EconVue Weekly Spotlight July 19, 2016
posted by Lyric Hughes Hale on July 19, 2016 - 12:00am
My favorite quote this week:
I've got fifty quid that says we see an alien invasion by Christmas (@markcoflaherty)
It has truly been an amazing time, when anything might happen. We focus mainly on the chaos in Turkey, a member of NATO since 1952 and a country that houses more than 90 US tactical nuclear weapons. Since last Friday approximately 35,000 people have been dismissed or detained, including the deans of all its universities. Turkish academics are no longer free to travel outside the country. This does not bode well for Democrary. Ironically, President Erdogan, who banned Twitter, used it to regain his hold on his country.
This evening, Donald Trump was nominated by the Republican party as its candidate for the President of the United States. The status quo, as Ronald Reagan said, is Latin for the mess we are in. It is being challenged everywhere.
Stories in our Spotlight This Week: Turkey
1. Turkish Military's Influence Rises Again
Dion Nissenbaum 5/15/16 WSJ
This article appeared in the WSJ two months' prior to the attempted military coup in Turkey, the first ever in a NATO country. Worth reading today.
2. Turkey is the Next Failed State in the Middle East
David P. Goldman 10/15/15 Middle East Forum
Turkey may become the region's next failed state…There has to be a fall guy in the Middle East's film noir, and that unenviable role has fallen to Turkey. The disintegration of the US-Turkish alliance began last fall with a surprise from Washington.
3. Erdogan's Coup
Edward N. Luttwak July 2016 Slate
An assessment of the events in Turkey by the man who literally wrote the book on how to stage a coup, the estimable Edward Luttwak.
4. Turkey's Coup may have Failed - but History Shows it won't be Long Until Another One Succeeds
Robert Fisk 7/16/16 Independent UK
The story in Turkey is not over. Tactical nuclear weapons are housed at the base in Incirlik and reports are that 42 helicopters have gone missing from that location. Veteran journalist and historian Robert Fisk writes that another coup might be on the horizon.
5. Turkey Extends Purge to Universities, Asking All Deans to Go
Isobel Finkel 7/19/16 Bloomberg
The purge is gaining force, and Erdogan is now going after academics. How will universities reopen this fall?
More Stories in our Spotlight This Week
6. How To Embrace Nationalism Responsibly
Lawrence Summers 7/10/16 Washington Post
Brexit might have been more about national identity than immigration policy.
7. Philippines V. China: Arbitration Outcomes
I attended the 6th annual CSIS conference on the South China Sea last week in Washington. The Chinese speaker was on the defensive about environmental concerns for coral reefs and fishing. This is a game changer for Chinese diplomacy with profound domestic implications (probably positive) for President Xi Jinping.
8. China is the Biggest Market in Fintech - the World Just Doesn't Know it Yet
Jason Jones 7/16/16 LendAcademy
9. Japan's Public Broadcaster Says Emperor Akihito Ready to Abdicate
Robin Harding 6/13/16 FT
The emperor has apparently made know his wish to resign, abdicating in favor of his son, who could also serve as regent. Could Queen Elizabeth do the same?
10. Obama slammed Polish democracy on Friday. Here’s how Polish TV proved him right.
Michael Birnbaum 7/9/16 Washington Post
More than 100 journalists have been dismissed or have resigned from Poland’s public broadcaster this year, a measure of the major changes underway there. Some journalists say that anyone perceived as critical of the Law and Justice party is now under threat.
President Obama's remarks were intentionally misrepresented by government media during his visit to Warsaw. At risk: the independence of Poland's high court. And another blow to freedom of the press worldwide.
11. Historical Echoes: The Fed's Cuban Connection
Mary Tao 7/15/16 Liberty Street
In 1926 the Atlanta Fed prevented a run on Cuban banks by shipping $26.5M in cash to Havana via gunboat before banks opened on Monday morning. The Boston and Atlanta Feds both had offices in Cuba beginning in 1923 to protect US interests.
12. Most Heavily-Armed States in America
CBS News 7/18/16
New York is the least heavily armed; Washington DC is #2, after Wyoming.
EconVue Research and Insights
Growing Number of Fed Banks Lobby for Rate Hikes Michael Lewis 07/12/16
At their June meeting, FOMC members, hawks and doves alike, seemed to be in full retreat. In the “dot plot,” every member scaled back their expected future increases in the funds target in the near-, medium- and long-term. The median number of rate hikes expected in 2016, which went from four in the December 2015 dot plot to 2-3 in March 2016, crumpled to barely two +25BP moves expected in June. Many observers, not to mention the Fed futures market, scoffed at the FOMC’s resolve to do even that.
Data Round-Up: Single-Family Housing Starts Post Impressive Trend Gain Michael Lewis 07/19/16
Housing starts were up nicely in June, reaching 1.189 mm units (seasonally-adjusted at annual rate) from a downwardly-revised 1.135 mm units in May; this +4.8% gain was well above the consensus estimate. For 2016 to date, total starts are up a solid +8% vs. the same period in 2015. Single-family starts, the more economically-sensitive component, accounted for the majority of the June increase. They are up a very impressive +15% for 2016 to date vs. the first six months of 2015.
Obama Speaks: A Presidential Assessment of Obamacare David W. Johnson 07/19/16
Earlier this month, President Obama took the unprecedented step of authoring an academic research article in The Journal of the American Medical Association (JAMA) to document the Affordable Care Act’s (ACA) accomplishments and suggest improvements. EconVue expert David Johnson analyzes the President's arguments.
Finally, we end as we began, with Turkey. The transcript of today's conference call with Steven Cook, an expert on Turkey at the Council on Foreign Relations is here. His overall assessment is that Turkey is in chaos and that there will be an inevitable worsening of relations with the US. I asked the second question.