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What We Read Today 03 July 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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Articles about events, conflicts and disease around the world

U.S.

  • Is It Time to Start Shutting Down Law Schools? (Bloomberg)  No one wants to go to law school, yet new ones keep popping up.  Last year, 10 law schools (5% of the 200 in the U.S.) were unable to place more than 30 percent of their graduating class in permanent jobs that required passing the bar, according to ABA data.  And the number of applicants to U.S. law schools has benn approximately cut in half over the past decade.

Greece

  • IMF says Greece needs extra €60bn in funds and debt relief (The Guardian)  The International Monetary Fund (IMF) has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs up to €60 billion (£42 billion, $66 billion) of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy.  With days to go before Sunday’s knife-edge referendum that the country’s creditors have cast as a vote on whether it wants to keep the euro, the IMF revealed a deep split with Europe as it warned that Greece’s debts were “unsustainable”.
  • Prof. Steve Keen on Greek debt crisis (30Jun15) (YouTube)  This was today's Video of the Day.

  • Honeymoon is over for Greek couple who went penniless in NYC (Associated Press, MSN News)  Valasia Limnioti and Konstantinos Patronis' long-planned "dream trip" to the U.S. ended in New York City, where their three-week honeymoon, following a June 6 wedding in Volos, quickly turned into a nightmare: Their Greek-issued credit and debit cards were suddenly declined and they were left penniless.  Other Greek travelers around the world experienced similar difficulties.  Limnioti and Patronis were helped by a Greek Orthodox Church and a New York based Greek journalist who hails from their home town, so they were able to eat until their plane departed for Greece three days after they wwere left penniless.
  • Greece can still avoid a catastrophic exit from the Eurozone (Voxeu.org)  The author says that Grexit and the reintroduction of the drachma would have severe consequences for the Greek people. This column argues, based on Argentina's experience, that this would produce a sharp devaluation of the drachma, inflation, and a severe reduction in real wages and pensions. The effects would be far worse than the reductions that could have occurred as a consequence of the policies proposed by the Troika.   His solution:  Resume negotiations and continue with measures to achieve fiscal consolidation, and carry out adequate structural reforms,  In other words, accept the proposed austerity.  He then makes a statement of faith (hopium) that the Troika Institution will suddenly reverse the path of the past five plus months:

If Greece resumes negotiations, Europe should be smart enough to provide debt relief as to reassure debt sustainability compatible with growth and stability.

Syria

  • ISIS publicly smashes Syrian artifacts (CNN)  ISIS militants reportedly smashed cultural treasures from the ancient Syrian city of Palmyra, including an artifact dating back to the second century, according to a statement from the group and Syrian state media.  Other reports say one artifact almost 3 millenia old was destryed.
  • Syria military resists major rebel assault in Aleppo (BBC News)  The Syrian military has carried out a series of air strikes after rebel forces launched a major assault to take control of the northern city of Aleppo, the country's second largest city and once Syria's commercial and industrial hub.  It has been divided roughly in half between government-held areas in the west and rebel-controlled eastern quarters for almost three years.

Saudi Arabia

  • Saudi Arabia field report: Another potential oil crisis in the Middle East (Brookings Institution) Saudi Arabia is the world's largest exoporter of oil but rising consumption will turn it into an energy importer in less than 25 years.  Saudi Arabia is currently the biggest energy consumer in the Middle East.  Energy demand in Saudi Arabia has increased annually by an average of 7.5 percent over the last five years. Economic and population growth explain some of the surge; even with oil prices flat or decreasing, real GDP rose by 3.6 percent in 2014. However, Saudi Arabia has not used energy efficiently. The kingdom’s energy intensity (defined as total energy consumption per unit of GDP, where Saudi Arabia is 4.1 when the UK sets 1 at 2013) is four times that of energy efficient countries, such as Britain and Germany, and their energy consumption per capita is high.  See also next article.  Econintersect:  How will the advent of cheap solar energy effect these conclusions?  Saudi Arabia is also one of the richest countries in the world for solar exposure.

energy.intensity.global


Are Surpluses Normal? (Steve Keen, Forbes)  Steve Keen has contributed to GEI.  Prof. Keen uses a very good discussion of sectoral balance accounting and the economic history of the U.S. to explain the ignorance of England’s Chancellor George Osborne plan to enact a law which will require British governments to run surpluses “in normal times”.  When a country with a current account deficit (which the UK has - and has no effective means of changing) runs a budget surplus it necessarily removes money from the private sector and leads to recessions.  Of the many good gaphs in the article we have reproduced two below:

debt.private.cycles

debt.sources.money.cycles

Other Economics and Business Items of Note and Miscellanea

  • As Earth's Spin Slows, Clocks Get Another Leap Second (Scientific American)  Due to a complex interplay of Earth’s and the moon’s gravitational fields, our planet’s rotation has gradually slowed over the millennia. It hasn’t been the designated length of one solar day—the time it takes Earth to make a full rotation, or slightly more than 86,400 seconds—since about 1820.  As a result, our global standard of time, known as Coordinated Universal Time, or UTC, occasionally becomes misaligned with UT1—the marker used to measure the actual length of one mean solar day and has to be adjusted with a "leap second" from time to time.

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