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What We Read Today 29 June 2016

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 day in the early am at GEI News (membership not required for access to "The Early Bird".).

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Topics today include:

  • The Poorest Town in Every State

  • The Richest Town in Every State

  • 25 Signs and Symptoms of Alzheimer's Disease

  • Where Might the S&P 500 be Headed?

  • There are Now $11.7 Trillion in Bonds with Negative Yields

  • U.S. Private Debt Growing Again

  • Deutsche Bank and Santander Fail Fed Stress Tests Again

  • Complete Fed Stress Test Results

  • Over 50 Years of Shifting American Income Patterns by Job Classification

  • EU Politicians Want Vengeance on UK

  • EU Businesses Want Continued Relationships

  • EU Snubs Scotland

  • Four Ways to Reverse Brexit

  • Turkey and Russia to Hold "Kiss and make Up' Talks 

  • And more

Articles about events, conflicts and disease around the world

Global

  • There are now $11.7 trillion worth of bonds with negative yields (CNBC)  The level of negative-yielding global debt is continuing its climb into the stratosphere.  Following the turmoil of the British vote to leave the European Union and the desire for the safety of government bonds, the amount has jumped to $11.7 trillion. That's a 12.5%  increase since the end of May, according to a Fitch Ratings report Wednesday.

U.S.

Click for larger image at Political Calculations.

  • Deutsche and Santander again fail US stress test; Morgan Stanley gets a sexond chance (Reuters)  The stress test results announced on Wednesday by the Federal Reserve, known as CCAR, are particularly important because they determine how much capital big U.S. banks can put toward dividends, stock buybacks, acquisitions or investments.  U.S. bank subsidiaries of Deutsche Bank AG (DBKGn.DE) and Banco Santander SA (SAN.MC) yet again failed this stress test due to "broad and substantial weaknesses" in their capital planning processes.  The Fed gave Morgan Stanley (MS.N) only a conditional pass, saying that the bank also had to resolve weaknesses in its processes. Morgan Stanley has until Dec. 29 to resubmit its capital plan for approval.  he vast majority of participants passed with flying colors, including some that have had trouble in the past, like Citigroup Inc (C.N), Bank of America Corp (BAC.N) and Ally Financial Inc (ALLY.N). JPMorgan Chase & Co (JPM.N), Goldman Sachs Group Inc (GS.N) and Wells Fargo & Co (WFC.N) also passed.  For details see Federal Reserve releases results of Comprehensive Capital Analysis and Review (CCAR) (Fed Press Release)

  • Shifting Incomes for American Jobs (Flowing Data)  With some occupations, people make more annual income than others. Obvious. But we typically see figures in terms of means and medians when in reality, the difference between the person who makes the most and the one who makes the least can be significant.  The chart below shows the spread for major occupation groups, for several decades. Imagine you randomly select 50 people from each group, and this is what their annual income probably looks like.  Note:  What is displayed is not pay.  Each dot represents the difference between lowest and highest income (total, not just salary or wage) for the lowest earners and the highest for 50 randomly selected individual positions.  The author says if "you randomly select 50 people from each group, and this is what their annual income probably looks like".  Click on title for interactive chart which displays data for 1960, 1980, 2000 and 2014. 

low.high.incomes.by.occupation

EU

  • Trade and politics collide as UK, EU consider their future (CNBC)  Trade between the United Kingdom and the European Union is worth hundreds of billions of dollars, and businesses across Europe want it to continue uninterrupted. The sticking point: The British have made the Europeans really, really mad.  Political leaders in Europe are strongly motivated to punish the U.K. for the Brexit.  Well-entrenched business interests want it to continue with as little disruption as possible, but the politicians want to impose something like a 21st century VersaillesTreaty.  See next article.

  • EU spells out conditions for single market access to Britain (Associated Press)  European Union leaders drew a stark line along the British Channel on Wednesday, telling the U.K. that it cannot keep valuable business links with its former continental partners in a seamless single EU market, if it doesn't also accept European workers.  The challenge cuts to the heart of the British vote to leave the bloc following a virulent campaign where migration from poorer EU countries was a key concern. It also sets the scene for the complex departure negotiations facing departing Prime Minister David Cameron's successor, for which nominations opened in London Wednesday.  See Versailles Treaty comment in preceding article discussion.

UK

1. Ignore the vote

2. Enough citizens sign a petition

3.  Hold a general election

4. A significant change in conditions - basically negotiate a new deal

Turkey

  • Attackers kill 42 in scenes of chaos at Istanbul airport (Associated Press)  The death toll is still rising, up from 36 when today's Early Bird was published.  Suicide attackers armed with guns and bombs killed 42 people and wounded hundreds at Istanbul's busy Ataturk Airport Tuesday night, apparently targeting Turkey's crucial tourism industry. The government blamed the attack on Islamic State extremists but there was no immediate confirmation from the group.  More than 230 additional people are reported injured.

Russia

  • Putin and Erdogan mend ties after Russia-Turkey jet incident (BBC News)  The leaders of Turkey and Russia have spoken for the first time since the downing of a Russian military jet by Turkey sparked a diplomatic crisis.  Recep Tayyip Erdogan and Vladimir Putin agreed over the phone to meet in person, Mr Erdogan's office said.  The call came after Turkey expressed "regret" earlier this week to Mr Putin and to the family of the Russian pilot killed in the incident.  The fighter jet was shot down near the Syria-Turkey border in November.  Turkey claimed that the jet was warned repeatedly after entering Turkish airspace, a claim fiercely denied by Russian officials.

Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea

  • Supermodel Christina Estrada Wants Ex to Pay for Her $262 Million Lifestyle (The Daily Beast)   On one level, considering how many people live paycheck to paycheck, former supermodel Christina Estrada’s testimony at London’s High Court on Tuesday detailing financial hardship as endured by the super-rich might sound absurd, indeed offensive.  On another level, it was fabulous.  She is pleading with a London court for millions from her ex to keep up her high-flying lifestyle—including $1.3M a year for clothes.  And what a life Ms. Estrada was used to: She is seeking almost $262 million in compensation for her 13-year marriage to Dr. Walid Juffali, a 61-year-old Saudi billionaire.  Econintersect:  Let's add it up - 13 years x 365 nights - that figures out to just over $55,000 a night.  But then, what is the reason for the divorce?  Estrada divorced her husband after he married a younger model, 25-year-old Lebanese model and TV presenter Loujain Adada. in 2012.  Saudi law allows up to four wives.  So, under those circumstances, to what portion of her ex-husband's net worth is she entitled?  Perhaps 10%? Or 20%?  Or 25%?  If 20%, $262 million x 5 = $1.3 billion.  Dr. Juffali is personally be worth more than that; he is CEO and Chairman of E. A. Juffali and Brothers, one of Saudi Arabia's largest companies, valued at more than $19 billion.  Wikipedia gives his net worth as £4 billion ($5.2 billion) so Estrada's claim is only 5%.  Dr. Juffali would be getting off cheap.  Note:  He divorced his first wife in 2000 with a settlement of $40 million.

  • The poorest town in every state (24/7 Wall St., MSN News)  Slide show.

  • The richest town in every state (24/7 Wall St., MSN News)  Slide show.

  • 25 Signs and Symptoms of Alzheimer's Disease (Health.com)  There are many other causes of memory loss, including vitamin B12 deficiency, and brain, thyroid, kidney, or liver disorders. However, having several other symptoms could be a sign of Alzheimer's disease (AD).Recognizing the signs of dementia can help lead to a quicker diagnosis.  See slide show of the 25 Alzheimer's symptoms.

  • What's Next For The S&P: "All Eyes On 1,950" The Charts Say (Zero Hedge)  While some are focused on a possible developing bearish head-and-shoulders top (see Lance Roberts), ZH sees a possible bullish reverse head-and-shoulders bottom.  See first chart below.  ZH also presents another long-term chart which would indicate that there should not be too much longer before a long-term cyclical top for stocks should be put in place - but maybe not just yet.  See second chart below.  Click on either chart for larger image at Zero Hedge.


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