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News Items by John Ellis.
**Calendar Note: News Items will not be distributed on Monday, 14 October. It will resume distribution Tuesday, 15 October.**
1. Turkish forces moved to seize control of key highways in northeastern Syria on Saturday, as Turkey’s offensive against Syrian Kurdish fighters pressed into its fourth day with little sign of relenting despite mounting international criticism. Turkey’s state-run Anadolu news agency said that Turkey-backed Syrian opposition forces had taken control of the M-4 highway that connects the towns of Manbij and Qamishli. Turkish troops also cut the route linking the northeastern city of Hassakeh with Aleppo, Syria’s largest city and once commercial center, according to the Syrian Observatory for Human Rights, an opposition war monitor. The push deeper into northern Syria by Turkish troops came days after U.S. President Donald Trump cleared the way for Turkey’s air and ground invasion, pulling back U.S. forces from the area and saying he wanted to stop getting involved with “endless wars.”
2. US troops have come under fire from Turkish forces in northern Syria, the Pentagon has said, adding to the chaos in the country as Ankara’s incursion continued into its third day. An explosion occurred a few hundred metres away from a US outpost where the country’s troops are still stationed, according to Captain Brook DeWalt, a Pentagon spokesperson. The outpost is not far from the Syrian town of Kobani.
3. The first Islamic State prisoners were reported to have escaped Kurdish captivity in northern Syria last night as services and security began to collapse under the weight of the Turkish onslaught. More than 100,000 people have been forced from their homes since Turkish forces and their Syrian rebel allies stormed the area on Wednesday under cover of airstrikes and artillery shelling, the UN said. Aid agencies reported a looming humanitarian crisis as the Kurds jammed roads heading south to the fringes of the 20-mile zone that President Erdogan has said he will occupy.
4. The Pentagon will deploy an additional 1,800 troops to Saudi Arabia, senior defense officials said Friday, a modest increase in the U.S. military’s presence in the Middle East meant to deter Iranian aggression. Calling Saudi Arabia a “long-standing security partner,” Defense Secretary Mark T. Esper said he had spoken with Crown Prince Mohammed bin Salman earlier Friday about the kingdom’s defensive capabilities and U.S. efforts to protect partners in the region.
5. The U.S. and China took an initial step to cement a trade agreement that had been derailed, with Washington saying yesterday it would shelve a planned increase in tariffs on goods imported from China, while Beijing would increase purchases of U.S. agricultural products. The two sides left many details to be worked out in the weeks or months ahead on tough issues including China’s enforcement of intellectual property rules, U.S. access to Chinese markets, Chinese government support for state-owned enterprises, and the fate of U.S. tariffs on nearly $360 billion worth of Chinese imports already in place.
6. The Federal Reserve said it would buy short-term Treasury debt beginning next week to avoid a recurrence of the unexpected strains experienced in money markets last month. The Fed will buy Treasury bills beginning next Tuesday at an initial pace of $60 billion a month and continue those purchases into the second quarter of 2020. The announcement Friday marked a U-turn for the central bank, which until August had been shrinking its nearly $4 trillion asset portfolio.
7. Money has been pouring into investment-grade debt and steadier, dividend-generous stocks in more defensive industries such as utilities and consumer staples, or companies that are growing quickly irrespective of the economic backdrop. The result? A record-breaking valuation divergence between supposedly safe and risky assets, as demonstrated by a trio of recent Goldman Sachs reports. Investors have always preferred more predictable earnings growth, but the valuation gap between stocks with stable and choppy profits — as defined by the volatility of their earnings over the past decade — is now at its widest level in at least the last 35 years, according to Goldman estimates.
8. The biggest financial companies that Facebook recruited to launch a world-wide cryptocurrency-based payments network have backed out of the project, threatening to derail an ambitious initiative to remake global finance before it ever gets off the ground. “I would caution against reading the fate of Libra into this update,” David Marcus, the Facebook executive overseeing the project, wrote Friday on Twitter. “Of course, it’s not great news in the short term, but in a way it’s liberating. Stay tuned for more very soon. Change of this magnitude is hard. You know you’re on to something when so much pressure builds up.” While some of the companies left open the possibility of rejoining the network in the future, the loss of Visa and Mastercard is an especially painful setback for libra. The credit and debit cards that run over their networks would have made it easier for consumers to buy the digital coins.
9. U.S. regulators sued a company that raised $1.7 billion through a cryptocurrency offering that became one of the largest such deals ever. The Securities and Exchange Commission on Friday said it obtained a legal order to halt Telegram Group Inc. from distributing its crypto asset, known as gram. Telegram, founded by two Russian brothers, developed a messaging app that is popular with cryptocurrency traders and developers. The SEC’s order seeks to block the company from distributing as soon as next week in the U.S. an asset that regulators say can’t legally be traded in the country. Telegram has over 200 million MAUs (monthly average users) worldwide.
10. Brussels will this weekend hold last-ditch Brexit negotiations with Boris Johnson’s team aimed at preventing the UK from crashing out of the EU after a breakthrough in talks between the two sides sparked hopes of a deal. EU diplomats gave a green light to ramp up talks after Michel Barnier, the EU’s chief Brexit negotiator, told them that the UK prime minister had shifted his position sharply on a series of central demands by the EU.
11. The top 1% of high earners in the UK have enjoyed a 7.6% real terms pay increase over the last two years, while the average worker’s pay rose by just 2 pence an hour. A TUC (Trades Union Congress) analysis of government hourly pay data between 2016 and 2018 shows that pay among the very top earners increased at a faster rate than any other group.
12. Germany’s security agencies are investigating their own ranks for suspected plots to attack immigrants and politicians, as authorities have become increasingly concerned about allegations of extreme-right radicalism among some soldiers and police officers. The probes examine a range of activities, from racist discussions in online chat forums and illegal weapons possession, to suspected hit lists of left-wing politicians and liberal activists, according to confidential documents and people familiar with the investigations. The inquiries are also examining alleged plots to carry out terrorist attacks.
13. The former U.S. ambassador to Ukraine whose abrupt ouster in May has become a focus of House impeachment investigators yesterday said in remarks before Congress that her departure came as a direct result of pressure President Trump placed on the State Department to remove her. The account by Marie Yovanovitch depicts a career Foreign Service officer caught in a storm of unsubstantiated allegations pushed by the president’s personal attorney Rudolph W. Giuliani and a cast of former Ukrainian officials who viewed her as a threat to their financial and political interests.
14. To the delight of thousands who repeatedly roared their approval, President Trump denounced the impeachment inquiry and condemned what he called the “unholy alliance of corrupt Democrat politicians, deep-state bureaucrats and the fake news media.” “The radical Democrats’ policies are crazy. Their politicians are corrupt. Their candidates are terrible,” Mr. Trump said to huge applause. “And they know they can’t win on Election Day so they’re pursuing an illegal, invalid and unconstitutional bullshit impeachment.” Regarding House Speaker Nancy Pelosi (D-CA), he said: “She hates the country. Nancy Pelosi hates the United States of America, because she wouldn’t be doing this.”
15. With a crucial debate looming next week in the Democratic presidential primary, the party’s populist wing appears increasingly in control of the race — rising in the polls, stocked with cash and with only a wounded leading candidate, Joseph R. Biden Jr., standing in its way. The principal beneficiary of this trend has been Senator Elizabeth Warren.
16. Born wet, human babies are 75% water. Then, with every step we take, we begin to dry. The longer we live, the drier we get. One year after birth, a human baby is only 65 percent water – a ten percent drop, says the U.S. Geological Survey. Babies are wetter than children. By the time we're adults, the USGS says, adult men are about 60 percent water, adult women 55 percent. Elderly people are roughly half water.
17. For more than five years, Americans have been doing something decidedly un-American: We’ve been using less electricity. Between 1950 and 2010, average residential electricity consumption increased 10-fold. But after that, in a shift that captured the attention of economists, government agencies and others who monitor the energy market, consumption began to decline. One reason: LEDs.
18. Kenyan marathoner Eliud Kipchoge became the first human to run a marathon in under two hours, covering the 26.2-mile distance in 1 hour, 59 minutes and 40 seconds, in a specially-tailored event in Vienna on Saturday. The race against the clock, backed by the British petrochemicals billionaire Jim Ratcliffe, unfolded on a closed, 9.6-kilometer (6-mile) circuit of perfectly flat tree-lined road. Although it was the quickest marathon ever recorded, the effort won’t count as a world record because it didn’t come in a race setting and he relied on rotating pacemakers.
19. October baseball today/tonight: Nationals vs. Cardinals (4:08pm ET). Yankees vs. Astros (8:08pm ET).
Quick Links: A run-down of the forces in Northern Syria. Only a locked door stopped a massacre at a German synagogue. Peace is slipping away in Colombia. Poland’s state media is government’s biggest booster before election. Sex video scandal engulfs Orban's party on eve of Hungarian vote. Trouble is brewing in China's shadow banking sector. America is losing the Chinese shopper. PG&E’s blackouts in California are a bleak preview of the disruptions that will become routine in a warmer world. The Saddleridge fire. Dennis Muilenburg stripped of Boeing chairmanship. Big data is coming to the National Hockey League. Darwin Award nominee.
Political Links: Larry Summers: Global economy is at risk from a monetary policy black hole. Trump’s China deal yields plenty of questions. Tories lead Labour by 6 percentage points, new poll shows. These 19 counties voted for every White House winner since 1980. Sites and dates for 2020 presidential debates. Rudy Giuliani is said to be under investigation for Ukraine work. Trump tells reporters he doesn’t know if Giuliani is still his attorney. Kevin McAleenan steps down as acting DHS secretary. Elizabeth Warren critics see a lecturing elitist. Shepard Smith exits Fox News.