Friday's News Items.
9 August 2019. By John Ellis.
1. Sluggish oil demand growth in the first five months of 2019, the lowest increase in that period since 2008, has forced the International Energy Agency to further lower its full-year estimates. The risk of a global economic slowdown and an escalation in the US-China trade war “could lead to reduced trade activity and less oil demand growth,” the IEA said “The outlook is fragile,” it added.
2. Japan's economy expanded for a third straight quarter, though at a slower pace, in the three months through June amid escalating trade tensions and uncertainty over the global economy. Gross domestic product for the quarter expanded 0.4%, or at an annualized rate of 1.8%, according to preliminary figures released by the Cabinet Office on Friday. First quarter growth was revised to 2.8%, up from 2.2%.
3. China's factory gate prices shrank for the first time in three years in July, stoking deflation worries and adding pressure on Beijing to deliver more stimulus as the economy sputters amid an intensifying trade war with the United States. With demand slowing at home and abroad, Chinese manufacturers are having to cut prices to keep market share, depressing profit margins and discouraging the fresh investment needed to get the economy back on its feet. Falling prices for crude oil, iron ore and other raw materials are also playing a part.
4. Hundreds of pro-democracy protesters have descended on Hong Kong’s airport for the start of three days of sit-ins aimed at bringing their protest to the attention of international travelers. Protesters have not sought police permission for the rally, but promised they would not be confrontational. It nevertheless sets the stage for a potentially turbulent weekend of protests, in defiance against Beijing’s latest warnings that civil unrest must cease in the territory.
5. Indian Prime Minister Narendra Modi, in his first public comments since his government’s move to end the autonomy of the disputed state of Jammu and Kashmir, dismissed concerns about lasting unrest after a military clampdown is lifted and said the new status would help the economy and boost the welfare of Kashmiris. In the 40-minute nationally televised address, Mr. Modi criticized the unique autonomy India’s only Muslim-majority state had before as encouraging anti-India sentiments. He said it had become a weapon for India’s enemy Pakistan, which also claims the area as its own. “The people of Kashmir and Jammu have been strong enough to thwart any conspiracy by Pakistan to fuel terrorism and separatism,” he said. “I assure the situation will gradually improve and the life of people will become much easier.”
6. A Pakistani cleric once close to Osama bin Laden has called on militants to wage jihad against Indian troops in Kashmir, increasing the threat of a terrorist retaliation to the imposition of direct rule in the region. Maulana Abdul Aziz, 59, the imam at the Red Mosque in Islamabad during a 2007 siege by the Pakistani army that left more than a hundred people dead, declared that “jihad is mandatory”. Speaking to The Times, he denounced Pakistan’s strategy in Kashmir as a failure and demanded that Imran Khan, the prime minister, free Islamists held in Pakistani jails and “open the border for our fighters” to strike Indian forces.
7. The merciless dogfight between Mexican drug cartels has produced its latest macabre spectacle with the discovery of 19 mutilated corpses – nine of them hung semi-naked from a bridge – in a city to the west of the capital. The massacre, in Uruapan 250 miles from Mexico City, was claimed by the increasingly dominant Jalisco New Generation cartel which posted a large white banner beside the dangling bodies of its victims. “Lovely people, carry on with your routines,” it read, beneath the group’s capitalized red initials, CJNG.
8. Malaysia filed criminal charges against 17 current and former Goldman Sachs Group Inc. employees, stepping up its efforts to prosecute individuals it alleges were involved in frauds related to the state investment fund 1MDB. Goldman Sachs Vice Chairman Richard J. Gnodde and John Michael Evans, a former partner at the U.S. bank who’s now president of Alibaba Group Holding Ltd., were among those charged. They were directors of three Goldman Sachs units that Malaysia has accused of misleading investors when arranging $6.5 billion in bond sales for 1MDB in 2012 and 2013.
9. Stocks fell and investors moved into the safety of government bonds on Friday, while Italian assets came under pressure as optimism was tempered by fresh trade concerns and the re-emergence of political risk in Europe. Traders pulled out of Italian government debt with Rome’s ruling coalition government on the verge of collapse, sending yields rocketing, while shares in the country’s banks fell sharply.
10. Matteo Salvini, Italy’s hardline deputy prime minister, tore up the populist coalition last night and demanded a new election as he set out to govern the country alone. The anti-migrant leader of the League party said that he was fed up with sharing power with Five Star and accused his coalition partner of holding up his plans for regional autonomy and new infrastructure. Mr Salvini said he had asked for a quick confidence vote in parliament “to confirm that there is no longer a majority . . . so we can quickly give a say back to the electorate.”
11. The risk of the UK tipping into recession this year is now "very real" after the economy shrank in the three months to June, pummeled by factory shutdowns and a freeze in construction work. GDP went into reverse, dropping by 0.2 percent on the quarter - the first contraction since 2012 and the joint-worst performance since the financial crisis in 2009.
12. British Prime Minister Boris Johnson may hold a general election just a few days after the UK leaves the EU, in what could be a major blow to Nigel Farage's Brexit party. A spokesman for Mr Johnson said that if MPs forced him to hold a general election, he would set the date after the Brexit deadline, such as on November 1, which in turn would fulfill his "do or die" promise to leave the EU on time.
13. A group of top officials have been removed from their posts at Turkey’s central bank just weeks after President Recep Tayyip Erdogan sacked its governor. At least nine senior figures, including the chief economist, Hakan Kara, were told on Thursday that they were being moved to other roles, according to two people familiar with the matter. Others affected included the heads of units covering banking and finance, markets, institutional risk and research, and monetary policy.
14. Shipping has been banned from a Russian port for a month after an explosion at a secretive military facility triggered a radiation leak. The Dvina Bay area of the White Sea was closed off after the blast at a missile research facility near Nyonoksa, which killed two people and injured others. A sharp increase in background radiation was reported in the city of Severodvinsk in the Arkhangelsk region, the state news agency Tass said, citing local officials.
15. Hundreds of schoolchildren have been drafted in to make Amazon’s Alexa devices in China as part of a controversial and often illegal attempt to meet production targets, documents seen by the Guardian reveal. Interviews with workers and leaked documents from Amazon’s supplierFoxconn show that many of the children have been required to work nights and overtime to produce the smart-speaker devices, in breach of Chinese labor laws.
16. The White House is circulating drafts of a proposed executive order that would address allegations of anti-conservative bias by social media companies, according to a White House official and two other people familiar with the matter — a month after President Donald Trump pledged to explore "all regulatory and legislative solutions" on the issue. None of the three would describe the contents of the order, which one person cautioned has already taken many different forms and remains in flux. But its existence, and the deliberations surrounding it, are evidence that the administration is taking a serious look at wielding the federal government’s power against Silicon Valley.
17. Facebook Inc. is offering news outlets millions of dollars for the rights to put their content in a news section that the company hopes to launch later this year, according to people familiar with the matter. Representatives from Facebook have told news executives they would be willing to pay as much as $3 million a year to license headlines and previews of articles from news outlets, the people said.
18. Juan Carlos Izpisúa Belmonte, of the Salk Institute for Biological Studies, believes epigenetic reprogramming may prove to be an “elixir of life” that will extend human life span significantly. Mr. Izpisúa Belmonte cautions that epigenetic tweaks won’t “make you live forever,” but they might delay your expiration date. As he sees it, there is no reason to think we cannot extend human life span by another 30 to 50 years, at least. “I think the kid that will be living to 130 is already with us,” Izpisúa Belmonte says. “He has already been born. I’m convinced.”
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