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What We Read Today 08 October 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.

  • Wal-Mart to stop healthcare benefits for some part-time workers (Siddharth Cavale, Reuters) Wal-Mart will discontinue health care benefits for approximately 2% of its workers who work less than 30 hours a week, effective 01 January 2015. That date is when ACA (Affordable Care Act, aka Obamacare) will require all companies with 50 or more employees to offer health insurance for all employees working 30 hours or more a week.

Under the law, employees working less than 30 hours a week and receiving insurance through an employer would not be eligible for government subsidies available (based on income) through the government exchanges. Other companies which have already made the move for part-timers include Target,Home Depot and United Parcel Service. They were formerly among the 24% of corporations that offered health insurance to part-time employees.

The change at Wal-Mart will impact about 30,000 employees who will now be able to get insurance through an ACA exchange. These employees are currently getting more than 75% of their health insurance premium paid by Wal-Mart. The extent of premium subsidies from the government will vary with income. Read also Wal-Mart to End Health Insurance for Some Part-Time Employees (Shelly Banjo and Stephanie Armour, The Wall Street Journal).

Click for different map size options at Al Jazeera.

  • Recent articles about Scotland Independence and Similar Movements

Could the Scottish National Party join the next UK government? (The Conversation)

  • Articles about conflicts and disease around the world

Hong Kong protests: Talks scheduled as crowds shrink and frustration rises (CNN World)

Turkey treads the tightrope on ISIL, egged on by Washington (Al Jazeera)

Turkey stuck at a crossroads as Islamic State terrorises Kobane (The Conversation)

Turkey asks a steep price to back Syrian Kurds in fight against ISIL (Al Jazeera)

ISIL pushes into Kobane, sending Syrian Kurds fleeing for safety (Al Jazeera)

ISIS mission: Divided, uncertain Canada edges gingerly into Iraq (CBC News)

Pro-Russia separatists target key assets in eastern Ukraine (Los Angeles Times)

Poland warns Russia it could face tougher EU sanctions over Ukraine (Reuters)

Russian companies face credit crunch danger (Financial Times)

India and Pakistan Trade Blame in Kashmir Deaths (The New York Times)

If India and Pakistan Went to War: 5 Weapons Pakistan Should Fear (The National Interest)

Pakistan's suicidal desperation: Modi-led India rising evoke LoC attacks (FirstPost.India)

There are 11 articles discussed today 'behind the wall'.

Do not miss "Other Economics and Business Items of Note", the final section every day.

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  • U.S. Job Market Disconnect (Walter Kurtz, The Daily Shot e-mail, no url) Kurtz provides macro-evidence of structural problems in the U.S. labor market: Graph 1, Job openings at a 12-year high; Graph 2, average duration of unemployment at highs never seen (at least since the data has been kept starting in 1948); and Graph 3 showing the remarkable shift in the relationship between jobs openings and average duration of unemployment. See also Labor supply/demand imbalance in the United States.




  • China uncovers US$10b in fake trades (Kwong Man-ki, South China Morning Post) When GEI News reviews the monthly trade balance data reported for China we always caution that not all the trade may be real. This article reports that $10 billion in fake invoices have been uncovered in China that mask the transfer of money but not of goods. This amount is only about 5% of the average monthly exports China has been reporting so it is not of major significance ... unless it is only a small fraction of the fake invoices that actually exist undetected.
"Without the forcing mechanisms of competition, entry, and choice, monopolies slowly but surely gravitate to serving themselves, not their customers".
  • IMF sees risk of new eurozone recession (Chris Giles, Financial Times) The International Monetary Fund (IMF) has raised the estimate of recession probability significantly over the past six months. Europe has nearly a 40% chance of going into recession between now and the end of June 2015. If it happened it would be the third since the start of the Great Financial Crisis almost 7 years ago.


  • Banks rewrite derivatives rules to cope with future crisis (Tom Braithwaite and Tracy Alloway, Financial Times) One of the problems hanging over the financial system has been the retained right of derivative counterparties to "pull the plug" on derivatives contracts in a financial crisis. Since the derivatives universe is a $700 trillion market, this has been a recipe for system collapse. The agreement to abandon this practice will improve the situation for banks' crisis planning which has been criticized when reviewed by the Federal reserve. Of course, this doesn't answer the question of why a $65 trillion global economy need $700 trillion in derivatives to begin with.
  • Geithner Testifies in AIG Bailout Suit (Damian Paletta and Leslie Scism, The Wall Street Journal) Geithner testified that the settlement terms arranged by the government between AIG and banking counterparties for derivatives held by AIG were necessary to save the global financial system. The former New York Fed chief, who later became U.S. Secretary of the Treasury, conceded he once said the government’s rescue ‘wiped out’ AIG shareholders. The suit has been brought by former AIG shareholders who claim that the losses on those derivatives were all forced onto AIG instead of being shared with the banks involved.


  • Pension fund slashes Pimco investment (Stephen Foley and Mamta Badkar, Financial Times) Florida state pension funds will pull much of their $2.9 billion investments with PIMCO funds. This will add to outflows experienced by that management company, headed by $23.5 billion leaving just one fund, PIMCO Total Return, just in the month of September. PIMCO co-founder and Total Return fund manager William Gross resigned abruptly from PIMCO on 26 September.



  • Other Economics and Business Items of Note and Miscellanea

Obama the victim as officials rush into print before sell-by date (Financial Times)

The Earliest Group Of Modern Humans To Branch Off Survived Until Just 2,300 Years Ago (Business Insider) Hat tip to Doomstead Diner (via Twitter).

Your phone screen just won the Nobel Prize in physics (The Conversation)

Why Growing More Food Won't Stop Hunger (JSTOR Daily)

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