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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.
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LinkedIn's billionaire founder shares his best networking advice (Richard Feloni, Business Insider)
LinkedIn co-founder and chairman Reid Hoffman believes it is not as important what you know as it is who you know and what they know. This is the power and value of networking which Hoffman explains in a 48-slide presentation.
Articles about events, conflicts and disease around the world
Econintersect: Is there any difference between "bipartisan" and "mostly partisan"? In the House 85% of Democrats did not vote for this and for the Senate 80% of Democrats did not support. Republicans voting against: in the House none and the Senate one.
A Stock Market Alarm Is Sounding for the First Time Since 2007 (Anthony Mihaydari, The Fiscal Times) Hat tip to Rob Carter. The alarm Mihaydari refers to is the high positive investor sentiment which is often a good contrary indicator. But there is a more important factor presented: The broad NYSE Composite index has repeatedly bumped up against the 11,100 level and has thrice been repelled. Currently it is coming up against the "ceiling" for the fourth time. Does this look like a possible topping pattern to you?
What are the effects of not expanding Medicaid? (Jeremy Barofsky, Brookings) For the 22 states which refused expanded Medicaid, coverage has increased by 7% over the last year. For the 38 states plus the District of Columbia which have expanded medicaid coverage has increased by more than 25%. For Kentucky Medicaid coverage increased by 70% in 2014. For the states which did not expand medicaid this article says:
A study of the Medicaid program in one of the states that did expand Medicaid found significant long-term benefit for that state:
Also mentioned in this article is an analysis that found that increased incomes because of better health outcomes actually increase tax revenues enough to approximately pay for the additional health care.
The perils of internationalising the Chinese yuan (Peter Cai, China Spectator) Given China’s current economic and financial instability, any attempt to suddenly throw open capital account controls in order to internationalise the currency is foolhardy. Right now Cai says a major risk for China is capital outflows as the government cracks down on corruption. These outflows have been rising significantly as we have discussed here recently. Cai's conclusion:
Market expectations of the first Fed rate hike seem unrealistic (Walter Kurtz, Sober Look) Fed Funds futures continue to point to the first Fed rate hike in late Q3/early Q4 of 2015. The debate is now focused on whether this timing is unrealistic. To be sure, whether we have a hike in September of 2015 or in January of 2016 will have little direct impact on near-term growth. But could an earlier hike exacerbate disinfaltionary pressures in the United States and globally? Or is weakness in inflation a fleeting thing to be gone once oil prices start to rise and hold higher prices again? At any rate here is a graph showing implied expectations.
Fitch: Danish Krone Peg Defence Looks Credible, But Has Risks (Reuters) The defense of the peg of the Danish krone ot the euro involves a steep negative interest rate on CDs. Here is an excerpt from a note from Fitch Ratings:
Reuters points out that if the peg were abandoned a sharp appreciation of the krone would occur, along the lines experienced by the Swiss franc which appreciated 15% immediately upon abandoning the euro link. It seems that some people may be betting that a decoupling is imminent - see next article.
The Daily Shot February 22, 2015 (Walter Kurtz) Referring to previous article, it appears that some are betting the Danish krone will be decoupled from its pin to the euro soon. Why else would the flow into Danish CDs be occurring when the interest rate is minus 0.75%? When the Swiss franc decoupled from the euro it appreciated 15% overnight.
Check that number again - people buying Danish CDs are paying the banks 75 basis points a year for the privelege of letting the banks hold their money. That is several times the Bullion Vault storage fee (including insurance) for gold bullion, which is 0.12% per annum. These are indeed interesting times in which we live.
Just one graph: Growth in Real Average Income for the Bottom 90%, 1950-2013 (Dirk Ehnts) Dirk is a regular contributor to GEI. This is from the Economic Report of the President, 2015.
Other Economics and Business Items of Note and Miscellanea
Knock-Off Economics (U.S. News & World Report) A jab at Republicans. Could have done a similar one for Democrats.
The wealthy are walling themselves off in cities increasingly segregated by class (The Washingtom Post)
The Bank of England Dove Hunt Is On (The Wall Street Journal)
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