Monday's News Items.
26 August 2019. By John Ellis.
1. The values that Americans say define the national character are changing, as younger generations rate patriotism, religion and having children as less important to them than did young people two decades ago, a new Wall Street Journal/NBC News survey finds. When the Journal/NBC News survey asked Americans 21 years ago to say which values were most important to them, strong majorities picked the principles of hard work, patriotism, commitment to religion and the goal of having children. Today, hard work remains atop the list, but the shares of Americans listing the other three values have fallen substantially, driven by changing priorities of people under age 50. Full poll results are here.
2. The same poll finds that — despite Americans’ overall satisfaction with the state of the U.S. economy and their own personal finances — a majority say they are angry at the nation’s political and financial establishment, anxious about its economic future, and pessimistic about the country they’re leaving for the next generation.
3. China’s renminbi weakened to a new 11-year low on Monday but global markets stabilized after President Trump said China has requested to restart trade talks, breathing life into risk assets as investors hoped for a de-escalation in tensions. “I have great respect for the fact that China called, they want to make a deal,” Mr Trump said at the G7 conference in Biarritz on Monday morning. “This is the first time I’ve seen them where they really do want to make a deal, and I think that’s a very positive step,” Mr Trump said.
4. China “resolutely opposes the escalation of the trade war” with the United States and instead welcomes “calm negotiations”, according to Vice-Premier Liu He, after last week’s moves by both Beijing and Washington further increased the trade tensions between the world’s two largest economies. Mr. Liu, who is China’s chief trade negotiator, was responding to Friday’s announcement that the US plans to raise the tariff rate on US$250 billion of Chinese imports from 25 per cent to 30 per cent from October 1, and the tariff on US$300 billion of goods from 10 per cent to 15 per cent starting on September 1.
5. China is “seriously making” preparations for relations with the U.S. to deteriorate, according to Global Times’ editor-in-chief Hu Xijin. Mr. Hu was responding to what seemed like a rare expression of regret by Trump on Sunday. When asked if he was rethinking his decision to escalate the trade war, Trump acknowledged having second thoughts. Hours later, the White House said his comments had been misinterpreted and that the president regretted not raising tariffs more. The Global Times is a Chinese tabloid run by the People’s Daily, which is the flagship newspaper of the Communist Party. Hu has said the paper voices opinions that official sources can’t.
6. The US and Japan agreed in principle on Sunday to core elements of a trade deal that President Trump and Prime Minister Shinzo Abe said they hoped to sign in New York next month. The agreement would cool a trade dispute between the two allies as a trade war between the US and China escalates. US trade representative Robert Lighthizer said the deal covered agriculture, industrial tariffs and digital trade. Auto tariffs would remain unchanged.
7. Hong Kong police said on Monday they arrested 36 people, the youngest aged 12, after violence during anti-government demonstrations escalated as protesters hurled Molotov cocktails at security forces who responded with water cannon and tear gas. Sunday’s protests saw some of the fiercest clashes yet between police and demonstrators since protests escalated in mid-June over a now-suspended extradition bill that would have allowed Hong Kong people to be sent to mainland China for trial.
8. Attacks against Iranian-allied forces in three countries, all blamed on Israel, escalated tensions across the Middle East on Sunday, drawing threats of retaliation and intensifying fears that a bigger conflict could erupt. The attacks Saturday and Sunday (and Monday) targeted Iranian forces and their proxies in Lebanon, Syria and Iraq, in what appeared to be a significant escalation of Israeli efforts to contain the expansion of Iranian influence in the region that could jeopardize the continued presence of U.S. troops in Iraq and draw Lebanon into a new war. All of the attacks were shrouded in the mystery that engulfs much of the shadowy conflict between Israel and Iran.
9. President Trump has "rowed" with his fellow G7 leaders over his demand that Russia be readmitted to the group, rejecting arguments that it should remain an association of liberal democracies, according to diplomats at the summit in Biarritz. The disagreement led to heated exchanges at a dinner on Saturday night inside the seaside resort’s 19th-century lighthouse. According to diplomatic sources, Trump argued strenuously that Vladimir Putin should be invited back, five years after Russia was ejected from the then G8) for its annexation of Crimea.
10. German business leaders are increasingly pessimistic about the eurozone’s largest economy, according to a closely-watched sentiment survey which hit its lowest level since 2012 this month. The Ifo business climate survey of German executives fell to 94.3 in August, worse that consensus forecasts provided by Reuters. This is fifth straight month of falling sentiment, down from 95.8 in July. “There are ever more indications of a recession in Germany”, said Clemens Fuest, president of the Ifo Institute, which published the survey.
11. Britain can “easily cope” with a no-deal Brexit, Boris Johnson said yesterday, as President Trump pledged that a free-trade agreement with the US would follow within a year. Speaking at the G7 summit in Biarritz, the prime minister said that the prospect of a Brexit deal was “improving” but remained “touch and go” as he warned that the European Union would be to blame if Britain crashed out. Talks with Donald Tusk, president of the European Council, failed to yield a significant breakthrough yesterday.
12. Mr. Johnson insisted on Sunday the UK would not pay the £39 billion divorce bill in full in the event of a no-deal Brexit on October 31, as EU officials said it was “squarely and firmly” up to Britain to find a solution to the vexed issue of the Irish border. At the G7 summit in Biarritz, the UK prime minister held a cordial meeting with Donald Tusk, president of the European Council, albeit with no sign of a breakthrough on a revised Brexit deal. Mr Johnson said the chances of a deal were “improving”, but it was “touch and go” whether one could be struck.
13. Robert Samuelson: "Just for the record, it’s worth reciting the basic facts in the latest report from the Congressional Budget Office. It demonstrates the nonchalance with which the budget is now treated by both parties. According to CBO estimates, massive deficits stretch as far as the eye can see. Between 2020 and 2029, the projected deficits total $12.2 trillion, which is nearly $1 trillion more than was estimated in May. In every year after 2020, the deficit exceeds $1 trillion and is more than 4 percent of gross domestic product (GDP). By 2028, the projected deficit will be 5 percent of GDP. The actual deficits will probably be higher, even though the CBO projections assume — unrealistically — that there will be no recession during this period and that the unemployment rate will remain near 'full employment.'"
14. UBS Global Wealth Management, which oversees more than $2.48 trillion in invested assets, has gone underweight on equities for the first time since the Eurozone crisis. The Swiss asset manager cut its stock positioning relative to high-grade bonds to reduce its exposure to trade wars and political uncertainty, Global Chief Investment Officer Mark Haefele wrote in a note to investors. “Risks to the global economy and markets have increased, following a renewed escalation in U.S.-China trade tensions,” said Haefele, who had so far resisted turning bearish on stocks since the world’s two biggest economies began their trade feud last year.
15. Over the past two years, Jane Schwartzberg, head of strategic client segments at UBS Group AG ’s U.S. wealth-management unit, has seen a marked increase in requests from prospective clients who want to work with female financial advisers. “It’s not that women make better advisers,” said Ms. Schwartzberg, who oversees the firm’s marketing efforts to women, business owners and wealth inheritors. “It’s that prospects are now more vocal that they want diversity from the people they get advice from.”
16. A gigantic floating raft of volcanic rock that emerged from an underwater volcano eruption in the Pacific Ocean is slowly drifting towards the Australian coast, heartening hopes it could benefit the imperiled Great Barrier Reef. The massive pumice raft – over 20,000 football fields in size and composed of volcanic rock that's light enough to float on the surface of water – appeared only a few weeks ago, after a suspected underwater volcanic eruption near Tonga.
17. The ability to edit genes in living organisms offers the opportunity to treat a plethora of inherited diseases. However, many types of gene-editing tools are unable to target critical areas of DNA, and creating such a technology has been difficult as living tissue contains diverse types of cells. Now, Salk Institute researchers have developed a new tool -- dubbed SATI -- to edit the mouse genome, enabling the team to target a broad range of mutations and cell types.
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