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What We Read Today 05 September 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 (and sometimes longer ones) 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.

  • Draghi brings out ABS rocket boosters (Ralph Atkins, Financial Times) The ECB (European Central Bank) action announced today is not QE (quantitative easing) in the form it has been customarily used. Instead of boosting weakened banks with expanded reserves with the expectation that lending will then be increased, the ECB is injecting money directly into the real (non-financial) economy by purchasing ABS (asset backed securities) and covered bonds. More 'behind the wall'.

  • Abe’s Support Jumps After Boosting Female Ministers in Reshuffle (Isabel Reynolds, Bloomberg) Prime Minister Shinzo Abe gained support in polls following placing a record-breaking five women in his cabinet. One poll has his approval rating at 64% and another has 60%. Previously polls were running just above and just below 50%.
  • Recent articles about Ferguson:

Holder announces Ferguson probe, review of St. Louis County police practices (Kimberly Kindy and Sari Horwitz, The Washington Post) Too bad for St. Louis County police that they are not bankers.

  • Articles about wars elsewhere in the world:

As Islamist Militants Advance, Residents Flee a Nigerian City (Adam Nossiter, The New York Times)

Al Qaeda's new Indian subcontinent branch: What it means for Myanmar (The Interpreter)

UK edges closer to military operations against Isis (Sam Jones, Jim Pickard and George Parker, Financial Times)

Between Gaza and Israel, a Border Crossing in Need of Travelers (Jodi Rudoren, The New York Times)

Somalia offers amnesty to al-Shabab fighters (Al Jazeera)

Libyan Militias Seize Control of Capital as Chaos Rises (David D. Kirkpatrick, The New York Times)

Why Airstrikes In Syria Won't Work (Adam Schiff, The Daily Beast)

Syria May Have Hidden Chemical Arms, U.S. Says (Rick Gladstone, The New York Times)

The Islamic State is forcing the West out of its Iraq war trauma (Anshel Pfeiffer, Haaretz)

Ukraine and rebels back peace plan, ceasefire from Friday (Adrian Croft and Gabriela Baczynska, Reuters)

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

This week we have started a new section "Other Economics and Business Items of Note", the final section every day.

Please support all that we do at Global Economic Intersection with a subscription to our premium content 'behind the wall'.

There are between 75 and 100 articles reviewed most weeks. That is in addition to the 140-160 articles of free content we provide.

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  • An Excellent Time for U.S. Shale Producers (Dave Gonigam, 5 Min. Forecast) More than 1.1 million new jobs were created between 2010 and 2013 in just four states. Almost 14% of employment growth has occurred in four states with 9% of the population.

Click on map for larger image at Agora Financial.

  • It wouldn’t matter if China went into a recession (Adam Carr, China Spectator) Carr write from the point of view of how Australia would be affected and with the thesis that a recession in China is a decline of GDP growth to 6%. Talk about looseness of terminology! Houses and Holes at Macro Business said: "Mad" Adam Carr has entered an enviable zen state (Mad Adam apotheosis!).
  • Negative Response to Draghi (Walter Kurtz, The Daily Shot email, no url) The Euro sank and French bonds went to negative interest for the first time. The market was not very impressed. See also next article.


  • The Dying Russians (Masha Green, The New York Review of Books) The population of Russia has declined by 5% since the end of Communism, mostly due to increased mortality. The author says scientists have yet to explain why Russians are "dying in numbers, and at ages, and of causes never seen in any other country that is not, by any standard definition, at war".


  • I Really Want to Crush the Efficient Market Hypothesis…. (Cullen Roche, Pragmatic Capitalism) Cullen is dismayed by the idealized world of "rational expectations" and "normal distributions". Even the idea of passive investing gives him heartburn since even the purest passive investor makes decisions about what to buy. He says:
The only truly passive index is a portfolio of the global financial assets. And since no such portfolio exists in any realistically applicable manner, you must, by definition, actively choose to pick your assets in some way.
  • ADP: August Payrolls Rise 200k-plus For Fifth Straight Month (James Picerno, The Capital Spectator) James Picerno has contributed to GEI. The markets will get crushed today if the BLS Employment Situation Report does not match the ADP job gains. Another payrolls gain above 200,000 has been assumed and failing to meet the assumption would not be taken well. For details on the ADP report see GEI Analysis.



  • Other Economics and Business Items of Note

Chinese officials are fleeing the public sector for the private sector (China Spectator)

Three Misconceptions About the Economy That Should Die (The Motley Fool)

Could some form of socialist economics make a comeback? (ABC Radio, PM with Mark Colvin)

Government Punishes Savers to Support Debtors – Has Western Society become Fascist? (Martin Armstrong)

Ecuador will be the First Country to Start Digital Currency (Martin Armstrong)

Eurobonds – the Coming Federalization of Europe (Comprehending The True Monetary History of the World)

Modern economics is such junk (Catallaxy Files)

No Such Thing As A Free Lunch: IRS Mulls Tax On Employee Meals (Forbes)

Regulators Propose Rule to Reduce Risk of Derivatives (The New York Times)

How stolen credit cards are fenced on the Dark Web (USA Today)

Regulators Propose Rule to Reduce Risk of Derivatives (The New York Times)

California's Largest Utility Receives Largest Fine In History Of California Utilities (Forbes)

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