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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Articles about events, conflicts and disease around the world
USA 1, FIFA 0: Sepp Blatter to Quit (The Daily Beast) Days after winning a fifth term, the godfather of soccer said he could no longer withstand the scandal that gets closer to him every day.
Odds of Qatar Hosting the World Cup Slashed After Blatter's Resignation (Bloomberg Business) Qatar’s plan to host the 2022 World Cup might be in jeopardy after the head of soccer’s international governing body, Joseph “Sepp” Blatter, said he would resign. Econintersect: There appears to be little talk of jeopardy for Russia's 2018 World Cup, although both 2018 and 2022 selections are under investigation for corruption.
"I would like to normalize (rates) as soon as possible ... but the conditions haven't been right. In some sense when we start raising rates that's good news. ... I’m worried about what's happening in Europe. It would be nice if they came to a conclusion over what's happening in Greece.”
31/5/15: IMF slashes Ukraine Economy Outlook (Constantin Gurdgiev, true economics) CG contributes to GEI. Post presents IMF press release and adds brief comments. The forecast is ugly: -9% GDP growth for 2015 and 46% inflation for the year.
Indian factory growth accelerates in May, strong domestic demand-PMI (The Economic Times) Manufacturing sector grew at its fastest pace in four months in May on improved domestic demand, even as input costs remained high and firms adopted a cautious approach on hiring. The headline HSBC India Purchasing Managers' Index (PMI), compiled by Markit, surged to 52.6 in May, from 51.3 in April, with levels of production and new orders rising at the fastest rates since January 2015.
China signs biggest free trade deal with S Korea (China Daily) This the largest bilateral FTA (free trade agreement) deal for China in terms of volume, abolishing tariffs on 9% of all South Korean products within 20 years, while South Korea will eliminate tariffs on 92% of all goods from China.
Consensus falls toward Keen’s view (IDEA Outllook 2015) When IDEA published Steve Keen’s 2015 Global Economic Outlook in January, its predictions were well outside the consensus. Today, only five months later, the gap has substantially closed, without revising the outlook. Indeed, we witnessed a remarkable revision to the consensus Q1 US GDP forecasts, when they came down dramatically in April, after the quarter had closed, forecasting the past. Now in May we see America "turning Japanese" as predicted in January,with a slow first half of the year and a projection for a darker second half. Econintersect: China, Japan and the Eurozone are also discussed with excellent graphs. For here we have reproduced the two following for the U.S. and Japan:
The 20 Hottest U.S. Real Estate Markets in May 2015 (Cicely Wedgeworth, realtor.com) The housing market is chugging ahead, with even higher home prices and more buyer activity—and in May, we’re seeing more than the ordinary seasonal uptick. Econintersect: See the latest from Keith Jurow later this week (GEI Analysis) with data showing that the housing market is in trouble once one leaves the hot markets.
Grab The Reins On The Dollar (The Inflation Trader, Seeking Alpha) The author is not a dollar bull and offers reasons why hr thinks U.S. debt is about to increase further which would weigh against the dollar. Econintersect: We have annotated the Bloomberg chart for the U.S. Dollar Index from the article which emphasizes the 30+ year downtrend and illustrates that we are at a juncture where the resistance level for that trend is challenged. Strengthening of the index above 100 would define a clear change in the long-term trend. The author of the article does not expect that to happen:
I have been surprised by the dollar's rally, but unless something changes in a more serious way I don't expect the rally to end up resembling the two prior periods of extended dollar strength.
Other Economics and Business Items of Note and Miscellanea
Poisoning the Democratic Well (CounterPunch) Opponents of so-called free trade deals have always struggled with the question of why these international treaties don’t generate more alarm and vocal opposition from Canadians. These treaties, after all, trump all other Canadian authority to make laws — provincial legislatures, Parliament, the courts and even the Constitution. If, instead of being bored by news of another ho-hum “trade deal,” Canadians were told that a panel of three international trade lawyers would be reviewing all new laws and determining, in secret, which ones passed muster by meeting with the approval of their giant corporate clients, would they react differently? Econintersect: This gives an entirely new consideration for the term "corporate governance".
The Lie Factory(The New Yorker) Don't miss this, subtitled "How politics became a business." The business of generating lies (otherwise known as political consulting, got its start in 1933 in a campaign to stop the candidacy of novelist Upton Sinclair for Governor of California and now "rules the world".
Inside the war on coal (Politico) How Mike Bloomberg, red-state businesses, and a lot of Midwestern lawyers are changing American energy faster than you think. The war on coal is not just political rhetoric, or a paranoid fantasy concocted by rapacious polluters. It’s real and it’s relentless. Over the past five years, it has killed a coal-fired power plant every 10 days. It has quietly transformed the U.S. electric grid and the global climate debate.
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