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What We Read Today 12 July 2014

Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.

  • Highway Fatality Rates Quadruple In US Oil Boom States (Meagan Clark, International Business Times, North Dakota and Texas have not been able to keep up with the heavy machinery and truck traffic over their highways which are deteriorating as a result. This is part of the contribution to soaring highway traffic fatalities, which are up four-fold in the past 10 years.

  • Infrastructure and Spaghetti Investing (Michael Likosky, Huffington Post) Michale Likosky has contributed to GEI. Likosky says we must avoid a process like "throwing spaghetti at a wall to see what sticks" when it comes to infrastructure investment. But when infrastructure does make sense if should be developed with infrastructure banks and public-private partnerships, according to Likosky.
  • The Southern Lights put on a display in the night sky (Marc Duldig, The Conversation) Over the past few months night sky watchers in the southern parts of Australia have been presented with lots of beautiful displays of the Aurora Australis or Southern Lights. Duldig discusses the origins of the displays.

Click on picture for larger image at The Conversation.

There are 13 articles discussed today 'behind the wall'.

Six of the articles are about U.S. employment data, housing and the connections between them.

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  • Employers say they can't fill jobs - and here's why (Mark Koba, CNBC) Hat tip to Marvin Clark. Despite high unemployment, 83% of employers say it is somewhat/very difficult to fill positions. For 52% of unfilled jobs openings the employer reports the primary reason as "lack of available applicants" and another 24% cite lack of skills or experience.



  • Homeownership Reconsidered (Prashant Gopal, Bloomberg) The Great Financial Crisis and the collapse of the U.S. housing bubble has many wary of home ownership, This is especially true of the millenials, the age group that would be providing housing market support now if they were following the pattern of previous generations and buying their first home in their 20s and 30s. But they aren't - see He's the Top U.S. Mortgage Salesman. His Daughter Isn't Buying It (Lorraine Woellert, Bloomberg). See also next two articles.


  • The Return of the First-Time Home Buyer? (Real Estate Daily News, Realtor Mag) This misguided article represents an egregious example of misuse of data. First the data quoted is that in 2013 the percentage of young adults age 18-24 living with their parents declined from 56% to 55%. The article represents this to indicate there are 300,000 now looking for a place of their own. Forget that this statement is assuming that 1% of the 30 million in that age group are not necessarily looking for a place of their own but may be looking for a place to share, including some moving into a dorm room. And if, on average, they were looking to pair up with a roommate, significant other or spouse, this would halve the number to 150,000. As I said, forget that - the uncertainty in surveys is often +/-4%. In such a situation a change of 1% nominal has no meaning! See also next article
  • Nation's Housing 2014 (Joint Center for Housing Studies of Harvard University) While home ownership participation has fallen by 4% over the entire U.S. population, it has fallen much more among younger age groups - down 7% among 25-34 year olds and down nearly 9% among 35-44 year olds. See graphs below. Yet this study concludes that first time home buyers, which fall more than 50% in the 25-34 age group, will increase from current levels over the next decade. The study estimates that 2.4 -3.0 million new households will form per year over the coming decade (recent levels have been less than 1 million). Although they mention briefly the elderly, no estimate of how mortality and common living and care facilities will reduce the household count, so how much this will subtract to give a net household formation number is a question. Also, the impact of debt is mentioned but not quantified. GEI News recently published an estimate of reduced first-time home purchase demand by about 2 million units due to student debt burdens which would correspond to 7-10% of new household formations among the young demographics over the next decade.

Click on graphs for larger images.

  • How to Read the Polls in This Year’s Midterms (Nate Cohn, The New York Times) It looks like the races for Senator this year are exceptionally close and polls have a high risk of being wrong in such situations. That is especially true when so many of the polls have partisan sponsors, which is the case this year.
  • Why the renewable target should be ramped up, not cut (Peerapat Vithayasrichareon, Iain MacGill and Jenny Riesz, The Conversation) Modeling the various penetrations of renewable energy into the energy future for Australia indicates that a fat tail uncertainty in fossil fuel costs supports higher renewables usage with a higher most probable cost which has far less uncertainty.


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