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 dayin the early am at GEI News (membership not required for access to "The Early Bird".).
Most Americans don’t vote in elections. Here’s why (Al Jazeera) The rise of the donor class and the influx of corporate cash have caused many voters to lose faith in politics. Econintersect: It's like the disillusioned have the attitude that "one person, one vote" has been replaced with "$1 million, one vote".
After more than 50 votes in Congress and two attempts before the U.S. Supreme Court to mothball the ACA and public exchange marketplace, some Republicans are now seeing the budget reconciliation process as yet another avenue for achieving this long-time goal.
Other members of the GOP prefer to reserve this budget tactic for tax reform or other policy objective, according to a recent report by the National Law Review. The publication also suggested that Paul Ryan (R-WI), who chairs the House Committee on Ways and Means, plans to meet a budget resolution deadline of July 24 for committees with jurisdiction over health care issues to come up with a repeal plan.
IMF Euro Area Report: Debt's a Mean Bitch… (Constantin Gurdgiev, true economics) CG contributes to GEI. Low inflation is "pushing up real rates, more in countries with higher debt burdens", according to the IMF (IMF report linked in preceding article). CG says:
Broadly-speaking, with annual expected inflation at or below 1%, we have serious pressure on Portugal and Spain, where Government borrowing costs (and by some proximity, banks funding costs) have not declined as dramatically as in, say, Ireland. The second sub-group at risk are countries with lower debt ratios, but still high enough funding costs - Slovenia and Italy. Ireland is in a separate category, having enjoyed significant declines in cost of funding, without a corresponding improvement in debt ratios. In other words, for Ireland, so far, the challenge is less of day-to-day funding of debt, but the quantum of debt outstanding. Short-run sustainability is fine, but longer run sustainability is still problematic.
In fight against Islamic State, Turkey's Erdogan sees chance to battle Kurds (Reuters) Forced into battle against Islamic State as it presses on Turkey's borders, President Tayyip Erdogan is seizing the chance to keep another foe in check, bombing Kurdish militants he sees as a threat to the integrity of the Turkish state. The illogic of this is evident when one realizes that the Kurds have had the most success against the Islamic State of any force. It also presents a problem for the U.S. which has been considering the Kurds an ally.
The Gecko’s Bite (Foreign Policy) Indonesia’s anti-corruption commission has made great strides in combating graft. But now it risks becoming a victim of its own success.
After Quick 8.5% Crash, Confusion Reigns in Chinese Stocks (Bloomberg) More than half of 3 weeks of recovery was given back in one day. Monday’s plunge was all the more surprising because it followed a government rescue package that had helped drive a 16% rally since July 8. That support appeared to vanish without warning, leaving analysts guessing whether authorities shifted their policy stance or just got overwhelmed by a flood of sell orders. After the close of trading, the securities regulator denied speculation that the government has exited the stock market.
Focusing on the Wrong Thing (5 Min.Forecast) Whether you think there is any value in technical analysis or not, there is on important reason you should not ignore it: Other people do believe. And sometimes technical signal patterns can be anticipated. The chart below is one of those situations. In about 3 months it will no longer be possible for the S&P 500 to remain between the two blue lines (dotted for resistance and solid for support). So sometime between now and the day the two lines meet there will be a breakout (up through the dotted line) or a breakdown (down through the solid line). Whenever one of those things happens there will be a market reaction, however fleeting, and you should be paying attention (because we have warned you). How you react (and if you react) will depend on what your investment objectives are at the time.
Other Economics and Business Items of Note and Miscellanea
Seven Reasons to Take Social Security Sooner (Wealth Management) We all know the advice to wait as long as possible to start Social Security in order to increase annual payments. But there are reasons why taking benefits as early as possible may be the right decision for some.
Why Walgreens moved to a private exchange (Employee Benefit Advisor) Walgreen Co. was one of the first large employers to move employee health care benefits from a group insurance plan to private health care insurance exchange (HIX). Did they save money? No, the company is spending on health benefits at the same rate. Why did they do it? Because it offered each employee the option to create the personalized plan best for them.
This idiotic: Greece's creditors want to shrink its economy. Joseph Stiglitz has been writing books for nearly two decades now trying to impress upon rightwing economists the idea that if people do not have income they cannot spend. You would not think it is a hard argument to make. But you would be wrong.
I think the future will be some combination of Rothbard and Kurzweil. Keynesianism will still be around intellectually because it is far too useful to the ruling elite to be abandoned. Yet the institutions that put it in play will be on the ropes. Broke governments will leave us with nearly free markets, while the law of accelerating returns will continue to open up radically new economic opportunities.
Lost in translation: Annual funding notices confound readers (Employee Benefit News) Annual notices to pension fund participants shouldn't require the employee to consult an actuary, regulator, auditor, accountant and/or a professional investor to be able to understand the report. Unfortunately, this author reports that they do require that level of expertise.
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