Overseas Headlines- September 25, 2019

Date: September 25, 2019

United States:

Nancy Pelosi Impeachment Gambit Brings Peril for Trump — And Democrats

“House Speaker Nancy Pelosi’s decision to launch a formal impeachment inquiry of Donald Trump will consume the nation’s attention, grind the work of government to a halt and ultimately determine whether the president heads into re-election damaged or emboldened. Pelosi on Tuesday threw the weight of her office behind an impeachment she’s been reluctant to embrace — until allegations surfaced last week that Trump improperly pressured the government of Ukraine. That has set her on course for a constitutional clash with Trump, who quickly assailed the proceedings as “Witch Hunt garbage” and vowed a vigorous defense. That defense will intensify on Wednesday, when Trump will release an unredacted transcript of his call with Ukrainian President Volodymyr Zelenskiy, which the president says will rebut claims he leaned on Ukraine to investigate former Vice President Joe Biden. Adding to the moment, Trump will meet with Zelenskiy in person on the sidelines of the United Nations General Assembly before holding a news conference. And according to the New York Times, the administration was preparing for the possible release of a redacted version of the whistle-blower complaint by an intelligence official that touched off the uproar over the phone call. ”




Draghi’s Fiscal Plea to Germany Is Fair, Ex-Bundesbank Head Says

“Bundesbank President Jens Weidmann hasn’t yet declared himself in favor of a fiscal boost in Germany, but his predecessor now says it’s needed. Axel Weber, the chairman of UBS Group AG, told Bloomberg Television that officials in Europe’s biggest economy need to loosen purse strings rather than maintain a positive budget balance. He echoed this month’s plea to governments by European Central Bank President Mario Draghi that “it’s high time for the fiscal policy to take charge.” While the Netherlands this month shifted its stance towards ending an era of debt reduction in favor of fiscal loosening, German officials have held firm. Economy Minister Peter Altmaier played down the prospect of stimulus in comments on Tuesday, while Weidmann told a newspaper in August that there’s no reason for a major economic package. Weber disagrees. Weber was the Bundesbank president from 2004 until 2011, when he withdrew his prospective candidacy to lead the ECB by resigning over purchases of bonds of indebted European countries during the region’s debt crisis. That decision made way for Draghi to get the ECB role instead, and for Weidmann to succeed him at the German central bank.”



China’s Economy Struggling Across All Sectors, Beige Book Says

“China’s economy in the third quarter was the weakest it has been this year, according to the China Beige Book, with manufacturing, property and the services sectors all worsening, even as borrowing picked up. Manufacturing revenue, profits, volumes and sales prices fell by double-digit paces from the previous three months, although borrowing remained at its highest level, according to the quarterly report. “Retail and services stood out mostly for how incapable they were at picking up the slack,” the report said. The current weakness in the economy is primarily due to manufacturing. While a drop in exports was a factor, most of the decline was due to “considerably slower sales price growth,” according to the report. Prices at the factory door stopped rising in June and then fell in July and August, which can hurt companies’ profits, limiting their ability to invest and service debt. The services sector continued to underperform, with both revenue and profits dropping from the same period last year. Hiring also slowed, which means that “if manufacturing does have to shed a large number of jobs, services has shown no capacity to absorb them,” the report said. There was a resurgence of borrowing in the period. Shadow banking posted the biggest quarterly increase since the Beige Book began, bond issuance rose for a fifth quarter and lending increased. These trends indicate there isn’t a shortage of credit to the economy, the report said. Pent-up demand for loans, which shows who wants to get access to capital but can’t, was at its lowest in four years. Meanwhile, more than 30% of manufacturing firms were borrowing each quarter, indicating that “the sector as a whole is in clear distress or a large proportion of firms should be failing,” according to the report. The report is based on interviews with more than 3,300 firms conducted in China from mid-August to mid-September.”


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