Delayed News Items.
Friday, 2 August 2019. By John Ellis.
1. The American middle class is falling deeper into debt to maintain a middle-class lifestyle. Cars, college, houses and medical care have become steadily more costly, but incomes have been largely stagnant for two decades, despite a recent uptick. Filling the gap between earning and spending is an explosion of finance into nearly every corner of the consumer economy. Consumer debt, not counting mortgages, has climbed to $4 trillion—higher than it has ever been even after adjusting for inflation. Mortgage debt slid after the financial crisis a decade ago but is rebounding.
2. President Trump yesterday said that he will impose additional 10% tariffs on $300 billion worth of Chinese imports starting Sept. 1, blaming Beijing's foot-dragging on agricultural purchases and other promises made during previous negotiations. "Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional tariff of 10% on the remaining 300 billion dollars of goods and products coming from China into our Country," Trump said in a Twitter thread, adding that the U.S. looks forward to "continuing our positive dialogue with China on a comprehensive Trade Deal."
3. Secretary of State Mike Pompeo took aim at China, portraying the country as disrespectful of others’ sovereignty and branding it a selfish player in the global trading system, during a speech in Bangkok. Mr. Pompeo contrasted what he described as mutually beneficial American investment in Southeast Asia with what he depicted a coercive and unfair Chinese approach. He was speaking Friday, hours after the U.S. moved to escalate a trade conflict between the world’s two largest economies that has rocked Asian supply chains and helped slow global growth.
4. A popular news anchor watched by hundreds of millions of Chinese poured scorn on the United States, using an obscenity to accuse it of sowing chaos. A prominent official blamed Washington directly for the antigovernment protests upending Hong Kong. Pointed hostility toward America, voiced by Chinese officials and state-run news organizations under the control of an all-powerful propaganda department, has escalated in recent weeks in tandem with two of China’s big problems: a slowing economy complicated by trade tensions and turbulence in Hong Kong that has no end in sight.
5. The top Chinese military official in Hong Kong has called the violent protests of recent weeks “absolutely intolerable,” in a threatening speech that coincides with the release of an extraordinary video showing Chinese soldiers practicing firing on demonstrators. Together, the speech and the video served as a thinly veiled warning to the protesters in Hong Kong that China’s patience is growing thin and that it is becoming increasingly willing to use force to quell the demonstrations in the semiautonomous territory.
6. The ratcheting up of trade tensions between the US and China triggered a steep sell-off in stocks and a rush of haven buying of government bonds on Friday as fears deepened about the threat posed by the dispute to global growth. The worries led to the biggest two-day rally for US Treasuries since May 2018, pushing the benchmark 10-year yield down by 18 basis points over two sessions.
7. China’s renminbi weakened sharply today to its lowest level this year following an escalation in trade tensions with the US, as President Trump moved to impose additional tariffs on imports of Chinese goods overnight. The onshore renminbi, which trades 2 per cent in either direction of a daily midpoint set by the Chinese central bank, weakened 0.6 per cent to Rmb6.9374 against the dollar, its weakest level since November.
8. Oil prices sank almost 8% yesterday, their biggest drop since February 2015, after Mr. Trump announced new tariffs on Chinese imports, stoking fears that the trade dispute between the two countries will drag on, crimping global growth. West Texas Intermediate, the U.S. benchmark for crude prices, settled 7.9% lower at $53.95 a barrel on the New York Mercantile Exchange. The last time prices fell by roughly this much was more than four years ago, when waves of new production from U.S. shale drillers flooded the market. Prices rebounded a bit this morning.
9. Prime Minister Shinzo Abe's government on Friday formalized Japan's decision to remove South Korea from its "white list" of 27 countries with preferential trade status, a move that further fuels bilateral tensions. South Korea responded by saying it will take Japan off its white list as a countermeasure. The removal, which will take effect on Aug. 28, means that South Korea will be stripped of the privileged status that has allowed it to access Japanese goods without going through cumbersome processes.
10. The Trump administration is preparing to withdraw thousands of troops from Afghanistan in exchange for concessions from the Taliban, including a cease-fire and a renunciation of al-Qaeda, as part of an initial deal to end the nearly 18-year-old war, U.S. officials say. The agreement, which would require the Taliban to begin negotiating a larger peace deal directly with the Afghan government, could cut the number of American troops in the country from roughly 14,000 to between 8,000 and 9,000, the officials said. That number would be nearly the same as when President Trump took office.
11. The US has withdrawn from a critical 1987 nuclear arms control treaty with Russia after Moscow refused to destroy a new intermediate-range missile that Washington and its Nato allies said violated the Cold War-era pact. President Trump withdrew from the Intermediate-Range Nuclear Forces Treaty today, six months after the US told Russia that failing to destroy its SSC-8 cruise missile would spark the collapse of the treaty. Secretary of State Mike Pompeo said Russia was “solely responsible” for the demise of the pact.
12. President Trump said he may order a blockade of Venezuela, where the U.S. has sought to depose President Nicolas Maduro. “Yes, I am,” Mr. Trump told reporters Thursday after he was asked whether he was considering a blockade or quarantine. He didn’t elaborate.
13. The US military is conducting wide area surveillance tests across six midwest states using experimental high-altitude balloons, documents filed with the Federal Communications Commission (FCC) reveal. Up to 25 unmanned solar-powered balloons are being launched from rural South Dakota and drifting 250 miles through an area spanning portions of Minnesota, Iowa, Wisconsin and Missouri, before concluding in central Illinois. the balloons are intended to “provide a persistent surveillance system to locate and deter narcotic trafficking and homeland security threats”, according to a filing made on behalf of the Sierra Nevada Corporation, an aerospace and defense company.
14. The Justice Department has declined to prosecute former FBI Director James B. Comey for mishandling confidential memos he wrote documenting his interactions with President Trump, according to a person familiar with the matter.
15. The White House has instructed newly installed Defense Secretary Mark T. Esper to re-examine the awarding of the military’s massive cloud-computing contract because of concerns that the deal would go to Amazon, officials close to the decision-making process said. The 11th-hour Oval Office intervention comes just weeks before the winning bid was expected to be announced and has now left a major military priority up in the air. Last week, President Trump told reporters: “I’m getting tremendous complaints about the contract with the Pentagon and with Amazon. They’re saying it wasn’t competitively bid... Some of the greatest companies in the world are complaining about it..."
16. The Federal Trade Commission is examining Facebook's acquisitions as part of its antitrust investigation into the social-media giant, seeking to determine if they were part of a campaign to snap up potential rivals to head off competitive threats, according to people familiar with the matter. "Snapping up rivals to head off competitive threats" hardly seems like exotic corporate behavior, but never mind.
17. Keep spending! A two-year agreement to raise federal spending and at the same time lift the government’s borrowing limit will go to the president’s desk after it passed the Senate with more Democrats voting for it than Republicans. The bill, which provides for more than $2.7 trillion in discretionary spending over the next two years, was the result of weeks of negotiations between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi (D., Calif.). It suspends the debt ceiling until the end of July 2021 and sets spending levels roughly $320 billion above limits set in a 2011 law.
18. The birth rate in England and Wales has fallen to a record low, with a nearly 10 per cent drop in the number of babies being born since 2012. Official figures show there were 657,076 live births last year or 11.1 per 1,000 people, the lowest rate since records began in 1938.
19. The spacecraft LightSail 2 has demonstrated controlled solar sailing in orbit around Earth for the first time. Light sails are seen as a possible way to propel small spacecraft over long distances, perhaps even beyond the solar system. LightSail 2’s sails are thinner than a human hair and their total surface area is 32 square meters. Photons of light from the sun impart only a minuscule amount of energy to the sails, but the momentum adds up over time, so the spacecraft continually accelerates.
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