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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.
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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Dollar strength weighs on Fed rate-setters (Sam Fleming, Financial Times) The rapid climb of the U.S. dollar is reflective of two things: (1) the perceived strength of the U.S. economy and (2) the race to devalue among other major currencies. The dollar's rise has hurt foreign earnings at major multinationals like Apple, IBM and Procter & Gamble and is driving up the cost of the country’s exports, worsening America’s trade balance. (See graph below.) But the decline in the growth rate for U.S. export trade occurred while there was a relatively slow appreciation for the currency (up a very few percent from the beginning of 2011 to the end of 2013. By comparison the growth in value of U.S. exports was impacted to a lesser extent as the dollar shot up in the second half of 2014. If the appreciation of the dollar continues (which is very likely should the Fed raise interest rates the already low growth rate for exports could turn negative. This is one of the factors that could give pause at the Fed during interest rate discussions.
Articles about events, conflicts and disease around the world
Utilities wage campaign against rooftop solar (Joby Warrick, The Washington Post, 07 March 2015) Hat tip to Doomstead Diner via Twitter. Utility executives are worried about a grave new threat totheir business: "... not superstorms or cyberattacks, but rooftop solar panels." And utilities are taking, or have taken, action in at least 24 states to stop the threat. One of the attack points has been to try to make net metering (see infographic below) so expensive that home owners will not be able to afford it. The reason is that in many parts of the country the cost of solar electricity is less than that delivered by the grid, and in some areas much cheaper than the grid rate. Projections have been made that solar still has a steep cost curve in front of it and in 10-20 years may have as little as 20% of today's cost. Econintersect: The Luddite utilities are following a losing path. They should instead be building solar farms as fast as they can.
China Restructuring (Walter Kurtz, The Daily Shot) Kurtz has a set of graphs that show the rapid slowdown of Chinese growth over the past three years, ranging from declines of 35% to 50%:
China’s New Normal Means More Jobs in U.S., Good News for Yellen (Rich Miller, Bloomberg Business) The author maintains that the slowdown in China and the reduced level of omports to the U.S. from China is good news for American workers. The implication is that jobs will return from China to the U.S. Econontersect suggests instead, in many cases, they may move to Vietnam, Philippinea, Malaysia, Indonesia, etc. etc.
Surprise: U.S. Economic Data Have Been the World's Most Disappointing (Steve Matthews and A. Catarina Saraiva, Bloomberg Business) When the Bloomberg U.S. Economic Surprise Index is high it's a good thing. It means that economic news is surprising on the high side, things are better than expected. And when it's low? You're right, the news is percieved as disappointing. The index just moved to a point last seen in the Great Depression. To be more exact, about the time the Great Recession was determined (about a year after the fact) to have ended. What does this mean? All other dips coming close to this point (there have been six others) of course recovered and life went on. So will that happen again? Stay tuned - the alternative is to keep getting negative surprises and revisiting the dispair of the first quarter 2009.
Other Economics and Business Items of Note and Miscellanea
Women in the Muslim world taking the fast track to change (McKinsey) There is still an equality gap for the 800 million Muslim women worldwide, but the rates of education and employment for some have increased dramatically in a short span of time.
The Fed Impedes GAO Audits by Destroying Source Documents (Naked Capitalism)
One of the Hottest Get-Rich-Quick Trades Is Banned in the U.S. (Bloomberg Business) Also illegal in Brazil, but allowed most other countries, although with strict regulation in many.
Western corn rootworm is getting the EPA's attention (CNBC) Insects are evolving too fast for Monasanto.
Note To Reporters: You Cannot Analyse A Sovereign Like A Corporation (Bond Economics) Hat tip to Art Patten.
American Mystery Story: Consumers Aren't Spending Even In a Booming Job Market (Bloomberg Business) See latest detailed analysis of retail sales at GEI.
Investigation: Army substance-abuse program in disarray (USA Today) Army drug clinics turned away thousands because priority was to "fill slots" and "get reports in on time" rather than to provide effective treatment.
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