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.
The "1%" Own Half The World's Assets: The Stunning Chart (Zero Hedge) Actually, the "stunning" chart is the first featured in the article showing that 90% in the U.S. have under 25% of the wealth (down from more than 35% thirty years ago) while the top 0.1% has almost the same wealth as the bottom 90% (up by more than 3-fold over the last 40 years).
The Financial Crisis: Lessons for the Next One (Alan Binder and Mark Zandi, Center on Budget and Policy Priorities) This is an extensive analysis of what the effect of fiscal and stimulus and monetary easing has been. Conclusion: A repeat of the Great Depression was avoided. An interesting graph indicates that fiscal policy has returned to nearly the average for government spending as a fraction of GDP for the last 35 years.
London house prices up by 10 per cent in October and first-time buyers bear the brunt - Rightmove (City A.M.) There's just no end to it. London house prices are 9.8% higher than they were in October 2014, data released today by online property market Rightmove reveals. Nationally, house prices rose 5.6% year-on-year with first-time buyer properties leading the way at 9.6%. The number of properties coming to the London market was down by 16.2% compared with October last year. Only four boroughs out of 32 have a greater supply of properties coming to the market than the same month in 2014.
Pensions committee warns industry is at risk of next mis-selling scandal over new freedoms(City A.M.) The work and pensions select committee is today publishing its report on pension freedom guidance and advice, in which it blasts reforms introduced in April as being "insufficient". The report, the result of an inquiry, announced in July, into recent pension reforms, states that "freedom to choose" is not enough: "People must have the freedom to make a well-informed choice." And the committee warns: "To not provide the basis for a well-informed choice could lead to the next major pensions mis-selling scandal."
Forget Syria: Putin is on the verge of victory in Ukraine (City A.M.) The Russian President is at heart a Gaullist: a committed Russian nationalist, determined to restore pride to his battered country following its humiliating collapse at the end of the Cold War, according to columnist John Hulsman. He says that the focus on Syria has distracted the West from the growing control exercised by Putin's proxies in Ukraine in a "frozen war".
Radiation biology: new life at Chernobyl (Financial Times) People may be gone in the radiation zone from the Chernobyl disaster nearly 30 years ago in Ukraine and neighboring Belarus but wildlife is flourishing.
RBI back to mopping up foreign exchange through spot route (Business Standard) After being a net seller in the spot foreign exchange market in August, the Reserve Bank of India (RBI) turned net buyer in September once again. The trend continued in October with the central bank mopping up flows thanks to enhancement in foreign portfolio investors' (FPIs) investment limit in Indian debt.
Negative trend persists in business sentiment (The Hindu) Extending this year's downward spiral, the Dun & Bradstreet Composite Business Optimism Index for the October-December quarter projects a 4.1% decline compared with the July-September period. The survey, however, does not capture the impact of the Reserve Bank of India's (RBI) latest interest rate reduction as the announcement was made post the survey period.
Japan PM Abe presses firms to lift capital spending to revive economy (Reuters) Prime Minister Shinzo Abe's government on Friday urged Japanese firms to help revive the flagging economy by using their hefty cash piles to boost capital expenditures. The request was made during the first round of talks between cabinet ministers and business leaders on expanding business investments, in a show of government pressure on companies to lift investment needed to generate a virtuous growth cycle.
China's GDP growth slows to 6.9 percent (Al Jazeera) For the first time since The Great Recession China has GDP growth rate less than 7%. Is this good news (6.9% is above estimates which ranged from 6.5% to 6.8%) or bad news (6.9% is below the government target of 7.0%). Econintersect: In either case the interpretation as good or bad is basically nonsense since the uncertainty in the numbers, although not specified by the Chinese agency making the report, is almost certainly of the order of +/- 0.5% and possibly even more. So when will a GDP miss be significant news? When it is 0.5% off or more. That may be coming - see next article.
Goldman takes a knife to China GDP forecasts (CNBC) Goldman Sachs slashed its forecasts for China's growth over the next three years amid broadening pessimism over the health of the world's second largest economy. On 31 August the bank marked down its 2016, 2017 and 2018 projections to 6.4%, 6.1% and 5.8%, respectively from 6.7%, 6.5% and 6.2%, previously. The government is targeting growth of "around 7%" this year.
China's Economy May Be Even Bigger Than You Think (Bloomberg) Mark Mobius, the chairman of the emerging-markets group at Franklin Templeton Investments said in a recent interview with Bloomberg TV that the size of the service economy in China is under reported:
"We think that a lot of the economy is not really being counted because China is being converted from a manufacturing-oriented economy to a service economy."
China is making a new 5-Year Plan - and it'll decide the fate of the global economy (Business Insider) China represents 32% of all global GDP growth, and about 30% of global capital expenditures, according to Credit Suisse. In other words, If China sneezes, the rest of us will get pneumonia. So what happens in the next five-year plan to be announced between October 26 and October 29 will basically be a significant part of what the outlook is for the entire world.
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