What We Read Today 26 March 2014

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 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.

• Sanctions Against Russia: Will There Be Blowback? (Ben Kramer-Miller, Wall St. Cheat Sheet) Possible blowback include Russia dumping U.S. Treasuries (it holds $132 billion) and disrupting international financial markets, cutting off oil and natural gas to Europe which depends heavily on that source of energy, interfering with western corporations which have been doing business in Russia, withholding wheat from its usual customers, withholding palladium from world markets (it is the world’s leading producer), etc., etc., etc. (See also next article.)

• “No Great Tragedy” (Dave Gonigam, 5 Min. Forecast) Dave points out that Russia, a net exporter (approaching $200 billion trade surplus each of the last two years), has much more to lose from global economic disruption than to gain, at least in the short run. He points out that Russia could move away from Europe and more to China as a mercantile partner, but “these things are not done in a day, and the Russian people have to eat in the meantime“.

• Bitcoin exchange Vircurex freezes withdrawals, hoping for fresh influx of customers (David Meyer, GIGAOM) Hat tip to Rob Carter. More bitcoin hacking thefts. The Beijing company’s solution? Apply Ponzi finance principles.

• 5 things every retirement portfolio should have (Robert Isbitts, MarketWatch, The Wall Street Journal) Rob Isbitts contibutes weekly to Global Econiomic Intersection. Here Rob defines the five characteristics necessary for investing successfully for and during retirement.

• There will be no Minsky moment for China (Peter Cai, China Spectator) Cai says that the Chinese government has “enormous power” and could “act decisively” to prevent a crisis from getting worse. What is that power? The government is the central bank, the only large scale economy in the world where that is the case.

Yes, China faces huge challenges this year in dealing with mounting debt problems and a slowing economy. But we cannot ignore the fundamentals, such as strong balance sheets and reform momentum. If history tells us anything, it’s that Beijing has a strong record of proving pessimists wrong and shorting China has never been an easy proposition.

• Putting China’s dramatic transformation into perspective (Steve Keen, China Spectator) Steve Keen contributes to Global Economic Intersection. Most recent articles were about Secular Stagnation, Misapplication of Math by Economists and Faulty Economic Logic. Eight of his lectures have been Documentary of the Week. In this article he recounts his view of the recent history of economic development in China.

• 7 Recycling Mistakes You’re Probably Making (Beth Bucszynski, Care 2 make a difference) Sometimes recycling mistakes are worse than not recycling at all.

Today there are 13 more articles discussed ‘behind the wall’.

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