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".).
Exclusive: Edward Snowden on the man who inspired his work (Al Jazeera) Edward Snowden says his actions were inspired by Thomas Drake, a former senior executive at the NSA, who blew the whistle on waste, fraud and abuse within the agency and was subsequently charged under the Espionage Act by the Obama administration. That is why Snowden chose to flee the country whyen he made his revelations.
Tesla Falls on Sales Target Cut to as Few as 50,000 Vehicles (Bloomberg) Tesla Motors Inc. fell in extended trading after the electric-car maker backed off its full-year vehicle sales forecast. Tesla said it now aims to deliver 50,000 to 55,000 vehicles this year, compared with a previous target of 55,000. The company sees third-quarter production and deliveries of just more than 12,000 vehicles.
The economics behind Europe's migrant crisis (Chicago Tribune) The supply of migrants to Europe is fueled by waves of people fleeing the economic and social misery of their home countries - and, in some cases, political oppression, persecution and violence. They do so in hopes of a better future for themselves and their children. The temptation for some to try to make it all the way to the UK is amplified by the attractiveness of an economy with low unemployment, comprehensive social services and a country where many already know the language. But as the supply of migrants has increased, the demand for migrant labor has gone the other way. Tougher laws have made it harder and more dangerous for employers to hire undocumented workers. And with a European unemployment rate of more than 10%, the demand is further damped.
UK’s official statistics out of date, says Bean (Financial Times) Sir Charlie Bean, former deputy governor of the Bank of England, told the Financial Times the current framework for the national accounts “was developed in the aftermath of the Great Depression”.
German Bund futures fall on Fed rate hike risk (Reuters) German Bund futures fell on Wednesday after comments from a top U.S. Federal Reserve official revived expectations that interest rates in the world's biggest economy would rise in September. Atlanta Fed President Dennis Lockhart said it would take "significant deterioration" in the U.S. economy for him to not support a rate hike in September, according to the Wall Street Journal. He is considered a centrist on the Fed's policy-setting Federal Open Market Committee and has a vote on the panel this year.
Why Moscow wants Iran deal and Congress vote doesn't matter (i24 News) One of the reasons why sanctions against Iran will be lifted whether or not America pulls out of the nuclear deal is that the other signatories (Russia, China, and the EU) have an economic interest in lifting those sanctions. This economic interest includes natural gas. On the face of it, there was no reason for Russia to let Iran re-renter the natural gas market. The two countries, after all, are competitors. Yet a closer look at the complicated geopolitics of energy makes sense of Russia’s endgame. The EU imports about one third of its natural gas from Russia. This relative dependency limits the EU’s leverage over Russia and, therefore, Europe’s ability to rein in Vladimir Putin’s rampant annexation of eastern Ukraine. Since Iran has one of the world’s largest natural gas reserves, it could potentially help diversify Europe’s imports. Yet it might take a decade for Iran to turn into a major natural gas supplier (not least because Iran has a high domestic demand that is likely to increase). Putin, of course, understands that Iran might become a major competitor in this field, but he appears to assess that bringing back Iran into the natural gas market may help Russia create a cartel that will artificially inflate the price of natural gas. Doing so would serve Russia’s economic interests.
A year after massacre by Islamic State, Iraq’s Yazidis are clinging on (The Conversation) The Islamic State (IS) attempted to consolidate its control of northern Iraq in 2014 by trying to exterminate the thinly protected enclaves of assorted ethnic and religious groups on the Nineveh Plains. One of the largest such groups was known as the Yazidis. The ensuing assault on Sinjar, the center of the Yazidis' exclave, displaced roughly 200,000 civilians and forced almost 50,000 Yazidis to flee to the mountains. Eventually the Kurds managed to get most of the refugees into camps in Kurdish protected areas. Some still remain isolated in the mountains.
UPDATE 3-South Africa strives to save jobs at under-fire mines (Reuters) South Africa's mining ministry held talks with companies and unions over planned job cuts on Wednesday, as President Jacob Zuma's government frets over high unemployment ahead of key elections next year. The mining industry, which contributes around 7 percent to Africa's most developed economy, is struggling with sinking commodity prices, rising costs and labour unrest.
Austrian Economics Might Explain China's Turmoil (Noah Smith, Bloomberg View) Malinvestment and instability of financial markets are two principles of Austrian Economics which have very real applications in understandingwhat is going on in China right now. But otherwise Smith pretty much ravages the Austrian School of Economics in this article.
Panicking is a horrible investment strategy (Sam Ro, Business Insider) Bank of America Merrill Lynch's Savita Subramanian examined what happened to stock market investors who sold at the first signs of volatility. (See also next article.) She told clients in a recent note:
"We compare a buy-and-hold strategy vs. a panic selling strategy from 1960-present. We assume an investor sells after a 2% down-day and buys back 20 trading days later, provided the market is flat or up at the end of that period."
'Trying to time the market can be dangerous' (Bob Bryan, Business Insider) According to Bank of America Merrill Lynch's Savita Subramanian, trying to play the timing game is walking a razor's edge. Once the 5% loss is hit the market is subsequently up about 60% of the time, so exiting after the decline is net a losing proposition, according to Subramanian. (See preceding article.) Subramanian:
"Trying to time the market can be dangerous. While pullbacks of 5% of more have historically occurred three times per year, trying to time pullbacks can lead to underinvestment and underperformance in an up-market."
The Gig Economy Makes Karl Marx’s Dreams Come True (The Freeman) This article perceives a libertarian ideal deriving from the "gig" (also called the "sharing") economy: self direction of the individual's time and efforts. He points out that this was also an ideal of Karl Marx as he considered what benefits communism might deliver to the individual. The author gloatingly suggests the ideal is a product of capitalism, not of communism. Of course, there are still many questions how the new economy will "shake out" - see previous article.
Study claims perovskite solar cells can recoup their energy cost within three months (gizmag) Scientists at Northwestern University and the U.S. Department of Energy have found that perovskite cells, one of the most promising solar technologies of recent years, can repay their energy cost over 10 times faster than traditional silicon-based solar cells. The finding confirms that, once issues related to cell longevity are ironed out, perovskite cells could soon bring us solar energy on the cheap, and do so with less impact on the environment over their lifetime.
The Economics of Project Management (Inside Quality Insider) The two primary factors contributing to poor economic performance of project management both relate to failure to understand the benefits from broad organizational relationships, according the quality guru John Flaig. Specifically:
The silo effect of having projects run within functions rather than across functions
The lack of understanding with respect to the importance of the functional, variance, and covariance relationships that form the basis of robust project management
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