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What We Read Today 05 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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Every day most of this column ("What We Read Today") is available only to GEI members.

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Greece has overwhelmingly rejected the austerity deal for continuing the country's bailout.  See GEI News:  Greece: "No!!!" - It's a Landslide.  More on Greece in subscriber section below.

The rest of this post is available only the GEI Members.  Membership is FREE -  click here.


Articles about events, conflicts and disease around the world

Global

U.S.

  • The New Post-Homophobic Christianity (The Daily Beast)  Sally Kohn says that most Christians are going to adapt to the new America just fine.  Econintersect:  But not all - see next article.
  • Former Oregon bakery owners must pay $135,000 for denying lesbians wedding cake (LA Times)  Oregon law bars businesses from discriminating or refusing service based on sexual orientation, just as they cannot turn away customers because of race, sex, disability, age or religion.  In 2013 Aaron and Melissa Klein, who owned the former Sweet Cakes by Melissa bakery in Gresham, OR, refused to sell a wedding cake to a homosexual couple because of their (the Kleins') religious beliefs.  In a final judgment by the Oregon Labor Commission, the Kleins have been ordered to pay Rachel and Laurel Bowman-Cryer $135,000 to "compensate the couple for emotional and mental suffering that resulted from the denial of service".  The Kleins see themselves as victims: 

Aaron Klein said his family had suffered because of the case and the glare of media attention.

The bakery’s car was vandalized and broken into twice, he said. Photographers and florists severed ties with the company, eventually forcing the Kleins to close their storefront shop in September 2013.

In a Facebook post, the Kleins vowed to contest the ruling.

“We will NOT give up this fight, and we will NOT be silenced,” they wrote. “We stand for God’s truth, God’s word and freedom for ALL Americans.”

Greece

  • Greek Pollsters Forecast Narrow ‘No’ Win in Austerity Vote (Bloomberg)  Greek pollsters and early results suggest a win for the “No” side in Sunday’s referendum, endorsing Prime Minister Alexis Tsipras’s call to defy creditors over more austerity as the country veers toward an exit from the euro.  Four informal surveys published as voting finished estimated the lead for “No” at three or four percentage points. The first official projections of the result are due around 9 p.m. With more than 12% of ballots counted, the margin of victory looked wider with at least 60% of people opposing the demands of creditors.
  • Nai or Oxi on the Greek Referendum? (EconMatters)  EconMatters contributes to GEI.  Good collection of views from the EU and from the Greek government.  EconMatters says: "It is time for Greece to move on, take the responsibility, and find a way to regain its footing."  See also next article.
  • Timeline: What's Coming Next for Greece? (Bloomberg Business, 15 June)

Click for large image at Bloomberg.
greece.timeline.bloomberg.600x600

  • The Other Contagion: What If Greece Thrived After Euro Exit? (Bloomberg Business)  What if Greece became the "new Iceland".  That north Atlantic island country gave "the finger" to European banks and refused to accept government responsibility for bank debts.  Iceland saw a two-year 41% collapse of GDP 2007-2009, renounced the bank debt in 2010 and recovered 18% 2010 - 2013.  Now Iceland is not Greece (smaller country and not is not an EU member, see articles about Iceland below), so a direct comparison is not appropriate, but the question remains:  What if?  Bloomberg summarizes the "conventional wisdom" (and then goes on to discuss what academics think might happen if conventional wisdom is, well, conventionally wrong).   The conventional wisdom part of the discussion:  

It is the scenario few talk of: What if Greece left the euro area and its economy thrived?

The reason for the silence may be that it’s too ridiculous a concept to even consider.

As the country’s referendum on austerity nears, economists are lining up to warn that quitting the euro and defaulting on its debts would make Greece an even bigger pariah in financial markets and push it toward a deeper depression with the bankruptcies, unemployment and social unrest that entails.

Such pain, so the conventional wisdom goes, would scare the likes of Spain and Portugal into rededicating themselves to the German-branded austerity and economic reform that membership of the single currency demands. To some, a euro zone without Greece would be smaller yet possibly stronger.

Iceland

iceland.gfc.crash.annotated

Russia

  • Russian spacecraft filled with crew supplies docks at space station (CNN) Hat tip to Alun Hill. After three failed attempts to launch resupply rockets (two American and one Russian) over the last eight months, an unmanned Russian spacecraft filled with assorted goodies for the crew docked at the Space Station today (Sunday).  Without resupply the three astronauts on the station would have exhausted supplies in about four more months.
  • America’s Losing Russia Strategy (The Daily Beast)  According to this article, confronting Putin isn’t enough to restore peace on Russia’s borders. What’s needed is Détente Plus.  As for American hawks:

Get even tougher, do more, they urged in White House meetings and the press. They never addressed what they would do if more and more failed—as it almost certainly would.


Import/Export Prices Have Declined Uniformly Around The World (Eric Bush, Gavekal Capital)  World export prices declined by -15.8% year-over-year in April and are back at level last seen in 2009. World import prices have declined by -15.1% year-over-year as well.  In the developed world, export prices are down-16.6% year-over-year. This a larger drop than what occurred in 2009 and is the largest year-over-year decline since 1990 (when this series began). Import prices have declined by -17.5% year-over-year. The drop it 2009 was slightly larger.  See also next article.

export.import.prices.global.gavekal2015.april


CPB World Trade Monitor April 2015 (CPB Netherlands Bureau for Economic Policy Analysis)  Even as prices have been collapsing (see previous article) trade volumes are not falling but perhaps sputtering a bit.  

Based on preliminary data, the volume of world trade rose 0.3% in April from the previous month, following an unrevised 0.1% decline in March. As in March, the initial estimates of global import and export volumes moved in opposite directions (but with the signs reversed). Import growth turned negative both in advanced and emerging economies. The only exception was Japan, where the opposite happened. Global export growth turned positive due to a major turnaround in emerging Asia, and in spite of a slowdown in export growth in advanced economies.

world.merchandise.trade.volumes.2015.april 

Other Economics and Business Items of Note and Miscellanea

Date:  Thursday, July 23, 2015 - 18:00

Event at 18:00, followed by a drinks reception for registered attendees only
Institute for Government, 2 Carlton Gardens, London SW1Y 5AA

“Behavioral economics is no longer a fringe operation, and writing an economics paper in which people behave like Humans is no longer considered misbehaving”.

This week both houses of the Pennsylvania legislature passed a bill to end Pennsylvania’s state liquor monopoly — but it was not to be.  Pennsylvania Governor Tom Wolf vetoed the legislation, claiming allowing private wine and liquor sales would lead to “higher prices and less selection” for consumers. No, really. That was the explanation. Read it for yourself.

  • Ancient Greek Economics Being Proved In Modern Greece: Gresham's Law (Forbes)  Econintersect:  This is a very contrived attempt to rationalize likely inflation with the drachma should Greece leave the euro zone.  Gresham's Law has little to do with the use of the Drachma - it will be the currency required to do business with the government and to pay taxes (which the Greeks are not very proficient at, admittedly).
  • Greece's Yanis Varoufakis prepares for economic siege as companies issue private currencies (The Telegraph)  The Greek finance minister says the country has a six-month stock of oil and four months of pharmaceuticals as businesses are creating parallel private currencies to keep trade alive and alleviate an acute shortage of liquidity.  Econintersect:  What is another word for "parallel private currencies"?  IOUs.  At some point the IOUs will have to be valued in the local currency in order to do business with the government and to pay taxes.  (See remark made for Forbes article above.)
  • Contemporary Islamic Economic Thought (Social Sciences Research Network)  Contemporary Islamic thought has significantly benefited from modern economics, and a new field, Islamic economics, within Islamic legacy is shaping up.

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