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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Topics today include:
Europe on the Verge of Collapse
Why are Stocks Falling?
U.S. Wealth Effect: Housing Rise Offsets Stocks Fall
Politicians' Ignorance of Economics
Taliban: We Did University Attack
Taliban: We Did Not Do University Attack
Oceans: More Plastic than Fish
China's Silk Road Aided by Commodity Collapse
Articles about events, conflicts and disease around the world
A New Ninth Planet May Have Been Detected, Scientists Say (NBC News, CNBC) Far beyond the orbits of the outer solar system dwarf planets (Pluto, Ceres and others) Caltech researchers may have discovered a new planet lurking in the outer reaches of our solar system. They're calling it "Planet Nine" for now. The planet, if it exists, has a mass 10 times that of Earth and takes between 10,000 and 20,000 years to orbit the sun. Planet Nine has not actually been observed. Instead, evidence of the planet was discovered through mathematical modeling and computer simulations trying to explain the behavor of physical matter at the outer edges of our solar system. The researchers were trying to prove a ninth planet could not exist and instead have found evidence that increases the probability that it is out there.
What the market plunge is saying about the economy (CNBC) As stocks endure a brutal beginning to the year, a scary question is echoing across Wall Street: Is the stock market, which is typically seen as a forward economic indicator, saying a major American slowdown is nigh? Plastic trash will outweigh fish in the oceans by 2050 unless the world takes drastic action to recycle the materials, a report warned Tuesday on the opening day of the annual gathering of the rich and powerful in the snow-clad Swiss ski resort of Davos. An overwhelming 95% of plastic packaging, worth $80 billion to $120 billion a year, is lost to the economy after a single use, according to a global study by the Ellen MacArthur Foundation, which promotes recycling.
Europe on the verge of collapse: Soros (CNBC) Billionaire financier George Soros has warned that the European Union is on the "verge of collapse" over the migrant crisis and is in "danger of kicking the ball further up the hill" in its management of the issue which has seen more than a million migrants and refugees arrive in the region in 2015.
A few days ago, Labour launched a lecture series – “The New Economics” – intended “to broaden the debate around economics in Britain.”
The line-up of speakers certainly includes various sizeable brains, from the world of academia and left-wing campaigning. But there’s a notable dearth of experience in the real, wealth-creating economy.
In fact, on closer examination, the ten speakers appear to have a total of around one year of experience in the private sector between them: Yanis Varoufakis, the former finance minister of Greece, worked from 2012-13 as Economist-in-Residence at the Valve Corporation, a computer games firm. That doesn’t really suggest ‘broadening the debate around economics’ – more shrinking it to a theoretical discussion.
Given that one of Labour’s major problems is that their hard left economic opinions suggest they pose a threat to business, jobs and growth in the UK, how exactly will this help them? No doubt their expert speakers could produce some fascinating academic articles, but could they run a whelk stall between them?
Pakistan attack: Gunmen kill 19 at Bacha Khan University (BBC News) Most of the dead are male students, shot in the head. One Taliban source says the attack is in response to to military attacks on "millitant strongholds" and was carried out by "four suicide attackers". Another spokesman says the organization was not involved and the attacks were "un-Islamic".
Commodities Crash Boosts China's New Silk Road (Bloomberg) While commodities producers grapple with the lowest prices in more than a decade, the slump could prove a blessing for President Xi Jinping’s signature initiative to build an intercontinental web of infrastructure and trade links with China at the center. The New Silk Road program announced by Xi more than two years ago is finally gathering steam just as the prices of oil, steel, concrete and other building materials sink. That’s making it easier for China to sell its ambitious vision to build roads, railways, pipelines and ports from Xian to Athens, diversifying the country’s trade options and exporting the excess industrial capacity that’s dragging down its own economy.
Other Economics and Business Items of Note and Miscellanea
Hillary Clinton: “Of course we want to raise the minimum wage!”
Donald Trump: If we trade with China, “they suck us dry ... take everything. We get nothing!”
Bernie Sanders: “Ordinary Americans are working longer hours for lower wages.”
But it’s not true! Politicians are so ignorant about economics.
On his blog, Cafe Hayek, George Mason University professor Donald Boudreaux says his main job is showing students that much of what they believe about economics is wrong. I wish he taught presidential candidates.
U.S. Housing Market Tracker (The Wall Street Journal) The U.S. housing market has struggled to find equilibrium after the bubble of the past decade. Here’s a look at where various gauges of supply and demand stand today. Select from the interactive charts for more information. Below is one of the charts (without interactive features here):
Tennis' vulnerability to corruption, match-fixing lies in economics (Sports Illustrated) The real economic challenge to tennis is fighting the incentive structure, and dealing with the disparity between low levels of prize money and high levels of betting. We have no glib solution but, as things, stand now, the math is grim. Gamblers can make tens of thousands of dollars betting on players who are competing for $104 in prize money? The current tennis bibery scandal is based in the economics of incentives. Ethics? Is there an economics of ethics?
A new analysis of ice-core climate data, archaeological evidence and ancient pollen samples is being used to suggest farming some 7,000 years ago helped put the brakes on a natural cooling process of the global climate, possibly contributing the warmer climate seen today.
But the study is expected to raise a few eyebrows, given there were far fewer people on Earth back then and industrialization -- and the coal-fired power plants that come with it -- was still a long ways off.
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