North Korean purge raises questions of stability - MarketWatch -
While some argue that the younger Mr. Kim’s succession of purges—he’s culled close to half of the top military leaders and other officials who served under his father—show he is effectively consolidating power, others express concern about whether he will be able to manage the balance of competing interests under his charge.
Experts note that a difficult balancing act between the military and the party is at the core of North Korea policy. Shortly after his ascent to power, Mr. Kim’s regime adopted an ideology known as byungjin that simultaneously prioritizes economic development and nuclear weapons, which North Korea continues to call its nonnegotiable “treasured sword.”
Mismatched policies and dueling factions could unsettle the regime, some analysts warn.
"The biggest danger to the regime remains from within," said Scott Snyder, Washington-based director of the Program on U.S.-Korea Policy at the Council on Foreign Relations. "It could be that the steps that Kim Jong Un is taking are steps that are potentially corrosive, rather than consolidationist." — (Marketwatch)
Prices have been rising in part due to the fall in the Brazilian currency.
The Brazilian real has fallen nearly 20% against the US dollar since May this year.
The decline has been blamed on an outflow of capital triggered by speculation that the US Federal Reserve will taper its stimulus policy, leading to a stronger dollar.
The Fed has used the programme, known as quantitative easing, to increase the money supply and improve liquidity in the financial system.
(via BBC News - Brazil raises interest rate to 10% as it battles inflation)
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Higher inflation pressuring Brazil’s central bank to raise borrowing costs is a tricky situation.
I’d keep an eye on a slowing economy causing unemployment to increase, which would then lead to consumers unable to repay loans (credit growth has been significant over the past few years).
This is all speculation, certainly worth more extensive investigation.
Car And Student Loans Account For 95% Of All Consumer Credit Issued In Past Year | Zero Hedge -
Today’s consumer credit report did not tell us anything we didn’t already know: in October, total consumer credit rose by $18.2 billion, the most since May 2013, with the usual massive historical revisions. However, of this $18.2 billion, $13.9 billion was non-revolving credit, while revolving (credit card) debt rose by $4.3 billion. Which means revolving credit is still a woefully low $856.8 billion, or well below the $1.02 trillion when Lehman failed, even as credit issued mostly by Uncle Sam to fund car purchases and liberal educations, has exploded.
Germany’s central bank has lifted its forecasts for economic growth to 1.7 per cent for 2014, despite the significantly lower growth of 0.5 per cent already expected for the current year. - (fundweb)
(via Bundesbank raises German growth to 1.7% for 2014 | News | Fundweb)
ECB's Weidmann Warns Central Banks Might Be Too Dominated by Fiscal Concerns - WSJ.com -
The shift in responsibilities away from governments and toward central banks has gone too far, Mr. Weidmann signaled. For many politicians, central bankers “cannot have enough arms now—arms with which they are to pull all the levers to simultaneously deliver price stability, lower unemployment, supervise banks, deal with sovereign credit troubles, shape the yield curve, resolve balance sheet problems, and manage exchange rates,” Mr. Weidmann said.
Mr. Weidmann’s comments suggest he would be reluctant for the ECB to take still more dramatic measures to stimulate the European economy such as additional government-bond purchases or keeping interest rates ultralow longer than the inflation outlook would warrant.
He opposed the ECB’s decision last year to create an open-ended bond-purchase program, which has yet to be used, arguing that it blurred the line between fiscal and monetary policy. His predecessor at the Bundesbank also opposed government-bond buying by the ECB. — (WSJ)
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This goes along the lines of what El-Erian from PIMCO said a few weeks back. Central Banks have taken on too much of a burden of responsibility to operate effectively towards their principal mandates.
(via Four Reasons Why Shanghai Just Had Its Worst Smog Day Of All Time - Business Insider)
Consumer sentiment highest in five months - Economic Report - MarketWatch -
It’s becoming more clear that the upcoming government budget/debt deadlines are not having an effect on confidence. The headwind of uncertainty due to paralysis in Washington is not strong enough to deter continued economic growth over the short-term.
Paul Ryan, Patty Murray a few billion dollars apart on budget deal - Capitol Report - MarketWatch
David Penchyna, leader of the Senate’s energy committee and a member of Pena Nieto’s Institutional Revolutionary Party (PRI), said the bill would be submitted to Senate committees on Thursday, but that the committees would not vote on it until Friday at the earliest.
"We are very close to finishing drawing up the bill to be able to present it … not just the changes that will be proposed, but also a presentation of the reasons," Penchyna told reporters.
His comments come after Mexico’s Senate passed an electoral reform demanded by the opposition early on Wednesday, the last major obstacle to pushing on with the energy bill.
The electoral bill, would allow lawmakers to serve consecutive terms in office and curb the power of the presidency, still must be voted on by the lower house.
On Tuesday, prominent leftist Andres Manuel Lopez Obrador was rushed to hospital for surgery after suffering a heart attack, reducing the likelihood that he will be able to lead street protests against the energy plans.
The PAN has made its support for the energy overhaul conditional on passage of the electoral reform.
The PAN, which is the PRI’s natural ally on the energy revamp, is pushing for more lucrative contracts to be offered, such as concessions, and lawmakers say they are exploring options for bigger changes.
The reform as originally proposed in August falls short of rules in oil-producing peers such as Brazil, Colombia and Norway that allow companies to keep a share of output.
(via Mexico lawmakers preparing to debate energy reform: top senator | Reuters)
UPDATE 1-Mexican retail sales fall in September | Reuters -
Catching up on the LATAM situation. This was a pretty bearish report. Largest drop on YoY basis since the dark days of 2008 acts as kryptonite for political capital and willingness to continue much needed reforms. Energy reform is currently being discussed in the legislature.
(via U.S. gains 203,000 jobs in November - Economic Report - MarketWatch)
(via ‘Great’ third quarter likely means GDP to tank in fourth - Capitol Report - MarketWatch)
China says it monitored U.S. B-52s that flew through its air zone - CNN.com -
The air zone declaration is a clear example of the new approach of Chinese President Xi Jinping, who has been in power for about a year, according to Kleine-Ahlbrandt.
“Unlike his predecessors, Xi is making foreign policy with the mindset of a great power, increasingly probing U.S. commitments to its allies in the region and exploiting opportunities to change the status quo,” she says.
But for the time being, the U.S. government is standing its ground in the East China Sea. - CNN
`China air defence zone not a no-fly zone`
Fast track risky path for Pacific trade pact | Business & Technology | The Seattle Times