Financial Markets and Economy
Americas Student Loan Crisis Risks Turning AAA Debt Into Junk (Bloomberg)
It’s no secret Americans are having trouble paying off their record $1.2 trillion in student loans. What’s less known is that the trend is turning a typically sleepy corner of the bond market into a potential hazard zone.
China Stocks Slump Over 10% Post-Intervention: Derivatives Dealers Reveal $150 Billion In "Questionable" Exposure (Zero Hedge)
"Right now, dealers are going through their books trying to work out what their positions are worth," explains a major participant in the Asian derivatives market as Reuters reports the suspension of hundreds of mainland China stocks has created disputes between banks and their clients over the valuation of billions of dollars of equity derivatives. "In the end, someone is going to have to call the value of those deals, and someone else will lose out," and with over 1000 stocks still suspended, and Chinese stocks now 12% off post-intervention highs, ISDA – the body that represents the world's largest dealers – is worried that at least $150 billion of outstanding OTC equity derivatives on mainland-listed shares may not have the appropriate language to deal with these events. After 3 days of "you will never learn" rises, margin debt declined following China's great data last night and the continuedgood news is bad news sell off today.
Asia shares mostly higher after Greek vote, dollar up after Yellen (Business Insider)
Asian stocks were mostly higher on Thursday after the Greek parliament approved a bailout plan while the dollar stood tall after Federal Reserve Chair Janet Yellen reinforced expectations for a U.S. rate hike.
Japan's Nikkei <.N225> rose 0.5 percent, as did Australian shares <.AXJO>. South Korea's Kospi <.KS11> was up 0.2 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> was flat, with the focus on how Chinese shares will fare when they begin trading.
Singer, Ackman Need Only Turn to Goldman to Ease China Fears (Bloomberg)
Hedge fund managers including Paul Singer and Bill Ackman who’ve been concerned about the slump in China’s stock markets may feel better if they listened to the country’s best economists.
Japan's Economic Disaster: Real Wages Lowest Since 1990, Record Numbers Describe "Hard" Living Conditions (Liberty Blitzkrieg)
With so much attention rightly focused on China at the moment (see: Chinese Authorities Arrest Over 100 Human Rights Activists and Lawyers in Desperate Crackdown on Dissent), people aren’t paying enough attention to the budding economic calamity unfolding in Japan.
3 charts that explain China's stock market fall (Business Insider)
The sheer size and importance of China’s equity markets cannot be overstated. Second in size only to the New York Stock Exchange, the combined value of the Asian country’s stock markets is $14 trillion and change. Or at least it was, before they fell 30 percent, wiping away nearly $2 trillion in value. To put this in perspective, the gross domestic product (GDP) of debt-troubled Greece is around $200 billion.
Commercial Real Estate prices increased in May (Calculated Risk)
Here is a price index for commercial real estate that I follow.
Refiners Race to Make Cheap Oil Into Gasoline (Bloomberg)
Record driving and plenty of oil are making this the best summer to make fuel in at least a decade.
Greek Bailout Approved in Athens as ECB Weighs Emergency Funding (Bloomberg)
Greek lawmakers passed a bailout agreement that keeps the country in the euro for now, shifting attention to the European Central Bank as it weighs whether to pump more money into the country’s hobbled financial system.
After more than four hours of debate stretching into the early hours of Thursday, 229 members of the 300-seat parliament in Athens approved new austerity measures that are a precondition of as much as 86 billion euros ($94 billion) in aid. Among those who opposed the bill were 32 members of Prime Minister Alexis Tsipras’s Coalition of the Radical Left, or Syriza, a sign the premier may have lost his majority.
These are the three things crippling Puerto Rico's economy (Business Insider)
As the Euro-zone deals with Greece, the U.S. must deal with what’s being described by some as the “Greece of the Caribbean” – Puerto Rico.
This is what a good economy looks like (Business Insider)
There's a lot of good news for the economy in the Fed's July Beige Book economic update, particularly when it comes to real estate.
The bottom line is that many regions across the country are seeing a building boom in either residential or commercial real estate or both. In addition, housing prices are increasing in a lot of places.
This is what a good economy looks like.
Sina Drops as Deutsche Bank Cuts Recommendation on Web Outlook (Bloomberg)
Sina Corp. dropped to the lowest level since May in New York trading after Deutsche Bank AG downgraded its rating on the stock to hold on concern the Chinese Internet company’s web portal business will be hurt as advertisers shift to mobile platforms.
Here's how the price of everything has changed since 1993 (Business Insider)
A New York Times chart showing how the prices of various goods have changed relative to the overall inflation rate has been making the rounds on Twitter, so we decided to take a closer look at the varying aspects of inflation.
Russia ETF Extends Decline as Industrial Production Contracts (Bloomberg)
The biggest exchange-traded fund tracking Russian stocks ended a four-day gain as data showed industrial production fell more than forecast and oil slumped, dimming the economic outlook for the world’s biggest energy exporter.
How Banks Lost Their Groove in Small Business Finance… and Why They May Never Get It Back (Forbes)
Prior to the Great Recession, easy credit conditions prevailed for small businesses. Cash was free flowing, and relaxed lending practices made it relatively easy to secure financing.
After the Lehman Brothers crash and during the ensuing “credit crunch,” volume fell roughly 19 percent from 2008 until 2012. This general slowdown in lending coincided with stricter requirements placed on borrowers. Financing simply became less available — even for “creditworthy” companies. For the first time in U.S. business history, small business owners frequently were unable to secure credit even from their own banks.
When capitalism turns to cannibalism (Business Insider)
When people say “capitalism has failed” or “capitalism has succeeded,” we have to ask: what type of capitalism do you mean?
Authentic capitalism, in which capital is placed at risk to earn a return in a competitive, transparent marketplace, or do you mean cartel-state capitalism, or crony-capitalism, or monopoly capitalism or finance capitalism, i.e. the types that dominate the global economy?
Egg prices may break lower as bird-flu fears fade (Market Watch)
Egg prices continued climb last month, as millions more chickens suffered collateral damage from the recent bird-flu outbreak. But there is a sunny side to this story: there could be some relief for consumers, and chickens, in the near future.
Wholesale prices for eggs for fresh use in June surged by a seasonally-adjusted 69.6% from May, after soaring 42.9% in the previous month, according to the U.S. Department of Labor’s producer-prices report out early Wednesday. Prices last month were nearly double what they were a year ago on an unadjusted basis.
If You're Feeling Bullish on China, ConsultDr. Copper (Bloomberg)
If this week’s better data from China convinced you that things in the world’s second-biggest economy aren’t that bad after all, check with Dr. Copper.
The metal, known to some as the commodity with an economics degree, plummeted to a six-year low of $5,240 a metric ton last week on the back of the rout in Chinese stocks. While the government was able to stop the bleeding in equity markets and copper has recouped some of its losses, people who trade the metal predict weaker demand growth from China will help drag down prices.
Fed’s Beige Book sounds optimistic about the economy (Bloomberg)
A key report about the U.S. economy released Wednesday offered an optimistic take on the U.S. economy, further lending credence to speculation that the Federal Reserve will raise interest rates later this year.
The Federal Reserve’s Beige Book indicated growing optimism about the U.S. economy, with each of the central bank’s 12 districts reporting activity expanded from mid-May through June, and particular optimism coming from five districts. Like many previous reports, that growth was described as “modest” or “moderate.”
Crude oil is getting crushed (Business Insider)
Crude oil is getting crushed.
Greece and Europe Must Consider Ecuador (Bloomberg)
The sucre maintained a fairly stable exchange rate against the US dollar until 1983, when it was devalued to 42 per dollar and a crawling peg was adopted. Depreciation gained momentum and the free market rate was over 800 per dollar by 1990 and almost 3000per in 1995. The sucre lost 67 percent of its foreign exchange value during 1999, then in one week nosedived 17 percent, ending at 25,000/$1USD on January 7, 2000. On January 9, President Jamil Mahuad announced that the US dollar would be adopted as Ecuador's official currency. — Wikipedia
Greece faces a fiscal impossible trinity. They're not the first.
Buy and hold investing works, even when it looks like it's not (Business Insider)
What I failed to mention in this tweet is that in order to earn that 93% gain, an investor would have had to first endure a 45% loss. There’s always a catch when looking back at historical market data.
One of the responses I received on this was that it’s impossible for an investor to ride it out in this type of scenario. I understand the sentiment here. It’s gut-wrenching to watch your stocks get cut in half. Most investors can’t handle those kinds of losses. Buy and hold is not for everyone, but for those who are able to extend their holding period, that’s a good thing. The fact that so many people feel that a strategy is impossible to pull off is the exact reason that it works over time. This is true of any successful, long-term approach.
Politics
Drugged Sex Is Rape, Obama Says Regarding Bill Cosby Allegations (Bloomberg)
President Barack Obama said he’s not able to revoke a White House honor bestowed on comedian Bill Cosby, who has been accused of drugging and raping about two dozen women.
“There is no precedent for revoking a medal,” Obama said Wednesday at a White House news conference. “We don’t have that mechanism.”
Responding to a question about whether he would rescind the Presidential Medal of Freedom awarded to Cosby in 2002 by President George W. Bush, Obama referenced allegations lodged against the comedian.
Behind in presidential polls, Ted Cruz surges in fundraising (Market Watch)
Ted Cruz is way behind in polls about the 2016 Republican presidential nomination. But he’s killing it when it comes to fundraising.
The Texas senator is in eighth place among the GOP White House hopefuls, according to the latest average of polls from RealClearPolitics. But Cruz places third in the money race, when counting his own campaign and affiliated super PACs, behind fellow Republican Jeb Bush and Democrat Hillary Clinton.
3Charts That Show Why Hillary Clinton Wants to Increase Profit-Sharing (Bloomberg)
In a speech at the New School in New York City on Monday, presidential candidate Hillary Clinton called for building a “growth and fairness economy.”
The Future Costs Of Politically Correct Cultism (Alt-Market)
I rarely touch on the subject of political correctness as a focus in my writings, partially because the entire issue is so awash in pundits on either side that the scrambling clatter of voices tends to drown out the liberty movement perspective. Also, I don’t really see PC cultism as separate from the problems I am always battling against: collectivism and the erasure of the individual in the name of pleasing society. Political correctness is nothing more than a tool that collectivists and statists exploit in order to better achieve their endgame, which is conning the masses into believing that the group mind is real and that the individual mind is fiction.
The 2016 Presidential Candidates' Time in Elected Office, Ranked (Bloomberg)
The current front-runners from each party are not the ones with the most experience in politics.
Technology
Tesla gets ready for its 'Gigafactory' by tripling its Nevada land (Engadget)
Tesla's battery-focused "Gigafactory" isn't even finished yet, but that isn't stopping the electric car maker from expanding its plant's territory. The company just confirmed that it has nearly tripled its Nevada land purchases, adding 1,893 acres to the 1,000 it got back in 2014. Not that Tesla is planning to grow the factory itself in the near future. A spokesperson tells the Wall Street Journal that most of the new turf is a buffer space — Tesla could put solar farms in this area to power the factory, but it won't add manufacturing capacity in the short term. Elon Musk and crew have the option of buying thousands of more acres, though, and there's a real chance that they'll need the extra headroom if the Model 3 and Powerwall take off.
Concept Rocking Chair Could Power Your Phone (Popular Science)
The volta, a chair that generates energy while you rock.
A team of four undergraduates from UC Berkeley has created a rocking chair that generates energy while you rock.
The chair, called Volta, is equipped with a pendulum under the seat that moves as the sitter rocks back and forth. The motion of the pendulum generates energy that gets stored in batteries. That power can be used to give extra juice to electronics like phones and tablets.
Health and Life Sciences
What does rosemary do to your brain? (BBC)
In folk medicine, rosemary has been associated for centuries with having a good memory. But is it worth investigating whether it really has any powers, asks Dr Chris Van Tulleken.
In scientific terms there are different kinds of memory.
There's past memory – your experiences and what you learned at school. There's present memory, which is your working minute-to-minute memory. And there's future memory or "remembering to remember".
Medical Studies Without Females are Incomplete (Even if They're Rats) (Gizmodo)
Some sex differences, like facial hair or genital anatomy, are plain to see. But people also have hormonal and metabolic sex differences that aren’t so obvious, and those can change how diseases affect the body and how drugs work.
So when males are the only test subjects in medical research–both in the animal models that help develop new drugs and medical treatments and in the human clinical trials that follow–specific (and sometimes surprising) effects of those treatments on females remain hidden.
Life on the Home Planet
Gap Widens Between U.S. Climate Policy and Coal Leasing (Scientific American)
Southern Utah is national park country—five parks spread across scenic red rock canyons and picturesque mesas. It’s also the scene of the Obama administration’s ongoing coal leasing program, which allows mining companies to produce coal on federally-owned public land.
At a time when climate scientists are warning with increasing urgency that many fossil fuel resources must be left in the ground, the federal government is leasing publicly-owned land and minerals for coal mining at an increasing rate, especially in Wyoming, Colorado and Utah. It’s happening even as the White House finalizes the Clean Power Plan, which will regulate coal-fired power plant emissions, and the president prepares to travel to Paris, where he will pledge to slash the United States’ carbon emissions to 28 percent below 2005 levels by 2025.
