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HOUSTON, Texas (KTRK) -- An armed group of people rushed the door of a Popeyes Chicken restaurant in southeast Houston Monday night demanding chicken sandwiches.
Houston police were called to the restaurant on Scott Street and Corder just after 9 p.m.
Employees told ABC13 a mob of two women, three men and a baby were told at the drive-thru that the chicken sandwiches were sold out, but that apparently triggered the would-be customers. That is when police said they tried to get inside the restaurant.
One man had a gun, but a restaurant worker was able to lock them out. All the while, the group left the baby inside their black SUV.
No injuries were reported, and police are working on a description of the suspects.
U.S. markets were closed for the Labor Day holiday, but other markets globally opened with slight upticks.
European markets were up slightly in early trading. London's FTSE 100 rose 0.9% to 7,274.50 and France's CAC 40 added 0.1% to 5,487.74. Germany's DAX was 10 points higher at 11,949.88.
In Asia, the Shanghai Composite Index gained 1.3% to 2,924.11 while Tokyo's Nikkei 225 shed 0.4% to 20,620.19. Hong Kong's Hang Seng lost 0.4% to 25,626.55.
Seoul's Kospi ended 1 point higher at 1,969.19 and Sydney's S&P-ASX 200 retreated 0.4% to 6,579.40. New Zealand and Taiwan gained while Southeast Asia markets retreated.
A new round of tariffs hit Sunday when the U.S. began taxing $112 billion in Chinese imports at 15%. China hit back by taxing certain U.S. imports at 10% and 5%.
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This round of U.S. tariffs is expected to send prices higher for some consumer goods, like footwear, clothing and textiles. President Trump had previously spared clothing and shoes from tariffs.
“The bottom line is that, for the first time, Trump’s trade war is likely to directly raise prices for a lot of household budget items like clothing, shoes, toys, and consumer electronics,” PIIE senior fellow Chad Brown wrote in a report.
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If the U.S. and China cannot come to an agreement on trade, more tariffs are expected to hit Dec. 15.
A woman walks with an Argentinian flag during a march in support of President Mauricio Macri on August 24, 2019 in Buenos Aires, Argentina.
Ricardo Ceppi | Getty Images News | Getty Images
Argentina's government has imposed currency controls in a bid to stabilize financial markets, as Latin America's third-largest economy faces a deepening economic crisis.
The temporary measures, announced on Sunday, allow the government to restrict foreign currency purchases following a sharp drop in the super-sensitive peso.
All companies must now request permission from Argentina's central bank to sell pesos and buy foreign currency to make transfers abroad.
In an official bulletin issued on Sunday, the government said currency controls were necessary "to ensure the normal functioning of the economy."
The latest move follows the surprise announcement on Wednesday that Argentina would seek to defer payments on roughly $100 billion of debt, which credit rating agency S&P classified as a default under its own criteria.
The measures — which will remain in place until the end of the year — constitute a startling turnabout for President Mauricio Macri.
Shortly after starting his term in December 2015, the embattled leader of South America's second-largest country abruptly removed strict capital controls that had been in place since 2011.
In a vote seen by many as a key gauge for the first round of Argentina's presidential election at the end of October, business-friendly Macri lost by a far greater margin than expected to the opposition ticket of center-left Alberto Fernandez and populist ex-leader Cristina Fernandez de Kirchner.
The peso fell to a record low last month, after the primary result cast serious doubt over the center-right incumbent's re-election chances.
Argentina's currency, seen by some as a guide for the country's economy, closed at around 59.49 per U.S. dollar on Friday. The peso has fallen more than 30% since the August 11 primary vote.
Market participants had expected some form of capital controls from Argentina's government. However, some are concerned the move could jeopardize the International Monetary Fund's (IMF) latest disbursement of its historic $57 billion bailout program.
James Athey, senior investment manager at Aberdeen Standard Investments, told CNBC's "Squawk Box Europe" that he still believes the IMF will deliver another $5.4 billion tranche to Argentina later this month.
"Essentially, the IMF doesn't want to be the one that pulled the plug."
Athey argued credit rating agencies had the same problem when it comes to Argentina, with many of them "rushing" to downgrade the country to junk status in recent weeks.
"Realistically, the underlying health of the situation, I don't think it has changed that dramatically. What has happened is that prices of some of the external assets have changed and given the facade that things are dramatically worse… They were always pretty bad."
"So, I don't think the IMF wants to be the one that says: 'No, you can't have that last bit of money'. But, $5 billion at this stage is really throwing a few pennies into the wishing well," Athey said.
China's Shanghai Composite Index(SHCOMP) rallied 1.3% to close the day higher. It was lifted by defense and infrastructure stocks. Newly released economic figures were also unexpectedly positive.
The shipbuilding and aerospace industries were the best performers on the market. China has said it will showcase new equipment and weaponry at a military parade meant to celebrate the 70th anniversary of the founding of the People's Republic of China on October 1.
The defense sector is expected to outperform the broader Shanghai Composite Index this month, according to analysts at China Galaxy Securities, an investment firm.
Infrastructure shares also jumped. New private survey data released Monday showed China's manufacturing sector expanded in August to a five-month high.
The data, released by the media group Caixin, suggests that strong infrastructure spending is propping up factory activity in China, according to Julian Evans-Pritchard, senior China economist at Capital Economics.
But long-term concerns remain an issue as exports continue to struggle.
The latest round of tariffs that the United States and China imposed on each other went into effect Sunday — a round that came as concerns about slowing global growth are building and fear of recession stalks several major economies. Investors and executives around the world are also waiting to see when the two economic superpowers will come back to the negotiating table.
The outlook for global demand is still cloudy, Evans-Pritchard wrote in a research note.
The manufacturing indexes are consistent with a slowdown in year-on-year economic growth, he said, adding that Chinese authorities will have "little choice" but to ease policy in the coming months to offset the tariff impact.
Among other major indexes, Hong Kong's Hang Seng Index(HSI) lost 0.4%, while Japan's Nikkei(N225) also fell 0.4%.
South Korea's Kospi(KOSPI) ticked up by less than 0.1%.
Here are the other big moves at 4:15 p.m. Hong Kong time:
Newly releasedfactory activity from Japan pointed to a continued downturn in the country's manufacturing sector. "The sector was plagued by production cutbacks and flagging demand, which have been the trends so far in 2019," said Joe Hayes, an economist at IHS Markit, in a note. "Softer growth across Asia, particularly in China, was reported to have dented export opportunities."
The yuan weakened in both onshore and offshore trading. The Chinese central bank fixed the yuan at 7.0883 per oneUS dollar on Monday, slightly weaker from Friday's 7.0879.
In this Aug. 27, 2019, photo, an employee works on the production line of a smart electricity meter manufacturing plant in Nantong in eastern China's Jiangsu province. Two surveys of Chinese manufacturing show demand is weak amid a mounting tariff war with Washington over trade and technology. (Chinatopix via AP)
BEIJING (AP) — Two surveys of Chinese manufacturing show demand is weak amid a mounting tariff war with Washington over trade and technology.
A monthly purchasing managers' index released by a business magazine, Caixin, rose to 50.4 from July's 49.9 on a 100-point scale on which numbers above 50 show activity increasing.
That indicates "renewed improvement" but said a gauge of new orders fell to its lowest level this year, the magazine said.
A separate survey released Saturday by an industry group, the China Federation of Logistics & Purchasing, showed activity declining to 49.5 from July's 49.7. It said market demand was "relatively weak."
Chinese exporters are struggling in the face of U.S. tariff hikes. Exports to the United States, their biggest market, fell 6.5% in July.
Washington and Beijing stepped up their fight on Sunday by imposing additional tariffs on billions of dollars of each other's goods.
Beijing has propped up economic growth by boosting government spending on construction.
Economic growth sank to 6.2% over a year earlier in the quarter ending in June, its lowest level in at least 26 years.
A loss of faith in Argentina’s reform programme had been visibly demonstrated by a two-week run on the peso in spring last year. President Mauricio Macri had few options left. A long-mooted contingency plan went into action.
“When it came to it, we had discussed it so much, for Macri it was no problem,” says one senior government official recalling the events of last May. “The decision took five minutes . . . back then, Macri was fine and he was very happy with the agreement . . . after all, we had managed to get $50bn.”
Fifteen months later, the giant bailout has become a millstone around Mr Macri’s neck. Voters angry at the continuing recession delivered a stinging rebuke on August 11, handing a big victory to his Peronist rival Alberto Fernández in a primary vote. The contest is regarded as a reliable barometer for the election in October and its result panicked investors because it spelt disaster for Mr Macri’s chances.
Following days of market chaos in the wake of the vote, Mr Macri’s government bowed to the inevitable last week and asked creditors for more time to pay back Argentina’s $101bn of foreign debt, including the IMF money, as Buenos Aires struggled to avoid the country’s ninth sovereign default — and the third this century.
With the record-breaking bailout veering off track, questions are being asked about why the IMF, which has overseen 21 bailouts to Argentina, including one that ended in a historic default, lent so much money to support a programme that is crumbling after little more than a year.
“It’s another black eye for the IMF in Argentina,” says Benjamin Gedan, who leads the Argentina project at the Wilson Center in Washington. “They were caught up in the same euphoria as investors . . . They thought the number two economy in South America was embracing the Washington consensus.”
Having already disbursed $44bn of the bailout to Buenos Aires, the fund now faces a difficult choice: whether to stick with the programme and hand over another $5.4bn later this month to Mr Macri’s government or cut its losses and wait to deal with the next president. The IMF said in a statement issued after officials visited Argentina last week that it was assessing the impact of the proposed debt measures but would “continue to stand with Argentina during these challenging times”.
Its decision on the bailout’s future will be taken without the person who was instrumental in winning approval for the rescue: Christine Lagarde, who has stepped down from the IMF’s top job to lead the European Central Bank.
Ms Lagarde is unapologetic about her leading role in lending to Argentina. “We were the only game in town,” she told the Financial Times in July. “There was nobody else at the time to invest in the recovery process through which the government had decided to engage, and given the size of the challenge, we had to go big.”
The last 70 years of Argentina’s history have been punctuated with regular economic crises and Mr Macri’s inauguration in December 2015 was no different. His Peronist predecessor, Cristina Fernández de Kirchner, had emptied the government coffers, signing decrees to increase spending by an extra $27bn in her final days in power. Inflation was running close to 25 per cent, foreign exchange reserves were dangerously low and generous subsidies for utilities and transport were draining the budget.
The new president seemed well equipped for the challenge. The multimillionaire scion of an Italian immigrant who made his fortune through lucrative government contracts, he projected an image of cool competence, business savvy and sober realism which came as a relief to investors after the chaotic populism of Ms Fernández.
“I really believe that finally we have learnt from our mistakes,” Mr Macri told the Financial Times in September 2016, when asked about his economic programme. “There is no other country in the world with as much upside as Argentina.”
Something Mr Macri was keen to avoid if at all possible was being forced to seek help from the IMF, a perennial bugbear for Argentine leaders.
Buenos Aires’ troubled history with the fund stretches back six decades. Most notorious was the 2001 economic collapse, which ended with what was then the biggest debt default in history, bank runs, widespread civil unrest and the president fleeing by helicopter from the roof of the presidential palace.
Nearly a generation later, the bitterness remains. A poll last year by the Wilson Center found that 56 per cent of Argentines dislike the IMF, the worst ranking of any international organisation surveyed. The centre’s Mr Gedan compares the organisation to Superman’s arch enemy: “In Argentina, the IMF is like Lex Luthor,” he says. “Historically whenever the IMF swoops into Argentina, it leaves brutal budget cuts and economic chaos in its wake.”
So Mr Macri opted for a gradual approach to fixing the economic mess left to him by Ms Fernández, hoping to avoid another cycle of IMF-imposed austerity and political crisis.
“Macri’s political team told him he couldn’t start his term with a big [austerity plan],” says one source close to the administration. “That would be a typical rightwing government, which would end up with him leaving the presidential palace by helicopter when it failed.”
Mr Macri, who was also handicapped by his lack of a majority in congress, avoided big cuts to public spending and hoped that steady growth and restoring access to international borrowing would dig the economy out of its hole.
For a couple of years, the plan seemed to work. But the big deficits needed a constant stream of foreign money to fund them. High interest rates pushed up the value of the peso, meaning more dollars needed to be borrowed to fund the deficit. When a loss of market confidence triggered last year’s run on the peso, Mr Macri had to turn to the IMF.
Claudio Loser, who ran the IMF’s western hemisphere division at the time of Argentina’s 2001 crisis, says the main problem was excessive borrowing. “They were overconfident about their ability to continue borrowing significant amounts while adjusting [the economy] slowly,” he says. “That was the mistake.”
Kenneth Rogoff, a former chief economist at the IMF and now professor of economics at Harvard University, agrees. “Argentina made a lot of mistakes,” he says. “The general principle their programme violated was that when markets overshoot, policy has to overshoot. They didn’t do that — they tried a policy of gradualism.”
Yet despite the early mis-steps, Mr Macri secured a big IMF loan relatively quickly. Helping to smooth the way was his warm personal relationship with Donald Trump, president of the country with the biggest share of the votes on the IMF board.
“I’ve been friends with Mauricio for a long time, many years . . . we knew each other very well,” Mr Trump told reporters when he visited Argentina in 2018. “I actually did business with his family.” Mr Trump was referring to his purchase of a prime New York site for $95m in 1984 from Mr Macri’s father, Franco.
“Macri caught the ear of Trump,” says Hector Torres, a former senior IMF official now at the Centre for International Governance Innovation, a Canadian think-tank. “He got Trump to believe he needed a hand and he started [lobbying] via the [US] Treasury before going to the IMF.”
“Sure we spoke to the Treasury,” says the former senior Argentine official. “The situation was so delicate that it required a rapid response and the fund is so bureaucratic that it can’t act quickly enough.”
The fund’s initial bailout for Argentina, announced in June 2018, pledged $50bn, much more than expected. Christine Lagarde, then IMF managing director, said the money would “bolster market confidence”.
But only two months later, markets had lost confidence in the peso and Argentina went back to the Fund again.
A key flaw in the first deal, say former Macri officials and economists, was the IMF’s insistence that the peso float freely, which led to a fresh bout of selling as markets tested the currency.
“It was the chronicle of a death foretold,” says the former senior Argentina official. “The first agreement with the fund was inflationary and therefore bound to cause a recession. A depreciating currency forces you to raise interest rates and that cools down the economy.”
Following weeks of negotiations Ms Lagarde announced last September that the IMF would stump up an extra $7bn, bringing the Argentina bailout to a record $57bn, and allow the money to be spent faster. She was confident the revised plan would be “instrumental” in restoring market confidence.
This time, the IMF allowed Argentine authorities a limited amount of scope to intervene to defend the peso. But the restrictions on when and by how much it could step inwere too much for the central bank chief Luis Caputo, who resigned.
“The fund got it incredibly wrong, both the first and the second time,” says a second former Macri administration official, referring to the exchange rate decision. “It’s forgivable for the fund — they have to cover their bases and it’s what they do elsewhere — but not for the government. The government rushed and took whatever it was offered. That was a colossal mistake.”
The IMF declined to comment on Argentina beyond its published statements, saying it is reviewing the programme. Officials are understood to believe that the bailout went mostly according to plan apart from the inflation element. Buenos Aires’s inflation targeting failed, sources close to the fund say, because it was not co-ordinated with a wider government strategy to keep prices under control and because the inflationary effects of the devaluation were worse than expected. Mr Macri’s gradual approach to reining in spending was a key problem. Argentina’s statistics agency Indec says annual inflation was 54.3% in July.
Although the modified September bailout calmed markets, it did not revive the economy. As the election approached this year, interest rates of more than 70 per cent were choking businesses, unemployment was rising and inflation remained stubbornly high.
The gloomy economic picture made an easy target for the opposition Peronists as Argentina’s presidential election campaign got under way. They painted the market-friendly Mr Macri as the candidate of a privileged few who had imposed misery on the masses.
Poll predictions prior to the August 11 primary that Mr Macri was running close to his challenger Mr Fernández proved disastrously wrong. In the event, Mr Fernández trounced the president by a 15-point margin. The following day, the Buenos Aires stock market plunged 37 per cent and the peso hit a record low as investors woke up to the likelihood of a Peronist return to power.
The panic further undermined Mr Macri by reviving the instability he had promised to banish. It helped to trigger last week’s debt “reprofiling” announcement by new finance minister Hernán Lacunza under which foreign investors will be asked to agree voluntarily to delays in repayments. Standard & Poor’s labelled the move a “selective default” last Thursday, a classification it withdrew hours later.
“An Argentine sovereign debt default is now more likely than not,” said Capital Economics before the announcement. It predicted that bondholders were likely to lose about half their money in a restructuring.
Mr Fernández, the likely next president, has sent contradictory signals about his intentions towards the bailout, saying he will pay back the IMF loan but also harshly criticising the fund. “Those that have generated this crisis, the government and the IMF, are responsible for putting an end to and reversing the social catastrophe that an ever greater portion of Argentine society is suffering,” he said in a statement.
Daniel Marx, a former finance secretary, saw a political motive in the remarks. “[Fernández] is setting the stage for the next negotiation.”
Investors and business people would like to see Mr Fernández and Mr Macri work together to calm markets, stabilise the economy and minimise uncertainty during the painfully long transition until the next president is inaugurated in December. But there has been little sign that either of the two presidential candidates is prepared to do so.
Ironically, experts agree that if Mr Macri had sought IMF help from the outset, he would have fared better.
“Had Macri gone to the IMF at the start, it would probably have worked,” says Victor Bulmer-Thomas, an associate fellow at Chatham House in London. “The problem is that the history is so awful that governments delay going to the IMF until it’s almost too late. As a result, the fund is faced with an impossible situation. It then prescribes the usual remedies and they don’t work.”
Additional reporting by James Politi in Washington
