Links for 10/5

[admin]

Buried deep in a routine Federal Reserve report that is notable mainly for its numbers-heavy presentation is a data point that threatens to upend the notion that Corporate America is struggling to boost earnings. The Fed’s measure of income, which happens to have moved in unison with profits for Standard & Poor’s 500 Index companies 83 percent of the time since 1992, just posted its biggest quarterly increase since 2012.

The Big Surprise About Weak U.S. Profits Is How Strong They Are - Bloomberg Business

Hussman's analysis suggests that, on average, it takes the market about 12 years to work off extreme over- or undervaluation and get back to "normal." In other words, it takes valuations about a dozen years to mean-revert.

History suggests stocks are overvalued - Business Insider

AstraZeneca, one of Britain’s largest businesses, is using a multimillion-pound tax avoidance scheme in the Netherlands, set up months after the UK relaxed its tax laws for multinationals in 2013. A Guardian investigation has found the pharmaceutical giant created the scheme using $2.7bn (£1.8bn) of internal group loans routed through its Dutch subsidiaries. The company paid no corporation tax in the UK, despite having made global profits in 2013 and 2014 totalling $4.5bn.

Revealed: how AstraZeneca avoids paying UK corporation tax | Business | The Guardian

Mr Macron had even tougher words for Germany, warning that the eurozone will disintegrate in a storm of populist revolt unless Berlin drops its vehement opposition to fiscal union and large transfers to the poorer regions. The former Rothschild banker said the currency bloc is fundamentally unworkable without a joint budget to back it up and will leave debt-stricken countries on the periphery in permanent trouble.

France signals EU treaty change to avert Brexit, warns on euro survival - Telegraph

If you ever need a little pick-me-up, one neuroscientist says he has the playlist for you. Dr. Jacob Jolij, of the University of Groningen in the Netherlands, created a playlist of feel-good and uplifting songs — and a formula for finding them.

Jolij created the most uplifting playlist - Business Insider

[admin]

Gunnar Garfors traveled to every country in the world before turning 40 - and he isn't stopping anytime soon. We sat down with the globetrotter to find out how he stays safe while traveling around the world.

Gunnar Garfors on safe traveling tips - Business Insider

The theory is also thought to explain why we seek out and enjoy other intrinsically unpleasant experiences, such as fear-inducing rollercoasters or sad movies. “If an animal took a rollercoaster it would be scared, and it would never go again.” says Rozin.

BBC - Future - Why pain feels good

"If a 2011 style bear market plays out, I believe that the Dow (Dow Jones Global Indexes: .DJI) is roughly 1,000 points away from hitting what could be an intermediate term bottom, and the S&P (INDEX: .SPX) has another 90 points to fall…before we can get a long-lasting bounce," Cramer said.

Cramer: I can't be bullish until THIS happens - Yahoo Finance

A marked slowdown in big emerging market countries will cut global growth to its lowest level since the deep recession of 2009, the head of the International Monetary Fund has warned. Christine Lagarde, the IMF’s managing director, said forecasts to be published by her organisation next week would show activity expanded by less than the 3.4% recorded in 2014 – the joint weakest since the world economy came to a standstill six years ago.

IMF chief warns of weaker global economic growth | Business | The Guardian

“In reality, immigrants do not commit a lot of crime,” says Emily Owens, a University of Pennsylvania professor of criminology and Wharton professor of business economics and public policy. “The immigrant crime rate is very low compared to native people. This idea that immigrants commit a lot of crime — there is no evidence.”

The Immigration ‘Boogeyman’: Separating Fact from Fiction

[admin]

To estimate the amount of hidden money, Mr. Zucman begins with a simple trick. If you add up all the financial liabilities and all the assets in the world, they ought to balance. One person’s liability ought to be another’s asset. (Or one company’s, one country’s, etc.) But if you add up all the world’s reported liabilities, the figure is about $6 trillion higher than the reported assets—a sum that’s been growing. The likeliest explanation: around $6 trillion in assets are being hidden.

Is Wealth Inequality Hidden in Tax Havens? Piketty’s Co-Author Thinks So - Real Time Economics - WSJ

Additionally, some evidence suggests that not only are business students more impaired in their moral judgments in a broader sense than are those in other majors and professional schools, but that business schools themselves may be responsible. More disturbing, observational and anecdotal evidence suggests that business students are not only impaired in their moral judgments but that significant percentages of them have severely impaired moral imaginations. By this I mean not only do they make bad ethical decisions, but they actually are incapable of identifying an ethical situation when they are presented with one.

Business Schools Breed Unethical Businessmen | The New Republic

Robert Mugabe, the 91-year-old leader of Zimbabwe, deviated slightly from his prepared remarks, during his Monday evening address to the United Nations General Assembly, to do something that he does frequently: slur against homosexuality. "We are not gays," he shouted. And it's worse than it sounds.

Why Robert Mugabe just shouted "We are not gays" in his UN speech - Vox

And the streets of Lagarto had their own rules. In a rare and revealing 2012 interview with Spanish newspaper El Pais, Costa reflected: "I fought for everything, I couldn't control myself. "I insulted everyone and didn't have any respect for the opposition. I thought I had to kill them…I got very heated. I got used to football where the biggest ones threw their elbows at the others, and I thought that was normal."

BBC Sport - Diego Costa: Does the Chelsea striker have a softer side?

Japanese and American car makers backed research into hybrid and electric cars, but the European commission was lobbied strongly by big German car makers BMW, Volkswagen and Daimler, to incentivise diesel. A switch to diesel was said by the industry to be a cheap and fast way to reduce the carbon emissions that drive climate change.

The rise of diesel in Europe: the impact on health and pollution | Environment | The Guardian

[admin]

According to the IMF’s 2015 Article Iv Consultation-Press Release and Staff Report, published August 3, oil and natural gas exports comprised 65 percent of exports, 52 percent of the Federal government budget, and 14.5 percent of GDP in 2014. Including their domestic contribution, hydrocarbons represent ~30 percent of GDP.

Is Russia Plotting To Bring Down OPEC? | OilPrice.com

It is ironic that the French saw the deutschmark as the source of German power. In practice, the existence of Germany’s own currency was what prevented it from becoming super-competitive. As Germany gained competitive ground, the deutschmark rose against other currencies, thereby offsetting the competitive improvement. This spared Europe the consequences of the inbuilt Germanic tendency towards financial “virtue”, ie over-saving and the amassing of claims on other countries. The source of Germany’s recent dominance is the very thing that the French constructed in order to curtail it, namely the euro.

France's Macron is wrong to think fiscal union is solution to eurozone's woes - Telegraph

Nearly three out of four companies in the U.S. Fortune 500 operate at least one subsidiary in an offshore tax haven and some have registered more than 100, allowing them to evade taxes on hundreds of billions of dollars in profits every year, according to a study conducted by the U.S. Public Interest Research Group and the Citizens for Tax Justice.

How Fortune 500 companies avoid paying $620 billion in taxes - Business Insider

Sales of the yellow machines – backhoes, loaders, bulldozers, etc. – have been falling for three years. Containerized freight coming from China is down 30% since 2013. The world economy is slowing down. A global recession is now in the cards.

Global recession is coming - Business Insider

In case anyone missed it, auto sales just shot up to a fresh cycle high of 18.2 million (also the best since 2005) while mortgage purchase applications through late September were running 20% above year-ago levels

Jobs report doesn't mean economy crumbling - Business Insider

[admin]

Stocks and bonds still trade at silly prices. Shills from Wall Street still “talk their books” on TV. And the Fed is still promising a rate hike – perhaps before the end of the year. This rate hike talk is either believed or not. To the extent it is believed, it is disastrous in the short run. To the extent it is not believed, it is disastrous in the long run.

Global recession is coming - Business Insider

The recent selloff in emerging-market assets, including Mexico and Malaysia’s currencies, has opened up investment opportunities not seen for decades, according to Franklin Templeton’s Michael Hasenstab, who’s well known for making contrarian bets.

Templeton Betting on `Multi-Decade' Emerging-Market Opportunity - Bloomberg Business

In financial markets, China is firmly entrenched in the driver's seat, according to David Woo. During an interview on BloombergTV, Bank of America's Head of Global Rates and Currencies Research outlined how the selloff in stocks and relatively tepid decline in bond yields since the devaluation of the Chinese yuan affirm his theory for what's been driving equity and fixed income markets.

Bank of America's Woo: "China Is Still More Important Than The Fed" - Bloomberg Business

The eight-hour workday hasn't changed much since Henry Ford first experimented with it for factory workers. Now, Americans work slightly longer—an average 8.7 hours—though more time goes into email, meetings, and Facebook than whatever our official job duties actually are. Is it time to rethink how many hours we spend at the office? In Sweden, the six-hour workday is becoming common. "I think the eight-hour workday is not as effective as one would think," says Linus Feldt, CEO of Stockholm-based app developer Filimundus. "To stay focused on a specific work task for eight hours is a huge challenge. . . . In order to cope, we mix in things and pauses to make the workday more endurable. At the same time, we are having it hard to manage our private life outside of work. We want to spend more time with our families, we want to learn new things or exercise more. I wanted to see if there could be a way to mix these things."

Why Sweden Is Shifting To A 6-Hour Workday | Co.Exist | ideas + impact

CORPORATE profits are at their highest level in at least 85 years. Employee compensation is at the lowest level in 65 years. The Commerce Department last week estimated that corporations earned $2.1 trillion during 2013, and paid $419 billion in corporate taxes. The after-tax profit of $1.7 trillion amounted to 10 percent of gross domestic product during the year, the first full year it has been that high. In 2012, it was 9.7 percent, itself a record. Until 2010, the highest level of after-tax profits ever recorded was 9.1 percent, in 1929, the first year that the government began calculating the number.

Corporate Profits Grow and Wages Slide - The New York Times

[admin]

As the world’s financial policymakers convene for their annual meeting Friday in Peru, the dangers facing the global economy are more severe than at any time since the Lehman Brothers bankruptcy in 2008. The problem of secular stagnation — the inability of the industrial world to grow at satisfactory rates even with very loose monetary policies — is growing worse in the wake of problems in most big emerging markets, starting with China. This raises the specter of a global vicious cycle in which slow growth in industrial countries hurts emerging markets, thereby slowing Western growth further. Industrialized economies that are barely running above stall speed can ill afford a negative global shock.

The global economy is in serious danger - The Washington Post

It's called a profit recession. It hasn't happened for five years, and it's rarely good for stocks.  U.S. companies led by aluminum-maker Alcoa will start posting financial results this week for the three months through September, and the consensus projection of analysts is for total Standard & Poor's 500 Index earnings to fall by 5.1% from a year earlier. That would mark the second straight quarterly decline in corporate profit -- for the first time since 2009.

Bad News for Blue Chip Stocks: S&P 500 Profits Poised to Fall - TheStreet

The lower growth in the U.S. economy is not a hangover the Great Recession, Bernanke said, noting that more capital investment is needed to boost economic growth. He also said long-term low or no inflation has risks. "If inflation is so very, very low that it's close to deflation, the risk is that ordinary interest rates will be low all the time ... what happens where there's a recession, there's no where to cut."

Ben Bernanke: Slow productivity growth is weighing on US economy

Former Federal Reserve Chairman Ben Bernanke said in a newspaper interview published on Sunday that more corporate executives should have been prosecuted for their actions leading up to the 2008 financial crisis.

Bernanke: More execs should have faced prosecution for 2008 crisis - USA Today | Reuters

It’s long been an accepted wisdom that too much time spent sitting in front of the TV is bad for us. It may not lead to square eyes, as our mothers told us, but it is strongly linked to obesity in adults and children. TV viewing has also been linked with disruptions to sleep; one hour of TV viewing per day for kids can shorten sleep by seven minutes per day, according to this study. For babies and toddlers under the age of two, there’s strong evidence that screen viewing has a negative effect on language development. There’s also no evidence that educational media, which may provide benefits for older kids, works for children under two.

How Much Screen Time is Safe for Kids? | Digital Trends

[admin]

Mr Ma’s message was that his company exists for the long-term good of society, a far cry from the creed of shareholder value followed by many in the room. He pledged to help America’s struggling small firms export to China’s 630m internet users, who between them now spend more online than Americans do. The venue for the event was the Waldorf Astoria hotel, which, when it opened in 1931, in the midst of the Depression, was hailed by President Herbert Hoover as “an exhibition of confidence and courage to the whole nation”. Today the Waldorf is owned by a Chinese insurance firm run by Deng Xiaoping’s grandson-in-law. The whole event seemed to symbolise a change in the world’s economic order.

The sticky superpower | The Economist

As Brian Krebs, who writes for the well-regarded cybersecurity news site Krebs on Security, wrote on Tuesday, the barcodes found on boarding passes are chock full of information about you. And you don’t need any fancy equipment to read them.

Barcodes on boarding passes - Tech Insider

He doesn't suffer fools gladly either, as shown by his response after a heavy defeat in Madrid. Interviewer: "This tie is over, isn't it?" JK: "How could I justify picking up my pay cheque if I stand here and say the tie is over? It would be just as stupid as saying we're going to walk all over them [in the second leg]. I can always supply silly answers to silly questions." Then, sarcastically: "Yes, the tie is over, but we have to play them anyway."

BBC Sport - Jurgen Klopp: Furious football from a witty and winning coach

Shivers across the skin, trembling limbs, a fluttering heart: we’ve all experienced the electrifying sensations variously called “chills” or “frisson”. Some people even feel so aroused that researchers call the experience a “skin orgasm”.

BBC - Future - Five ways to have a skin orgasm

The Fed has been using easy money because the economy has needed a lot of support," he argued. "A better policy would be a better mix of monetary, fiscal, and other policies. The fact that the Fed is the only game in town means the Fed has to do too much.

Ben Bernanke: Slow productivity growth is weighing on US economy

[admin]

It starts by analysing the factors that might be causing slower growth. The recent sluggish productivity record suggests that long-run potential output growth – the rate at which economies expand over many decades – has slowed. Persistently low investment helps explains why labour productivity and wage growth have been so modest. The fund’s world economic outlook states: “Low aggregate demand is one factor that discourages investment. Slow expected potential growth itself dampens demand, further limiting investment, in a vicious circle. Ageing populations further restrain investment in a number of countries; in some others, institutional shortcomings or political instability are deterrents.”

A worried IMF is starting to scratch its head | Business | The Guardian

What accounts for this unusual degree of independence? Not self-sufficiency, in fact, but “group reliance,” according to Dwayne Dixon, a cultural anthropologist who wrote his doctoral dissertation on Japanese youth. “[Japanese] kids learn early on that, ideally, any member of the community can be called on to serve or help others,” he says. This assumption is reinforced at school, where children take turns cleaning and serving lunch instead of relying on staff to perform such duties. This “distributes labor across various shoulders and rotates expectations, while also teaching everyone what it takes to clean a toilet, for instance,” Dixon says.

Why Japanese Kids Can Walk to School Alone - The Atlantic

Goldman Sachs expects the stock market to rally every year for years to come. But not every stock in the market should be expected to do well. In its new quarterly chartbook for clients, Goldman Sachs' David Kostin and his team identify the stocks offering the most downside relative to Goldman analysts' price targets. We picked out the 16 stocks with more than 10% downside to their targets.

GOLDMAN: Stocks with the most downside - Business Insider

They are overwhelmingly white, rich, older and male, in a nation that is being remade by the young, by women, and by black and brown voters. Across a sprawling country, they reside in an archipelago of wealth, exclusive neighborhoods dotting a handful of cities and towns. And in an economy that has minted billionaires in a dizzying array of industries, most made their fortunes in just two: finance and energy.

The Families Funding the 2016 Presidential Election - The New York Times

future education will recognise that these 30 students are individuals and will differentiate course delivery and materials, tailoring these to each student’s specific needs. Historically we couldn’t provide every student with their own teacher; advances in technology will personalise education so that it does suit every student.” Much of this tech will be in MOOCs ­ massively open online courses ­ which are like giant online-only, impersonal schools. Some will be in more ­desirable improvements to classroom­-style education, with students learning on digital platforms (such as smartphones or even feature phones) and analytics programs that make sure no pupil is left behind. And the ultimate aim is to have individually ­crafted experiences for every pupil. But VR brings something that none of these courses and this tech seems to focus on ­ immersion which enthuses.

How VR is going to take over the classroom