Early Headlines: China Monetary Easing, China Transportation Infrastructure Spending 5X U.S., Another Mediterrannean Tragedy and More
Early Bird Headlines 20 April 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
- On the Invention of Money – Notes on Sex, Adventure, Monomaniacal Sociopathy and the True Function of Economics (David Graeber, Naked Capitalism) Econintersect: We suggest this as required reading for all those who have argued that barter led to money which led to credit. The archeological record is clear: Credit existed before money. Graeber writes:
[E]economists thus predicted that all (100%) non-monetary economies would be barter economies. Empirical observation has revealed that the actual number of observable cases-out of thousands studied - is 0%.
- Someone Calculated How Many Adjunct Professors Are on Public Assistance, and the Number Is Startling (Slate) Hat tip to Pavlina Tcherneva. More on this in What We Read Today later today.
- The Economy Has Slowed Because the Fed Has Already Tightened (The Wall Street Journal) True, the Fed's interest-rate target remains close to zero. But the Fed tightens through its words, not just its actions, and the drumbeat of chatter from the Fed in the last year has made it clear that officials plan to start raising rates sometime this year.
- Supply-Side Doom in Kansas (Bloomberg View) Kansas is hurting. State tax revenues are down 3.8% for 2014 vs 2013. Under the leadership of Republican Governor Sam Brownback, the state radically cut income taxes on corporations and individuals. Going on the assumption that this would generate a burst of economic growth and higher tax revenue, no alternative sources of revenue were put into place. Similarly, the state failed to lower spending.
- What is the Likelihood of Greece Leaving the Eurozone, Really? (Michael Grogan, First Class Analytics) Michael Grogan has contributed to GEI. Grogan thinks a "Grexit" is becoming more likely but also thinks the eurozone is in a better position to survive the event than it was in 2012.
- Greek Debt Deal: A New May Deadline? (Bloomberg Business) Video.
- Up to 700 migrants feared dead after boat sinks off Libya (Al Jazeera) The Italian Coast Guard reports that dozens confirmed dead so far in what could become the Mediterranean's worst known migrant sea disaster.
- Nigeria mystery deaths: Pesticides suspected, says WHO (BBC News) Total of 18 deaths may be result of pesticide poisoning.
- At least nine killed in bomb attack on U.N. vehicle in Somalia (Reuters) Two Kenyans and seven Somali guards were killed in a bomb attack on a vehicle carrying workers to the United Nations compound in Garowe in the Somali region of Puntland early Monday.
- Russia Russia's Economy Steps Back from the Brink (Bloomberg View) It's been fascinating to watch the Russian economy adjust to sharply lower oil prices. With a little help from the central bank, the country's recession might not be as bad as previously thought.
- Is Beijing about to join the global easing club? (China Spectator) Sunday evening, the People's Bank of China, the country's central bank, swung into easing mode, cutting the reserve requirement ratio (RRR) by as much as one per cent, the largest since the darkest days of the global financial crisis. RRR refers to the amount of money banks must set aside in reserve. Chinese lenders are required to hold 18.5% of deposits in reserve, one of the highest requirements in the world. The move is expected to inject as much as 1.5 trillion yuan worth of liquidity into the financial market, according an estimate by Minsheng Securities. Econintersect: Is China about to reduce use of fiscal stimulus and increase monetary easing? See next article.<
- China to spend 2.5 trillion yuan on transport infrastructure in 2015 (China Spectator) China's Ministry of Transport says the country will spend more than 2.5 trillion yuan ($404 billion) on building transport infrastructure this year, including investing at least 800 billion yuan on railway construction. This is 5x what the U.S. has proposed to budget for transportation infrastructure. See Obama Proposes Tax for Upgrade of Infrastructure (The New York Times).
- Beijing urges more bank lending to real economy (The Australian) China Premier Li Keqiang urged banks to step up their efforts to support economic growth, the official Xinhua News Agency reported Friday. Econintersect: Doesn't this sound familiar?
- China ETFs: It's The Year Of The Bull But It May Be Too Late To Be A Pig (Trang Ho, Forbes) Trang Ho has contributed to GEI.
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