econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 11 June 2016

Special Edition Of What We Read Today 11 June 2016

Written by

Econintersect: Due to a scheduling error, 'What We Read Today' did not appear in the newsletter for 11 June 2016. Normally only GEI Members (membership is free) have access to this daily feature but we are publishing a 'Special Edition' tonight that everyone can read.

BECOME A GEI MEMBER - IT's FREE!

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for "The Early Bird".).

Every day most of this column ("What We Read Today") is available only to GEI members. Today's special edition is available for everyone.

To become a GEI Member simply subscribe to our FREE daily newsletter.

BECOME A GEI MEMBER - IT's FREE!

Topics today include:

  • Furor over Tesla S Suspension System

  • Tesla Offers Lower Price Tesla Model S

  • The 60/40 Portfolio Won't Cut It Going Forward

  • The Debt Paradox - Does It Make Sense?

  • Affordable Housing is Disappearing

  • How High Will Second Quarter GDP Go?

  • Brexit Will Cascade

  • Brexit Too Close to Call

  • Are European Banks Crashing?

  • Goldman Loves Duterte

  • Venezuela Voids Opposition Leaders' Signatures on Recall Petitiion

  • And More

Articles about events, conflicts and disease around the world

U.S.

  • Urban sprawl: Did gentrification lead to rent surge, or vice versa? (CNBC) The relentless search in major cities for affordable yet aesthetically pleasing housing isn't getting any easier. Affordable housing in cities like San Fransisco and New York is very difficult to find, even extending into the suburbs, as frothy rents ("gentrification") are forcing working class people to flee.

  • Goldman raises U.S. second-quarter GDP view after trade data (Reuters) Goldman Sachs economists said on Wednesday they raised their outlook on U.S. economic growth in the second quarter to 3.0% from 2.7% following a smaller-than-forecast widening in goods trade deficit in April. The Commerce Department said the U.S. goods trade gap grew to $57.5 billion from $56.9 billion in March. Goldman economists had forecast the deficit of $57.9 billion for April. The date on this article is 25 May. Goldman has reportedly raised the estimate again since then to 3.2% See also next article.

  • The Daily Shot And Data - June 10, 2016 (Walter Kurtz, Sober Look, Talk Markets)

atlanta.ny.fed.gdp.est.2016.2q.jun.10

EU

"There is going to be a cascading effect across Europe. The U.S. is going to be your safe haven - the U.S. currency, the U.S. debt markets, the equity market."

  • European Banks Are Crashing (Zero Hedge) From Deutsche Bank to Credit Suisse and from Barclays to Banco Popolare, the European banking system got battered this week with Friday's plunge the biggest in 4 months... (See first chart below.) ZH compares the decline of Deutsche Bank stock to that of Lehman Brothers (second chart) and then points out that European banks as a whole are not doing any better than German banks as the German bund yield curve flattens dramatically (third chart).

european.banks.deutsche.bank

bund.yield.curve.european.banks.decline

UK

  • Brexit Decision Too Close to Call in Poll as Stakeholders Lobby(Bloomberg) British public opinion is too close to call on whether the country should stay in the European Union, with many voters still undecided as interest groups and political leaders make their cases, according to an Opinium survey released on Saturday. The poll for the Observer newspaper showed 44% support Britain remaining in the 28-nation bloc, up from 43 percent a week ago. Some 42% of respondents backed leaving the European Union, also up 1 point from the previous poll released on June 4, as attitudes start to crystallize ahead of the June 23 referendum, but the differences aren't statistically significant.

Qatar

  • Dutch woman arrested in Qatar after making rape claim (BBC News) A Dutch woman is being detained in Qatar on suspicion of adultery after she told police she had been raped. The 22-year-old, who was on holiday, was drugged in a Doha hotel and woke up in an unfamiliar flat, where she realized she had been raped, her lawyer says. She was arrested in March on suspicion of having sex outside of marriage. She is due to appear in court on Monday. The alleged rapist is also being held, but says the sex had been consensual. A Dutch foreign ministry spokeswoman said the woman, who she named as Laura, had been arrested but not yet been charged.

Philippines

  • Goldman Sachs Comes Out Bullish on a Strong-Willed Duterte(Bloomberg) Goldman Sachs Group Inc. says the hard man of Philippine politics could prove a boon for the nation's economy. President-elect Rodrigo Duterte's election on a mandate to boost infrastructure spending, cut red tape for business and invest more in farming could lift the country's potential growth rate, the U.S. bank's analysts concluded after recent meetings in Manila.

Venezuela

  • Venezuela recall: Opposition leaders' signatures voided (BBC News) Venezuela's opposition leaders say their signatures on a petition for a referendum to oust President Nicolas Maduro have been invalidated. Former presidential candidate Henrique Capriles is among those who say their signatures have been ruled out for "failing to meet the requirements". The Speaker of the National Assembly, Henry Ramos Allup, described the move as "shameful" and "a provocation". The decision was announced on Friday by the National Electoral Council (CNE). The electoral body's president, Tibisay Lucena, said more than 600,000 signatures had been invalidated. The other voters who signed the petition - more than 1.3 million people - will need to turn up at regional electoral offices to confirm their identity later this month. Voters will have five days from 20 June to have their signatures checked. Econintersect: Taking voter ID to the next level?

Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea

  • U.S. reviewing suspension complaints in Tesla Model S cars (Reuters) A federal regulator said on Thursday it is reviewing reports of suspension problems in Tesla Motors Inc's (TSLA.O) Model S sedans, and is investigating whether the company urged customers to sign agreements not to disclose the problem. A spokesman for the U.S. National Highway Safety Administration (NHTSA), Bryan Thomas, said the agency is "examining the potential suspension issue on the Tesla Model S, and is seeking additional information from vehicle owners and the company". The safety review follows reports of a possible defect in the Tesla Model S that may cause suspension control arms to break, which could cause the driver to lose control of the car. A review is a step before the agency decides whether to open a formal investigation leading to a potential safety recall. A Tesla spokeswoman said she was looking into NHTSA's statement, declining to immediately elaborate.

  • Elon Musk suggests complaints about the Model S may have been fabricated (The Verge) Tesla fiercely defended its Model S sedan today against complaints about its suspension system, and now its CEO says some of those complaints are bogus. Elon Musk said in a series of tweets today that the vast majority - 37 of 40 - of complaints filed with the National Highway Traffic Safety Administration (NHTSA) regarding concerns with suspension systems in the Model S sedan appear to be fraudulent. Additionally, Musk says that the safety regulator found no safety concerns related to the car's suspension system.

  • Tesla Offers Lower-Price Model S Sedan (The Wall Street Journal) Tesla Motors Inc. released a lower-priced version of its Model S electric sedan, a move to tap into the huge enthusiasm for its coming Model 3 and boost flagging sales growth of its existing cars. On Thursday, it began selling a $66,000 version of its Model S with a battery modified to limit its travel range to about 200 miles on a charge. The price is 9% below the prior lowest-cost model. Tesla expects to start shipping the Model 3, starting at about $35,000 in the next 18 months.

  • Why the Standard 60/40 Stock & Bond Portfolio Won't Survive the Next Decade (Wolf Street) Everyone's familiar with the classic 60/40 investmentportfolio. If you've ever dealt with financial advisors, this is the standard allocation they'll recommend. 60% of your money in the stock market, and 40% in bonds. There's no doubt this has been a great strategy the past few years. Check out the statistics from Jan. 1 2010 to Jan. 1 2016 below. The standard 60/40 portfolio grew an average of 9.88% per year. And not only that, but the Sharpe ratio was at a stellar 1.33, indicating an outstanding risk-adjusted return! Then compare that to 70 years of returns in the second table below. It looks like the recent period of outperformance has been an anomaly. To get the Sharpe ratio back near the long-term average for the period 2001 to 2040 would require disastrously low Sharpe ratios over the next 24 years. Analyst Wolf Richter explains why the risk outlook for bonds is so negative now. Econintersect: Using an analogy, there are a few inches of gain left for bonds but a potential mile of losses.

2016-06-10-Alex-M-sharp-ratio

  • The Debt Paradox (Around the Curve) This author says that economists often lament that too much debt causes financial stress. However in reality, he says, there is no evidence that the indebtedness level of an economy has anything to do with the level of interest rates, the key indicator of financial stress. Econintersect: This is a kluge. The author does make some valid points, such as borrowing to increase consumption isn't such a great idea, and simple judgments based on debt/GDP ratios are not very useful. But the data used is quite opportunistic and doesn't make a lot of sense. In the first graph below the author uses total debt as a measure whereas private debt and government debt provide two completely different economic and financial functions. Also, what is the significance of grouping developing economy currencies with reserve status currencies (IMF special drawing rights basket - U.S. dollar, euro, yen,pound sterling and Chinese yuan renminbi)? On top of that, why should the euro, which has no fiscal coupling, be plotted with the other reserve status currencies? In the case of the second chart we see no basis in logic for suggesting that a causative relationship should exist between private sector debt increase being related to aggregate savings. The exception is, of course, that debt liability for one party creates an asset for another. If that is the case then Chart 2 is simply showing an accounting tautology. Steve Keen had a much shorter summary on Twitter.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
2015 Household Income Up 5.2% Is Just Spin
Hjalmar Schacht, Mefo Bills and the Restoration of the German Economy 1933-1939
News Blog
Is The Butterfly Effect Real
August 2016 Philly Fed Coincident Index Shows Continuing Slowing Of Economic Rate of Growth
Global Bonds: Why Our Analyst Says Things Just Got "Monumental"
Trends In Expenditures By US Colleges And Universities, 1987-2013
Why Firms In Developing Nations Don't Grow As Fast
Infographic Of The Day: Upcycling Your Rug
Early Headlines: Is Secular Middle East Possible?, Why Cruz Flipped, Bubble Mortgage Crisis Lives On, Current US Housing Cycle, US Abandons Syria Truce, Brazil's New Pres. Investigated And More
The Most Costly Man-Made Disaster
Are Taxes Crippling The Car Sharing Industry
HMS Terror Wreck Found - But What Happened To Her Doomed Crew? Here's The Science
Confirmed Yahoo Hack Could Be The Largest Ever
What We Read Today 23 September 2016
How To Eradicate One Of Our Deadliest Enemies, Gene Drive And Malaria
Investing Blog
How To Protect Your Money Against Negative Interest Rates
Technical Thoughts: How Much Risk?
Opinion Blog
The Setting Sun: Japan Faces Monetary Exhaustion
Note To Joe Q Public On Fed Policy: Promise In September, Deliver In December
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
23Sep2016 Market Close: US Indexes Close Lower As Crude Prices Slip, Fed Lowers Economic Growth Prospects, Indicators Melting Into Bearish Territory
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved