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.
Economics And Migration (Talk Markets) The point is often made, especially by economic liberals, that in Britain new migrants from the EU contribute more to the exchequer than they take out. But what if we take a wider view? What if the lifetime tax contribution of the incomer and weighed it against his lifetime claims on State expenditure? And if an incomer takes work that could otherwise have been done by someone already in this country, should we include on the debit side some of the costs of keeping the latter unemployed? Or underemployed? Or does the economy expand and provide more employment? Does the case change for the U.S. or other countries? The author doesn't know and thinks it is worth a "proper holistic examination of the issues". Econintersect: This would be a great Ph.D. thesis study.
Wall Street Takes a Hit in Democratic Party's Platform Draft (Bloomberg) Wall Street was hit hard in the latest draft of the Democratic Party's platform, which in a nod to the influence of Bernie Sanders, took a sharp leftward turn from 2012 on a range of issues, from regulation and taxes to support for a $15 minimum wage. The 35-page document, hammered out in drafting sessions in St. Louis, reflects a delicate and as yet untested balancing act by presumptive Democratic presidential nominee Hillary Clinton, as she seeks a unified position on contentious issues ranging from wages to oil drilling to the Trans-Pacific Partnership trade pact. See also next article.
Democrats Back a Trading Tax, Say Speediest Traders a Threat (Bloomberg) Democrats drafting their party's platform proposed taxing trades on U.S. exchanges and called the speediest traders a threat, stepping into two of the most contentious areas of modern markets. According to a draft released Friday of the proposed Democratic platform, a summary of goals the party wants to promote:
"We support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets. We acknowledge that there is room within our party for a diversity of views on a broader financial transactions tax."
There Is Absolutely - No Doubt - 100% - A Raging Car Bubble (Talk Markets) The author starts off with one sign: His landscaper drives a Mercedes. He also says there are home refinance, student loan and corporate debt bubbles, but the auto bubble is the "most obviously exuberant". What he says he is talking about is "a subprime auto loan bubble that is parallel with the 2002-2007 housing bubble". He talks about Walmart parking lots "packed with Maserati's, Bentley's, and Mercedes Benz's". But there is some data, too. First graphic shows auto loans back to housing bubble levels, more than $2 trillion in auto loans over the last 4 years. Of those, more than $600 billion (30%) are sub-prime (credit scores less than 680). The second graphic shows the history of auto inventory/sales. Econintersect: The dollar amounts in the housing bubble were much larger than in the "auto bubble". In the housing bubble about 20% of mortgages were subprime during the 2-year peak (2005-06). In those two peak years more than $6 trillion of new mortgages were issued, about $1.2 trillion subprime. In the four years 2003-2006 the total mortgage issuance was more than $10 trillion (compared to $2 trillion in the last four years ending 2015 for auto loans).
Top lawyer's warning as Iraq inquiry report looms (The Guardian) One of Britain's leading experts in international law has said that the Chilcot inquiry into the Iraq war must deliver a convincing account of the mistakes that led to the 2003 conflict to help restore public trust in politics. The inquiry will publish its 2.6 million-word report on Wednesday amid a tumultuous time in British politics. Before the report's release, Philippe Sands QC, author of Lawless World, a book about the Iraq war, said:
"Of singular importance is the need for Chilcot to restore trust in the process of decision-making in government. [There is a need to establish] precisely what went wrong, why it went wrong and who were the key players in making it go wrong, so that lessons will be learned that will allow us to make sure it never happens again".
Germany Edges Italy on Penalties (BBC News) Germany reached the Euro 2016 semi-finals after winning a thrilling penalty shootout against Italy in Bordeaux. Joachim Low's World Cup holders looked on course for victory in normal time - against a country they had never beaten at a major tournament - when Mesut Ozil rounded off a slick build-up with Mario Gomez and Jonas Hector to score at the near post in the 65th minute. Germany missed more penalties in one shootout than ever in their history - three - but were once again the winners on penalties, this time by 6-5. They will face the winner of France vs. Iceland later today a the European Cup semifinal. Portugal meets Wales in the other matchup.
Bangladesh mourns victims of Dhaka cafe attack (BBC News) There were nine Italians among the 20 hostages killed in the Dhaka, Bangladesh cafe hostage crisis. GEI incorrectly reported the number as 3 in 'What We Read Today' yesterday. Other nationalities identified were 7 Japanese, 1 Indian and 1 American.
Turkey's six foreign policy sins and the Istanbul Bombing (Informed Comment) Hat tip to Doomstead Diner. A detailed discussion is presented of foreign policy "sins" involving Russia, Israel, Armenia, Azerbaijan, Egypt and Syria. Econintersect: Not exactly foreign policy because more than half of Kurds live in Turkey, but that has been a major ethnic relations problem for Turkey for years. Until very recently, Turkey seemed to feel the Kurds were more of a danger than ISIS.
Australian election 2016: Malcolm Turnbull says Coalition can form majority despite dramatic losses (The Guardian) Malcolm Turnbull's Coalition has been pushed to the brink in a shock election result which saw the Liberal party lose at least 11 seats, with 30% of the vote still left to be counted. At a speech given after midnight, the prime minister claimed the Liberal and National parties would form a Coalition majority government even though he had been advised the result would not become clear until at least Tuesday. The Labor Party is in a virtual tie with the Coalition at this point of the vote tally.
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