Labor Day News Items!
2 September 2019. By John Ellis.
1. China issued a stern warning to Hong Kong protesters as well as the West on Sunday, reiterating that it will not tolerate any attempt to undermine Chinese sovereignty over the city. "The end is coming for those attempting to disrupt Hong Kong and antagonize China," stated a commentary piece published by the state's Xinhua News Agency. The strongly worded message was directed at "the rioters and their behind-the-scene supporters" -- which can be taken as an accusation of Western meddling. It said that "their attempt to 'kidnap Hong Kong' and press the central authorities is just a delusion," adding, "No concession should be expected concerning such principle issues."
2. Thousands of Hong Kong university and school students boycotted class and rallied peacefully for democracy earlier today, the latest acts of defiance in an anti-government movement that has plunged the Chinese-ruled city into crisis. The boycott followed a weekend marred by some of the worst violence since unrest escalated more than three months ago, with protesters burning barricades and throwing petrol bombs, and police retaliating with water cannon, tear gas and batons.
3. Tariffs on clothing and other imports from China went into effect yesterday, escalating the trade war in a move expected to squarely hit consumers. The U.S. tariffs of 15% on tools, apparel items, some footwear and many electronics will be charged on imports valued at $111 billion last year, according to an analysis by The Wall Street Journal. Additional tariffs of 15% on $156 billion of smartphones, laptops, toys, video-games and other products have been postponed until Dec. 15, after the period when goods are typically imported for the holiday season.
4. China shrugged off President Trump’s latest escalation of the tariff war, with state media signaling the government is ready to weather the economic turbulence as no progress to resolve the standoff is in sight. Editorials and commentaries since the Trump administration slapped tariffs on roughly $110 billion in Chinese imports on Sunday have focused on the impact that the latest hikes on goods produced in China will have on U.S. consumers.
5. The U.S. economy is consistently ranked among the world’s strongest. But cut off its addiction to debt and exhaust its gold and currency reserves, and a very different picture would emerge. The nation’s health as measured by gross domestic product per capita would plunge into negative territory without its dependence on borrowed money, according to data compiled by Bloomberg.
6. William Cohan (slightly edited): "We live in a world awash in debt. No one knows exactly how much of the trillions of debt that’s out there is at risk of default. We do know that since 2008, the dollar amount of American corporate bonds outstanding has increased to more than $9 trillion, from around $5 trillion. Companies, universities, municipalities and governments globally have never been more indebted, with a record of $237 trillion reached at the end of 2017, 40 percent more debt than a decade ago."
7. Argentina slapped currency controls on businesses on Sunday to prevent capital flight after the peso lost more than a quarter of its value since primary elections last month, in its latest move to stave off a rapidly spiraling economic crisis. The central bank will require exporters to repatriate earnings from sales abroad, while all companies, not just banks, must seek authorization to sell pesos for foreign currency, after it lost $3 billion in reserves on Thursday and Friday alone.
8. Facebook’s proposed Libra currency could undermine the European Central Bank’s ability to set monetary policy and Europe should ignore its siren call of “treacherous promises” ECB board member Yves Mersch said on Monday. Facebook announced Libra — a new digital coin backed by four official currencies and available to billions of social network users around the world — earlier this year, saying it hoped to launch next year. “Depending on Libra’s level of acceptance and on the referencing of the euro in its reserve basket, it could reduce the ECB’s control over the euro, impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks, and undermine the single currency’s international role,” Mersch added.
9. The clouds that have gathered over Germany’s ruling “grand coalition” for more than a year not only failed to disperse on Sunday but may even have darkened a little. The anti-immigration Alternative for Germany party made strong gains in elections in two east German states but the mainstream parties of left and right also performed better than expected, bringing relief to chancellor Angela Merkel’s government in Berlin.
10. Boris Johnson raised the stakes against Tory rebels last night by promising to remove the whip from any who vote to block a no-deal Brexit and ban them from standing as a Conservative candidate at the next election. The prime minister issued the threat as opposition leaders and some Tories prepared to force through legislation compelling the government to secure another delay if there was no agreement with the European Union.
11. Tory rebels have accused Boris Johnson of "goading" them into voting against the Government in order to force a snap election. With the Prime Minister now prepared to sack any Conservative MP who votes to delay Brexit this week, his critics fear he has set a trap in order to "purge" the party of Remainers. Rumors are rampant in Westminster that an election could be called this week.
12. A Labour government would confiscate about £300 billion of shares in 7,000 large companies and hand them to workers in one of the biggest state raids on the private sector to take place in a western democracy, according to analysis by the Financial Times and Clifford Chance. The UK’s 2.6 million landlords would also face a moment of reckoning if Labour won the next general election after shadow chancellor John McDonnell said he wanted a “right to buy” scheme for private tenants as well as higher taxes on landlords.
13. Hezbollah hit Israeli military vehicles in the Galilee region with anti-tank missiles yesterday, prompting retaliatory airstrikes and artillery fire on Lebanese villages on the Israeli border, in what is the most serious clash between the old enemies for four years. Saad Hariri, the prime minister of Lebanon, appealed to the US and France to intervene to prevent the exchange escalating into open war.
14. Senior White House advisers have proposed secretly expanding the C.I.A.’s presence in Afghanistan if international forces begin to withdraw from the country, according to American officials. But C.I.A. and military officials have expressed reservations, prompting a debate in the administration that could complicate negotiations with the Taliban to end the war. Meanwhile, the US says that it is 'at the threshold' of an Afghan withdrawal agreement.
15. The Taliban attacked a northern Afghan city early Sunday, a day after striking another city in the north, raising fears of renewed assaults on population centers even as the top U.S. negotiator said he was on the “threshold” of securing a peace deal with the militant group as he headed to Kabul. Taliban fighters attacked Pol-e-Khomri from at least two directions, Fawad Aman, a spokesman for the Afghan Defense Ministry, told The Washington Post. The Afghan intelligence agency said 30 to 40 Taliban fighters launched the attack about 2 a.m.
16. Dan Balz: “Just four states are likely to determine the outcome in 2020. Each flipped to the Republicans in 2016, but President Trump won each by only a percentage point or less. The four are Pennsylvania, Michigan, Wisconsin and Florida. Many analysts point to Wisconsin as the single state upon which the election could turn. Shifting demographics, the growing urban-rural divide and the gap between white voters with and without college educations have helped to create an electoral map unlike those of the recent past."
17. Carl Hulse: "The battle for the White House may be the marquee political event of 2020, but it is the rapidly intensifying struggle for control of the Senate that will determine how power is truly wielded in Washington come 2021. As Republicans assess President Trump’s uncertain re-election chances, they see maintaining control of the Senate as their last line of defense against the prospect of Democrats controlling both the House and the White House. Democrats view gaining the Senate as a way to stymie Mr. Trump should he win a second term."
18. A growing number of companies are helping workers gain access to payroll advances and loans, reflecting concern over the impact money problems are having on productivity levels and worker retention. Employers including Walmart and Pima County, Ariz., have recently added these services. The aim is to help cash-strapped employees, many with damaged credit, cover unexpected expenses without resorting to high-cost debt.
19. Elon Musk: "Let me tell you, in general, the rate of advancement of computers is insane. A good example would be video games. You know, if you go back 40 years ago, 50 years ago maybe, you had you had Pong, that was just two rectangles and a square. Now, you've got photorealistic real-time simulations with millions people playing simultaneously. If you assume any rate of improvement at all, the games will be indistinguishable from reality, you will not be able to tell the difference. Either that or civilization will end. Those are the two options.”
20. The best source for news about Hurricane Dorian is, unsurprisingly, The Weather Channel.
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Quick Links: Is Germany going soft on China? Caixin PMI: China’s manufacturing starts expanding again. Elon Musk's charm offensive in China is paying off. Hong Kong's real problem is inequality. UK factory activity hits lowest level since 2012 amid Brexit uncertainty and global headwinds. The rising tide of economic pessimism. Robin Wigglesworth: Investors should beware the smoothness of private capital returns. The UK's offshore wind boom. Tesla is in the early stages of becoming a fully-fledged motor insurer. How The Wall Street Journal is building an incubator into its newsroom. How a small Division 3 college in Ohio helped fuel the Patriots dynasty. Heroic Secret Service dog that protected Obama wins prestigious award. Why is Joe Rogan so popular?
Political Links: Gallup: "Sixty-four percent of Americans approve of labor unions. Ruth Bader Ginsburg says she’s ‘alive’ and healing following cancer treatment. Universal Basic Income (UBI) is an idea gaining popularity with Democrats. W hile back, John Lanchester made the case for UBI here. 10 major social changes in the 50 years since Woodstock. Megan McArdle: "Chicago kept saying it would pay for pensions later. Well, it’s later." Mark Leibovich: Why is Joe Biden running for president? An interview with J. Ann Selzer, pollster for The Des Moines Register and one of the very best in her profession.