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Monday's News Items.
19 August 2019. By John Ellis.
1. Researchers at ETH Zurich have refined the famous CRISPR-Cas method. Now, for the very first time, it is possible to modify dozens, if not hundreds, of genes in a cell simultaneously. The timing of this change in activity can also be precisely controlled. This is of interest for basic research, for example in investigating why various types of cells behave differently or for the study of complex genetic disorders. It will also prove useful for cell replacement therapy, which involves replacing damaged with healthy cells. In this case, researchers can use the method to convert stem cells into differentiated cells, such as neuronal cells or insulin-producing beta cells, or vice versa, to produce stem cells from differentiated skin cells.
2. Just as much of the world has come to see rapid population growth as normal and expected, the trends are shifting again, this time into reverse. Most parts of the world are witnessing sharp and sudden contractions in either birthrates or absolute population. The only thing preventing the population in many countries from shrinking more quickly is that death rates are also falling, because people everywhere are living longer. Governments worldwide have evolved to meet the challenge of managing more people, not fewer and not older. Capitalism as a system is particularly vulnerable to a world of less population expansion; a significant portion of the economic growth that has driven capitalism over the past several centuries may have been simply a derivative of more people and younger people consuming more stuff. If the world ahead has fewer people, will there be any real economic growth?
3. Ruchir Sharma: "The postwar miracle is over. Since the financial crisis of 2008, the world economy has been struggling against four headwinds: de-globalization of trade, depopulation as labor forces shrink, declining productivity and a debt burden as high now as it was right before the crisis."
4. The world’s headlong dash to zero or negative interest rates just passed another milestone: Homebuyers in Denmark effectively are being paid to take out 10-year mortgages. Jyske Bank A/S, Denmark’s third-largest lender, announced in early August a mortgage rate of -0.5%, before fees. Nordea Bank Abp, meanwhile, is offering 30-year mortgages at annual interest of 0.5%, and 20-year loans at zero.
5. Less than a decade ago, investors could barely be compensated enough to hold the bonds of Spain and Portugal for fear the nations could be severed from the European Union. Now, they are a hair’s breadth away from having to pay for the privilege. An unprecedented surge in sovereign debt across the world has driven 10-year yields in the Iberian nations to record lows just shy of 0%. With about $16 trillion of global debt now paying negative rates, investors are snapping up positive yields wherever they can find it -- even if that means getting into some of the euro area’s riskier markets.
6. Jerome Powell is entering the most perilous stage yet of his tenure as Federal Reserve chairman, fighting to keep the U.S. from recession while taking the blame from President Trump for skittish markets and a slowing economy. Mr. Trump’s unyielding criticism of the Fed has led people inside the central bank to feel like they are fighting to both buoy the U.S. economy and preserve the Fed’s independence from political interference.
7. Investors are anticipating a fresh wave of stimulus measures to tackle flagging growth, as the White House said it was considering a new round of tax cuts to boost the economy. Central bankers will gather at their annual Jackson Hole meeting in Wyoming on Thursday as warning signals from financial markets add to rising pressure to come up with ways to support the global economy. Asian markets were higher in Monday trade on hopes of such measures.
8. Credit rating agencies have downgraded listed companies worldwide at rarely seen levels this year, underscoring the risks to the global economy posed by the prolonged U.S.-China trade war. The 487 downgrades for financial and nonfinancial companies through Aug. 13 outpaced the number of upgrades by 60, data from S&P Global Ratings show. The number of downgrades have not surpassed upgrades for a full year since 2016. Net downgrades among American companies are at the highest in three years. Among Chinese enterprises, the gap between credit downgrades versus upgrades has reached its worst in two years.
9. A prolonged dollar rally is pressuring U.S. corporate earnings, hitting commodity prices and threatening to deepen a selloff in emerging markets. The U.S. currency has continued to grind higher this year despite an escalating trade fight with China and broadsides from President Trump, who has complained that the dollar’s strength is curbing growth. Last month, the greenback rose even after the Federal Reserve cut interest rates for the first time in a decade, defying expectations that lower rates would cut the appeal of U.S. assets to yield-seeking investors.
10. US companies are watering down their spending plans as the threat of slowing global growth and the trade war sap business confidence. Capital expenditure, or capex, is set to grow 3.5 per cent this year, a sharp drop from the 4.2 per cent anticipated just four months ago, according to Citi analysts. The downward revisions reflect the spending plans of 714 listed US companies, excluding financial groups, and echo the drumbeat of dire sentiment data that began to appear late last year indicating businesses would curtail their investments.
11. President Donald Trump said the U.S. is “doing very well with China, and talking!” but suggested he wasn’t ready to sign a trade deal, hours after his top economic adviser laid out a potential timeline for the resumption of substantive discussions with Beijing. Trump vowed that the U.S. was “poised for big growth” after various trade deals are reached. But speaking to reporters as he departed New Jersey for Washington on Sunday, Trump said China needs a trade agreement more than the U.S. given the relatively weak condition of the Asian nation’s economy.
12. A sea of Hong Kong protesters marched through the dense city center in the pouring rain on Sunday, defying a police ban, in a vivid display of the movement’s continuing strength after more than two months of demonstrations, days of ugly violence and increasingly vehement warnings from the Chinese government. People began assembling in the early afternoon in Victoria Park, the starting point of huge peaceful marches in June that were joined by hundreds of thousands of protesters. The police approved the Sunday rally but objected to plans to march to the Central district, citing clashes that had occurred after previous events. But protesters marched anyway.
13. If an armed conflict broke out between Beijing and Washington, China’s hi-tech ballistic missiles would likely cripple the United States’ military bases and naval fleet across the Western Pacific region within hours, a new report by Australia-based researchers has said. With China making rapid technological advancements and sharpening its hard power, the report urged the US and regional allies such as Australia and Japan to overhaul military investment and deployment plans, or face the prospect of American “military primacy” being undermined by the Asian power.
14. The quantum revolution is coming, and Chinese scientists are at the forefront. Quantum technology seeks to harness the distinct properties of atoms, photons and electrons to build more powerful tools for processing information. Last year, China had nearly twice as many patent filings as the United States for quantum technology overall, a category that includes communications and cryptology devices, according to market research firm Patinformatics. The United States, though, leads the world in patents relating to the most prized segment of the field — quantum computers — thanks to heavy investment by IBM, Google, Microsoft and others.
15. Two days after the explosion of a suspected nuclear-powered cruise missile undergoing testing on Aug. 8, two monitoring stations nearest the site of the accident stopped transmitting data, Lassina Zerbo, who heads the Comprehensive Nuclear Test Ban Treaty Organization, told The Wall Street Journal. The Russian monitoring stations, called Dubna and Kirov after the places where they are located, were contacted immediately about the data disruption, Mr. Zerbo wrote in an email on Sunday to the Journal, and Russian officials responded that they were experiencing “communication & network issues.”
16. Yemen’s Houthi rebels struck Saudi Arabia’s Shaybah oil field, one of the kingdom’s largest, Saudi officials and the Houthis said, deepening tensions between Iran and its rivals that have engulfed the region’s energy facilities. The Houthis said in a statement Saturday that they had targeted Shaybah with 10 drones. The Iran-aligned rebels said the attack was their largest of its kind on Saudi Arabia, which they have been fighting for control in Yemen since 2014.
17. At least 63 people died in the Afghan capital after a suicide bomber linked to the Islamic State blew himself up in a crowded wedding hall late Saturday night. It was one of the most devastating attacks on civilians here in years of conflict and terror. The local affiliate of the extremist Sunni militia claimed responsibility in an online statement Sunday, accompanied by an image of a young man with an assault rifle. The Arabic text described him as a Pakistani named Abu Asim who had attacked a gathering of “rejecter polytheists,” as the group describes followers of Shiite Islam. Today, a series of bombings struck restaurants and public squares in the eastern Afghan city of Jalalabad, wounding at least 34 people, officials said, as the country marked the 100th anniversary of its independence.
18. For months, Afghans have been waiting anxiously to see whether negotiations between U.S. officials and Taliban insurgents will lead to a lasting peace and a solid path to power-sharing or leave them bereft, facing revived conflict and a possible Taliban takeover. Those concerns deepened Saturday as news spread that President Trump’s top peace negotiator, Zalmay Khalilzad, had presented him Friday with a nearly finished deal that would remove thousands of U.S. troops but had not locked in Taliban commitments to a cease-fire or political negotiations with Afghan officials.
19. Britain faces shortages of fuel, food and medicine, a three-month meltdown at its ports, a hard border with Ireland and rising costs in social care in the event of a no-deal Brexit, according to an unprecedented leak of government documents that lay bare the gaps in contingency planning. The documents, which set out the most likely aftershocks of a no-deal Brexit rather than worst-case scenarios, have emerged as the UK looks increasingly likely to crash out of the EU without a deal.
20. Italy’s Five Star Movement said yesterday that Matteo Salvini, the leader of the League party, was no longer a credible partner in a move that appeared to pull the plug on the ruling coalition. Leading figures of the Five Star party met yesterday at the villa of the movement’s founder Beppe Grillo to discuss their position before a Senate debate on the future of the government that is due to be held tomorrow. “All those present were agreed in defining Salvini as no longer a credible interlocutor,” Five Star said in a statement.
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