Monday, 29 July 2019. By John Ellis.
1. China said violent protests in Hong Kong wouldn’t be tolerated, its most high-profile response to unrest rocking the city after a chaotic weekend of unrest illustrated the government’s struggles in quelling a leaderless, unpredictable and widespread movement. The Hong Kong and Macau Affairs Office, which answers to China’s cabinet, reaffirmed its support for the city’s government and police in a rare briefing Monday in Beijing. Office spokesman Yang Guang said the country remained committed to the “one country, two systems” that had ensured the former British colony’s autonomy since its return in 1997.
2. Communist Party mouthpiece People’s Daily has called on the Hong Kong police to take immediate and forceful action to end the unrest and restore law and order in the city, in a strongly worded commentary published on Monday. “At a time like this, the Hong Kong Special Administrative Region government and the police should not hesitate or have any unnecessary ‘psychological worries’ about taking all necessary steps [to restore order],” the commentary said.
3. Russian police detained almost 1,400 people in a violent and sustained crackdown on pro-democracy protesters in Moscow over the weekend, in a sign that the Kremlin’s recent tolerance of popular unrest has ended and it is seeking to quell growing opposition movements. Riot police in helmets and body armor beat crowds of protesters with batons and dragged scores into waiting police trucks in a brutal response to a rally called to protest against a decision not to allow opposition candidates on the ballot for upcoming local elections in the country’s capital.
4. Iran for the first time tied the British seizure of an Iranian oil tanker to the ailing nuclear deal on Sunday, calling it illegal and a violation of the agreement. By making that link, Iran appeared to be trying to press the Europeans to make good on the promised financial benefits of the 2015 agreement known as the Joint Comprehensive Plan of Action.
5. Official campaigning for presidential elections got off to an ominous start on Sunday as suspected Taliban fighters attacked the Kabul political offices of President Ashraf Ghani’s running mate, leaving at least 20 people dead and dozens more wounded, according to the interior ministry. Just hours after Mr. Ghani kicked off his campaign for another five-year term in office with the declaration to war-weary Afghans that “peace is coming,” a car bomb exploded outside the fortified office compound of Amrullah Saleh, former head of Afghanistan’s intelligence agency and one of two vice presidents on Mr. Ghani’s ticket for the twice-postponed presidential election, now scheduled for Sept. 28.
6. The Federal Reserve this week will most likely cut interest rates for the first time since 2008, when the economy was mired in a deep recession, as the central bank tries to keep a record economic expansion from petering out. The expected change, while likely to be small, will end an era of gradual rate increases intended to return the economy to a more “normal” state in the wake of the Great Recession, when the Fed slashed rates to near zero as it tried to rescue the economy.
7. The Treasury Department is expected to hold its quarterly note and bond sales at record levels for the third straight time as Washington’s latest budget deal shows that the U.S.’s debt binge will continue. President Donald Trump once said he would eliminate the national debt, but now he’s set to approve a budget that will help usher in trillion-dollar annual deficits. In part because of that, Wall Street securities firms predict that a boost in Treasury issuance may be coming in a year’s time.
8. Negotiators for the U.S. and China will face off in Shanghai this week in another attempt to piece together a trade accord amid much lowered expectations for the kind of sweeping deal that appeared within reach this spring. People close to the talks said a major breakthrough is unlikely on points that led to negotiations breaking down in early May, but that modest wins might be obtainable.
9. China’s shrinking car market is hitting foreign manufacturing groups hard, with some companies operating at a fraction of their potential output, sparking fears a number will be forced to quit the world’s biggest market. Ford and Peugeot owner PSA have suffered the most, with their factories running well below full capacity at historic lows because of plunging sales after last year’s reversal in the Chinese auto market — the first in almost three decades.
10. Jack Ma’s online bank is leading a quiet revolution in the way China lends to small businesses, taking aim at a credit bottleneck that has held back Asia’s largest economy for decades. Using real-time payments data and a risk-management system that analyzes more than 3,000 variables, Ma’s four-year-old MYbank has lent 2 trillion yuan ($290 billion) to nearly 16 million small companies. Borrowers apply with a few taps on a smartphone and receive cash almost instantly if they’re approved. The whole process takes three minutes and involves zero human bankers. The default rate so far: about 1%.
11. Electricity generation from coal power stations across Europe fell by nearly a fifth over the first half of this year, the steepest decline ever recorded. The sudden drop, driven by buoyant carbon prices and new installations of wind and solar farms, has led campaigners to say that 2019 may mark the beginning of the end for coal in Europe. Around half of the coal was replaced by gas plants and the rest by renewables, according to an analysis by the London and Brussels-based think tank Sandbag.
12. U.K. Prime Minister Boris Johnson’s high-level Brexit cabinet holds its first meeting Monday, and will gather every day to ensure the country leaves the European Union on Oct. 31. Michael Gove, named to a job that makes him Johnson’s top aide, will lead the sessions as the government steps up preparations for a no-deal Brexit, the premier’s office said Sunday in a statement. Unless the EU agrees to re-open negotiations, that’s the most likely outcome, he said.
13. For generations, the wealth of U.S. households was built on the foundation of homeownership. That is changing. Homeownership rates for younger Americans have fallen sharply over the last decade. The median age of a home buyer is 46, the oldest since the National Association of Realtors began keeping records in 1981. Economists, policy makers and mortgage lenders expect the trend to extend to younger generations. The decline illustrates what for many Americans is the real legacy of the financial crisis.
14. A report this year by the Commonwealth Fund think tank in New York found fewer uninsured Americans than in 2010 but more who are “underinsured,” a term that describes policyholders exposed to high out-of-pocket costs, when compared with their individual incomes. The report estimated 44 million Americans were underinsured in 2018, compared with 29 million in 2010 when the Affordable Care Act was passed. That’s about a 50% increase, with the greatest jump among people with employer coverage.
15. The Walt Disney Company just broke an all-time record for annual box office earnings, making more money by July than any movie studio has ever made in a whole year. The company announced today (July 28) that it brought in $7.67 billion to date worldwide, breaking the record Disney previously set when it brought in $7.61 billion over 2016.
16. In a now-viral tweet-storm on Saturday, President Trump characterized Rep. Elijah E. Cummings’s Baltimore-based congressional district as a “rodent infested mess” where “no human” would want to live. His criticism rang with a particular irony in Baltimore County, where presidential son-in-law Jared Kushner owns more than a dozen apartment complexes that have been cited for hundreds of code violations and, critics say, provide substandard housing to lower-income tenants.
Quick Links: Get ready for the world economy’s biggest week of 2019. Former Fed chief Janet Yellen endorses quarter-point rate cut this week. U.S.-China talks set to resume as neither seems eager for a deal. China is increasingly confident it can weather the trade wars. US-China trade talks collapse was ‘not normal’, says veteran US negotiator. Air traffic between China and Africa has jumped 630% in the last decade. Are Chinese infrastructure loans putting Africa on the debt-trap express? More than 80% of global energy still comes from fossil fuels. Sea of Galilee earthquakes triggered by excessive water pumping. Droughts hit Thailand and India, risking stress on food supplies. The roots of Boeing’s 737 Max crisis: A regulator relaxes its oversight. Pfizer and Mylan in talks to merge off-patent drugs businesses. It’s a trend: Staying together by living apart. A teen-ager just made $3 million playing Fortnite.
Political Links: Putin critic apparently poisoned. Rise in extremist violence puts Germans on edge. Europe is about to find out how bad the economy has become. The EU must prepare for a no-deal Brexit. Will Boris Johnson lose his seat at the next general election? Sterling resumes slide as investors focus on no-deal Brexit rhetoric. String of wins lifts President Trump. Dan Coats to step down as Director of National Intelligence next month. U.S. Rep. John Ratcliffe (R-TX) will be nominated to replace him. Trump works “the base” with attacks on Rep. Cummings (D-MD). White House chief of staff Mulvaney: Trump's tweets on Cummings not racist. Nearly half of House Democrats back impeachment inquiry. Sen. Kirsten Gillibrand (D-NY) preparing attack on Biden. Is Joe Biden too old? Sen. Kamala Harris (D-CA) releases Medicare-for-all plan. Democrats need to win Michigan in 2020. It’s not at all clear that they will.