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What We Read Today 23 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.

  • Government ups air bag warning to 7.8M vehicles (Tom Krisher, Associated Press, MSN Autos) The government has raised the number of autos which might contain the Takata Corp airbags that can discharge shrapnel when deployed. Originally 4.7 million vehicles were identified; the number is now 7.8 million. Safety advocates say more than 20 million autos may be affected. The National Highway Traffic Safety Administration (NHTSA) website has been malfunctioning Tuesday and Wednesday so car owners should go to their manufacturer's web site to try to find information.

  • Water Crisis Seen Worsening as Sao Paulo Nears ‘Collapse’ (Vanessa Dezem, Bloomberg) Brazil's largest metropolis and largest state, Sao Paulo, is experiencing the most severe drought in eight decades. The region is home to more than 40 million people and produces about 1/3 of Brazil's GDP. Spokesmen are now using words like "collapse" when discussing the effects of the drought.
  • Canada PM Calls Parliament Shooting a 'Terrorist' Act (Jon Williams, Jack Date, Lee Ferran and Meghan Keneally, abc News) Hat tip to Rob Carter. This is being investigated as a suspected ISIS act. Experts are saying it represents the first act of what may be a global ISIS campaign.
  • Recent articles about Scotland Independence and Similar Movements

Scotland’s main parties to discuss further devolution at Smith commission (The Guardian)

Devo max in Scotland would be disastrous for Northern Ireland and Wales (The Conversation)

Scottish government calls for maximum devolution Post-referendum proposals submitted to Smith commission stop just short of what would have been achieved by independence (The Guardian)

Why does Catalonia want independence from Spain? (The Telegraph)

  • Articles about conflicts and disease around the world


Ebola quarantining could impinge on US civil liberties (Al Jazeera)

Fears of Islamic State using Ebola in the US are an absurd and cynical distraction (The Conversation)

Doctors: CDC's New Ebola Tracking Plan Is Political Theater (Foreign Policy)

WHO: Experimental Ebola vaccines could come to West Africa by January (Al Jazeera)


Somaliland inspired by Scotland and Catalonia independence campaigns (The Guardian)


Syria conflict: '200 air force strikes' in 36 hours (BBC News)

Isis claims it has US airdrop of weapons intended for Kurds (The Guardian)

Man arrested on suspicion of attending Syrian terrorist training camp (The Telegraph)


US jury convicts Blackwater guards in 2007 killing of Iraqi civilians (The Guardian)

Blackwater Founder Remains Free and Rich While His Former Employees Go Down on Murder Charges (The Intercept) Hat tip to Roger Erickson.

Iraqi Kurds to send forces to Syria's Kobane Kurdish authorities agree to send Peshmerga fighters to northern Syrian town to fight ISIL after Turkey allows passage. (Al Jazeera)


Ukraine crisis: Separatists plan breakaway elections (BBC News)

Ukraine rebels dream of New Russia (BBC News)

Mud and Loathing on Russia-Ukraine Border (Bloomberg)


Should America worry about a China-Russia axis? (CNBC)

Russia’s borders: old ties pull Bulgaria in two directions (The Conversation)

Russia calls Europe's bluff on Ukraine gas deal (Fortune)

North Korea

North Korean detainee reunites with family in Ohio (Associated Press, MSN News)

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

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  • Crude Settling Down to $80 (Walter Kurtz, The Daily Shot email, no url) How long can oil stay at these prices before the energy boom contribution to the growing U.S. economy starts shutting down?


  • China’s outbound investment set to eclipse inbound for first time (Jamil Anderlini, Financial Times) China is expected to have outbound direct investment exceed $130 billion in 2014, up from $108 billion in 2013. This increase has occurred in spite of the Chinese government crackdown on corruption which has been one process for money to leave the country. In fact the crackdown was so effective that the outbound investment in the first half of 2014 was actually lower than the previous year. Obviously things have picked up in the third quarter and are expected to continue to do so to year-end. The inbound investment money totaled $118 billion in 2013, $10 billion more than the outbound investments. This year inbound investments are not expected to get as high as $130 billion which will make the first time in history that capital outflows have exceeded inflows. This event marks the coming of age of China as a global financier, just at a time when their production and domestic investment oriented economy of the past is slowing down. It is all part of the rebalancing that the country will be going through over the next decade. See also next article.


  • How China's richest will fund Australian innovation (Peter Cai, China Spectator) Australia has been one of the destinations for Chinese capital as wealthy Chinese seek to establish residency there. A common target for these funds has been government treasury securities and residential real estate investments. Since the so-called investor visa program was instituted in November 2012 about $2 billion has been brought into Australia from China as part of the program. After four years of residency the newcomer is eligible for citizenship and, when that is granted, the investments can be sold and the assets moved anywhere in the world. The money has done little to develop the Australian economy during the four years and obviously it will do nothing if it leaves later. The government's new plan is to require such investor visa program assets to be invested in venture capital and small cap stocks where it can better contribute to growth in Australia.
  • Li upbeat despite economic slowdown (Zheng Yangpeng and Li Xiaokun, China Daily) Li Keqiang, Premiere of China, is happy with his country's economic performance, making statements that include "within a reasonable range" and "positive and profound changes". Li attended a meeting of the Asia-Pacific Economic Conference (APRC) where he commented on China's progress in rebalancing its economy for the future. For latest GDP data and discussion see China: GDP Keeps Slowing but Very Gradually (GEI News).
  • China to Let World in on Gauge Showing State of Economy (Xiaoqing Pi, Bloomberg) It is estimated that there are about 200 million migrant workers in China who are not included in the employment market reports published quarterly. However, the government has had a measurement for these "shadow" workers which has been used to help plan the addition or removal of economic stimulus programs. It is believed that this broader measure of employment has been showing a higher unemployment rate than the official 4.08%. We should soon know exactly what it is because the government is planning to make public the data and the methodology (based on guidance from the International Labour Organization.
  • No hard-landing for China's economy for now (Walter Kurtz, Sober Look) Growth is now at the lowest rate since the Great recession in 2009 but at this point no collapse of the Chinese economy seems in the offing. The forecast sharp drop in GDP (Bloomberg) did not occur in the third quarter as GDP growth contracted by only 0.1%. See GEI News for GDP details and also for the latest Manufacturing PMI just out.


  • Apple's Mac Surge: 4 Observations (Michael Endler, Information Week) Perhaps the biggest surprise last quarter was the best ever Mac sales. The desk top units, rumored to be dinosaurs, soared like modern eagles to displace iPads as number two for sales, behind the massive iPhone sales. And Endler says 2015 should be even stronger for Apple, which is firing on all cylinders.
  • Gap between wages and rents continues to grow (Walter Kurtz, Sober Look) How much longer can the building boom in multi-family housing continue? Rent is growing 50% faster than is income. Many Americans can't afford to buy a home and now a growing number won't be able to afford to rent. The era of declining median income must end or U.S. economic growth will end.


  • Other Economics and Business Items of Note and Miscellanea

The Money Midterms: A Scandal in Slow Motion (The New Yorker)

Pound falls after Bank of England minutes released (BBC News)

Japan’s Shinzo Abe will struggle to recover from ministerial scandal (The Conversation)

Why Was the NSA Chief Playing the Market? Newly released documents show the NSA chief was investing his money in commodities so obscure that most financial pros stay away. (Foreign Policy)

Judging the Right to Vote (The New Yorker)

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