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.
Vince Cable, Stephen Kinnock and Andrew Cooper: Restoring trust in capitalism means moving beyond ideology (City A.M.) Findings from new, exclusive polling conducted by Populus for the Centre for Progressive Capitalism are stark. Almost 75% of respondents said the UK's economic system is effective at providing opportunities for people from wealthy backgrounds to achieve their aspirations. However, only 5% think that the UK's economic system is effective at providing opportunities for people from poor backgrounds to achieve their aspirations. And only 11%t said that the economic system helps people from all walks of life. From the authors' conclusions:
That's why we welcome the launch of the Centre for Progressive Capitalism as a much-needed initiative that aims to look at some of the underlying systemic issues across our economic system beyond traditional political divisions and out-dated ideological labels.
Firms need access to capital and reasonably priced office space, and to employ workers with the necessary skills who have access to housing. This needs to be combined with a long-term innovation and industrial strategy. Lastly, the governance arrangements of firms need to be realigned for the long term. These are big issues and the Centre has a big job ahead of it, but we look forward to a dynamic dialogue under its auspices.
Chart shows what's really driving crude-oil prices (Market Watch) The chart below shows a high negative correlation between the dollar index and the price of oil. Econintersect: So there is no question that there is a relationship but it is not correct to say that the dollar is "driving" the price of oil. Two points: (1) The rise in the dollar could have been in part due to the drop in oil prices that resulted from a production glut - there is no proof of the direction of cause and effect either way. (2) Even if there is a causal relationship for the correlation the price of oil has been moving much more than the dollar (when they have had negative correlation). Consider the following five calculations made by Econintersect (note case 4. - emphasized - when the negative correlation did not hold):
From middle of 2010 to 2Q 2011: Dollar -16%; Oil +50%;
From 2Q 2011 to mid-year 2012: Dollar +12%; Oil - 36%;
From mid-year 2014 to 1Q 2015: Dollar +28%; Oil -55%;
From 1Q 2015 to January 2016: Dollar -2%; Oil -50%;
From January to April 2016: Dollar -6%; Oil +60%.
Regional Fed banks should be public, says Yellen's ex-advisor (The Fiscal Times) Hat tip to Roger Erickson. A former top Federal Reserve policy advisor called Monday for the Fed's 12 regional outposts to be made government entities, rather than owned, as they have been since their inception more than a century ago, by the banks they regulate. Dartmouth College Professor Andrew Levin also called for seven-year term limits for all Fed policymakers, and stronger outside oversight of the U.S. central bank including annual reviews of monetary policy. All central banks other than the Fed are entirely owned by their governments.
Why Obama is forgiving the student loans of nearly 400,000 people (Market Watch) The Department of Education will send letters to 387,000 people they've identified as being eligible for a total and permanent disability discharge, a designation that allows federal student loan borrowers who can't work because of a disability to have their loans forgiven. The borrowers identified by the Department won't have to go through the typical application process for receiving a disability discharge, which requires sending in documented proof of their disability. Instead, the borrower will simply have to sign and return the completed application enclosed in the letter. If every borrower identified by the Department decides to have his or her debt forgiven, the government will end up discharging more than $7.7 billion in debt, according to the Department. Econintersect: By our calculation this is about 0.6% of outstanding student loan debt.
Echo Papa Exposed (The Intercept) Hat tip to Roger Erickson. Erik Prince, or "Echo Papa," is the founder of Blackwater and chairman of Frontier Services Group, a publicly traded logistics and aviation company. This article asserts that Prince is building a secret private mercenary airforce "capable of generating healthy profits while fulfilling his dream of privatized warfare".
NC governor signs order amending law blocking protections for gays (The Hill) North Carolina Gov. Pat McCrory (R) signed an executive order on Tuesday partially amending a controversial measure that blocked protections for LGBT people. McCrory's order expands state employment policy to include sexual orientation and gender identity, and it affirms the right of the local governments and private sector businesses to implement their own nondiscrimination policies. McCrory said he'd seek legislation to reinstate the right to sue for discrimination in state courts. However, the most controversial aspect of North Carolina's controversial law, which mandates that people use public restrooms that correspond to their biological sex, would remain intact. Econintersect: So women in North Carolina can expect someday to share a bathroom with a bearded man if the law is obeyed.
Eurozone crisis 'pushing migrants to UK' (BBC News) The Eurozone jobs crisis is encouraging more southern European migrants to head to the UK to join those from the east, the Migration Observatory has said. Over the past five years the number of EU nationals living in the UK has gone up by almost 700,000 to 3.3 million. The report said 49% of the 700,000 were from Poland and Romania, but Spain, Italy and Portugal accounted for 24%. The Migration Observatory says there is no single "pull factor" but a mixture, including wages and economic prospects.
House prices: London and regional rental prices climbed higher in March (City A.M.) London rents rose by 7.7% in the year to March as demand for rental property in the capital remained strong, new research shows. However, HomeLet said that the data comes ahead of reforms that are predicted to have a major impact within the sector, including a stamp duty increase for buy-to-let properties, and could tell a different story next month.
It's official: India set for an 'above normal' monsoon (The Hindu) In line with recent predictions by private weather forecasters, India's official weather forecasting agency too has said the monsoon is likely to be "above normal" and likely to be 106% of the average of 89 cm. Monsoon rains within 96% and 104% of this average are considered "normal" in the terminology of the India Meteorological Department (IMD). India has suffered through four years of increasing shortfalls in rainfall with below normal monsoons.
China exports rise at fastest pace in a year in March (CNBC) The trade picture in the world's second-largest economy staged a turnaround in March, with exports rising at the fastest clip since last February, official data revealed on Wednesday. Dollar-denominated exports rose 11.5% on-year, recovering from a 25.4% slump hit in February that marked a seven-year trough. Imports meanwhile fell an annual 13.8%, unchanged from February. That left Beijing with a surplus of $29.86 billion for the month, compared with February's $32.59 billion surplus.
Brazil's Dilma Rousseff accuses deputy of coup plot (BBC News) President Dilma Rousseff of Brazil has denounced a "coup" plot against her, suggesting that Vice-President Michel Temer is one of the "conspirators". The president - who is facing impeachment in the national Congress - hinted that he was one of the ringleaders of a plot to overthrow her. She said an audio message released on Monday by Mr Temer, whom she did not name, was evidence of the conspiracy. In the message, Mr Temer appears to accept replacing her as president. He also calls for a government of national unity. See also Rousseff suffers fresh coalition blow.
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