Monday's News Items.
12 August 2019. By John Ellis.
1. Hong Kong airport cancelled all remaining flights on Monday (today) after anti-government protesters flocked to the international transportation hub, in the worst blow to the territory’s economy since protests started over ten weeks ago. “All flights after 6pm are cancelled,” said the operator on Hong Kong’s airport general inquiries line. The arrival hall and airport car park were full on Monday afternoon, while local media reported some people were walking to the airport after they were unable to board packed buses and trains. The Asian financial hub is embroiled in its worst political crisis since the territory was handed over from British to Chinese rule in 1997.
2. Protests in Hong Kong turned increasingly violent over the weekend, as police fired tear gas inside two rail stations and demonstrators hurled petrol bombs at officers. Intense clashes broke out on Sunday in several districts on Hong Kong island, Kowloon and the New Territories. For the first time, police fired tear gas and rubber bullets inside a train station -- a move that medical experts say could threaten the lives of passengers. About 40 people were injured, two seriously, according to the Hospital Authority.
3. Thousands of demonstrators rallied in Moscow on Saturday in the latest protest over upcoming municipal elections, but with a significant new demand: the release of those arrested in previous weeks, including prominent opposition leaders. Until now, the protests, which began four weeks ago, have sought to add opposition candidates to the city’s ballot next month. The new push not only widens the scope of the protests but also redirects attention to the arrests ahead of the Sept. 8 election. Even as the protest was underway came the news that Lyubov Sobol, who had been the most prominent opposition candidate still free, was detained at her election headquarters by police.
4. Russia’s state communications watchdog has asked Google (GOOGL.O) to stop advertising “illegal mass events” on its YouTube video platform, it said on Sunday. The watchdog, Roscomnadzor, said some entities had been buying advertising tools from YouTube, such as push notifications, in order to spread information about illegal mass protests, including those aimed at disrupting elections. It said Russia would consider a failure by Google to respond to the request as “interference in its sovereign affairs” and “hostile influence (over) and obstruction of democratic elections in Russia."
5. American intelligence officials are racing to understand a mysterious explosion that released radiation off the coast of northern Russia last week, apparently during the test of a new type of nuclear-propelled cruise missile hailed by President Vladimir V. Putin as the centerpiece of Moscow’s arms race with the United States. American officials have said nothing publicly about the blast on Thursday, possibly one of the worst nuclear accidents in Russia since Chernobyl, although apparently on a far smaller scale, with at least seven people, including scientists, confirmed dead.
6. Russia has bestowed posthumous awards and praised as “national heroes” five nuclear scientists who died in a mysterious explosion at sea during a rocket engine test. Officials have been drip-feeding information about the blast on a platform in the White Sea off northern Russia on Thursday that caused a radiation spike in a nearby city. US-based nuclear experts said they suspected the explosion occurred during the testing of a nuclear-powered cruise missile vaunted by the Russian president Vladimir Putin last year.
7. The Pakistani prime minister, Imran Khan, has likened the Indian government to Nazis, warning that global inaction over Kashmir would be the same as appeasing Hitler. His comments came as authorities in Indian-administered Kashmirreportedly reimposed some curfew rules in parts of the territory, following an easing of restrictions in Srinagar, the region’s main city, that had allowed people to visit shops over the weekend and attend Friday prayers.
8. Correspondents for The New York Times got one of the first inside views of life under lockdown in Kashmir and found a population that felt besieged, confused, frightened and furious by the seismic events of this week. India’s swift and unilateral decision last week to wipe out Kashmir’s autonomy significantly raised tensions with its archrival, Pakistan, which also claims parts of Kashmir. The territory lying between the two nuclear armed nations was already one of Asia’s most dangerous and militarized flash points, smoldering for decades. Anything dramatic or provocative that happens here — and India’s move was widely seen as both — instantly sends a jolt of anxiety across this entire region.
9. India’s decision to revoke Kashmir’s autonomy leaves Pakistan’s leadership in a bind over how to handle jihadist groups that Pakistan’s military nurtured to liberate the disputed area. Islamabad is under international pressure to crack down on the extremists or face financial sanctions. Worst, attacks by those militant outfits could ignite armed conflict between India and Pakistan. But the government is also under domestic pressure to counter India’s move in a region Pakistan views as an integral part of its identity, making such extremist groups a tempting tool. Now, after India’s shift, experts say Pakistan is unlikely to continue what they say is the government’s first serious effort to dismantle its jihadist infrastructure.
10. Argentina’s President Mauricio Macri unexpectedly lost a primary vote by a landslide, foreshadowing a defeat in October’s presidential election and a possible return to the policies of his predecessor, Cristina Kirchner. Investors were bracing for a market sell-off after Sunday’s primary, effectively a test of national sentiment before the two-round presidential ballot. The scale of Macri’s defeat took pollsters by surprise, yet it reflects widespread public dismay at the country’s direction amid recession, austerity and inflation running at more than 50%. With 94% of ballots counted, Alberto Fernandez, the main opposition candidate who has Kirchner as his running mate, took 47% of votes to 32% for Macri. If that result were to be replicated in October, Fernandez would take the presidency without the need for a runoff.
11. Israel’s army said it killed four heavily armed militants from Gaza attempting to cross into the country early Saturday, accusing the Palestinian territory’s ruler Hamas of allowing what it called a potential mass-casualty attack. The militants were armed with AK-47 assault rifles, RPG grenade launchers, hand grenades and wire cutters, the Israeli military said. The quality of their arms pointed to a planned attack, it added, noting the militants were carrying energy bars and dates in case they needed to hide out.
12. Zombie companies, or corporate underachievers overdosed on cheap credit, are proliferating across the globe, threatening to derail the weakening world economy. Worldwide, the number of companies that do not generate sufficient profits to cover their interest payments and survive only by repeatedly refinancing their loans has doubled in a decade to constitute a fifth of all corporations, Nikkei research shows. The ranks of zombies have grown especially fast in the U.S., Europe and some countries in Asia.
13. Global investment banks are shedding tens of thousands of jobs as falling interest rates, weak trading volumes and the march of automation create a brutal summer for the sector. Almost 30,000 lay-offs have been announced since April at banks including HSBC, Barclays, Société Générale, Citigroup and Deutsche Bank. Most of the cuts have come in Europe, with Deutsche accounting for more than half the total, while trading desks have been hit hardest.
14. Investors have flocked to fixed income mutual funds at the fastest rate since the financial crisis, piling in almost $500 billion in the first half of 2019 during trade war tensions, recessionary fears and market volatility. About $487 billion flowed into fixed income funds this year, up from $148 billion in the first half of 2018, according to figures from Morningstar, the data provider. It is the highest level of first-half net inflows into bond mutual funds for at least a decade.
15. A steep slide in U.S. government-bond yields last week wrong-footed investors and left some pondering what was once unthinkable: whether interest rates in America could one day turn negative. Historically, people who lent money out got more money back later, a way to compensate for inflation, for the risk of not being repaid and for forgoing other investments. Now, though, there is more than $15 trillion in government debt around the world with negative yields. That means, essentially, that savers holding these bonds are paying the government to store their money.
16. Saudi Aramco is buying a 20% stake—worth some $15 billion including debt—in India’s Reliance Industries' oil and chemicals business, a move that would help match its enormous crude production with refining capacity, as it gears back up for a planned initial public offering.
17. China’s automobile deliveries continued to shrink last month, extending the market’s historic decline. Sales of sedans, sport utility vehicles, minivans and multipurpose vehicles in July fell 3.9 per cent from a year earlier to 1.53 million units, the China Association of Automobile Manufacturers (CAAM) said on Monday. That is the 13th consecutive monthly decline.
--------
Quick Links: Ifo Institute: Global economic outlook darkens amid escalating trade dispute. Goldman: Fears rising that U.S.-China trade war is leading to recession. Jeffrey Epstein's apparent suicide is unfathomable. Epstein’s death has a simpler explanation. Ghislaine Maxwell: The British socialite at the center of Jeffrey Epstein scandal. Why fentanyl is deadlier than heroin, in a single photo. China's PBOC says its own cryptocurrency is 'close' to release. People with 'subprime' credit scores are reportedly getting approved for Apple's new credit card. Drinking water crisis in Newark, New Jersey. The billion-dollar race to become China's Amazon Twitch.
Political Links: Warren wins the weekend in Iowa. Biden stumbles. Will voters revisit Beto O'Rourke? Bill de Blasio is campaigning in Yiddish. Elon Musk endorses Andrew Yang, says UBI "obviously needed." Seth MacFarlane has quietly become one of Hollywood’s major political donors. Guatemala elects Alejandro Giammattei as president. Salvini bids for full power while Italy's on vacation. Salvini's plan of attack. AfD's surge in support in Germany threatened by party disunity. Short bets against sterling rise to highest in more than two years. There’s no other explanation: It must be August.
--------