Global News October 16, 2017

  1. BBC
  2. Global News October 16, 2017

“American Bulls Clash with Europe’s Bears at World Finance Summit.”

The world economy is either the healthiest it’s been in a decade, poised to continue an epic bull run, or perched on the precipice of another crisis. It just depends what side of the Atlantic you’re on.
In panel after panel, American bankers expressed optimism about markets and global growth, while European finance chiefs warned of “storm clouds” over the Continent and a coming recession. The attitudes on display at the Institute of International Finance’s annual meeting in Washington underlined the divergent fortunes of the regions since the 2008 crisis.
U.S. Treasury Secretary Steven Mnuchin echoed those sentiments, telling attendees that tax and regulatory overhauls could fuel growth exceeding 4 percent. The global economy remains “far from our true potential,” Mnuchin said.
The European delegation espoused a starkly different, and darker, worldview.
“I can see the storm clouds gathering, I am warning against complacency,” UBS Group AG Chairman Axel Weber, the former president of Germany’s central bank, said Friday. “Enjoy the recovery while it lasts, because it will not last.”
While Europe is tussling over Brexit, bank rescues and anemic growth, the U.S. economy has gained some traction this year, allowing the Federal Reserve to increase rates. President Donald Trump’s promises to curb regulation and lower corporate taxes have helped push U.S. stocks to record highs.
Last week, some of the biggest U.S. banks beat third-quarter profit estimates despite a slump in trading revenue. Many of their European rivals are expected to show they struggled when they report results later this month.


“Iraqi forces seize Kirkuk from Kurds in bold advance.”

Iraqi government forces captured the Kurdish-held city of Kirkuk on Monday, responding to a Kurdish vote on independence with a bold lightning strike that transforms the balance of power in the country. A convoy of armored vehicles from Iraq’s elite U.S.-trained Counter-Terrorism Force seized the provincial government headquarters in the center of Kirkuk on Monday afternoon, residents said, less than a day after the operation began.
Prime Minister Haidar al-Abadi ordered that the Iraqi flag be hoisted over Kirkuk and other disputed areas claimed by both the central government and the Kurds, who defied Baghdad to hold a vote for independence on Sept. 25.
Baghdad described the advance as largely unopposed, and urged the Kurdish security forces known as Peshmerga to cooperate in keeping the peace. The Peshmerga said Baghdad would be made to pay “a heavy price” for triggering “war on the Kurdistan people”.
Washington, which works closely with both the federal forces and the Kurdish Peshmerga to fight against Islamic State, called on “all parties to immediately cease military action and restore calm”, according to a U.S. Embassy statement. “ISIS (Islamic State) remains the true enemy of Iraq, and we urge all parties to remain focused on finishing the liberation of their country from this menace.”
The military action in Kirkuk helped spur a jump in world oil prices on Monday. Oilfields near Kirkuk halted production, but Baghdad said it would quickly restart it. “We’ve got confirmation from military commanders that it’s a matter of a very short time,” a senior Baghdad oil official told Reuters. “Our brave forces will regain control of all Kirkuk oilfields and then we will restart production immediately.”


BBC News
“Portugal and Spain wildfires: Death toll soars to dozens.”

At least 31 people have died in a series of wildfires in Portugal, the country’s civil protection service says. A spokeswoman for the agency told reporters that firefighters were still tackling 145 separate fires – dozens of which were still considered serious.
Across the border in Spain’s Galicia region, at least three people are dead. More than 50 people have also been injured on the Portuguese side of the border. Local media reports about the victims say several people are still missing in Portugal, including a one-month old baby, while in Spain, two of the victims were found in a burned-out car by the side of the road.
Thousands of firefighters are battling the flames, which erupted across north-eastern Portugal and parts of Spain over the weekend after a hot dry summer. In Portugal, a state of emergency was declared north of the Tagus river – about half the country’s land area. More than 6,000 firefighters in 1,800 vehicles were deployed by early Monday morning.
Conditions were worsened by Hurricane Ophelia, which is approaching Europe’s western coast, bringing strong winds to fan and spread the flames. Rain is forecast for the affected regions late on Monday.


“As the quartet breaks up, central banking leadership flux looms.”

The leaders of the world’s top central banks who risked trillions of dollars and their reputations to rescue the global economy are now set to walk off stage at a time when the lingering effects of the crisis, evolving technology and a combustible political landscape will challenge their successors.
The Federal Reserve, the Bank of Japan and the People’s Bank of China may all have new bosses in early 2018 and there will be a new head of the European Central Bank the following year.
The new leaders will have to deal with the hangover from the 2007-2009 crisis and its immediate aftermath as well as newly emerging risks.
Some $10 trillion in assets bought by the Fed, the ECB and the BOJ to prop up their economies remains on the books and will have to be pared back. Stubbornly low global inflation and weak growth complicate the return to more conventional policies. There are unfinished reforms in China and Europe, while the rise of nationalism could erode central bank independence.
Further ahead, the spread of cryptocurrencies and other technologies threatens to weaken central bank control over the financial system.