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.
Happy New Year!
Oil ends 2015 down 35 percent; long, painful hangover seen (Reuters) Oil prices rose on Thursday but fell as much as 35 percent for the year after a race to pump by Middle East crude producers and U.S. shale oil drillers created an unprecedented global glut that may take through 2016 to clear.
World's Best Hikes: 20 Dream Trails (National Geographic) Great slide show with extensive trail descriptions. For this editor, there are 17 he has yet to set foot on. Pictured below: MacLehose Trail, New Territories, Hong Kong.
Biggest El Niño effects on US may be yet to come (Al Jazeera) The weather effects of El Niño, already blamed in large part for unusual winter floods, tornadoes and other extreme weather in the U.S., the U.K. and other countries during 2015, is far from over. Scientists predict El Niño's biggest effects will be felt in 2016. Follow the latest analysis weekly with GEI's weather and climate economist, Sig Silber.
Increasingly university research is funded by the Defense Department and by commercial interests and serves those interests. Universities are losing their role as sources of societal critics and reformers. Truth itself is becoming commercialized.
The banking system, which formerly financed business, is increasingly focused on converting as much of the economy as possible into leveraged debt instruments. Even consumer spending is reduced with high credit card interest rate charges. Indebtedness is rising faster than the real production in the economy.
Historically, capitalism was justified on the grounds that it guaranteed the efficient use of society's resources. Profits were a sign that resources were being used to maximize social welfare, and losses were a sign of inefficient resource use, which was corrected by the firm going out of business. This is no longer the case when the economic policy of a counry serves to protect financial institutions that are "too big to fail" and when profits reflect the relocation abroad of US GDP as a result of jobs offshoring. Clearly, American capitalism no longer serves society, and the worsening distribution of income and wealth prove it.
Why Small Debts Matter So Much To Black Lives (ProPublica) If you are black, you're far more likely to see your electricity cut, more likely to be sued over a debt, and more likely to land in jail because of a parking ticket. It is not unreasonable to attribute these perils to discrimination. But there's no question that the main reason small financial problems can have such a disproportionate effect on black families is that, for largely historical reasons rooted in racism, they have far smaller financial reserves to fall back on than white families.
Munich stations evacuated over 'IS attack threat' (BBC News) Police in Munich evacuated two major railway stations after an intelligence agency warned Germany of an imminent attack, officials said. Authorities received information that suicide bombers from so-called Islamic State (IS) could target the central station or Pasing station, Bavaria's interior minister said. Both stations have since reopened.
Russia security paper designates Nato as threat (BBC News) Russian President Vladimir Putin has signed an updated national security paper describing Nato's expansion as a threat to the country. The paper says Russia's "independent domestic and foreign policy" has triggered a "counter-action" from the US and its allies. It accuses these countries of striving to dominate global affairs.
Bumper harvest: 13 IPOs swelled up to 100% during 2015 (The Economic Times) As many as 13 of 20 primary market listings of calendar 2015 offered returns as high as 100% in what could be termed as the best year for the IPO market since 2010. This was in a sharp contrast with the performance of the BSE Sensex, where 18 of the 30 stocks eroded investor wealth by anywhere between 2% and 58%. Calendar 2015 saw the S&P BSE IPO index climbing 19% against a 5% drop in the secondary market benchmark Sensex.
China eyes huge deficit to cushion reforms, slowing growth (The Japan Times) China could run its biggest budget deficit in perhaps half a century next year as leaders turn to government spending to arrest the slowdown in the economy, policy advisers say, after a year of easing monetary policy has brought disappointing results. The government is expected to increase its budget deficit to about 3% of gross domestic product in 2016 from a target of 2.3% this year to help cushion against the possible economic impact from structural reforms, the advisers said. But, wait a minute - see next article.
Xi leads shift from Keynesianism to 'supply-side'economics (China Daily) This is just the opposite of the previous article. China's near-term tasks in supply side reform include cutting housing inventories and business costs, reducing government debt, eliminating superfluous industrial capacity, and streamlining administrative procedures, according to a statement produced at a Work Conference.
What Secret Do Global Banks Know about Chinese Banks? (Wolf Street) Over the last three years the world's largest banks have been cutting back on operations in China. Wolf Richter says the most important factor is the opacity of Chinese banks - nobody knows just how much bad debt they are stuffed with.
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