Today's News Items
15 August 2019. By John Ellis.
1. 15 minutes from Manhattan: A growing crisis over lead contamination in drinking water gripped Newark on Wednesday as tens of thousands of residents were told to drink only bottled water, the culmination of years of neglect that has pushed New Jersey’s largest city to the forefront of an environmental problem afflicting urban areas across the nation. The lead crisis in Newark, a city of 285,000 people, had been brewing for years, but escalated sharply over the weekend after federal officials issued a scathing letter warning about the safety of the drinking water and urging city officials to take more aggressive steps.
2. A sharp rally in government bonds set fresh records on Thursday, with the yield on 30-year US government bonds falling below 2 per cent for the first time as investors sought safety amid growing fears over the global economy and renewed trade tensions. Traders have dumped riskier assets such as stocks and crude oil and moved into perceived “havens”, including bonds, driven by a growing list of interconnected fears including trade tensions between the US and China, and slowing global growth.
3. The recession alarm bell ringing in U.S. government bond markets sent the world's stockpile of negative-yielding bonds to another record. The market value of the Bloomberg Barclays Global Negative Yielding Debt Index closed at $16 trillion Wednesday after the key U.S. 2-year and 10-year yield curve inverted for the first time 2007.
4. Global stocks began to stabilize a day after the Dow Jones Industrial Average posted its steepest fall this year on growing fears of a recession. However, the yield on the benchmark 10-year Treasury note extended its decline early Thursday, touching 1.545%—the lowest in three years—after hitting 1.574% Wednesday. Yields fall as prices rise.
5. President Trump lashed out at the Federal Reserve for not cutting interest rates more aggressively after fears about a global-growth slowdown rippled through financial markets Wednesday. Mr. Trump said the Fed, not his trade standoff with China, was to blame for recent signs of economic weakness. “We are winning, big time, against China…Our problem is with the Fed,” he said on Twitter Wednesday. Mr. Trump also said Fed Chairman Jerome Powell was “clueless.”
6. Mr. Trump on Wednesday appeared to propose a face-to-face meeting with Chinese counterpart Xi Jinping to find a “quick” and “humane” solution to the weeks of unrest in Hong Kong. In a series of tweets on Wednesday night Washington time, Trump also appeared to link the outlook for trade talks with China with a resolution of the Hong Kong protests.
7. The unrest in Hong Kong does not yet warrant direct intervention by Beijing despite hardening public sentiment and calls for tougher action in mainland China, according to Chinese government advisers. Shi Yinhong, an international relations expert at Renmin University and an adviser to the State Council – China’s cabinet – said China would risk damaging its ties with the United States and other major foreign powers, upsetting its own development and losing Hong Kong’s special status if it took the matter directly into its hands.
8. Katsuji Nakazawa published a smart, persuasive essay last week, under the headline: "China's power struggle lies behind global market turmoil." It is worth reading in full. Here's a snippet of Mr. Nakazawa's analysis: "To many, Trump and his many flip-flops on policy are the primary cause of the global market turmoil. But this reading misses the forest for the trees. 'Most people do not understand the true nature of this phenomenon,' a Chinese source involved in economic policy said. 'What is happening now is based on the tug of war in Chinese politics that has continued for the past year and a half.'"
9. China’s official economic data over the past four years has been “too smooth to be realistic,” given the significant volatility in key industries over the same period, according to a new study by Rhodium Group, a US-based economic research house. A new report claims that this unrealistic data has led to distortions in global economic growth estimates, which in turn has affected economic policy decision-making throughout the world, with China paying the highest price.
10. There is no mystery to the remarkable staying power of Venezuelan president Nicolas Maduro: as the country crumbles around him, the 56-year-old, they say, is kept in power by a vast drug trafficking industry that has captured the state. Figures are hard to come by but the United States estimates that a quarter of all Colombian cocaine passes through Venezuela, making it a key staging post in the worldwide trade. But it is the structure of the business that sets Venezuela apart from most of the continent. “In Colombia, in Mexico, the drug traffickers are civilians,” said Mildred Camero, a former head of the Venezuelan anti-drug commission. “Here it is the state itself.”
11. Jeremy Corbyn on Wednesday night began his attempt to bring down the government and block Brexit. The Labour leader has sent a letter attempting to build a cross-party coalition to force Boris Johnson from office, delay Brexit and campaign for a second referendum. Mr Corbyn has long been expected to make a move to stop a no-deal Brexit, but it was thought that he would not act until MPs returned from the summer recess on Sept 3.
12. The United States has applied to seize the Iranian oil tanker being held at Gibraltar, the government of the British territory revealed on Thursday, just as the authorities there were considering whether to release the ship they detained more than a month ago. The American action is the latest in a series of back-and-forth jabs that the United States and Iran have traded recently, raising fears of escalation into an all-out conflict in the Persian Gulf.
13. Pakistan’s prime minister, Imran Khan, has threatened to “teach Delhi a lesson” and vowed to fight until the end against any Indian violations in disputed Kashmir. In some of his strongest words since Delhi revoked Indian-administered Kashmir’s special status last week, Khan said the army was preparing to respond to anticipated Indian aggression in Pakistan-administered Kashmir.
14. The rest of the globe is beginning to react to India's decision to scrap the special status of Jammu and Kashmir, with Russia becoming the first permanent member of the U.N. Security Council to back the move, which has otherwise garnered guarded responses. Pakistani diplomats are working intensely to mobilize the international community against India's move. But the U.S. and many other nations have offered only tepid responses, calling on the South Asian neighbors to exercise restraint and maintain peace in the region.
15. Biological weapons could be built which target individuals in a specific ethnic group based on their DNA, a report by the University of Cambridge has warned. Researchers from Cambridge’s Centre for the Study of Existential Risk (CSER) said the government was failing to prepare for ‘human-driven catastrophic risks’ that could lead to mass harm and societal collapse. In recent years advances in science such as genetic engineering, and artificial intelligence (AI) and autonomous vehicles have opened the door to a host of new threats.
16. The US Army wants to build smart, cannon-fired missiles that will use AI to select their targets, out of reach of human oversight. The project has raised concerns that the missiles will be a form of lethal autonomous weapon – a technology many people are campaigning to ban. The US Army’s project is called Cannon-Delivered Area Effects Munition (C-DAEM). Companies will bid for the contract to build the weapon, with the requirements stating it should be able to hit “moving and imprecisely located armored targets” whose “exact position has high uncertainty”. Unlike laser-guided weapons, which hit a target highlighted by a human operator, C-DAEM will find targets for itself.
17. Since its debut in 2012, CRISPR gene editing has held the promise of curing most of the over 6,000 known genetic diseases. Now it’s being put to the test. In the first spate of clinical trials, scientists are using CRISPR/Cas9 to combat cancer and blood disorders in people. In these tests, researchers remove some of a person’s cells, edit the DNA and then inject the cells back in, now hopefully armed to fight disease. Researchers are also set to see how CRISPR/Cas9 works inside the human body. In an upcoming trial, people with an inherited blindness will have the molecular scissors injected into their eyes.
18. A lack of water vapor in the atmosphere has caused a global decline in plant growth over the past two decades, resulting in a 59 per cent decline in vegetated areas worldwide. Studying four global climate datasets, Wenping Yuan at Sun Yat-sen University in Zhuhai, China and his colleagues found that the decline is correlated with a vapor pressure deficit in the atmosphere, which has increased sharply over more than 53 percent of vegetated areas since the late 1990s. Vapor pressure deficit (VPD) is the difference between the pressure that would be exerted by water vapor when the air is fully saturated and the pressure it actually exerts. When this deficit increases, the pores on the surface of leaves that facilitate gas exchange close up, resulting in lower photosynthesis rates.
19. Scores of dolphins that have washed up dead on beaches in Tuscany this year were killed by a marine version of measles after being weakened by pesticide pollution, scientists have said. “Apart from having empty stomachs and traces of the virus, they were also highly contaminated by pesticides — the highest level we have ever seen in the Mediterranean,” Cecilia Mancusi, a biologist from Tuscany’s environmental protection agency, said.
20. Joel Kotkin: "America’s future will depend on believing in a shared mission. Calling progressives “Communists” or conservatives “fascists” gets us nowhere. Convincing young people, particularly young men, that they have no future won’t dissuade them from authoritarian views—or even violence. The road to sanity starts with a renewed embrace of a shared American identity that transcends all others." Read the whole thing.
Quick Links: Satellite photos show Chinese armored vehicles on border of Hong Kong. Huawei technicians helped African governments spy on political opponents. DeepMind's losses and the future of Artificial Intelligence. Major breach found in biometrics system used by banks, UK police and defense firms. The desperate race to neutralize a lethal superbug yeast. Scientists have discovered a new cure for the deadliest strain of tuberculosis. Stanford launches major effort to harness the microbiome to treat disease. Forget the yield curve; the 30-year Treasury is scary. The elevated repo rate is a sign of the cost of bigger budget deficits. Relentless rise of consumer debt in Russia. "If a brand can't find its purpose," Unilever CEO Alan Jope says, "we may sell it." WeWork's IPO is as outlandish as the company itself. But then, it's not really a company, it's a "state of consciousness."
Political Links: John Ellis (me!) on Facebook's leverage. Democrats’ uneasy 2020 reality: They need the likes of O’Rourke, Bullock and Hickenlooper to run for Senate. Hickenlooper will end his presidential campaign and (most likely) start his campaign for the US Senate in Colorado. Beto O'Rourke is rejoining the 2020 presidential race with "a major address to the nation." Democrats worry about Elizabeth Warren. Pelosi calls McConnell ‘Moscow Mitch.’ Salvini’s path to the premiership now looks less than smooth. Trudeau violated ethics law in SNC-Lavalin case, watchdog finds. Argentina’s peso falls again as Macri tries to shore up support. Netanyahu appears poised to block Omar, Tlaib from entering Israel ahead of a planned weekend visit. ‘A dormant volcano’: Kashmir’s streets are quiet, but residents seethe with resentment. Nick Eberstadt: America seems to be outmaneuvering Team North Korea. Your daily Jeffrey Epstein fix: Autopsy finds broken bones in Jeffrey Epstein’s neck, raising more questions about his death.