Early Bird Headlines 28 August 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
Global
- Expert: We’re ‘locked-in’ to 3 feet sea level rise (CNN) Hat tip to Alun Hill. According to Steven Nerem of the University of Colorado, we are “locked into at least 3 feet of sea level rise, and probably more.” Only a little less than 2 years ago the IPCC (Intergovernmental Panel on Climate Change) released its all-encompassing assessment on the current state of climate change research and made projections for a rise in global sea levels of 1 to 3 feet. That may be already significantly outdated.
- The Periodic Table’s Endangered Elements (Compound Interest) Hat tip to Barry Ritholtz, The Big Picture. In total, the graphic shows 44 elements whose supply is at risk. For some, the risk is more serious than for others – but there are 9 elements shown in this table for which there is concern that there is a serious threat to their supply within the next 100 years, and a further 7 for which there is a rising threat due to increased use. See next article.
Click on Periodic Chart for large image at Compound Interest.
- How Asteroid Mining Will Work (How Stuff Works) This is a review of how plentiful some metals are on asteroids. Feasibility of mining them is discussed in Asteroid Mining (Permanent). There is a company (Planetary Resources) planning to do this mining within the not too distant future. While the more plentiful metals in steroids do not include many of the endangered, any trace levels of them when mining the major metallic elements would be valuable added production. There is even a computer app that can be used by the public to explore for potentially valuable asteroids.
U.S.
- Dow sets a 2-day record, finishes up 369 points (CNN) After several volatile days with huge swings in both directions, the Dow finished Thursday up 369 points. Combined with Wednesday’s 619-point rally, it’s the best two-day point gain for the Dow in its history, surpassing the previous record set in 2008. Econintersect: If it is of any significance (and it may not be) the previous record came in the middle of a 59% market crash.
UK
- UK is perfectly placed to use 100 per cent renewable power (New Scientist) While Germany powers on with its mission to champion renewable energy, Malte Jansen urges the UK to follow suit. The UK could base its power supplies primarily on solar panels and wind turbines – the cheapest technologies for renewable-energy generation. But of course the sun doesn’t always shine and the wind doesn’t always blow, so those sources would have to be balanced with some backup. One backup option would be biomass that is used to produce biomethane, which can be stored, sent into the gas grid or burned to generate electricity on demand. And tides off Wales as high as 10 meters offer another good “fill-in” energy resource for leveling production of electricity. Costs for these renewables resources are becoming competitive and trending lower while fossil fuel costs are in a long-term uptrend.
Greece
- Former Greek PM’s party leads in opinion poll (Reuters) The first authoritative opinion poll published since Greek Prime Minister Alexis Tsipras resigned last week showed his leftist Syriza party leading the opposition conservatives ahead of Sept. 20 elections. The Syriza party was supported by 23% of those polled, versus 19.5% backing the conservative New Democracy party, while the Popular Unity party which split off from Syriza over a week ago only polled 3.5%.
India
- Modi’s big risk: a tide of unemployed workers (Reuters) A slump in India’s property sector is turning into an employment crisis for Prime Minister Narendra Modi, who rose to power on the promise of creating jobs. Over the last decade construction has been the country’s second largest industry, employing one of three Indian workers. The sector has collapsed 40% over the last 12 months and many jobs have disappeared.
Click image below to watch video at Reuters.
- Japanese Nikkei Gaps Higher, Continues On Up. (Investing.com) In mid-afternoon the Nikkei 225 was 2.77% higher and up 7.3% from Tuesday’s close.
Click on chart for latest streaming data from Investing.com.
China
- Is the economy of China really so different? (American Enterprise Institute) See also next article. The argument presented here is that China is in trouble and optimists about the Middle Kingdom will learn that China is subject to the same “basic laws of economics” as everybody else. The author says that there are at least two reasons why these China optimists will prove to have been overly Pollyanna-ish in their views:
The first is that there has never before been such a rapid run-up in private and quasi-official sector debt than there has been in China over the past six years. Indeed, Chinese private sector debt has now increased from around 110% of GDP in 2009 to over 180% of GDP at present. Such a rate of increase substantially dwarfs that which preceded either the US housing bubble’s bursting in 2006 or that which preceded Japan’s lost decade in the 1990s. As we know all too well, there are few instances where credit bubbles even on a very much smaller scale have not ended in tears.
The second is the very rapidity and scale of the Chinese equity market bust. In the space of but a few months, approximately half the value of the Chinese equity market’s valuation has been wiped out. This amounts to about US$ 5 trillion, or the equivalent of 50% of China’s GDP. It is difficult to believe that this will not take a big toll on Chinese household and business confidence. This is particularly the case considering that almost 10% of Chinese equities were bought on margin and that highly indebted households are not in the best position to weather large equity market losses as they might have been in earlier Chinese equity busts.
- False Alarm on a Crisis in China (The New York Times) This author thinks the preceding author has the wrong picture. See also What Investors Must Know About China (GEI Investing) and Explainer: What Role Does The Stock Market Play In The Chinese Economy? (GEI Feature). Here is the summary argument from the NYT article:
There is little evidence that China’s economy is slowing significantly from the 7 percent pace reported by the government for the first part of the year. Wage growth is running at about 10 percent annually; the pace of creation of nonagricultural jobs is stronger than in any recent year; both real disposable income and consumption expenditures of Chinese households are growing strongly. It is not the picture of an economy heading for a hard landing.
- China stocks extend rebound but banks lose steam; Hong Kong up on Wall Street rally (Reuters) Gains in major indexes were tempered by weakness in banks, which reported virtually no profit growth in the first-half and mounting bad loans, adding to worries that the economy may be at risk of a sharper slowdown than earlier expected. See also next article.
- Shanghai Gains for Second Day after Huge Decline (Investing.com) The Shanghai Composite was trading more than 2% higher in mid-afternoon action. The current price is up more than 7.5% from Wednesday’s close.
Click on chart for latest streaming data.
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