News Items.
16 September 2019. By John Ellis.
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1. Facebook will be quizzed by global regulators on its planned Libra coin project amid concerns from EU governments over the threat the digital currency poses to financial stability. Representatives of Libra will meet officials from 26 central banks, including the Federal Reserve and the Bank of England, in Basel on Monday in the first major encounter between Libra’s founders and policymakers since Facebook unveiled its plans to upend global payments, officials told the FT.
2. Niall Furgeson: "One emerging market at a time, China is building a global payments infrastructure. Right now, the various systems are distinct national versions of the Chinese original. But there is no technical reason why the systems should not be linked internationally. Indeed, Alipay is already being used for cross-border remittances. If America is stupid, it will let this process continue until the day comes when the Chinese connect their digital platforms into one global system. That will be D-Day: the day the dollar dies as the world’s No 1 currency and the day America loses its financial sanctions superpower. If America is smart, it will wake up and start competing for dominance in digital payments. The shortest cut to a system to rival Alibaba and Tencent is Libra, the digital currency proposed by Facebook, which, with its 2.4 billion active users, is uniquely positioned to create something on a Chinese scale — and fast."
3. Oil posted its biggest ever intraday jump, briefly surging above $71 a barrel after a strike on a Saudi Arabian oil facility removed about 5% of global supplies and raised the specter of more destabilization in the region. In an extraordinary start to trading on Monday, London’s Brent futures leaped almost $12 in the seconds after the open, the most in dollar terms since their launch in 1988. Prices have since pulled back about half of that initial gain of almost 20%, but are still heading for the biggest advance in almost three years.
4. The Trump administration intensified its focus on Iran Sunday as the likely culprit behind attacks on important Saudi Arabian oil facilities over the weekend, with officials citing intelligence assessments to support the accusation and President Trump warning that he was prepared to take military action. The government released satellite photographs showing what officials said were at least 17 points of impact at several Saudi energy facilities from strikes they said came from the north or northwest. That would be consistent with an attack coming from the direction of the northern Persian Gulf, Iran or Iraq, rather than from Yemen, where the Iranian-backed Houthi militia that claimed responsibility for the strikes operates.
5. Iran has warned that it is prepared for “fully fledged war” after the United States accused it of launching devastating drone attacks on two oil facilities in Saudi Arabia. The two powers are at their closest point to all-out conflict since President Trump reinstated sanctions last November, six months after pulling the US out of an international deal that limited Iran’s nuclear activities.
6. For many of the national security teams that monitor threats on the U.S., the apparent drone strike Saturday on the heart of Saudi Arabia’s oil production facilities was the realization of their worst fears. Based on early reports, multiple relatively inexpensive drone devices were able to pierce Saudi defenses in a way that a traditional air force could not: flying long distances to drop potent bombs that apparently set vast portions of the Saudi petroleum infrastructure ablaze. The attack underscored the fears raised by U.S. security officials and experts in terrorism about the rapid evolution of technologies allowing expanded unmanned flight.
7. As many as 800,000 Iranians are set to lose cash handouts within the next month as U.S.-imposed sanctions take their toll on the Islamic Republic’s economy. Iran plans to wean up to 30 million people off cash subsidies in the long term, but it “cannot take them off under the current economic situation,” said government spokesman Ali Rabiei at a news conference in Tehran.
8. Israeli Prime Minister Benjamin Netanyahu brought his cabinet to the West Bank on Sunday to legalize a Jewish settlement outpost, as he recycles a familiar litany of promises and warnings to try to win a tight re-election race. Polls show his Likud party and former military chief Benny Gantz’s Blue and White bloc in a dead heat ahead of Tuesday’s election, and Netanyahu has gone on a campaign blitz warning that a government led by his rival would make dangerous concessions to the Palestinians and Iran.
9. Robert Kagan: "For most of their existence, Israelis have struggled to embed their nation ever more firmly within the liberal economic, political and strategic order — believing it was their shared values more than anything else that would help protect Israel against its enemies. The fact that many Israelis, including the country’s leaders, seem to be abandoning this decades-long approach says something about the current state of Israeli politics and society. But it also says something about the state of the world. Israel’s turn away from the liberal order is a case study of what happens to small states when global winds shift."
10. New U.S. sanctions against North Korean hackers and revelations about North Korean malware show how Pyongyang’s cyber operations have become a crucial revenue stream and a security threat that soon could rival its weapons program, U.S. and industry officials say. North Korea’s hacks of financial systems and critical infrastructure world-wide reveal sophisticated cyber capabilities developed to counter global sanctions and expand Pyongyang’s geopolitical power, according to these officials.
11. The U.S.-led effort to force Venezuelan President Nicolás Maduro from office has moved into a new stage, with rising fears of military conflict between Venezuela and Colombia, and the activation of a 70-year-old mutual defense treaty among countries of the Western Hemisphere. Members of the Inter-American Treaty of Reciprocal Assistance agreed last week to invoke the 1947 pact, better known as the Rio Treaty, that allows joint actions ranging from economic sanctions to the use of military force and cutting transport and communications links. Foreign ministers of the treaty’s 19 member nations are due to meet later this month to decide which measures are necessary to stem the threat.
12. Venezuelan President Hugo Chávez in the mid-2000s ordered his top lieutenants to work with Colombian Marxist guerrillas to flood the U.S. with cocaine in his government’s efforts to combat the Bush administration, according to U.S. documents obtained by The Wall Street Journal that shed new light on the leftist regime’s struggle with Washington. The documents, prepared by federal prosecutors from the Southern District of New York, outline for the first time the possible role of Mr. Chávez, an icon of the Latin American left who died from cancer in 2013, in drug trafficking.
13. Black-clad protesters hurled gasoline bombs at government offices in central Hong Kong on Sunday, as a day that began with a peaceful march by tens of thousands of pro-democracy demonstrators descended into clouds of tear gas deployed by the police and ugly brawls between civilians. The police also used water cannons on Sunday after protesters vandalized a subway station and hurled bricks and gasoline bombs at a complex of government buildings that includes the city’s legislature, during a weekend that revealed the extent to which three months of pro-democracy demonstrations have frayed the city’s social fabric.
14. The slowdown in China's factory and consumer sectors deepened in August, with industrial production growing at the weakest pace in 17-1/2 years, a sign of increasing weakness in an economy lashed by trade headwinds and soft domestic demand. Production rose 4.4% in August year-on-year, slower than the 4.8% growth in July. Analysts polled by Reuters had forecast output would rise 5.2%. The growth is the slowest since February 2002.
15. Banks are getting back into the business of building mortgage bonds, laying the groundwork for a market that stands to grow as the Trump administration tries to reduce the government’s role in housing finance. Citigroup, Goldman Sachs, Wells Fargo and JPMorgan Chase over the past year have restarted or expanded the business of spinning fresh pools of mortgages into securities. They are adding a jolt of energy to efforts to revive the so-called private-label market for mortgage bonds, which virtually disappeared after it blew up during the financial crisis of 2008. Smaller operators have long tried, but mostly failed, to rebuild what was once among the most significant businesses on Wall Street.
16. About 49,000 General Motors employees walked off the job at 12 a.m. today after negotiations between the United Auto Workers union and the Detroit-based carmaker broke down. The union had announced plans for the nationwide strike Sunday afternoon, and no deal was reached before the midnight deadline. It is the first national UAW strike since 2007.
17. The aging of the world is happening fast. Americans 65 and older are now 16% of the population and will make up 21% by 2035. At that point, they will outnumber those under 18. In China the large numbers of people born before the one-baby policy was introduced in 1979 are swelling the ranks of older people, even as younger age groups shrink. Other countries are even older. Japan leads—more than a quarter of its population is 65 or older—but Germany, Italy, Finland, and much of the rest of the European Union aren’t far behind. A quarter of the people in Europe and North America will be 65 or older by 2050.
18. Should you fear the gray tsunami? “Despite all the stressing about aging,” says Daron Acemoglu, an MIT economist, “there is surprisingly very little evidence that aging societies are worse economically.” Looking at GDP data from 1990 to 2015, Acemoglu and Boston University’s Pascual Restrepo found no correlation between aging demographics and slowed economic growth. In fact, countries like South Korea, Japan, and Germany, all with rapidly aging populations, are actually doing well.
19. According to new research, the dead may not always rest in peace... quite literally. For more than a year after death, corpses move around "significantly", and this finding could be important for forensic investigations. Researchers at an Australia-based decomposition research facility - colloquially known as a "body farm", a term some scientists find disrespectful - made the startling discovery after using time-lapse cameras to film decomposing corpses.
20. Bonus Brexit item: UK Liberal Democrats will go into the next general election promising to cancel Brexit, after delegates at the party’s annual conference overwhelmingly backed the policy. Although the party has used the slogan “Bollocks to Brexit” the Lib Dems had previously campaigned only for a second referendum. The shift in position is an attempt to outflank Labour as the most overtly pro-Remain party in the campaign.
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