Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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The federal budget deficit, which has fallen sharply during the past few years, is projected to hold steady relative to the size of the economy through 2018. Beyond that point, however, the gap between spending and revenues is projected to grow, further increasing federal debt relative to the size of the economy—which is already historically high.
In this instalment of our series looking at Russia’s relations with the countries along its border, we reach Kazakhstan, Moscow’s closest ally in central Asia. Region specialist Julia Kusznir tells a story of two countries bound together by mutual dependency, but with one or two telling cracks at the edges.
Econintersect: As expected based on strengthening opinion polling in recent days, former Communist youth member Alexis Tsipras will be the next Prime Minister of Greece. The 41-year old charismatic leader of the leftist Syriza party will replace outgoing Prime Minister Antonis Samaras whose conservative New Democracy Party lost the election by a margin about 8% (36% to 28%). With 60% of the vote counted Syriza appears to be winning about 149 seats in the Greek parliament, two short of an absolute majority in the 300 member body.
Last week during the State of the Union address, President Obama pledged :
"To protect a free and open Internet, extend its reach to every classroom, and every community, and help folks build the fastest networks."
Obama is calling on the Federal Communications Commission to challenge a wave of state laws blocking the construction of municipal broadband networks, which are high-speed Internet services run by local communities.
There is a side to the Ebola crisis that, perhaps understandably, has received little media attention: the threat it poses to our nearest cousins, the great apes of Africa. At this moment in time Ebola is the single greatest threat to the survival of gorillas and chimpanzees.
In 2014, the union membership rate--the percent of wage and salary workers who were members of unions - was 11.1 percent, down 0.2 percentage point from 2013, the U.S. Bureau of Labor Statistics reported today. The number of wage and salary workers belonging to unions, at 14.6 million, was little different from 2013. In 1983, the first year for which comparable union data are available, the union membership rate was 20.1 percent, and there were 17.7 million union workers.
Econintersect: The first English settlement in North America was on what is now called Roanoke Island in 1587. The settlement there was 22 years before the first permanent settlement at Jamestown in Virginia. The fate of the Roanoke Island settlement has been an investigation of archaeologists for more than 100 years. It vanished from the Roanoke Island site sometime between when they were left there by Captain John White who returned to England for supplies in late 1587 and when he was finally able to return in August 1590. In 2012 GEI News reported on new developments in the quest for the Lost Colony involving a map that belonged to Capt. White, who was a cartographer and artist. The picture below is a woodcut by Theodor de Bry based on a watercolor by Capt. John White.
During the past six months, US dollar showed a powerful appreciation trend among the world currencies. Based on the statistics from Oanda Corporation, US dollar appreciated about 12% against Euro , about 18% against Japanese Yen, and about 10% against Canadian Dollar and British Pound in the past several months.
The Greek election tomorrow (January 25) is the most important in recent memory. If the pollsters are proven correct, Syriza is poised to win by a large margin and this victory will end four decades of two-party rule in Greece.
The falling price of oil, now at under $50 a barrel for the first time since 2009, has caused a spate of layoff announcements impacting thousands of workers in oil-related industries. Since June 2014, Challenger has tracked 21,917 US job cuts by oil and oil-related industries. Most recently, oil field services giant Schlumberger announced 9,000 job cuts and Baker Hughes reported 7,000.
Falling gasoline prices: the influence of crude oil prices and other factors
by U.S. Energy Information Agency
On a national level, the main reason cited for movements in gasoline prices is often changing crude oil prices. Crude oil acquisition is the main cost in producing gasoline, and changes in crude oil prices, along with changes in gasoline market conditions, drive changes in spot and retail gasoline prices. EIA estimates that at current prices, about 55% of the retail price of gasoline is attributable to the cost of crude oil. However, at the regional level, several factors other than falling crude prices are influencing regional wholesale gasoline spot prices and retail gasoline prices.
While the number of overall job cuts declined in 2014 to the lowest level since 1997, planned workforce reductions in the technology sector trended in the opposite direction, rising to the largest year-end total since 2009.
Temporary Assistance for Needy Families (TANF) is a federal program that provides cash assistance, work support, and other services to some low-income families. The cash assistance is generally limited to families with income well below the poverty threshold and few assets; it goes to roughly 2 million families per month, most of them headed by single mothers. The work support (such as subsidized child care) and the other services (such as initiatives to reduce out-of-wedlock pregnancies and promote marriage) are usually available to families with income up to twice the poverty threshold.
Of the four regional Federal Reserve surveys released to date, all show manufacturing expanding (although one barely expanding). A complete summary follows. The market expected this survey index at 4 to 8 (consensus 5.5) versus the 6 actual [note that values above zero represent expansion].
The headlines say new home sales surged from last month. Econintersect also sees the new home sales data improved - BUT even with this surge, the unadjusted 3 month rolling averages continued to decline. As the data is noisy, the 3 month rolling average is the way to look at this data.
The Chemical Activity Barometer (CAB), increased 0.2 percent this month, following a 0.1 percent slide in December, as measured on a three-month moving average (3MMA). Accounting for adjustments, the CAB remains up 3.6 percent over this time last year.
The non-seasonally adjusted Case-Shiller home price index (20 cities) for November 2014 (released today) year-over-year rate of home price growth slowed from 4.5% (reported as 4.5% last month) to 4.3%.
The Ridiculously Resilient Ridge (RRR) continues to play havoc with the weather. The East Coast is responding as if a powerful El Nino was in place and the West is exhibiting La Nina weather. I am surprised that NOAA has not noticed this pattern. Might the Aleutian Low be involved? I have attempted to shed some light on that in today's Weather and Climate Report. Unfortunately that appears to be a very complicated subject so it is likely that the existing computer models will continue to get it wrong especially in terms of seasonal forecasts.
According to new data derived from the monthly Current Population Survey (CPS), median annual household income in December 2014 was $54,417, 1.4 percent higher than the November 2014 median of $53,679. This month-to-month increase of $738 was statistically significant. The Sentier Household Income Index is now at 95.6 (January 2000 = 100.0).
Econintersect: Average gasoline prices fell 2.4 cents per gallon nationwide (Lowest since May 2009) this past week following the previous week's 7.5 cent fall from the week before. In the last year, gas prices have fallen $1.24 a gallon.
Average prices by region and a breakdown by grade follow after "Read more....".
ECRI's WLI Growth Index was unchanged but has remained in negative territory for 14 weeks. This index is forecasting a slight business cycle contraction in 1H2015. Obviously the markets do not share ECRI's view the business cycle is taking a downturn. ECRI also released their coincident index which is discussed below.
The headlines for existing home sales say that sales picked up - with sales improving for a change. Our analysis of the unadjusted data shows the unadjusted three month rolling averages for sales gaining more ground in positive territory after being in contraction most of 2014.
Econintersect: Week 2of 2015 shows same week total rail traffic (from same week one year ago) slightly declined according to the Association of American Railroads (AAR) traffic data. This was a good start to the new year.
Fed'sBalance Sheet week ending balance sheet was $4.473 trillion - down from the record $4.476 trillion for week ending 14 January 2015and up from the $4.476 trillion for last week. Note that on the 29 October 2014, the Federal Reserves governing board (FOMC) stated that .....
“Below the thunders of the upper deep, Far far beneath in the abysmal sea, His ancient, dreamless, uninvaded sleep The Kraken sleepeth: faintest sunlights flee….
“There hath he lain for ages, and will lie Battening upon huge sea-worms in his sleep, Until the latter fire shall heat the deep; Then once by man and angels to be seen, In roaring he shall rise and on the surface die.”
As the situation on the ground quiets down in the wake of the Jan. 24 barrage by Russian-allied forces near the Ukrainian city of Mariupol, Stratfor is continuing the watch initiated by our Red Alert. We believe, at the very least, that Russia is keeping its option to mount an offensive open, and at most, is preparing to launch an offensive to secure its hold on the Crimean Peninsula.
The European Central Bank (ECB) just announced a $70 billion per month bond buying plan. And Greece will probably elect an anti-austerity government on Sunday. Neither will do much to remedy the problems of the Eurozone.
Reports of heavy rocket artillery firing on the eastern parts of the city of Mariupol, Ukraine, as well as a statement made by a separatist leader, indicate the potential preparation of an offensive on the city. While this would be a significant escalation and an indicator of Russian intent to push further into Ukraine, potentially forming a much-rumored land connection to the northern border of Crimea, there are also several indicators required for such an offensive that are currently still missing.
Social safety nets are government or non-government (NGO) social programs to assist those in society who cannot work (or cannot work to full capacity). Many worry that such programs are incentives for people not to work IF they can get covered by a social safety net.
On Tuesday the National Bureau of Statistics released China’s 2014 GDP growth numbers and reported growth consistent with what the government has been widely promoting as the “new normal”.
According to the preliminary estimation, the gross domestic product (GDP) of China was 63,646.3 billion yuan in 2014, an increase of 7.4 percent at comparable prices. Specifically, the year-on-year growth of the first quarter was 7.4 percent, the second quarter 7.5 percent, the third quarter 7.3 percent, and the fourth quarter 7.3 percent.
Summary: To learn if 2014 was the warmest year let’s read the annual reports of NOAA and NASA. They give clear answers (different from the headlines). It might have been the warmest, but if so, only by a insignificant amount. The hysteria of activists about this is absurd. The data shows that the pause continues.
Although the crisis in Ukraine continues to focus attention on Russia's western border, Moscow is seeking to exploit a more lucrative prize along its vast northern frontage: the Arctic Circle. Melting ice has opened up new transit routes and revealed previously inaccessible oil and mineral deposits. Facing a year of harsh economic constraints, securing exploitable energy reserves remains a top priority for Moscow. The planned militarization of the Arctic is already underway, and funding is secured through 2015 (the Ministry of Defense was the only Kremlin ministry not to be curtailed in the most recent budget.)
Last week, I wrote about the crisis of Islamic radicalism and the problem of European nationalism. This week's events give me the opportunity to address the question of European nationalism again, this time from the standpoint of the European Union and the European Central Bank, using a term that only an economist could invent: "quantitative easing."
Pssst! Do you want to make some money trading some initials? Real easy money?
For real. I just made my subscribers 382% trading these initials. And we're not done. After closing out our 382% gain, we're in the same trade again, and we're up 180% in just a few weeks - and still going.
Insider buying declined sharply last week with insiders buying just $16.43 million of stock compared to $40.18 million in the week prior. Selling on the other hand increased with insiders selling $936.53 million of stock last week compared to $521.34 million in the week prior.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week went up to 57. In other words, insiders sold 57 times as much stock as they purchased. The Sell/Buy ratio this week compares unfavorably with the prior week, when the ratio stood at 12.98.
Below is a summary of the activity at Trefis during the past week that Trefis thought Econintersect readers would find interesting.
Trefis is a financial community structured around trends, forecasts and insights related to some of the most popular stocks in the US. It provides the unique feature of allowing the user to model future valuation based upon projected changes in components of each business. It also provides communication capabilities among members, including consensus of member analysis compared to Trefis staff analysis and blogging opportunities for members.
“No stock-market crash announced bad times. The depression rather made its presence felt with the serial crashes of dozens of commodity markets. To the affected producers and consumers, the declines were immediate and newsworthy, but they failed to seize the national attention. Certainly, they made no deep impression at the Federal Reserve.” -Thus wrote author James Grant in his latest thoroughly researched and well-penned book, The Forgotten Depression (1921: The Crash That Cured Itself).
A reader asked me to comment on the subjects of pinning and max pain in the option market. Although it may sound like it, these are not terms from professional wrestling. They are option-related terms that describe the behavior, or alleged behavior, of stock prices on option expiration day.
Below, technical overviews and analysis for key stock indices, commodities and currency pairs, based on market activity at what would have been the close (absent the holiday) of the 22 January 2015 U.S. session. This information is a comprehensive summary derived from simple and exponential moving averages along with key technical indicators shown for specific time intervals.
High oil prices have led to a surge of drilling for oil and gas in the U.S. in recent years. The Baker Hughes Rig Count shows a sharp rise in natural gas drilling activity that corresponded with the very high natural gas prices of 2005-2008, followed by a surge of oil drilling activity that took place as oil prices bounced around $100 per barrel (bbl):
No one-and I mean no one-wants anything to do with this base metal anymore. Stinks for anyone playing copper on the long side. But it also gives you a shot at fast, double-digit gains on another metals play... if you know where to look.
The DOW was off 548 points since last Friday, nearly 400 point this morning alone on heavy volume. Maybe this marks a bottom?
By noon the averages had curtailed their plunge and were trading sideways as volume finally fell to low. The short-term indicators are indicating bullish movement ahead, however, the caution flags are still out.
We have some dramatic pictures now of a truly terrifying ordeal - a single-engine airplane that fell out of the sky, and landed in the Pacific Ocean. The incident was captured on camera by the US Coast Guard.
Peter Thiel seems an unlikely source for such an important monetary insight. He's a hedge fund manager and venture capitalist. He was the first outside investor in Facebook. And perhaps most famously, he's one of the co-founders of PayPal.
Modern capitalism has a massive structural flaw in one of the cornerstones of its existence. The corporations which form the predominant business structure and which are the main instrument for dividing wealth have been operating on a false premise.
Since Milton Friedman we have all become monetarists. In order to raise inflation it will be necessary to increase the growth rate of the money stock. This requires that the ECB increase the money base. And to achieve the latter there is only one practical instrument, ie, an open-market purchase of government bonds. There is no other way to raise inflation than through an increase in the money base and a bond-buying programme is the time-tested way to achieve this.
Greece faces a decisive moment on January 25 in a snap election that could see major gains for the extreme left and right. But anyone worried about how Syriza on one side, or Golden Dawn on the other, might handle power, should consider a far more sinister force that has conspired to keep Greece away from recovery for years – the international markets.
It is well-known that Hungarian households financed their homes via loans in Swiss Francs, which led to big problems when during the crisis the Hungarian forint depreciated against the Swiss Franc. Probably debtors where delighted by the decision of the Swiss National Bank to stop the rise of the CHF, and now have been surprised by a decision to let the exchange rate be determined on the markets again.
One of the most striking things about the testimony in the AIG bailout trial is the degree to which Fed officials play fast and loose with the truth. And I don't mean the normal CEO version of having no memory of events that are inconvenient and very detailed recollections of things that boost their case. I mean statements that are flat out false.
The law of consent to medical procedures is (to paraphrase legal philosopher HLA Hart) “tantalisingly obscure”. Narrowly interpreted, the law sets out a professional standard regarding the risks a medical professional must disclose to a patient when carrying out a procedure. Astonishingly, the idea of what is considered informed consent primarily comes from case law, defined by decisions made in specific court challenges. It doesn’t really focus on the patient, but on the medical profession – something that is out of step with how most of us likely see the idea of consent.
Last night, President Obama gave a great speech. He almost always does. And to that ever-shrinking group of die-hards who continue to insist that somehow, and in someway, President Obama will validate the hope kindled by his 2008 presidential campaign, it was a moment of triumph. Yes, they are saying, in his heart - very deep down, perhaps - Obama does in fact share our values and concerns, etc., he just has a hard time finding ways to express it, etc.