More links: 2013-05-31
I have had a ton of old links I simply haven’t read that I am now going through. Some of them are old data that aren’t newsworthy anymore. But as I go through them, I find a lot of these articles are really still topical. So I am going to put up a few extra links over the next several days to show you what I’m reading to inform my world view.
Expect separate tech posts though because I have been saving the tech articles up separately. Happy Friday.
Edward
7 Characteristics Associated with Long Life (and How to Cultivate Them) | Mark’s Daily Apple
“One main determinant appears to be whether you have certain alleles. You can’t change that (not yet anyway), but there are some things you can control. What you can affect – and what appears to have a big effect on, or at least a strong association with longevity – are personality traits and characteristics. How you see the world. How you engage life. How you interact with others. Now, to be sure, many personality traits are somewhat out of your conscious control, whether genetically determined or set in motion by events long-past, but that doesn’t mean you can’t try to cultivate or emulate them.
What are some of these characteristics?”
It’s not the deficit that will haunt our children: it’s unemployment | Business | The Observer
“The latest official figures, released last week, showed that in Portugal, the youth unemployment rate hit 42.1% in the first quarter of 2013, while in Greece, official figures show an extraordinary 64.2% of 15-to-24-year- olds out of work.
Even the hardest-bitten austerians couldn’t ignore the political risk of having such a large group of young people standing idle. It would be surprising if they didn’t take to the streets – and in the years to come, it will be surprising if this neglected generation doesn’t channel its resentment and anger into demands for a different economic approach.”
Europe: The Light at the End of the Tunnel Is Still Two to Three Years Away
This is from 10 May:
“Deleveraging will not come through growth, as growth will not return until deleveraging is completed. It also will not come through inflation because the ECB will not inflate. The debate between Spendarians and Austerians has little relevance as only Germany is in a position to provide a significant discretionary fiscal stimulus and just a few more countries (the Netherlands, Finland and perhaps France) may be able to let the automatic fiscal stabilizers operate. If countries under the Excessive Deficit Procedure or on troika programmes wish to spread the pain of austerity over a longer period, then they will either have to convince the markets to fund them or ask the troika for additional concessional funding.”
Economy in U.S. Grew at 2.4% Rate, Less Than First Estimated – Bloomberg
“Consumer spending, which accounts for about 70 percent of the economy, increased at a revised 3.4 percent annualized rate in the first quarter. The gain, which added 2.4 percentage points to GDP, was more than the previous estimate of 3.2 percent. The median forecast in the Bloomberg survey called for a 3.3 percent increase.
Americans increased their personal spending by drawing down savings, today’s report showed. The saving rate dropped to 2.3 percent in the first quarter, compared with an initial estimate of 2.6 percent. It followed a 5.3 percent rate in the fourth quarter.
Disposable income adjusted for inflation dropped at an 8.4 percent annualized rate from January through March, compared with a 5.3 percent decrease that was previously estimated and the biggest decline since the third quarter of 2008. In the fourth quarter, real disposable income surged 8.9 percent.”
Pimco’s Gross Sees Treasurys’ Top – WSJ.com
So far, this is looking good. Time will tell. I believe a Japanese style outcome of stagnation would make this call moot.
“Bill Gross said the three-decade bull run in bonds ended in late April, in his latest attempt to call the top in a market whose buoyancy has repeatedly tripped up skeptical investors.
The comments by the manager of the world’s largest bond fund extended a May selloff of Treasurys, sending U.S. government-bond yields to the highest level since late March. The 10-year Treasury note fell 25/32 in price on Friday, to yield 1.900%, compared with 1.813% on Thursday, as bond prices move inversely to yields.”
Birth rate falls as Europeans struggle with crisis – Independent.ie
“In 2008 no country had fewer than 1.3 live births per woman, still a low figure by international standards. By 2011, Hungary, Poland and Romania had all fallen below this figure.
A birth rate of at least 2.1 children per woman is generally required to sustain the population of a developed country so a fall below 1.3 has serious consequences for those countries’ sustainability.
The rate had declined in 24 out of 31 European countries by 2011. Live births fell by 3.5pc over the three years, from 5.6 million to 5.4 million.”
Number of the Week: Total World Debt Load at 313% of GDP – Real Time Economics – WSJ
“Per-capita indebtedness is still just $11,621 in emerging economies (and rises to $12,808 if you exclude the two largest populations, China and India). For developed economies, it’s $170,401. The U.S. alone has total per-capita indebtedness of $176,833, including all public and private debt.”
Macro and Other Market Musings: Balance Sheet Recessions Are Really Nominal Income Recessions
“households’ deleveraging over the past few years may not be so much about their weakened balance sheets as it is about the unexpected decline in their expected nominal income growth. Josh Hendrickson and I are working on a paper where we develop this point more fully and, among other things, report the figure below. It plots expected household nominal income growth against the percent change of nominal household deb”
John F. Kennedy – Statement on the Steel Crisis, April 11, 1962
This is what Buffett refers to in his video from 1962 on the stock market dip.
Warren Buffett (1962) talks about a brief stock market drop – YouTube
Cool retrospective here of Warren Buffett from June 1962 talking about a dip in shares during the 1962 Steel Crisis. He comes across as a lot more technical and bookish back then and a lot less folksy. Apparently, a University of Nebraska at Omaha School of Communication documentary team discovered the film clip in the Nebraska State archives.
Warren Buffett sees ‘brutal’ damage for savers from central bank money printing – Telegraph
“Veteran investor Warren Buffett has warned that savers and bondholders are suffering a “brutal” erosion of their money as the US Federal Reserve and other central banks force yields to historic lows.”
ECB should reflect upon Denmark’s rate tactics – FT.com
“after almost a year of negative rates in Denmark there is scant evidence they have had much impact on bank behaviour. In the Looking-Glass world of negative rates, the ECB may care to ponder the Queen’s words to Alice in Lewis Carroll’s book: “You couldn’t have it if you did want it. The rule is, jam to-morrow and jam yesterday – but never jam today.””
Macro and Other Market Musings: The Seen and Unseen: Structural Budget Deficits Edition
“fiscal policy, independent of business cycle influences, has been tightening since 2010. It has gone from a deficit of 8.5% in 2010 to an expected one of about 4.6% in 2013. In other words, the reduction in the federal budget deficit over the past three years is more than just the government adjusting its balance sheet in response to improvements in the private sector’s balance sheet. It is also the result of explicit policy choices to impose fiscal austerity. And these explicit policy changes have been relatively sharp.
Many observers have overlooked the implications of this structural austerity experiment. Three years of explicit fiscal austerity in a depressed economy should, all else equal, lead to even more economic weakness. But it has not. Nominal GDP growth–a proxy for aggregate demand (AD) growth–has been remarkably steady. There is no evidence AD over the past three years has been adversely affected by this austerity. Friday’s job report underscores this point.
So what explains this development? The answer is not that fiscal policy has no effect, but rather that all else is not being held equal for U.S. aggregate demand growth. Specifically, Fed policy has effectively responded to the fiscal austerity, Eurozone shocks, China slowdown shocks, and other shocks to AD. Though this is a great accomplishment, it is far from adequate and is ultimately frustrating to watch. For it speaks to both the power and shortcomings of current Fed policy.”
Mixed outlook for European bank M&A /Euromoney magazine
“In an October 2012 report, the IMF estimated that European banks are likely to try to offload some $2.8 trillion of assets, or 7% of total assets, in the next two years.
At the AFME conference, PE executives painted a mixed picture of the FIG M&A climate in Europe. Cheap valuations, lack of competition relative to the US, and the growing supply meant US PE groups are targeting Europe.
The PE executives noted that regulators are now more hospitable to private equity capital in banks, given a lack of alternative investors.
Flowers, who moved to London last year to run the eponymous $3.5 billion fund, said “distressed asset financing” for PE firms had improved “dramatically” during the past three years but banks, and PE investors, now face a prolonged period of lower returns with G7 policy rates at historic lows.”
Dani Rodrik’s weblog: What is wrong (and right) in economics?
“I would say I am pretty conventional and mainstream on methods, but generally much more heterodox on policy conclusions. I have never thought of neoclassical economics as a hindrance to an understanding of social and economic problems. To the contrary, I think there are certain habits of mind that come with thinking about the world in mainstream economic terms that are quite useful: you need to state your ideas clearly, you need to ensure they are internally consistent, with clear assumptions and causal links, and you need to be rigorous in your use of empirical evidence.
Now, this does not mean that neoclassical economics has all the answers or that it is all we need. Too often, people who work with mainstream economic tools lack the ambition to ask broad questions and the imagination to go outside the box they are used to working in. But that is true of all “normal science.” Truly great economists use neoclassical methods for leverage, to reach new heights of understanding, not to dumb down our understanding. Economists such as George Akerlof, Paul Krugman, and Joe Stiglitz are some of the names that come to mind who exemplify this tradition. Each of them has questioned conventional wisdom, but from within rather than from outside.
However, contemporary economics in North America has one great weakness, and that is the excessive focus on methods at the expense of breadth in terms of social and historical perspective.”
Colleges Soak Poor Students to Funnel Aid to Rich – Bloomberg
“To increase their standing on college rankings, more private colleges are giving “merit aid” to top students, who are often affluent, while charging unaffordable prices to the needy, according to the report. The percentage of students receiving merit aid jumped to 44 percent in 2007-2008 from 24 percent in 1995-1996, the report found. To a lesser extent, public universities are using some of the same practices, Burd said.
Many of the most selective and wealthiest colleges, including the eight members of the Ivy League, Williams College in Williamstown, Massachusetts, and Cambridge-based Massachusetts Institute of Technology, award aid based only on financial need. Less selective nonprofit colleges often offer tuition reductions and merit aid to lure students to fill their seats.”
U.S. companies’ overseas earnings hit record $1.9 trillion: study | Reuters
“Large U.S. companies boosted their offshore earnings by 15 percent last year to a record $1.9 trillion, avoiding hefty tax bills by keeping the profits abroad, according to a new report.”
Travel advice from the airfare watchdog | Marketplace.org
“Consumer fly rights
1. If you’re bumped from a flight, never accept a travel voucher. You’re entitled to a cash payment on the spot of up to $1200 depending on the length of the delay.
2. Even if your luggage is merely delayed rather than permanently lost, you’re entitled to monetary compensation—not just a few bucks for a toothbrush. Maximum compensation on a domestic itinerary is $3,300; on an international one, approximately $1500.
3. You have the right to book an airfare and put it on hold at the same price for 24 hours, without payment.
4. If you’re flying from or within the European Union, you have additional rights in the case of delay or cancellation, including hotel, meals, and monetary compensation, if the problem was within the “reasonable control” of the airline.
5. If your flight is severely delayed or cancelled, most airlines will allow you to request a full refund, even on a non-refundable fare, if you choose not to fly.”
Stodgy Netherlands is nation that’ll blow up euro – Matthew Lynn’s London Eye – MarketWatch
“Which euro-zone country is most deeply in debt? The profligate Greeks, with their generous state-funded pensions? The Cypriots and their banks stuffed with dodgy Russian money? The recession-hit Spaniards or the boom-and-bust Irish?
None of the above. Actually, it is the sober, responsible Dutch.
Consumer debt in the Netherlands has hit 250% of available income, one of the highest levels in the world. In Spain, by comparison, it has never gone above 125%.”
Eric Holder to media: I get it – POLITICO.com Print View
““[Holder and Cole] said they are reaching out to editors and counsels for news organizations about how to strike what they called ‘the balance’ between protecting the flow of information and journalists’ ability to do our jobs and what they described as national security damage,” said POLITICO editor-in-chief John Harris, who was present at the meeting.
The five journalists at the meeting were Harris; Martin Baron, the executive editor of The Washington Post; Gerald Seib, the Wall Street Journal’s Washington bureau chief; Jane Mayer, The New Yorker staff writer; and Jim Warren, the Washington bureau chief for The New York Daily News.
Several news organizations boycotted the session, citing concerns with the provision that it be held on an off-the-record basis. The Associated Press, The New York Times, CNN, Fox News, NBC News, CBS News, Reuters, McClatchy, and The Huffington Post all passed on the meeting.”
“Evernote’s two-step verification — the most important of these three new services getting introduced today — had been in the works already, but plans to roll it out got accelerated after the February incident: today is the fruition of that attempt.
Like other two-step user authentication systems rolled out by Twitter just last week, Evernote’s service will be SMS-based, and it will be optional for all users. That is to say, if you are an Evernote user and don’t want to take the extra step to prove who you are every time you need to log in, you do not need to.”
Is It Better to Walk or Run? – NYTimes.com
“Walking and running are the most popular physical activities for American adults. But whether one is preferable to the other in terms of improving health has long been debated. Now a variety of new studies that pitted running directly against walking are providing some answers. Their conclusion? It depends almost completely on what you are hoping to accomplish.”
Velominati › Lost Art: Mashing a Giant Gear
“ycling enthusiasts used to mash a giant gear for one, simple reason: it looked super cool. Do you want to ride like Lucho Herrera who is always falling off his bike or Eddy Merckx who is always winning races?
Even as recently as the 90′s it was a common sight to see the pros riding at a cadence well under 60rpm, with their upper bodies heaving under the strain of every pedal stroke. These days, the pros dance uphill in cadences of 90 to 100 rpm, making molehills out of mountains. While it’s amazing to watch, part of me misses the days of the gear masher. Jan Ullrich was considered to push a huge gear because his climbing cadence was something like 75-80 rpm – hardly anything compared to what they did in the 50′s and 60′s.
During those days, the pros had to ride the Alps of Italy and France on 5, 6, or 7-speed clusters, hugely limiting the range of gears they could reasonably ride. “
Technique: Cadence Matters – BikeRadar
“elites are known to pedal faster than beginners, and with more oomph on the down stroke of their pedal action [2]. The exact reason why pros get more force down through the pedals is not clear. But (unsurprisingly) it seems to be due to their muscles, which contain higher blood capillary density and the type of muscle fibres that can only really be built up through years of endurance training – not to mention hill climbing, combined with fast riding in groups that allows high speeds and low effort. This produces high pedalling power and the ability to spin fast.”
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