The United States needs to encourage domestic production of a handful of minerals critical for the technology and defense industries, and stem reliance on China, U.S. Interior Secretary Ryan Zinke said Tuesday.

Zinke made the remarks at the Interior Department as he unveiled a report by the U.S. Geological Survey (USGS), which detailed the extent to which the United States is dependent upon foreign competitors for its supply of certain minerals.

The report identified 23 out of 88 minerals that are priorities for U.S. national defense and the economy because they are components in products ranging from batteries to military equipment.

The report found that the United States was 100 percent net import reliant on 20 mineral commodities in 2016, including manganese, niobium, tantalum and others. In 1954, the U.S. was 100 percent import reliant for the supply of just eight nonfuel mineral commodities.

“We have the minerals here and likely we have enough to provide our needs and be a world trader in them, but we have to go forward and identify where they are at,” Zinke told reporters at an Interior Department briefing.

He also blamed previous administrations for allowing foreign competitors like China to dominate mineral production for minerals, such as rare earth elements, used in smartphones, computers and military equipment.

Zinke said the report is likely to shape Interior Department policy-making in 2018, as the agency looks to carry out its “Energy Dominance” strategy, expanding mining and resource extraction on federal lands.

The survey is the first update of a 1973 USGS report that catalogued the production of minerals worldwide. The update was started under the Obama administration in 2013.

Many of the commodities that are covered in the new volume were of minor importance when the original survey was done, since it pre-dated the global electronics boom.

The USGS and Interior Department said the report is meant to be used by national security experts, economists, private companies, the World Bank and resource managers.

It does not offer policy recommendations, but Zinke will rely on the findings as he prioritizes research into certain mineral deposit areas on federal land and plans policies to promote mining.

“We do expect that to lead to policy changes. The USGS is not involved in policy, but I suspect you will see some policy changes,” said Larry Meinert, lead author of the report.
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Greece’s parliament on Tuesday approved the 2018 state budget, which includes further austerity measures beyond the official end of the country’s third international bailout next summer. 

All 153 lawmakers from the left-led governing coalition backed the budget measures in a late vote, while the 144 opposition lawmakers present rejected them. Three were absent from the vote.

Prime Minister Alexis Tsipras promised that the country would smoothly exit the eight-year crisis that has seen its economy shrink by a quarter and unemployment hit highs previously unseen during peacetime.

Tsipras argued that international money markets — on whose credit Greece will have to depend once its rescue loan program ends — are showing strong confidence in the country’s prospects, with the yield on Greek government bonds dropping to a pre-crisis low of less than 4 percent.

“The way to exit [the crisis] is for our borrowing costs to return to acceptable levels so the country can finance itself without the restrictive bailout framework,” Tsipras said.

The budget promises Greece’s international lenders continued belt-tightening measures and high primary budget surpluses — the budget balance before debt and interest payments are taken into account.

It sets the primary surplus at 2.44 percent for 2017 and 3.82 percent for 2018, higher than previously estimated. The economy is forecast to grow by 1.6 percent in 2017 and 2.5 percent next year, helped by a return to growth across Europe.

Debt to hold steady

With the Greek economy worth around 185 billion euros ($271 billion) in 2018, the national debt will remain at just under 180 percent of annual GDP, roughly unchanged from the previous year.

Greeks will see new tax hikes and pension cuts over the next two years. Bailout lenders had demanded additional guarantees the Greek economy will be stabilized before considering measures to improve the country’s debt repayment terms.

Opposition parties have criticized the budget, saying it will prolong the pain for Greeks. The main opposition conservative New Democracy party said the budget was “bleeding dry” the Greek people with 1.9 billion euros’ worth of new austerity measures.

Greece’s latest international bailout officially ends in August, more than eight years after the country began receiving emergency loans from the other European Union countries that use the euro currency, as well as from the International Monetary Fund.

In return for the funds, successive governments have had to impose repeated rounds of tax hikes and spending cuts, as well as structural changes aimed at reforming the country’s moribund economy and making it more competitive.

Tsipras first was elected in 2015 on promises to quickly end the painful austerity. But negotiations with bailout creditors soon went awry and, threatened with a disastrous euro exit, he signed on to more income cuts, increased taxation and further spending cuts.

His governing Syriza party is trailing New Democracy in the polls. But Tsipras insisted Tuesday that the government would see out its mandate, which ends in 2019.
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One of the most prominent people convicted in Latin America’s largest corruption scandal left prison Tuesday for house arrest after serving two-and-a-half years behind bars at a time when many Brazilians are becoming disillusioned with the graft investigation once hailed as a political game-changer.

Marcelo Odebrecht’s release came a day after Brazil’s top court halted investigations into several lawmakers, underscoring the limitations of the “Car Wash” investigation that uncovered nearly institutionalized corruption involving senior politicians in several countries and several major Brazilian companies.

Odebrecht, who was CEO of his family’s company of the same name, cooperated with prosecutors and testified that executives routinely paid bribes and made illegal campaign contributions to politicians in exchange for favors. He was originally sentenced to 19 years in prison but, once he began cooperating, that penalty was reduced to 10, with the agreement that the majority of it would be served under house arrest.

Odebrecht’s conviction and jailing were seen as a major victory for Car Wash prosecutors. The testimony of Odebrecht and other executives revealed that, for years, the company had essentially captured the Brazilian state, paying bribes and kickbacks to whoever was in power.

The corruption was so organized — and endemic — that it had its own department at Odebrecht, blandly named the Division of Structured Operations.

On Tuesday, Odebrecht left prison and went to the federal court in the southern state of Parana, where an electronic bracelet was attached, the court said. Neither the court nor his representatives would say where he was headed next, but local media have reported he will serve out his term in his home in an upscale neighborhood of Sao Paulo.

“The main objective of this new phase of his life is, I repeat, to return to the family fold, which is very dear to him, and to be effective in his collaboration” with prosecutors, Nabor Bulhoes, a lawyer for Odebrecht told reporters outside the court. “Right now, he has no other plan and no other goal.”

Lack of ‘real accountability’

While Odebrecht’s release was expected, it underscored the inequalities in Brazil’s criminal justice system, in which corruption and white-collar crimes generally receive little jail time.

“It’s terrible for the image of Brazil,” said Celcino Rodrigues Junior, a 26-year-old law student in Sao Paulo, referring to Odebrecht’s release. “It’s favorable to him because he will be in a mansion, he will be in total comfort.”

Revealing the extent of corruption in Brazil was one of Car Wash’s great achievements. The other was managing to put some of its masterminds, Odebrecht among them, in jail.

But the investigation has slowed in recent months, and there have been accusations that President Michel Temer and other senior politicians are trying to hinder it. Some fear the new chief of the federal police will be less aggressive in investigating corruption, and others bemoaned the closure earlier this year of the task force dedicated to the probe. Temer has always maintained that he supports the investigation.

Despite its success in sending several businessmen to jail, the Car Wash operation has also struggled to put senior politicians behind bars. That’s at least partially because sitting politicians have the right to be tried in the Supreme Court, where justice is slow and often deferential.

On Monday, a Supreme Court panel voted 2-1 to stop Car Wash investigations against four members of Congress. The decision effectively shields them from investigation while they remain in office.

Supreme Court Justice Gilmar Mendes also ordered house arrest instead of jail for Adriana Anselmo, wife of former Rio de Janeiro Gov. Sergio Cabral. Cabral has been convicted of corruption and is in prison, while his wife has been in jail accused of several crimes.

“Brazilians, as a whole, are exhausted by this marathon of scandal, and it’s only natural that they would be disappointed by and exhausted by the absence of any real accountability,” said Matthew Taylor, an associate professor at the School of International Service at American University in Washington.

Even though the operation, known as Lava Jato in Portugese, hasn’t always lived up to Brazil’s highest hopes, Taylor says it has made significant progress.

“The fact that Odebrecht went to jail at all is a paradigm-shifting event in Brazilian history,” he said. “Lava Jato has moved the needle.”
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A planned massive Republican tax overhaul has led Wall Street strategists to revise their 2018 corporate earnings forecasts sharply higher, but the jury is out on how long the accelerating effect on profits will last.

The tax bill, which the U.S. House of Representatives approved on Tuesday, will cut the corporate income tax rate to 21 percent from 35 percent, beginning Jan. 1, and would be the biggest positive factor for U.S. earnings in 2018. A Senate vote was still awaited.

Although there is a wide range of profit estimates for 2018, the expected tax plan benefit has strategists now calling for double-digit profit gains in 2018 over 2017, compared with their forecasts for mid-single-digit gains without the tax cuts. S&P 500 earnings growth for 2017 was an estimated 11.9 percent, according to Reuters data.

“This is going to drive the earnings numbers. [Tax] is going to overwhelm everything,” said Credit Suisse Group U.S. Equity Strategist Jonathan Golub, who was waiting for the bill’s passage to adjust his own earnings estimates.

With the U.S. and world economies expanding, consumer demand strong and interest rates low, corporate profits were expected to be healthy next year. The tax law will give them an added jolt of adrenaline.

Many strategists estimate the cut in corporate tax could deliver an extra boost to earnings next year of between about 7 percent to more than 10 percent. Some of the forecasts were based on a previous version of the legislation calling for a tax cut to 20 percent.

In one of the most recent projections, UBS on Friday said it saw a potential 9.1 percent boost to S&P earnings per share because of the tax plan.

Ripple effect unclear

It is unclear how great the lasting positive impact will be.

“The retention of this benefit is unclear,” said Savita Subramanian, Bank of America-Merrill Lynch’s head of U.S. equity and quantitative strategy, who forecasts the plan could add $19, or about 14 percent, to S&P 500 earnings including potential paybacks from repatriation, with the net recurring benefit likely to be closer to $11, or 8 percent.

Subramanian, in a presentation earlier this month, said companies may look to use the benefit for short-term lifts. For example, retailers, which have been suffering from competition from Amazon, may want to pass the benefit on with bigger sales and more promotions.

“You have to wonder how much of that benefit you’re going to really see float to the bottom line on a longer-term basis,” Subramanian said.

The boost to profits goes a long way to justify some of the rapid rise in stock valuations since Donald Trump’s election as president a year ago. Stronger earnings mean less stretched price-to-earnings ratios.

The S&P 500 has gained about 5 percent since mid-November when the House passed its tax overhaul bill, and is up about 20 percent year-to-date.

Golub and others said after the initial boost to forecasts, the profit numbers could still drift higher in the months ahead as companies adjust their plans.

“We’ll get a big jump in ’18, but the ripple effect of the tax bill could be the big surprise in the second half of ’18,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.

“The tax cuts … will give companies a lot more flexibility to do dividend increases, buybacks and hiring, and that’s what’s difficult to get a handle on,” Hellwig said.
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U.S. single-family homebuilding and permits surged to more than 10-year highs in November, in a hopeful sign for a housing market that has been hobbled by supply constraints.

Builders have struggled to meet robust demand for housing, which is being fueled by a labor market near full employment.

Land and skilled labor have been in short supply, while lumber price increases have accelerated.

The Commerce Department said on Tuesday that single-family homebuilding, which accounts for the largest share of the housing market, jumped 5.3 percent to a rate of 930,000 units.

That was the highest level since September 2007.

Pointing to further gains, single-family home permits rose 1.4 percent to a pace of 862,000 units, a level not seen since August 2007. The jump in groundbreaking on single-family housing units suggests housing could contribute to gross domestic product in the fourth quarter.

Investment in residential construction has declined for two straight quarters, weighing on economic growth. A survey on Monday showed confidence among homebuilders soaring to near an 18-1/2-year high in December, amid optimism over buyer traffic and sales over the next six months.

Prices of U.S. Treasuries remained at session lows after the data while the dollar pared declines against a basket of currencies. U.S. stock index futures were mixed.

Last month, single-family home construction in the densely-populated South shot up 8.4 percent to the highest level since July 2007 as disruptions from recent hurricanes continued to fade and communities in the region replaced houses damaged by flooding.

Single-family starts in the West increased 11.4 percent to their highest level since July 2007. They were unchanged in the Northeast and fell 11.1 percent in the Midwest.

Overall housing starts increased 3.3 percent to a seasonally adjusted annual rate of 1.297 million units. While that was the highest level since October 2016, October’s sales pace was revised down to 1.256 million units from the previously reported 1.290 million units.

Economists polled by Reuters had forecast housing starts decreasing to a pace of 1.250 million units last month. Starts for the volatile multi-family housing segment fell 1.6 percent to a rate of 367,000 units.

Overall building permits dropped 1.4 percent to a rate of 1.298 million units in November, pulled down by a 6.4 percent decline in permits for the construction of multi-family homes.
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The U.S. House of Representatives will vote Tuesday on a Republican $1.5 trillion tax bill that will provide tax relief for most Americans, but benefit the wealthy the most, according to a non-partisan tax analysis group.

Following the House vote, the Senate will vote on the measure later Tuesday, according to Senate Republican leader Mitch McConnell.  If both houses approve the measure, it will be sent to President Donald Trump for him to sign into law, completing the first extensive modification of the U.S. tax code in more than 30 years and giving Trump his first major legislative victory.

Republican lawmakers appear to have the votes to permanently cut corporate taxes from 35 to 21 percent, temporarily and modestly reduce taxes paid by wage and salary earners, and boost America’s national debt by up to $1.5 trillion.

The non-partisan Tax Policy Center concluded Monday the bill would cut taxes for 95 percent of Americans next year, but average cuts for top earners would greatly exceed reductions for people earning less.

The legislation also partially repeals former president Barack Obama’s signature health care law and is expected to add nearly $1.5 trillion to the federal debt during the next decade.

Republican supporters of the measure are hoping that eight consecutive years of U.S. economic growth will continue and accelerate due to a stimulus they hope the tax cuts will provide.

“This is going to make such a positive difference in the lives of working Americans,” House Speaker Paul Ryan told reporters Tuesday on Capitol Hill.

Democratic opposition

Democrats, who were excluded from the Republican closed-door bill drafting meetings, are unanimously opposed to the measure.  They have argued the tax package favors big corporations and the wealthy, largely ignores the middle class and forces the elderly to pay a heavy price.

“There are so many rip-offs in this bill that people are going to say this is some kind of new Gilded Age,” said Ron Wyden, the highest-ranking Democrat on the Senate Tax Committee.

Unless Republicans withdraw their support at the last minute, Congress could send the tax bill to the White House for Trump’s signature as early as Wednesday.  Minority Democrats do not have the votes to kill the bill on their own, but have vowed to make it a major campaign issue in next year’s midterm elections.   

As the Republican bill moves closer to becoming law, many polls show that most Americans oppose it.

A Harvard CAPS-Harris survey conducted between December 8-11 indicates 64-percent of American voters oppose the measure.  A new CNN poll conducted by the research firm SSRS shows 55-percent of Americans oppose it, a 10-percent increase since early November.  A Reuters/Ipsos released on December 11 found nearly half of Americans opposed the plan.

When asked about the bill’s weak showing in the polls, Ryan said he had “no concerns whatsoever,” and added “when you have a mudfest on TV … that’s what’s going to happen. Results are going to make this popular.”

 
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European Union environment and energy ministers on Monday agreed on renewable energy targets for 2030 ahead of negotiations next year with the European Parliament, which has called for more ambitious green energy goals.

Ministers said they would aim to source at least 27 percent of the bloc’s energy from renewables by 2030 — up from a target of 20 percent by 2020.

In October, the European Parliament called for this target to be increased to 35 percent, a level also put forward by a group of big technology, industry and power companies last week.

As part of the package of measures, ministers also agreed on the share of renewable fuels to be used in transport, while setting a cap on first-generation biofuels, which critics say compete for agricultural land with food.

EU member states set a 14 percent renewables target for fuels used in road transport by 2030, with bonuses given for the use of renewable electricity in road and rail transport.

The inclusion of rail into the renewable transport targets was criticized by the European Commission, as large parts of the European rail network are already electrified.

“The level of ambition is clearly insufficient,” Europe’s climate commissioner Miguel Arias Canete told ministers during negotiations.

The European Council and the European Parliament will need to find a compromise in talks over the final legal texts on these matters next year.

The EU’s renewables targets are part of a set of proposals to implement the bloc’s climate goals of reducing greenhouse gas emissions by at least 40 percent below 1990 levels by 2030, in the wake of the Paris Agreement to limit further global warming to no more than 2 degrees.

Ministers also reached a common position on a set of rules for the internal electricity market, such as the roll out of more sophisticated electricity meters to consumers and allowing grid operators to run energy storage facilities.
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Argentina’s Congress could pass a hotly debated pension reform measure Monday, lawmakers told reporters, as stone-throwing demonstrators gathered in the capital and the country’s main union called a 24-hour general strike to protest the proposal.

Debate on the bill was suspended Thursday amid violent protests, which were put down by police firing rubber bullets and tear gas. On Friday, the government amended the proposal to include a bonus payment to the most needy retirees.

But that did not satisfy thousands of opposition demonstrators who gathered around the congressional building again Monday as lawmakers debated the proposal inside.

The protesters, some wearing balaclavas, used sling shots to fire rocks at police. Security forces answered by using water cannons and tear gas, turning the vast lawn in front of the capital complex into a battlefield.

“This bill will put millions of retirees at risk. It changes the whole pension system,” Laura Rivas, a 34-year-old teacher, told Reuters, standing back from the most violent protest areas.

The day-long strike called by Argentina’s main CGT labor group started at noon local time (1500 GMT). It was not expected to affect the nation’s transportation system until late Monday night, allowing workers to get home in the afternoon.

The bill, key to President Mauricio Macri’s efforts to lower business costs and reduce Argentina’s fiscal deficit, has already passed the Senate, leaving the lower House to give final legislative approval. Opposition lawmakers said the one-time bonus amendment did little to persuade them to vote in favor.

“It will be a one-time bonus payment made in March,” opposition lawmaker Agustin Rossi told reporters, adding that the overall bill remained inadequate to meet pensioners’ needs.

Macri is aiming to cut the fiscal deficit to 3.2 percent of gross domestic product next year from 4.2 percent this year, and reduce inflation to between 8 percent and 12 percent from more than 20 percent this year.

The pension bill would change the formula used to calculate benefits. Payments would adjust every quarter based on inflation, rather than the current system of twice-yearly adjustments linked to wage hikes and tax revenue.

Economists say the current formula means benefits go up in line with past inflation. Left unchanged, that could harm Macri’s efforts to cut the deficit.

Under the new formula, benefits would increase by 5 percentage points above inflation, according to cabinet chief Marcos Pena. The plan would take effect at a time of lower inflation expectations and would slow the pace of pension benefit increases.
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