agreed this week. “Two rockets were fired from the Gaza strip towards Israeli territory,” the Israel Defence Forces (IDF) said in statement. Both were intercepted by it air defense system. Unlike earlier operations, the IDF’s retaliation did not target the Palestinian militant group Islamic Jihad, but Hamas, a military and political faction that rules Gaza. The Israeli military said its jets had bombed several sites run by the faction. (via The Guardian)
5. In the days since the ouster of Evo Morales, Bolivia’s first Indigenous president, deep ethnic tensions that have long divided the country have erupted, complicating efforts to move Bolivia out of political crisis. Mr. Morales, a champion of the Indigenous, has now been replaced by an acting president of European descent, and resentments have surfaced. Police officers have ripped the Indigenous insignia off their uniforms. Protesters have burned the Indigenous flag. And the acting president, who posted tweets many consider racist, initially appointed a cabinet without a single Indigenous member. (via The New York Times)
6. The Dow Jones Industrial Average crossed 28000 for the first time yesterday, notching a new record as fading recession fears extended the decade-long bull-market rally. A furious rise in the final minutes of the trading session thrust the Dow above its latest milestone, re-energizing a stock market that appeared listless in recent days. Investors drove the Dow up 222.93 points, or 0.8%, to 28004.89—its 11th record close of 2019—as they cheered trade developments and a rosier economic outlook. The blue-chip gauge has logged four straight weeks of gains. (via The Wall Street Journal)
7. Americans spent more on shopping in October while pulling back on nonessential items, suggesting consumers’ willingness to buy remained solid but more cautious. Retail sales—purchases at stores, restaurants and online—rose a seasonally adjusted 0.3% in October from a month earlier, the Commerce Department said Friday, after a drop in September. “Overall, this isn’t a really strong number, but it should do a lot to soothe the fear that consumers were going to struggle into year end,” said Calvin Schnure, senior economist at Nareit, an organization that represents real estate investment trusts. (via The Wall Street Journal)
8. U.S. workers are failing to improve the skills needed to succeed in an increasingly global economy, according to a government agency report released Friday. The National Center for Education Statistics asked 3,300 respondents ages 16-to-65 to read simple passages and solve basic math problems. What the researchers found is that literacy, numeracy and digital problem-solving ability in the U.S. have stagnated over the past few years. Some 19% of the test-takers ranked at the lowest of three levels for literacy and 24% lacked basic digital problem-solving abilities. Meanwhile, a shocking 29% performed at the lowest level for numeracy, the same as findings from the previous study conducted in 2012-2014. Almost one in three couldn’t correctly answer “how much gas is in a 24-gallon tank if the gas gauge reads three-quarters full.” (via Bloomberg News)
9. Continuing low interest rates could dent U.S. bank profits and push bankers into riskier behavior that might threaten the nation’s financial stability, the Federal Reserve said in a report released Friday. The latest version of the twice-yearly report, meant to flag stability threats on the Fed’s radar, highlighted the rate squeeze facing banks and insurers, noting that it could erode lending standards. The Fed has cut its benchmark interest rate three times in 2019. (via Bloomberg News)
10. The Federal Reserve Bank of New York added $68.343 billion to financial markets yesterday. The liquidity came in the form of a repurchase agreement operation that will expire on Monday. The Fed accepted $61.043 billion in Treasurys, $1 billion in agencies and $6.3 billion in mortgage bonds, and took everything eligible banks offered. The Fed also said it bought $7.501 billion in Treasury bills as part of its effort to grow its balance sheet and reduce its need to add liquidity on a temporary basis. Banks offered the Fed $33.313 billion in Treasury bills to buy. (via The Wall Street Journal)
11. Jeffrey Snider has a short, smart piece that examines what is occurring in the "repo" market. It ends rather ominously: "Risky corporate bond products, suspect repo collateral chains, global downturn, and the growing prospects for illiquid pricing. A bad combination. Even if an especially vigilant forest ranger can’t predict exactly when or where a wildfire might start, they can recognize the right mix of of ingredients which make one more likely. In global repo, money dealers are the forest rangers." Read the whole thing. (via Alhambra Investments)
12. Some investors expect a new surge of volatility in short-term money markets at year-end and are preparing to take advantage, gathering cash to lend overnight in the market for repurchase agreements, or repos. While periods of volatility are often difficult to forecast, these investors are making an educated guess. The cost of borrowing overnight using repo has spiked at the end of recent quarters and at the end of 2018, when a scarcity of available cash drove rates as high as 6%. Some analysts blamed the move on banks’ reluctance to add to their year-end repo positions by lending cash on December 31. (The Wall Street Journal)
13. Harbin Bank Co., a politically linked midsize Chinese lender, said key private shareholders have been replaced by government investors, becoming the latest financial institution to get state backing this year. Harbin Bank, which is one of the biggest financial businesses in China’s northeast and trades on Hong Kong’s stock exchange, will be 48%-controlled by two government entities after six private shareholders shed their stakes, according to a regulatory statement the lender issued late Friday. The shareholding change comes as Chinese authorities have thrown lifelines to at least four small lenders this year. The country’s economic slowdown and the government’s efforts to control credit have put particular pressure on institutions on the margins of the financial system. (The Wall Street Journal)
14. Google has long argued that its algorithms are objective and essentially autonomous, unsullied by human biases or business considerations. The company states in a Google blog, “We do not use human curation to collect or arrange the results on a page.” The Wall Street Journal has a lengthy piece today that contradicts Google's assertions. It's persuasive and detailed. (via The Wall Street Journal)
15. US drug regulators have issued their first ever approval for a Chinese-developed innovative cancer treatment, marking a breakthrough for the country’s biotech sector. The US Food and Drug Administration approved zanubrutinib, a treatment for mantle cell lymphoma, a rare kind of blood cancer, produced by BeiGene in Beijing under the name Brukinsa. The drug can be used by patients who have received one prior therapy for the disease. (via Financial Times)
16. South Korean cancer patients have caused a shortage of an anti-parasitic drug for dogs in the country, after YouTube videos went viral claiming that the treatment cured a United States patient with terminal cancer. Despite repeated warnings from the government about feared side effects, a growing number of patients have been taking fenbendazole, meant for ridding intestinal bugs in dogs and cats, in a phenomenon that is leaving doctors and health authorities in South Korea shaking their heads in disbelief. More than a dozen patients with well-advanced cancer went a step further, uploading a series of videos showing themselves taking the drug and reporting on the changes happening to their bodies over weeks. (via South China Morning Post)
17. Boris Johnson’s hopes of winning a Parliamentary majority have received a significant boost after the Brexit Party fielded just 274 candidates, giving the Tories a clear run in several key marginals. Nigel Farage had promised the Brexit Party would contest every Labour seat and field 300 candidates in total, but he fell 26 shy of that pledge, and failed to register candidates in 16 Labour-held seats. Other seats where the Tories will be the only Leave-supporting party include SNP and Liberal Democrat constituencies where the Conservatives were narrowly beaten in 2017. (via Daily Telegraph)
18. A federal judge in Florida ordered the state Friday to change the way candidates are listed on election ballots — a decision that Democrats in the crucial swing state say will finally take away an unfair advantage Republicans have enjoyed for years. Democrats called the decision “monumental.” The state said it will appeal. The current law says that whichever party holds the governor’s office can list its candidates first on the ballot in general elections. That hurts an opposing party, U.S. District Court Judge Mark E. Walker said. (via The Washington Post)
** Editor's Note: The power of Kevin Kelly's Recomendo delivered another boatload of subscribers to News Items this week. To those who signed up, welcome. Here's some background information. Paying customers get full access. "Free" subscribers get the Saturday edition in its entirety. Weekday editions, not so much. After Thanksgiving, News Items will be adding Political News Items to the mix. It will be distributed twice-weekly and will be comprised of reports, data, analysis and commentary that are I think are worthy of your time. Thanks again to Kevin Kelly for his generous review. He's helped News Items reach a (much) wider audience.
Quick Links: Venice underwater. The real reason to panic about China’s plague outbreak. The future of Iraq’s oil is Russian. What's wrong with Boeing? Jennifer Doudna on CRISPR's "unwanted anniversary." Reality itself may be subjective, thanks to quantum weirdness on a microscopic scale. DARPA is engineering glowing bacteria for bomb detection. Patrick Cockburn on the prospects for Islamic State. Since 9/11, nearly 19 percent of Native Americans have served in the armed forces, compared to an average of 14 percent of all other ethnicities. Trump pardons soldiers implicated in war crimes. Anger swells in Tunisia as harassment video goes viral. Saudi officials ‘unhappy’ with foreign demand for Aramco IPO. Starbucks opens its largest location yet, in Chicago. Google-Citi deal could be the future of banking. Can we all calm down about Apple Card’s “gender bias?” The movie 'Dark Waters" is said to be very damaging to DuPont. Martin Sorrell denies slapping former WPP protégé. A better way to convert dog years to human years, scientists say. That's one smart kid.
Political Links: Mark Leibovich on the testimony of former US Ambassador Marie L. Yovanovitch. Hong Kong's worst week of violence gives whiff of anarchy. Alibaba puts its faith in Hong Kong with mammoth secondary listing. One year later: French 'yellow vests' clash with police in Paris. White House humiliation. Obama talks 2020 politics. Democrats would likely gain two seats under new congressional map approved by North Carolina legislature. The Louisiana gubernatorial election is today and it's close. The Kamala Harris campaign meltdown. Deval Patrick takes early oppo hit. Elizabeth Warren details how she'd transition country to 'Medicare for All.' 'Dark money' group promotes Warren in Iowa. Bloomberg launching $100 million digital ad campaign as he contemplates Democratic presidential bid. Struggling farmers are key to Trump’s hopes in Minnesota. Roger Stone found guilty on all counts. Trump says Stone is no different than "Crooked Hillary." Political advertising, re-imagined. Drunken judges in a parking lot outside a White Castle at 3 a.m. Welcome news: Texas appeals court blocks inmate Rodney Reed’s execution.