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.
Obama's biggest economic policy mistake (Matthew Yglesias, Vox) Yglesias says it is the "systematic neglect of the Federal Reserve and of his ability to influence its course of action". This article is very much worth a careful read.
Millionaires who don’t have any money face having to work to 70 (Andrew Allentuck, Financial Post) Being house poor is one reason. Having debts is another. If someone has a residence worth $750,000 that costs $15,000 a year for taxes, insurance, heat, utilities and maintenance and debt service and repayment that costs $10,000 a year, an additional $250,000 invested for retirement can provide $10,000 a year (4% rule). In the article the couple case study in their 60's can receive approximately $30,000 in Canada Pension Plan benefits plus indexed work indexed work pension and Old Age Security benefits. The case study has them just barely making ends meet it they stop working at age 67. Their situation can be improved by downsizing to a cheaper home or a rental. But they also can keep on working to 70 and beyond to increase savings and reduce debt. Being a millionaire ain't what it used to be.
Recent articles about Scotland Independence Vote :
Fed's Fisher: wages rise when joblessness drops below 6.1 percent (Ann Saphir, Reuters) Research by the Dallas Fed staff indicates that wage inflation is starting in Texas and will spread nationally as the unemployment rate drops below the current level of 6.1%. The analysis used data from 1983 through 2013. Econintersect: We look forward to reviewing the work. How did they account for the slack resulting from the falling participation rate?
Euro carry trade the new 'Bernanke put' (Solomon Teague, Euromoney) The euro could be joining the yen as the currencies of preference for funding international financing. Ultra low interest rates make borrowing the euro or the yen for investment in assets denominated in other currencies very attractive. The combination of lower rates for borrowing and the probability of faster devaluation vs. other currencies can create huge profits.
Gold / Silver / Copper futures - weekly outlook: September 22 - 26 (Investing.com) Gold has dropped close to a persistent support level. Look for another bounce up toward 1300 or a break to the downside which could go all the way to the next support level around 1080. If you place any bets here keep tight stop loss control. A move in either direction could be sudden. Note: a break to the downside must be given a higher probability because the descending flag pattern is generally bearish. Later this week we will review copper and silver. There will be further discussion of descending flag patterns then.
In Praise of China’s New Normal (Yoa Yang, Project Syndicate) Yang thinks that China's New Normal has arrived (7% to 7.5% growth) and that rebalancing will occur without the 6% to 7% growth rates economists he quotes are forecasting. The author is Dean of the National School of Development and Director of the China Center for Economic Research at Peking University. He doesn't mention Michael Pettis, GEI contributor and University of Beijing professor, who says rebalancing will require GDP growth rates to get as low as 3%.
Can the Australian Dollar Hold on to Record Gains? (Adam Kritzer, Forex Blog) This is a 2011 article. When the Aussie was above $1 U.S. Kritzer opined it couldn't last. Note that the decline to $0.73 would put the Aussie right in the middle of the range it traded for 22 years, from 1985 through 2006.
China's job market said 'severe', finding work difficult - survey (Victoria Ruan, South China Morning Post) Sentiment regarding employment in China has degraded according to a survey taken by the PBoC (Peoples' Bank of China). In the third-quarter survey carried out with urban depositors, 42.8% of residents believe the job market faces "a severe situation" while finding jobs is difficult, with some feeling the prospects are "uncertain". Only 12.9% feel the employment situation is good and finding a job is easy, while 44.3% think it is just "so, so".
The College Illusion (Lynn O'Shaughnessy, Wealth Management) Is college worth it? Look at the stats for the Class of 2009 five years after graduation:
Other Economics and Business Items of Note and Miscellanea
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