Early Headlines: Money Laundering Via Aussie Homes, Greek Crisis Myths, Greek Vote Looks Tied, Chinese Grads Finding Few Jobs and More
Early Bird Headlines 03 July 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.
- Emerging Market Currencies (Uday Tharar, Twitter) Hat tip to Worth Wray. All emerging market currencies except China have depreciated over the last one year against the US dollar.
- Puerto Rico’s Pain Is Tied to U.S. Wages (The Wall Street Journal) The U.S. minimum wage is a big headwind for the Puerto Rican economy. The commonwealth is subject to the federal minimum wage of $7.25 an hour, even though local income and productivity are significantly lower than in Mississippi, the poorest American state. The minimum wage in Puerto Rico is equal to 77% of per capita income, compared with 28% in the U.S. overall.
- What's behind increase in shark attacks off the Carolinas? (CNN) It is probably warmer water than usual in the Atlantic, but experts are not sure exactly what combination of factors has produced nearly twice the number of Shark attacks off the Carolina coast in the past 3 weeks as are normally reported for an entire year.
- Give Me Money or I Shoot (Nicole Diekmann, Twitter)
- Greece View of Germany (rocco, Twitter)
- 9 myths about the Greek crisis (James K. Galbraith, Politico) Hat tip to Yanis Varoufakis. JKG has contributed to GEI. Here are the nine myths that JKG discusses in some detail:
1. The referendum is about the Euro.
2. The IMF has been flexible.
3. The creditors have been generous.
4. The European Central Bank has protected Greek financial stability.
5. The Greek government is imperiling its American alliance.
6. Alexis Tsipras called the IMF a "criminal" organization.
7. The Greek government is playing games.
8. A "Yes" vote will save Europe.
9. A "No" vote will destroy Europe.
- When Greece forgave Germany's debt (The Sydney Morning Herald) Hat tip to Steve Keen. Germany once benefited from other countries, including Greece, forgiving its debts and should have sympathy for calls to do the same for Greece today.
- Greeks Split Down Middle Before Bailout Referendum: Bloomberg Poll (Bloomberg Business) Greece is divided right down the middle heading into Sunday's referendum on European bailout proposals, portending even more upheaval for the stricken nation. Results of Bloomberg poll taken Thursday: 43.0% 'No', 42.5% 'Yes' and 14.5% don't know or won't answer. But when asked if they want to stay in the Eurozone a resounding 81% said 'yes' and only 7% said 'no'. The 'No' and 'Yes' factions have moved to a razor thin margin since the banks were closed; Less than one week ago 'No' had a 2:1 lead.
- IMF backs (ever so peculiarly) the SYRIZA government’s debt assessment (Alternative Economics) Blog by Greek Finance Minister Yanis Varoufakis discusses findings by IMF (International Monetary Fund) economists that the Greek debt is unsustainable and debt relief is the only way out.
- Greece is being deliberately humiliated for daring to question austerity, Caroline Lucas says (The Independent) Green Party MP Caroline Lucas says EU's response to the crisis shows how badly it needs to be reformed. Speaking at a Greece solidarity rally in London Caroline Lucas argued that the "deluded" policy coming out of the eurogroup was designed to punish the Syriza-led government.
- Greece: Only the 'No' Can Save the Euro (James K. Galbraith, The American Prospect) Hat tip to Yanis Varoufakis. JKG has contributed to GEI. The plain language of Sunday's referendum states that the vote is about the creditors' terms. It is not about Eu or eurozone membership. The threat to expel Greece is an obvious bluff. There is no legal way to eject Greece from the Eurozone or the EU. The referendum is actually, and obviously, on the survival of the elected government in Greece. The European leaders know this, and they are trying now to ensure that Tsipras falls. They do not realize that the most probable eventualities deriving from the "Yes" vote will be the rise of extreme right or left anti EU parties and the progression to the break-up of the monetary union and the EU confederation itself. Galbraith is clear in his opinion of fault here:
To understand the bitter fight, it helps first to realize that the leaders of today's Europe are shallow, cloistered people, preoccupied with their local politics and unequipped, morally or intellectually, to cope with a continental problem. This is true of Angela Merkel in Germany, of François Hollande in France, and it is true also of Christine Lagarde at the IMF. In particular North Europe's leaders have not felt the crisis and do not know the economics, and in both respects they are the direct opposite of the Greeks.
- Dreams Collide With China Slowdown for Job-Seeking Graduates (Bloomberg) Over 7.5 million college graduates are entering China's job market this summer, the most ever and almost seven times the number in 2001. Slower growth in the economy is curtailing employment opportunities in a way they never expected. Policy makers are trying to spur the employment-intensive services sector to find enough jobs for new grads.
- The Chinese Descend on Japan's Property Market, Pushing Prices Up (Bloomberg Business) Japan is now experiencing the same phenomenon already seen in Sydney, Vancouver and several U.S. cities: busloads of real estate buyers from China coming in, buying up homes and pushing prices higher
- How much money is laundered through Aussie homes? (Macro Business) Paris-Based Financial Action Task Force (FATF) on money laundering released its report on Australia, which found that Australian residential property is a haven for international money laundering, particularly from China. The report also recommended that Australia implement counter-measures to ensure that real estate agents, lawyers and accountants facilitating real estate transactions are captured by the regulatory net. For full report: Anti-money laundering and counter-terrorist financing measures: Australia.
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