August 30
Welcome back from the final weekend in August. Time to start shopping for school supplies. This week will be dominated, however, by anticipation of the jobs report for August. Expectations are that the nonfarm employment will grow by 223, 000, up from 215,000 in July. The weekend was filled with chatter about rates — five different Fed reps were speechifying at the Jackson Hole summit. Overseas, China is opening stronger, continuing its two-day rally from last week. Both Japan and Malaysia headed lower ahead of Tokyo’s report on industrial production, vehicle production, housing starts, and construction orders. Also on the radar: oil, which surged 10% last week, heading above $40/barrell for West Texas Intermediate.
Here is what else you need to know.
Unemployment rate can fall further without pressuring wages. A new report from the Congressional Budget Office says the pool of available workers is expanding. So the number of people per job isn’t shrinking — which would push up wages. This means that inflation won’t become a worry until unemployment hits 5% vs the previous estimate of 5.3%. New York Times (paywall)
Must read: Tianjin – a story of corruption and the urge to industrialize at any price. The founders of Rui Hai International Logistics were well-connected businessmen who were able to skirt the rules – even though the factory was based in a solidly middle class city, a model of China’s progress. New York Times (paywall)
Four CITIC execs and a reporter arrested for stock market manipulation. George Chen of the South Morning China Post details the story in his Twitterfeed, based on China’s Xinhua news. Chen reports that Wang Xiaolu of Caixin confessed that her reporting was “irresponsible and inaccurate.” The four arrested at CITIC – the Goldman Sachs of China – include two executive committee members and two department heads. Twitter
Fed’s Stanley Fischer says there’s “good reason to believe that inflation will move higher.” But the board’s vice chairman didn’t tip his hat on the timing of the next rate hike. He was joined by four other Federal Reserve presidents at the annual economic symposium held at Jackson Hole, Wyoming. NexChange
Blackrock buying FutureAdvisor. The robo advisor has $600 million in assets. Fortune
Bad loans rising. Non-performing loans are beginning to hurt China’s state-owned banks as ICBC, China Construction Bank, Agricultural Bank of China, and Bank of China report dwindling net profits amid a worrisome spike in bad loans. Financial Times (paywall)
Hanergy Thin Film to axe over 2,000 employees. The controversial Chinese solar company is reportedly set to lay off over a third of its staff as it shifts from being just a manufacturing equipment maker to an actual developer of solar products. A cancelled deal between the firm and its parent company – its largest customer – appears to have factored in the downsizing as well. Wall Street Journal (paywall)
Thailand makes Bangkok shrine bombing arrests. Security forces raided an apartment building in a Bangkok suburb just before dawn on Saturday and arrested a foreign man police believe was involved in the deadly shrine bombing two weeks ago. New York Times. (paywall)
Japanese protest against military law. Thousands of people have protested outside of Japan’s parliament against a new law allowing the military to deploy overseas for the first time since World War Two. The legislation has already been passed by Japan’s lower house and is expected to be passed by the upper chamber. BBC
Died: Oliver Sack, 82, from melanoma. The neurologist was prolific writer; his books, including The Man Who Mistook His Wife for a Hat, described his patients’ diseases. Vice
You won’t believe this…
Buzz Aldrin wants to colonize Mars. The second man to ever walk on the moon has recently revealed his master plan to colonize Mars by 2039. It involves the “Aldrin Mars Cycler,” a group of spacecrafts that would effectively function as “a subway-in-the-sky between our planet and our future second home,” as well as Phobos and Deimos – Mar’s moons – which he plans to use as rest stops during the trip.
Photo:COD Room