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What We Read Today 11 March 2015

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.

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).

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Greek government presses social security funds to hand over cash (Kerin Hope and Peter Spiegel, Financial Times)  Pension and welfare funds in Greece are opposing the government request for use of their cash accounts to get the country through its cash flow  crisis in March causeed in part by even more Greeks not paying taxes owed in January.  More on the Greek debt cirsis in the discussion section later below.


Greek talks with creditors finally to start (Peter Spiegel, Financial Times)  Talks started today in Brussels after two weeks of stalling.  The following video made in late February asks:  "What happened to European solidarity?"


Articles about events, conflicts and disease around the world

U.S.

EU

Greece

Italy

Iran

Ukraine

Russia

China

Japan

Australia

Venezuela



The pace of US job creation hasn't been this good in 15 years (Business Insider) For the 12 months ending February 2915 3.3 million were added to the ranks of the employed.  The last time that happened was in March 2000.  Econintersect note:  Someone at Business Insider "clipped" the final zeros from the rhs vertical axis and no one else noticed (apparently).


Evolution of the Jobs Gap, December 2007 - December 2018 (The Hamilton Project, Twitter)  Absent a recession the rojection now is that the employment level from before the Great Recession will be equaled some time between mid-2016 and mid-2017.


 

Stock Buybacks: Misunderstood, Misanalyzed and Misdiagnosed (Asath Damodaran, AAII)  Membership required.  This is a comprehensive and non-judgemental analysis of the mechanics and affects of stock buybacks which can have both opositive and negative results on the value and future of a company.  There are good comments following the article, including this one from Carl Lemp from CT:

With the current generation of top managers getting a good portion of their compensation in the form of stock options, stock buy backs serve to reward them along with all stock holders by helping hold up the stock price.

Looking at the top 10 list, one big pattern jumps out. They are all companies that were previously successful and generated piles of cash. So, the big downside of stock buy backs is that they reward the current management even though the best idea these management teams can come up with for using the pile of cash left by the previous generations of management is...stock buy backs. Instead of being rewarded for growing the companies, they are being rewarded for shrinking them. It is a short-term strategy for holding up the stock price that will only last as long as the pile of cash left by previous generations that grew the company in the first place.

Disclosure:  The Econintersect Managiing Editor is a Life Member of AAII.

stock.buybacks


 

Greek government presses social security funds to hand over cash (Financial Times)  Greece has a severe cash flow crunch right now.  Tax revenues for January fell "sharply" and "unexpectredly" in the face of the largest single month debt repayment month of the year in March.  (See graph below.)  From the Financial Times:

Yanis Varoufakis, the finance minister, insists Greece has enough cash to meet its debt obligations this month, while at the same time warning that payments to government suppliers and refunds of value added tax may be suspended because of the cash crunch.

But, according to another senior official, the government needs to rake in an extra €1.5bn by the end of March to avoid delaying some wage and pension payments.

The Social Security fund has as much as €2 billion in cash on hand.  The months on March, April and may will be especially challenging for Greece as more than 40% of the remaining debt payments for the remainder of the year are due then.  Almost 17% is due this month.

greece.debt.payments.2015.mar.dec


Other Economics and Business Items of Note and Miscellanea

Did lower oil prices help the economy at all? (CNBC)  Hat tip to Marvin Clark.  U.S. households "don't appear to be spending the oil largesse just yet."

Message to Congress on Curbing Monopolies. (FDR, 29 April 1938)  Hat tip to Roger Erickson.

Why Paul Krugman is wrong to oppose the Trans-Pacific Partnership (Marginal Revolution)  Tyler Cowen weighs in.

The Debate Over the Trans-Pacific Partnership: Focus (Washington Center for Equitable Growth)  Brad DeLong weighs in.

TPP at the NABE (Paul Krugman, The New York Times)  And this is what Cowen and DeLong (above) are talking about.

Housing's new worry: Repeat foreclosures return (CNBC)  Repeat foreclosures are those for parties who left the foreclosure process previously with some workout agreement.  These were higher in January than the same month a year ago, for the first time in over two years.

Dead Wrong: As Florida Bans 'Climate Change,' Warming Kills Mummies (U.S. News & World Report)  A state expected to lose up to 25% of its land to rising sea levels over the next 100 - 200 years, Florida's Department of Environmental Protection has under orders the past four years not to use the terms “climate change” and “global warming” in official communications.  In the Andes 7,000 year old mummies are starting to decay as hunidity rises.


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