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".).
Lacker Says Fed Taking Risks With Economy at Full Employment (Bloomberg) Federal Reserve Bank of Richmond President Jeffrey Lacker said the U.S. is already at full employment and the central bank may risk overheating the economy as it attempts to drive additional job gains. With the unemployment rate at 5.1%, the central bank has achieved its goal and “exhausted relevant slack in the labor market,” the Richmond Fed chief said. Econintersect: Lacker is lacking in logic. It is an ideological artifact that rationalizes 94.9% employment as "full employment" and Lacker is also ignoring the historically low labor force participation ratio - at least 2 million more people are available to work who are not counted in the labor force. Finally, at full employment there would be wage inflation pressure and there is none.
Big rise in German attacks on migrant homes in 2015 (BBC News) The German government says there have been almost 500 attacks on homes intended for asylum seekers this year - three times more than in 2014. German Interior Minister Thomas de Maiziere called such violence "shameful". Two-thirds of the attacks were carried out by locals who had no previous criminal record, he said. Germany expects to host at least 800,000 asylum seekers this year. The southern state of Bavaria's leaders have demanded that Berlin restrict the numbers arriving.
US to abandon training new Syria rebel groups (BBC News) The US is to end its efforts to train new Syrian rebel forces and says it will shift to providing equipment and weapons to existing forces. Its $500m (£326m) programme was heavily criticised after it emerged that US-trained rebels had handed vehicles and ammunition over to extremists. It emerged last month that only four or five of the fighters were in Syria.
India woman’s arm ‘cut off by employer’ in Saudi Arabia (BBC News) India's foreign ministry has complained to the Saudi Arabian authorities following an alleged "brutal" attack on a 58-year-old Indian woman in Riyadh. Kasturi Munirathinam's right arm was chopped off, allegedly by her employer, when she tried to escape from their house last week, reports say. Ms Munirathinam was working as a domestic help. She is recovering in hospital. Her family has alleged that she was being tortured by her Saudi employers. Saudi authorities have not commented on the incident yet.
Has Russia Gone Rogue?(Council on Foreign Relations) In his Senate testimony before the Committee on Armed Services, CFR's Senior Fellow for Russian and Eurasian Studies Stephen Sestanovich argued that the United States should challenge responsible Russians to see how strange their country's military policy in Syria looks to the outside world. Russian actions reflect the new nationalism of Russian public opinion. The seizure of Crimea and continuing attempts to fragment eastern Ukraine have given this nationalist mood an angrier, more embattled tone. Russia's actions are a response, as President Obama has noted, to the weakness of the Assad regime in Syria, Russia's oldest (and now only) real ally in the region.
With Naval Strikes into Syria, Russia Is Now Messaging with Missiles (Council on Foreign Relations) The Russian Navy’s initial firing of twenty-six cruise missiles from ships in the Caspian Sea into Syria yesterday generated little effect on the Syrian battlefield—but that may not be the primary objective. Russian President Vladimir Putin capitalized on this opportunity to showcase this new sea-based, long range precision strike capability as a strategic messaging tool, a message aimed primarily at the West, but also with implications for Iraq and Iran. Econintersect: Some message! Four of the missiles went far off course and landed in Iran. That is like firing missiles from Chicago intended for Atlanta and hitting Toronto.
Japan economics minister Amari - economy in recovery trend despite some weakness (Yahoo News) Economics Minister Akira Amari said on Friday Japan's economy remained in a recovery trend although weakness was observed in some areas. Amari said he hoped discussions between the government and private sector kicking off later this month would spur corporate capital spending and help sustain a moderate economic recovery.
Whither Gold? (The Chart of the Day) For almost three years now the way to profit from gold would have been to trade the three round trip swings in the downward sloping trend channel. With gold now on the rise is the question is: Will the trade continue to be good for a fourth cycle?
Uh-oh (Sam Ro, Business Insider) Earnings drive stock prices and the projections are that third quarter earnings will decline. Uh-oh indeed.
Other Economics and Business Items of Note and Miscellanea
30 Common Facts That Just Aren't True (MSN Lifestyle) We’ve all grown up believing in certain facts that over the years have become common knowledge — veggies are best eaten fresh, bread with the slightest hint of brown is packed with nutrients and that nails and hair continue to grow well after we’re dead. This slide show busts many age-old myths.
Who’s Going to Win the 2015 Nobel Prize in Economics? (The Wall Street Journal) Thomson Reuters maintains a running list of possible winners, to which it adds a few names every year. They tabulate frontrunners based on the number of research citations those academics receive, and this year they added to the list Sir Richard Blundell of University College London for his work on labor markets and consumer demand, including how economic downturns shape families. There are approximately 50 names on the Economics list who have not yet won a Nobel. Twenty-four of them are specifically mentioned in this article.
The economics of battery energy storage (REneweconomy) Batteries are hot. Consider the excitement around Tesla’s Powerwall, or battery energy storage’s 600 percent Q2 growth over Q1, or one of the world’s largest utilities recently proclaiming that batteries will obviate the need for any new gas peaker plants in the U.S. post-2020. But the most important and exciting news around batteries still lies ahead. A new RMI report shifts the focus critically to the other part of the battery equation: value. The report found that batteries can reduce grid costs and customer bills, increase the resilience of the grid, and support a largely renewable electricity system. All that value is available, if we make some critical adjustments. Batteries can perform up to 13 services instead of the single one of storage of excess energy when that is produced. Incorporting all these functions radically change the economic payback of using batteries. The full report can be downloaded for free after registering here.
Behavioral Economics Nudges Regulators to Err (Financial Advisor) George Akerlof and Robert Shiller look at the role of trickery in market economies in their new book "Phishing for Phools". They explain that sellers are often out to deceive you, and showthat this isn't an occasional glitch in the market system so much as an intrinsic and pervasive trait. A technical term that applies is "asymmetry of information"; that is, the seller usually knows more than the buyer. Econintersect: This is not a new concept - recall the term caveat emptor.
At the Margin: Harvard Economics’ Precarious Spot on Top (The Harvard Crimson) The undergraduate student newspaper explores why Harvard has lost some of it's top economists, many to Stanford University in Palo Alto, California. The latest to leave is Raj Chetty ’00—a MacArthur “Genius” Grant winner and one of the youngest tenured professors in the University’s history—who many have predicted will one day win the Nobel prize.
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