5 September 2019. By John Ellis.
1. President Vladimir Putin’s endorsement was once enough to ensure the fortunes of United Russia, the ruling political party. In happier times, Russia’s biggest party attracted celebrities such as his rumored girlfriend, the Olympic gymnast Alina Kabayeva, 36, and Nikolai Valuyev, the heavyweight boxer known as the Beast from the East. Now, as regional elections approach and protests grip the capital, former loyalists are abandoning the party in droves. At least 20 of the pro-Kremlin candidates for Moscow’s city duma vote on Sunday have direct or indirect ties to United Russia — but every single one registered as an independent, in an apparent attempt to lose the whiff of disengagement and corruption which increasingly follows the party.
2. Federal Reserve officials are gearing up to reduce interest rates at their next policy meeting in two weeks, most likely by a quarter-percentage point, as the trade war between the U.S. and China darkens the global economic outlook. The idea of an aggressive half-point cut to battle the slowdown hasn’t gained much support inside the central bank, according to interviews with officials and their public speeches. While market-determined interest rates have tumbled, signaling a dimmer outlook for growth and inflation, many Fed officials believe that the 10-year U.S. expansion can continue at a modest pace and inflation will gradually rise to their 2% target.
3. The Federal Reserve is weighing whether to activate a dormant tool to combat credit crunches in a downturn as part of a broader overhaul of big-bank-capital and stress-testing requirements. Fed Vice Chairman for Supervision Randal Quarles, in remarks prepared for delivery Thursday in Frankfurt, proposed integrating the tool, the countercyclical capital buffer, into pending revisions to the annual stress testing exercises faced by the nation’s largest banks. The countercyclical capital buffer allows the Fed to require banks to hold more loss-absorbing capital should the economy show signs of overheating or to keep less of it during bad economic times. The Fed has so far never turned it on, but it is now considering whether to integrate the tool into a plan proposed last year to overhaul the annual exercise that tests big banks’ ability to weather a doomsday scenario.
4. China and the United States agreed to hold high-level trade talks in early October in Washington, China's commerce ministry said on Thursday, amid fears that an escalating trade war could trigger a global economic recession. The announcement followed a call earlier in the day between China's Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, the Ministry of Commerce said in a statement on its website. China's central bank governor Yi Gang was also on the call. "Both sides agreed that they should work together and take practical actions to create good conditions for consultations," the ministry said.
5. Chinese President Xi Jinping has rallied Communist Party cadres to meet the country’s coming “struggles” and ensure a “great national rejuvenation” by 2049, signaling that China is preparing for continued friction with the US and other Western powers over the next three decades. In a speech on Tuesday, Xi said China must go through “great struggles” to achieve the “Chinese dream” of national rejuvenation – a term popularized under the rule of Xi. Indeed, Xi used a word translating from Chinese as ‘struggle’ almost 60 times in a speech summary published by state media.
6. German Chancellor Angela Merkel is the first important western leader to visit Beijing since the unrest began in Hong Kong. And the domestic pressure is growing on her to use the trip to show solidarity with the pro-democracy protesters in the city — and to warn Beijing of grave consequences if it intervenes militarily to put down the unrest. The protesters scored a big victory on Wednesday when Carrie Lam, Hong Kong chief executive, withdrew the extradition bill that would have allowed criminal suspects to be transferred to mainland China for the first time. But her concession was rebuffed by activists as “too little, too late”.
7. Germany has faced a heavy fall in industrial orders from companies outside the eurozone in the latest sign of how the bloc’s biggest economy has sustained a powerful blow from the trade war. New orders from foreign buyers dropped 6.7 per cent in July from June, according to the Federal Statistics Office. The fall was much steeper than the 0.5 per cent dip in domestic orders and contrasted with a 0.3 per cent rise in orders from the euro area. Overall, manufacturing orders fell 2.7 per cent in July from the previous month. The drop was more severe than the 1.5 per cent decline forecast in a Reuters poll.
8. Output down. Domestic demand down. Export orders down. Recruitment down. Investment plans down. Those are the headlines from the latest quarterly survey of manufacturing bosses and members of Make UK, the industrial federation formerly known as the EEF, which is warning that the sector is heading into recession. With just weeks to go before the latest deadline for Britain to withdraw from the European Union, Make UK has reported its most negative outlook for the industrial sector since the Brexit referendum more than three years ago.
9. Britain’s economy will not be as badly damaged as feared by a worst-case scenario Brexit because of preparations made by several sectors, according to the Bank of England. Mark Carney, the governor, said that measures taken by ports in the UK and France and a last-minute concession by Europe over trillions of pounds of complex financial contracts had lessened the likely impact of a disorderly departure from the European Union.
10. UK Prime Minister Boris Johnson faces an increasingly desperate battle to force a general election as his opponents plot to trap him in office but without power until after the next Brexit delay. Mr. Johnson suffered two more defeats in the Commons last night as MPs first voted to compel him to secure another extension and then denied him the poll he wants on October 15.
11. President Rouhani of Iran has ordered his country’s nuclear industry to speed up uranium enrichment after the US brushed aside a French attempt at compromise with Tehran. “From Friday we will witness research and development on different kinds of centrifuges and new centrifuges and also whatever is needed for enriching uranium in an accelerated way,” Mr Rouhani said a televised speech last night.
12. Afghan officials expressed concerns over a pending U.S.-Taliban deal this week, as the militant group claimed responsibility for the second deadly explosion in the capital in less than three days. At least 10 people were killed and more than 40 injured on Thursday morning when a car bomb exploded in a heavily fortified area of central Kabul, close to Afghan security offices. Plumes of smoke could be seen rising over the capital as casualties were transported to a nearby hospital. The Taliban said in a statement that it had targeted a convoy of foreigners.
13. The Mexican government’s stepped-up effort to deport Central American migrants crossing its southern border has significantly stemmed the flow of unlawful migrants entering the U.S. in the past few months. U.S. Customs and Border Protection took about 64,000 people into custody at the U.S.-Mexico border in August, according to a U.S. government official briefed on the latest numbers. That figure includes arrests of people who crossed the border illegally and those who went to legal border crossings, of which CBP processes about 10,000 a month.
14. According to a recently released study from the US Bureau of Labor Statistics, about 33% of wage and salary workers in the US did not have access to any paid leave from 2017 to 2018. This is actually an improvement from 2011, when 38% of workers said they didn’t get paid leave. Ninety-five percent of workers with access to leave in 2017-2018 said they could use it for vacation, with the other 5% only able to use it for things like illness or childcare. The report shows workers with least education are least likely to get leave. While 79% of workers with bachelor’s degree had paid leave, less than 40% of those without a high school eduction got this benefit.
15. Nobel laureate Robert Shiller said he “wouldn’t be at all surprised” if U.S. house prices soon started to decline. The S&P CoreLogic Case-Shiller index of property values in 20 cities decelerated for a 15th month in June, increasing 2.1% from a year earlier. Shiller noted that adjusting for inflation, prices had already flattened. “It would suggest declining home prices in the near future,” Shiller, who teaches at Yale University, told Bloomberg Television on Thursday. “I wouldn’t be at all surprised if house prices started falling.”
16. Revenues at the world’s top investment banks plunged to a 13-year low in the first half of 2019 as geopolitical tensions, slowing growth and low interest rates compounded a structural decline that set in after the financial crisis. The 12 biggest US and European investment banks generated $76.8 billion in revenue from their trading and advisory operations during the six-month period, down 11 per cent from 2018. It was the slowest first half since 2006, according to the latest data from industry monitor Coalition.
17. Google is allegedly using a network of billions of “secret” webpages to funnel personal data on its users to advertisers and “work around” privacy laws. The claims have been made in evidence submitted to an investigation by the Irish data watchdog, which regulates the activities of the search and advertising giant in Europe. The pages were discovered by Brave, a browser company, which alleges that Google shares large quantities of sensitive data on its users with other companies to target advertising without adequately safeguarding privacy.
18. Allen Institute for Artificial Intelligence research paper: "AI has achieved remarkable mastery over games such as Chess, Go, and Poker, and even Jeopardy, but the rich variety of standardized exams has remained a landmark challenge. Even in 2016, the best AI system achieved merely 59.3% on an 8th Grade science exam challenge. This paper reports unprecedented success on the Grade 8 New York Regents Science Exam, where for the first time a system scores more than 90% on the exam's non-diagram, multiple choice (NDMC) questions. In addition, our Aristo system, building upon the success of recent language models, exceeded 83% on the corresponding Grade 12 Science Exam NDMC questions. The results, on unseen test questions, are robust across different test years and different variations of this kind of test. They demonstrate that modern NLP (Natural Language Processing) methods can result in mastery on this task. While not a full solution to general question-answering (the questions are multiple choice, and the domain is restricted to 8th Grade science), it represents a significant milestone for the field."
19. Human trials of new antimalarial drugs are in the pipeline after Kenyan scientists successfully used bacteria to kill the parasite that causes the disease. The Kenya Medical Research Institute (Kemri) and global health partners say the breakthrough could potentially lead to the development of a new class of drugs in less than two years.
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