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:
Understanding Facebook's Stock Restructuring
America's 20 Hottest Real Estate Markets
Why are Staff Leaving Business Insider?
Why are We Still Fighting about Obamacare?
Where is Oil Headed: $60 or $30?
Dollar Shorts at 3 Year High
Banks Claim Constitutional Right to Billions in Subsidies
Now is the Time for Tactical Investing (El-Erian)
Eurozone Recovery Accelerates
EU Migrant Flow is Slowing
Germany May Increase Military Effort in Libya
Reprimands for 16 for Afghan Clinic Bombing
Is the Bank of Japan Losing Credibility?
Russia Continues Menacing Stunts
China Bans U.S. Fleet Port Call Request
Articles about events, conflicts and disease around the world
Oil Market Deja Vu Triggers Predictions of a Return to $30 (Bloomberg) Oil’s climb above $45 a barrel is reassuring influential figures from BP Plc to the International Energy Agency that the industry is finally recovering from the worst slump in a generation. Others say the market is about to fall into the same trap as last year. There’s a sense of deja vu at Commerzbank AG, BNP Paribas SA and UBS Group AG, who say crude’s gain of about 70% from a 12-year low in January resembles the recovery that took hold this time last year -- only to sputter out by May as the supply glut endured. Prices will sink back towards $30 a barrel in the coming weeks, BNP and UBS warn.
Dollar net shorts hit highest in over 3 years: CFTC, Reuters (Reuters) Speculators' bearish bets on the U.S. dollar hit their largest since February 2013, boosted by expectations that the Federal Reserve will take its time in raising interest rates this year, according to Reuters calculations and data from the Commodity Futures Trading Commission released on Friday. The value of the dollar's net short position rose to $4.19 billion in the week ended April 26, from short contracts valued at $1.85 billion in the previous week. Speculators were short the dollar for a second straight week. For more on currencies and summaries for all markets see the article to be posted later on GEI Investing from Investing.com.
Banks Assert Constitutional Right to Billions in Subsidies (The Intercept) Rob Nichols, the chief lobbyist for the American Bankers Association, argued in a comment letter Thursday that a recent federal law reducing the dividend on the stock that banks purchase as part of membership in the Federal Reserve system, violates the Fifth Amendment clause banning the uncompensated seizure of property. Congress reduced the dividend as part of a deal to pay for transportation projects. Dividends for the stock, which cannot be bought or sold, had been set at 6% since the Federal Reserve’s inception in 1913. Banks cannot ever lose money on the stock; they’re even paid out if their regional Fed bank disbands. So the dividend represented a risk-free profit, earning back its investment in full every 17 years. The dividend cut, from 6% to the current interest rate on the 10-year Treasury note, is estimated to reduce the banks’ payments by roughly $7 billion over 10 years. The change only applies to banks with more than $10 billion in assets. Econintersect: How much should the U.S. pay banks for the "services" banks provide to the country? Should the banks pay the government for the right to provide services (like an annual "licensing fee")?
El-Erian: Stocks like Facebook can take you for quite a ride (CNBC) Hat tip to Jim Welsh. Allianz Chief Economic Advisor Mohamed El-Erian, says there are few companies that combine platform and content, which is the "most powerful equation". El-Erian says that successful investing is becoming more and more tactical (Econintersect: Meaning stock picking) rather than strategic (sector picking).
Eurozone recovery picks up speed (BBC News) The eurozone's economy grew by a faster-than-expected 0.6% in the first three months of the year, according to official statistics. The growth rate in the 19-nation bloc doubled from the 0.3% rate recorded in the previous quarter, and was above analysts' expectations of 0.4%. However, separate data from Eurostat also indicated that deflation had returned to the eurozone. Inflation in the bloc fell to minus 0.2% in April, down from zero in March. Other Eurostat figures showed the eurozone's unemployment rate fell to 10.2% in March, the lowest rate for four-and-a-half years.
NATO: Efforts to stem migrant flows making a difference (Associated Press) Efforts to stem the tide of migrants seeking the shores of Europe are working, NATO Secretary-General Jens Stoltenberg said Thursday. Speaking at a news conference with Turkish Foreign Affairs Minister Mevlut Cavusoglu in Ankara, the Turkish capital, Stoltenberg said the collective effort is "making a difference" and that the number of migrants crossing the Aegean Sea is "going significantly down." Under an EU-Turkey deal signed last month, migrants arriving on Greek islands from the Turkish coast from March 20 onward face deportation to Turkey unless they successfully apply for asylum in Greece. The International Organization for Migration says Greece has seen fewer than 70 arrivals per day in the past 10 days, down from nearly 1,500 of arrivals per day before the deal was struck.
Merkel hints at further military effort in Libya after talks (Associated Press) German Chancellor Angela Merkel said Monday that she, U.S. President Barack Obama and the leaders of France, Britain and Italy discussed ways of supporting the fragile unity government in Libya and the possibility of expanding military efforts to stop the smuggling of migrants across the Mediterranean. NATO is already patrolling for smugglers farther east, in the Aegean Sea between Greece and Turkey, and Obama had assured the European leaders the U.S. was "prepared to also take responsibility with regard to the migration route from Libya to Italy if necessary," Merkel said. She emphasized, however, that the five leaders didn't discuss "concrete proposals" for a NATO mission off Libya during their hour-long meeting in Hannover, and that a European Union mission in the Mediterranean had been "working quite well."
16 blamed for mistakes in deadly US attack on Afghan clinic (Associated Press) Human error, violations of combat rules and untimely equipment failures led to the mistaken U.S. aerial attack on a charity-run hospital in Afghanistan last fall that killed 42 people, a senior American general said Friday. Investigators called the attack a "disproportional response to a threat that didn't exist". Sixteen military members were given administrative punishments that could stall or end careers, but no one faces a court martial. A senior defense official said one of the disciplined was a two-star general.
First on CNN: Russians 'barrel roll' over another U.S. Air Force plane (CNN) A Russian SU-27 conducted a "barrel roll" Friday over the top of a U.S. Air Force RC-135 which was flying a reconnaissance mission in international airspace above the Baltic Sea, the Defense Department said. The Russian SU-27 approached alongside within 25 feet of the U.S. aircraft and then flew inverted over the top of the plane to the other side, Lt. Col. Michelle L. Baldanza, a U.S. Army spokesperson, said in a statement. Baldanza said:
"The SU-27 intercepted the U.S. aircraft flying a routine route at high rate of speed from the side then proceeded to perform an aggressive maneuver that posed a threat to the safety of the U.S. aircrew in the RC-135."
"We were recently informed that a request for a port visit by a U.S. carrier strike group, including the USS John C. Stennis and accompanying vessels, to Hong Kong was denied. We have a long track record of successful port visits to Hong Kong, including with the current visit of the (command ship) USS Blue Ridge, and we expect that will continue."
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Understanding Facebook's Stock Restructuring (Seeking Alpha) This week Facebook (NASDAQ:FB) announced that it will introduce a new version (or "class") of its stock. It will essentially be doing a 3-for-1 split, with Facebook stockholders getting two shares of the new version for every one share of the old version that they own. The purpose of the change is to allow Facebook founder Mark Zuckerberg to retain control of the company while following through on his pledge to donate much of his holdings to charity. Ordinarily when someone owns a stock, the financial investment comes with the right to vote on issues such as who should be on the company's board of directors. As companies issue more shares of stock over time - perhaps to give stock grants to their employees or fund acquisitions of other companies - the voting power of their founders decreases.
Democrats Pay High Price for Liberal Smugness (Bloomberg) Democrats are just too self-impressed to have the influence they imagine they should have, according to this writer. But when data is examined it is found that Democrats are similarly ill-informed as Republicans.
Here's what Business Insider employees just said about why people are leaving (CNN Money) Business Insider is hugely successful but at least 24 staffers have left since BI was sold to Axel Springer 6 months ago for $343 million. This article says that "morale inside Business Insider's Manhattan newsroom had arguably never been lower". This article attributes some of the problems to "to mismanagement on the part of a former top editor and exhausting pressure to grow the company's audience". But founder and CEO Henry Blodgett puts a different spin on things. He told employees Wednesday:
"It's always sad to say goodbye, but we have incredible journalists who are in great demand, and they are frequently presented with wonderful opportunities elsewhere. Happily, we have a very deep bench and amazing new colleagues joining us all the time, so our team just gets stronger."
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