FILE PHOTO: Turkish President Tayyip Erdogan addresses his supporters during a rally for the upcoming local elections, in Istanbul, Turkey March 12, 2019. REUTERS/Murad Sezer
March 19, 2019
ANKARA (Reuters) – President Tayyip Erdogan on Tuesday called on New Zealand to restore the death penalty for the gunman who killed 50 people at two Christchurch mosques, warning that Turkey would make the attacker pay for his act if New Zealand did not.
Australian Brenton Tarrant, 28, a suspected white supremacist, was charged with murder on Saturday after a lone gunman opened fire at the two mosques during Muslim Friday prayers.
“You heinously killed 50 of our siblings. You will pay for this. If New Zealand doesn’t make you, we know how to make you pay one way or another,” Erdogan told an election rally of thousands in northern Turkey. He did not elaborate.
He said Turkey was wrong to have abolished the death penalty 15 years ago, and added that New Zealand should make legal arrangements so that the Christchurch gunman could face capital punishment.
“If the New Zealand parliament doesn’t make this decision I will continue to argue this with them constantly. The necessary action needs to be taken,” he said.
Erdogan is seeking to drum up support for his Islamist-rooted AK Party in March 31 local elections. At weekend election rallies he showed video footage of the shootings which the gunman had broadcast on Facebook, as well as extracts from a “manifesto” posted by the attacker and later taken down.
That earned a rebuke from New Zealand Foreign Minister Winston Peters, who said he told Turkey’s foreign minister and vice president that showing the video could endanger New Zealanders abroad.
Despite Peters’ intervention, an extract from the manifesto was flashed up on a screen at Erdogan’s rally again on Tuesday, as well as brief footage of the gunman entering one of the mosques and shooting as he approached the door.
Erdogan has said the gunman issued threats against Turkey and the president himself, and wanted to drive Turks from Turkey’s northwestern, European region. Majority Muslim Turkey’s largest city, Istanbul, is split between an Asian part east of the Bosphorus, and a European half to the west.
Erdogan’s AK Party, which has dominated Turkish politics for more than 16 years, is battling for votes as the economy tips into recession after years of strong growth. Erdogan has cast the local elections as a “matter of survival” in the face of threats including Kurdish militants, Islamophobia and incidents such as the New Zealand shootings.
A senior Turkish security source said Tarrant entered Turkey twice in 2016 – for a week in March and for more than a month in September. Turkish authorities have begun investigating everything from hotel records to camera footage to try to ascertain the reason for his visits, the source said.
(Reporting by Ece Toksabay and Tuvan Gumrukcu; Editing by Dominic Evans and Nick Tattersall)
FILE PHOTO: Aerial view of containers at a loading terminal in the port of Hamburg, Germany August 1, 2018. REUTERS/Fabian Bimmer
March 19, 2019
BERLIN (Reuters) – A panel of advisers to the German government slashed its growth forecast for this year to 0.8 percent and warned risks related to Britain’s departure from the European Union, trade disputes and a sharper than expected slowdown in China remained high.
The group that advises the German government on economic policy had in November forecast that Europe’s largest economy would expand by 1.5 percent this year.
The panel said on Tuesday economic growth had slowed significantly, partly due to problems in the chemical and auto sectors and warned that a spiral of protectionist measures had the potential to push the economy into recession.
But Christoph Schmidt, one of the advisers, said: “The German economic boom is over but a recession is not currently expected due to the robust domestic economy.”
The group predicted the economy would grow by 1.7 percent in 2020.
(Reporting by Michelle Martin; Editing by Madeline Chambers)
FILE PHOTO: U.S. dollar notes are seen in this November 7, 2016 picture illustration. REUTERS/Dado Ruvic/Illustration
March 19, 2019
By Daniel Leussink
TOKYO (Reuters) – The dollar was under pressure on Tuesday, weighed by growing expectations the Federal Reserve would shift to a more accommodative policy stance this week and concerns about slower U.S. economic growth.
The dollar index, which measures the greenback against a basket of six major currencies, was a shade lower at 96.495, hovering close to a two-week low. The index has lost 1.2 percent after hitting a three-month high of 97.710 on March 7.
The dollar has weakened in recent sessions on growing expectations the Fed will strike a dovish tone at its two-day policy meeting due to start later on Tuesday.
Many investors expect the Fed, which has raised rates four times last year, to keep its benchmark overnight interest rate unchanged and stick to its pledge of a “patient” approach to monetary policy.
Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said while the market is expecting more accommodative sentiments from the meeting, equity markets were unlikely to react positively to such a development.
“If the Fed really shows a gloomy outlook for growth and rates, then it’s also a negative for U.S. equities. Then that will be a negative for the dollar,” Yamamoto said.
“There is a high risk that whichever the outcome is, it will push down dollar/yen.”
As the dollar took a breather, other major currencies advanced by default. The yen rose 0.1 percent to 111.27 yen per dollar, extending its gains to a third session.
Sterling also gained, rising 0.1 percent to $1.3268. It had seesawed overnight after the speaker of Britain’s parliament said Prime Minister Theresa May’s Brexit deal could not be voted on again unless a different proposal was submitted.
The Bank of England is expected to leave its interest rate outlook unchanged at a policy meeting on Thursday due to the deep uncertainty over Britain’s decision to leave the European Union.
The euro was down a tad at $1.1335.
Investors’ focus on Tuesday was also on Germany’s ZEW economic index for March, due for release around 1000 GMT.
The German economy, Europe’s largest, barely avoided recession in the final quarter of last year, as the negative impact from global trade disputes and Brexit weighed on a decade of expansion.
“The ZEW expectation index has been improving for four consecutive months,” said Mizuho’s Yamamoto.
“If another month’s improvement is shown, then I think that will be quite positive for the euro.”
(Editing by Sam Holmes)
President Obama’s Car Allowance Rebate System (CARS), more popularly known as “Cash for Clunkers,” is now a decade old.
For those with short memories or those utilizing the healthy defense mechanism of repression, CARS, enacted by Congress in the summer of 2009, was a Keynesian-inspired stimulus package consisting of a $3,500 or $4,500 subsidy to those willing to part with their inefficient used vehicles and “trade” them for newly manufactured cars and trucks with better mileage ratings. Congress initially appropriated $1 billion for what was to be a five month program, both to stimulate new car sales and supposedly improve air quality. Because the initial $1 billion was exhausted in a matter of days, Congress appropriated another $2 billion, the balance of which ran out well short of the five month stimulus period. Per the legislation, all vehicles traded in were immediately made inoperable and junked, their engines frozen with sodium silica.
Not surprisingly, this interventionist program was a massive policy failure for several very predictable reasons.
First, no economy is made better off by destroying existing resources. Contrary to conventional myth, production of soon-to-be-destroyed-war-goods during World War II did not propel the United States out of the throes of the Great Depression — and neither did euthanizing 690,114 operational vehicles “jump start” the U.S. auto industry in 2009. Both endeavors merely redirected resources to manufacturing sectors out of touch with genuine consumer demand.
Bastiat’s “broken window fallacy” demonstrates how society is never made better off by destroying goods. In the case of the automobile market, instead of having hundreds of thousands of operational used cars with some market worth, we have government-engendered malinvestment in the production of new vehicles not genuinely demanded by consumers. The average age of a used light vehicle on the road today is 11.6 years, versus 10.5 in 2009. Does it make economic sense to call for cars more than a decade old to be destroyed today? My own household would lose two perfectly good vehicles and incur much higher new car and insurance payments.
Second, we have distortions in the market because we can’t know what Cash for Clunkers participants might have purchased (or not purchased) instead of new cars What about less affluent consumers who now face a significantly diminished supply curve (and thus higher prices) for a used vehicle because Cash for Clunkers reduced the supply of older, cheaper used cars(and total vehicles for sale, for that matter) by nearly 700,000 units? Did significant fuel savings and cleaner air result from the removal and destruction of these vehicles? Experts say no; people tend to drive older vehicles sparingly or very short distances. A reliable but inefficient old vehicle which gets someone back and forth to a job that is, say, three miles away, may very well make it possible for the owner to keep a job. Anecdotally, my father purchased a new full-sized pickup in 1982 which he drove sparingly for 5 years. I inherited it with only 26,000 miles from my mother in 2002, then sold it 15 years later with 52,000 miles.. On a good day with a heavy tailwind, the truck might have gotten about 13 miles per gallon on the highway. But when was it driven by either my father or me … when only a full sized pickup truck would suffice, such a vehicle often seemed invaluable.
Third, only the price mechanism can rationally allocate resources. Producers and consumers meet at a price; prices in turn signal the need for more or less investment in a particular good or service.
Nobody in Washington DC knows the right number of vehicles to have on American roads, the optimal ratio of new versus used vehicles, or the correct number of each type of vehicle. These choices are best made by consumers who know intimately their own personal needs and constraints. Stimulating new car sales with subsidies, as the Obama administration did 10 years ago, could only generate malinvestment. Not only were new car sales per capita trending down at the time the CARS program, they had been trending down since 1975. Markets reflected genuine consumer preferences; DC reflected a political preference for auto makers and lenders.
The one recent exception to that forty-year downtrend of fewer new car sales per capita was the post-recession sales increase that occurred between 2009 and 2015. While some of this increase is attributable to drivers who weathered the recession but could no longer make do with older cars, the temporary increase in auto sales following the Cash for Clunkers “stimulus” did little more than the mimic the rise in the general overall consumer spending during that same, post-2009 time period.
Also contributing to the post-recession increase in auto sales was an increase in the number of households over that same period of time. While the number of autos per U.S. household actually trended down slightly from 2.05 autos per household in 2008 to roughly 1.95 in 2018, the number of total households increased over that same period — and at a significantly greater rate than the number of vehicles per household went down, accounting for more total cars in use. Demographics and consumer preferences, not Cash for Clunkers, created the post-recession spike in new car sales.
Since 2016, however, sales have dropped off. This is what we would expect given higher interest rates, higher auto prices, increased telecommuting, and riedesharing programs like Uber. Millennials, already strapped with college debt, appear less interested in new car ownership than their Baby Boomer parents.
And perhaps most of all, newer cars tend to be more reliable and longer-lasting. None of this bodes well for auto manufacturers.
The Cash for Clunkers program destroyed valuable resources, misallocated other resources, and made life difficult for cash-strapped drivers needing a low-priced car—not to mention mechanics and salvage yard operators who rely on clunkers for their livelihood. It, did nothing to rejuvenate the new car manufacturing industry. Before the next round of intervention we would be wise to reflect on Bastiat and learn the harsh lesson of Cash for Clunkers.
Policies pushed by far-leftist Democrats will literally end the national sovereignty of the USA.
Turkish President Tayyip Erdogan attends a ceremony marking the 104th anniversary of Battle of Canakkale, also known as the Gallipoli Campaign, in Canakkale, Turkey March 18, 2019. Cem Oksuz/Presidential Press Office/Handout via REUTERS
March 18, 2019
ANKARA (Reuters) – President Tayyip Erdogan on Monday described a mass shooting which killed 50 people at two New Zealand mosques as part of a wider attack on Turkey and threatened to send back “in caskets” anyone who tried to take the battle to Istanbul.
Erdogan, who is seeking to rally support for his Islamist-rooted AK Party in March 31 local elections, has invoked the New Zealand attack as evidence of global anti-Muslim sentiment.
“They are testing us from 16,500 km away, from New Zealand, with the messages they are giving from there. This isn’t an individual act, this is organized,” he said, without elaborating.
Australian Brenton Tarrant, 28, a suspected white supremacist, was charged with murder on Saturday after a lone gunman killed 50 people at mosques in the city of Christchurch.
At weekend election rallies Erdogan showed video footage of the shootings, which the gunman had broadcast on Facebook, earning a rebuke from New Zealand’s foreign minister who said it could endanger New Zealanders abroad.
Erdogan also displayed extracts from a “manifesto” posted online by the attacker and later taken down.
He has said the gunman issued threats against Turkey and the president himself, and wanted to drive Turks from Turkey’s northwestern, European region. Majority Muslim Turkey’s largest city, Istanbul, is split between an Asian part east of the Bosphorus, and a European half to the west.
“We have been here for 1,000 years and will be here until the apocalypse, God willing,” Erdogan told a rally on Monday commemorating the 1915 Gallipoli campaign, when Ottoman soldiers defeated British-led forces including Australian and New Zealand troops trying to seize the peninsula, a gateway to Istanbul.
“You will not turn Istanbul into Constantinople,” he added, referring to the city’s name under its Christian Byzantine rulers before it was conquered by Muslim Ottomans in 1453.
“Your grandparents came here… and they returned in caskets,” he said. “Have no doubt we will send you back like your grandfathers.”
Erdogan was re-elected last year with new powers but his AK Party, which has ruled Turkey since 2002, is battling for votes as the economy tips into recession after years of strong growth. He has cast the local elections as a “matter of survival” in the face of threats including Kurdish militants and attacks on Muslims such as the New Zealand shootings.
Speaking after a meeting of New Zealand’s cabinet, Foreign Minister Winston Peters said he told his Turkish counterpart that Erdogan’s use of the footage in an election campaign was wrong.
“Anything of that nature that misrepresents this country, given that this was a non-New Zealand citizen, imperils the future and safety of the New Zealand people and our people abroad, and that is totally unfair,” Peters said.
Turkish relations with New Zealand have generally been good, strengthened by Gallipoli commemorations which emphasize shared sacrifices in battle as much as the confrontation itself.
Turkish Foreign Minister Mevlut Cavusoglu, who was in Christchurch and visited Turkish citizens wounded in the attack, said Muslims around the world were worried about Islamophobia and racism.
A senior Turkish security source said Tarrant had entered Turkey twice in 2016 – for a week in March and for more than a month in September. Turkish authorities have begun investigating everything from hotel records to camera footage to try to ascertain the reason for his visits, the source said.
(Reporting by Tuvan Gumrukcu; Editing by Dominic Evans and Nick Tattersall)
FILE PHOTO: A general view is seen of the London skyline from Canary Wharf in London, Britain, October 19, 2016. REUTERS/Hannah McKay
March 18, 2019
By William Schomberg
LONDON (Reuters) – Britain will launch a new set of early warning indicators aimed at spotting the next big economic downturn more quickly, based on the volume of road traffic, businesses’ value-added tax returns and how long ships spend in port.
The Office for National Statistics has been under pressure to use more of the digital data created by businesses and consumers which other statistics agencies are streaming into their measurements of the economy.
The Bank of England is likely to pay attention too, as it is trying to improve its understanding of early signals coming from Britain’s economy as it navigates Brexit.
“Policymakers and analysts demand faster insight into the state of the UK economy in order to make informed, timely decisions on matters such as the setting of interest rates,” said Louisa Nolan, the ONS’s lead data scientist.
The ONS said its new indicators would be launched in April and in many cases they would be available a month earlier than gross domestic product data, the main measure of how fast an economy is growing or shrinking.
The ONS cautioned against using the new indicators as predictors of GDP but said they would be able to identify large changes to economic activity.
A new VAT index, which will show whether businesses are seeing more or less turnover, would have spotted the first quarter of the 2008-09 recession in Britain five months before it showed up official estimates, although GDP figures have been improved since then, the ONS said.
There was a “surprisingly good correlation” between the ONS’s shipping indicators and imports, while traffic counts for heavy goods vehicles in England were consistent with at least some economic events, such as the financial crisis.
The traffic flows numbers might also help to measure how much Britain’s economy can grow without creating excessive inflation pressure, the ONS said.
(Reporting by William Schomberg, editing by David Milliken)
FILE PHOTO: Cars for export stand in a parking area at a shipping terminal in the harbour of the northern German town of Bremerhaven, late October 8, 2012. REUTERS/Fabian Bimmer
March 18, 2019
FRANKFURT (Reuters) – German economic growth remained subdued in the first quarter, dragged down by weak industrial production, falling export demand for cars and deteriorating manufacturing sentiment, the Bundesbank said in a monthly report on Monday.
Struggling with unexpected weakness in among its car manufacturers, Germany barely escaped a recession last quarter. Fresh indicators suggest any recovery will be slow, at best, a drag on growth across the entire euro zone.
Car manufacturing suffered this quarter from a strike at a key engine plant, but a drop in export orders from outside the euro zone suggests deeper issues, rather than one-off factors, as has been suggested earlier.
“Manufacturing sector could therefore drag down overall economic growth for the third straight quarter,” the Bundesbank said in a regular monthly economic report.
Still, a boom in construction and buoyant private consumption should support the economy during the first quarter, the bank said, noting that employment continues to rise, despite the growth weakness.
“Private consumption, as signaled by the strong increase in retail sales, could pick up again significantly,” the Bundesbank said.
(Reporting by Balazs Koranyi, editing by Larry King)
WASHINGTON — Those of us who have always thought that Brexit — Britain’s withdrawal from the European Union — was a bad idea should be feeling self-satisfied and vindicated now. Well, we’re not; at least this observer isn’t. The reason is obvious. Many of the things that we feared would happen have happened, or might still. Worse, the consequences aren’t confined to the United Kingdom.
If you take a crude and unscientific survey of some of Washington’s major think tanks, you discover (no surprise) that they’re generally agreed that the economic outlook for Britain is grim. Here’s a commentary by economist Desmond Lachman of the right-of-center American Enterprise Institute:
“Since the Brexit referendum, the U.K.’s economic performance has deteriorated. It has done so as the U.K.’s future access to the European single market, which buys around 50 percent of the U.K.’s exports, has come into serious question. … At a time that the European economy is already stuttering, with Italy in recession and the German economy on the cusp of recession, the last thing that Europe now needs is a sclerotic UK economy.”
A new study from the Peterson Institute for International Economics reviewed the forecasts of 12 economic models and found that only two of them predicted gains from Brexit. Other studies forecast losses up to 8 percent of gross domestic product (GDP). The study also warns that “a no-deal ‘crash out'” — a reversion to higher tariffs rather than a “soft Brexit” of continuing the present no-tariff situation — “would have serious negative short-run impacts on the U.K., which are essentially impossible to model.”
Although EU countries would also lose some exports to the U.K., these are much smaller than the U.K.’s export losses to the EU. Thus, they’re more easily made up by boosting exports to other countries, the report contends.
The U.K.’s losses are not just theoretical. Already, some companies are announcing closures of U.K. manufacturing operations, a good example being Honda. Similarly, some banks are moving financial assets (stocks, bonds, other securities) from their London offices to locations on the continent. There is much fear that London will lose its traditional position as Europe’s pre-eminent financial center.
Meanwhile, the chaos, confusion and contradictions of Parliament’s efforts to find a tenable Brexit policy must seriously undermine confidence in Britain’s political system and its ability to attract future investors, domestic and foreign.
The prevailing political anarchy was on public display last week. On March 12, Parliament rejected Prime Minister Theresa May’s proposed agreement with the EU for the second time. Then on March 13, it voted down a proposal for the U.K. to leave the EU without an agreement, failing to acknowledge “that this is precisely what will happen unless they reconcile themselves to the very deal they rejected the day before,” as Douglas Rediker of The Brookings Institution noted in a blog post. The deadline for deciding is March 29, though that could be extended.
The larger and more significant issue floating over this controversy involves the future of the world trading system. There has been a loss of authority among the corporate executives, governmental officials and economists whose support is crucial if the system is to survive and flourish.
It’s not that they have changed their minds about the value of open trade so much as the public has turned more skeptical and hostile to trade expansion. A less supportive public in turn alters the political climate, making governments more nationalistic and leading to more, not fewer, trade barriers. Multinational firms become more cautious in making new investments, because they can’t know how much open trade will be tolerated.
Brexit is one example of this break from the past. Others are well-known: the Trump administration’s renegotiation of the North American Free Trade Agreement (NAFTA) with Canada and Mexico; its bargaining with China over trade practices; and the imposition of U.S. tariffs on steel and aluminum imports.
The fate of Brexit is just a small part of this much larger story. Is the post-World War II global trading system, constructed gradually over the past half-century or so, breaking down? Or is it just in a state of temporary hiatus? History awaits an answer.
(c) 2019, The Washington Post Writers Group