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.
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Today’s topics include:
U.S. Cracking Down on Money Laundering Using Real Estate
U.S, Apartment Surplus Coming
Low Oil is Hurting Many Economies
Turkey Expands Attacks of ISIS
Economists Who Look in a Mirror (Paul Krugman)
Chinese Retail Investors Flee Market
Goldman to Pay Another $5 Billion
Articles about events, conflicts and disease around the world
As oil prices bottom out, it's not just fragile petro-states in trouble (Al Jazeera) As oil prices dip to a 13-year low of around $30 per barrel, many of the world’s petro-states could see hundreds of billions dollars more shaved off their revenue streams in the coming months. The question now is, how long each of these countries can sustain their economies and stave off political unrest — a calculation that is about more than just oil. But it isn’t just fragile countries that are on edge. Increasingly, even the traditionally stable Gulf Cooperation Council (GCC) countries appear insecure. In the past weeks, Gulf states have made unprecedented cutbacks to fuel and water subsidies, undermining the social bargain by which these regimes govern their populations. For Saudi Arabia, in particular, austerity will compound rising domestic tensions stirred by its costly and unpopular interventions in Yemen and Syria.
Best and worst countries to live in (24/7 Wall St., MSN News) In this 50 slide presentation, the top 7 best countries are all in Europe and the 17 very worst are in Africa, all worse off than the 18th worse country, Afghanistan.
Hurricane Alex forms in the Atlantic, Azores threatened (Associated Press, MSN News) A rare January hurricane has formed far out in the Atlantic, and U.S. officials say it's the first hurricane to form in the month of January since 1938. A hurricane warning has been issued for the Azores. The U.S. National Hurricane Center in Miami says in a Facebook post that there hasn't been a hurricane present during the month of January since 1955, when Alice formed in late December 1954 and carried over into the next month.
Goldman Sachs to pay $5 billion to resolve claims on RMBS sale (Reuters) Goldman Sachs Group Inc (GS.N) said it will pay $5.06 billion to resolve civil claims related to the firm's securitization, underwriting and sale of residential mortgage-backed securities from 2005 to 2007. The agreement with regulators will reduce earnings for the fourth quarter by about $1.5 billion after tax, Goldman said in a statement.
U.S. Will Track Secret Buyers of Luxury Real Estate (The New York Times) Concerned about money laundering though luxury real estate transactions, the Treasury Department said Wednesday that it would begin identifying and tracking secret buyers of high-end properties. The initiative will start in two of the nation’s major destinations for global wealth: Manhattan and Miami-Dade County. It will shine a light on the darkest corner of the real estate market: all-cash purchases made by shell companies that often shield purchasers’ identities. See FinCEN Takes Aim at Real Estate Secrecy in Manhattan and Miami (U.S. Treasury Department).
White House readying overhaul of fossil fuel program: sources (Reuters) The Obama administration is preparing to announce as soon as Friday an overhaul of how the nation manages coal development on federal land, according to government and conservationist sources, in a further move to confront climate change.
How to Profit From Rising Rents: Build Apartments (The Wall Street Journal) Average rents nationwide rose 4.6% in 2015, the biggest gain since before the recession. This is encouraging developers to build more apartments. Over the next three years, developers are expected to build almost one million apartments in the U.S., more than the nearly 900,000 constructed over the previous three, according to researcher Axiometrics Inc.
Teacher faces involuntary manslaughter charges after deadly Alps avalanche (CNN) A schoolteacher who went with students onto a closed French Alps ski slope before an avalanche struck there and killed three people -- two of whom were students he was in charge of -- faces charges of involuntary manslaughter, a prosecutor announced Thursday. The physical education teacher accompanied 10 students from the St.-Exupery school in Lyon to a part of Les Deux Alpes ski resort that has been closed off since the start of the ski season -- at first due to lack of snow, then due to a high avalanche risk -- Grenoble prosecutor Jean-Yves Coquillat said.
Migrant crisis: Bavaria mayor sends refugees to Merkel (BBC News) A Bavarian mayor angry about Germany's asylum policy has sent a busload of Syrian migrants to Chancellor Angela Merkel's office in Berlin. But he has ended up paying for their accommodation in the capital himself. Peter Dreier, mayor of the district of Landshut, said he wanted to "send a signal" that Germany's asylum policies could not continue as before. The bus arrived in Berlin on Thursday evening. All those on board volunteered to make the journey, the council said. Germany took in 1.1 million asylum seekers in 2015. Mr Dreier said he had informed Mrs Merkel of his bus plan in a phone call in October.
PM says Turkish artillery hit IS positions in Iraq, Syria (Associated Press) Turkish tanks and artillery attacked the Islamic State group in Iraq and Syria in retaliation for the suicide bombing in Istanbul that killed 10 tourists, Turkey's prime minister said Thursday — the country's first significant strike against the Islamic extremists in months.
ISIL claims responsibility for deadly gun, bomb assault on Jakarta (Al Jazeera) The Islamic State of Iraq and the Levant has claimed responsibility for coordinated bomb and gun assaults on Jakarta — the first such attacks on Muslim-majority Indonesia by the group. At least seven people, including five attackers, were killed in the explosions and gunbattle between police and the attackers in the city's central business district.
Giving up on stocks: China's retail investors seek safety first (Reuters) As China's legions of retail investors flee the country's tumultuous equity markets, pushing stock prices down around 15% so far this year, money is flowing into perceived safe-haven assets such as domestic bonds, gold and the dollar. Unlike Western markets where institutional investors dominate, individuals account for 80% of transactions on Chinese exchanges. Nearly 100 million people have trading accounts.
Inflation Expectations (Mike Peel, Twitter) Expectations are decreasing and the rate of decline is getting bigger. That's what you call negative acceleration.
Other Economics and Business Items of Note and Miscellanea
Bernie Sanders And Basic Economics: Never In The Same Room Together (Investors' Business Daily) The author uses Sanders' proposal to cap ATM fees at $2 as an example of how the Senator does not understand economics. (Econintersect: Whether Sanders' proposal makes any sense or not, maybe the author does not understand - or believe - that there can be situations when regulations are useful or needed within an economy.) Here is an excerpt:
Maybe the problem is Sanders simply skipped over Adam Smith on his way to Karl Marx. If so, then we offer this passage from Smith's "Wealth of Nations" to help the socialist understand why privately owned ATMs pop up — and why they'll disappear if he has his way:
"It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages."
Mind-Altering Economics (Paul Krugman, The New York Times) Prof. K discusses the assertion that some make that (many) economists are ideologically oriented and selectively use data to support their beliefs. He agrees that there may be some cases of that but that the affect is not at all universal. He concludes with a statement that Econintersect finds ironic and amusing:
Again, the point is that the discipline of economics is, or at least can be, real — it can lead you, via evidence and/or analysis, to a different place from where you started. And if you’re an economist and that has never happened to you, you should take a long hard look in the mirror.
Lost Cast: Where are They Now (Wonderwall) It's been more than five years since "Lost" aired its series finale on May 23, 2010. During its six-year run, it was one of the most buzzedabout shows of the decade. Now that star Josh Holloway is returning to television -- his show "Colony" premieres on Jan. 14, 2016 -- Wonderwall.com is taking a look at what he and more of the "Lost" cast members have been up to since the J.J. Abrams, Damon Lindelof and Jeffrey Lieber-created drama went off the air. View the slide show here.
This is the brightest supernova astronomers have ever seen (Vox) When massive stars die, they do not fade gently into the good night. They collapse in on themselves and explode. It's called a supernova, and "it is the largest explosion that takes place in space," as NASA explains. Today in Science, astronomers report they've found the brightest such explosion ever observed. (To be more specific, it’s the most luminous ever observed. Luminosity is the measure of how much light and energy an object emits. The supernova still looks dim to us so so far away.)
Owners Still Overvaluing Homes vs. Appraisals (Realtor Mag) U.S. Home owners are still slightly overvaluing their homes compared to appraisers' estimates, according to the latest Quicken Loans Home Price Perception Index. In December, average appraised values were 1.8% lower than home owners' opinions of their homes' values. That marks the 11th consecutive month where appraised values were lower than home owners' expectations — but the gap is narrowing. Econintersect: The data table (below) shows 14 markets where appraisals were higher (by an average of 2.0%) and 13 markets where appraisals were lower (by an average of 1.8%) compared to home owner valuation.
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