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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Senate Cuts Deal To Pass Obama's Secretive Trade Bills (Huffington Post) Senate Majority Leader Mitch McConnell (R-Ky.) announced Wednesday afternoon that leaders had found a way around the impasse blocking a vote on trade treaty authority for the president by agreeing to let Democrats have votes on key trade enforcement measures before holding votes on the fast-track authority that Obama needs to finish new massive trade deals with Pacific Rim countries and Europe.
Articles about events, conflicts and disease around the world
Saudis claim their oil squeeze is working (Financial Times) Saudi Arabia says its strategy of squeezing high-cost rivals (U.S. shale, Russian suppliers and global deep water drilling) is succeeding, as the world’s largest crude exporter seeks to reassert itself as the dominant force in the global oil market. Saudis' production rose to a record high of 10.3 million barrels a day in April and there is no sign that it plans to reverse its policy at next month’s meeting of OPEC, the producers’ cartel, in Vienna. The Saudis also said that the bottom was in for oil prices. Econintersect: The "success" has managed to hold U.S. oil production down to 9.4 million barrels a day. See second and third articles below. Is this Saudi Arabia's "Mission Accomplished" moment?
U.S. oil production is declining at a faster pace (Financial Post) Investors looking for a bullish case for oil will likely be pleased to hear that the downtrend in U.S. oil production is accelerating. A new forecast from the U.S. Energy Information Administration calls for crude oil production from new wells to dip to 263,000 barrels per day (bpd) in June — the lowest level in two years. This article reports an EIA estimate of 86,000 barrels a day decline in June. See next article.
U.S. Oil Production (U.S. Energy Information Agency) Data through 08 May 2015 shows U.S. production at 9.37 million barrels a day, down from a peak of 9.42 the week of 20 March 2015. A further decline of 86,000 barrels a day in June (see previous article) would reduce production to 9.28 million barrels a day. See next article.
Short-term Eergy Outlook (U.S. Energy Information Agency) Report dated 12 May 2015. U.S. production of crude oil and other liquids is projected to continue to rise through 2016, reducing imports from 26% of consumption in 2014 to 21% in 2016.
Reports: Amtrak Train Was Speeding (The Daily Beast) Black box data reportedly indicates the train was traveling above 100 mph on a curve with a limit of 50 mph. See also House Cuts Amtrak Funding, reporting the Republican leadership on the House Appropriations committee has proposed a cut of 19% for Amtrak from 2014 levels. Democrats have been rejected in attempts to maintain the same level of funding. A GOP representative accused the Dems of "using the tragedy for political purposes".
Where is the seventh Celtic nation? (BBC News) Galicia, a region of 3 million people in northwestern Spain is believed to be a seventh ancient Celtic nation (joining Ireland, Scotland, Isle of Man, Cornwall, Wales and Brittany).
Putin May Have 10,000 Troops in E. Ukraine, Opposition Says (Bloomberg) A report by assassinated opposition leader Boris Nemtsov (shot in front of Kremlin 27 February) charges Russia has 8,000 to 10,000 soldiers in eastern Ukraine. It also says that rebel troop numbers may have reached 37,000 and that Moscow has spent $1 billion in support of the insurgency. The report has been released by opposition activist Ilya Yashin, who participated in completing the research following Nemtsov's death.
Rethinking Financial Deepening: Stability and Growth in Emerging Markets (IMF) This IMF study says the size of the financial sector in advanced economies is too large. The study proposes that a Financial Development Index (FD), which measures the extent of financial development, has a bell shaped function between economic growth and financial system size: There is a too small region, a just right region and a too big region.
The Rise of Extreme Poverty in the United States (H. Luke Shaefer and Kathryn Edin, Stanford University) Since welfare reform in 1996 the number of adults on welfare has declined by more than 75%. But the number of households with children subsisting on less than $2 per day per individual has increased by more than 150%, now totalling more than 1.6 million households (2011 data) and including more than 3.5 million children.
The number of adults on welfare has dropped dramatically since its reform in 1996. As of 2011, a little over 1 million adults remained on the welfare rolls in a typical month, down from about 4.6 million at the program’s peak in the early 1990s. As these numbers plummeted, the number of single mothers joining the workforce or returning to it grew at rates that were largely unexpected. For these reasons, welfare reform has been touted as a success.
At the same time, in the years since 1996, a new group of American poor has emerged: families with children who are living on virtually no income—$2 or less per person per day in a given month. These are America’s “extreme poor.” The U.S. official poverty line for a family of three would equate to roughly $17 per person per day. What scholars call “deep poverty”—incomes at less than half the poverty line—is about $8.50 per person per day, over four times higher than our cutoff. This new group of American poor, the extreme poor, are likely experiencing a level of destitution not captured in prior poverty measures, one that few of us knew even existed in such a rich country.
Figure 1 plots estimates from our baseline measure in red. It plots the number of households with non-elderly heads and minor children living in extreme poverty between 1996 and 2011.3 The breaks in the lines represent breaks between SIPP panels. This figure shows that the number of households living on $2 or less in cash income per person per day in a given month increased from about 636,000 in 1996 to about 1.65 million in mid-2011, a growth of 159.1 percent. In mid-2011 about 3.55 million children lived in extreme poverty in a given month.
Food-Stamp Use Is Now the Lowest Since 2011 (Kathleen Madigan, The Wall Street Journal) It's partly because of an improving economy and partly because of more stringent requirements, especially for childless adults. For context, see next article.
Food Stamps Charts (Matt Trivisonno's Blog) The changes in the preceding article are in the noise.
Dow (Inflation-Adjusted) (Chart of the Day) Below is a graphic from Chart of the Day, followed by an annotated version for those who believe in long-term reversion to the mean. Any predictions about what the next 20 years might hold for the Dow? To answer that question you will have to decide if the pre- or post-World War II chart pattern will apply. Or will there be a completely different pattern possible that was not seen in the 20th century?
Other Economics and Business Items of Note and Miscellanea
30 Best Paying College Majors: 2015 (ThinkAdvisor) Number 1 (top paying jobs) is Petroleum Engineering (starting salary $102,300). #30 is Applied Mathematics (starting slary is $54,300). For what's in between click on the title.
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