News: Real Estate, Risk, Economics. Sept. 25, 2014

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Table of Contents
(Click to sections below.)

1) Three reasons to worry about mega-regional trade deals – Forum:Blog Forum:Blog | The World Economic Forum

2) Why 'life expectancy' is a misleading summary of survival | Understanding Uncertainty

3) Is the economic recovery real? 3 stats to watch

4) "Women are Japan's most underused resource" | Thomas Walsh at Bruegel org

5) China flash PMI signals steepening job losses amid near stagnation of activity | Markit Commentary

  1.    Three reasons to worry about mega-regional trade deals – Forum:Blog Forum:Blog | The World Economic Forum

    Richard Baldwin, Professor of International Economics, Graduate Institute of International and Development Studies, Switzerland:

    US, EU and Japanese interests may be served in the short term, and the interests of small to medium-sized emerging markets will likewise be served (if not evenly), but where do Brazil, India and China fit in?

    If the mega-regionals and their power asymmetries take over, there is a risk that the WTO could go down in future history books as a 70-year experiment in which world trade was rules-based instead of power-based. It would, at least for a few more years, be a world where the world's rich nations write the new rules-of-the-road in settings marked by vast power asymmetries. This trend should worry all world leaders. In the first half of the 19th century, attempts by incumbent Great Powers to impose rules on emerging powers smoothed the path to humanity's greatest follies — the two world wars.

    And to think the WTO has been far from good enough in leveling the playing field.

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  2.    Why 'life expectancy' is a misleading summary of survival | Understanding Uncertainty

    Of course these 'period life tables' unrealistically assume mortality will stay the same in the future, whereas life expectancy has been growing at around 3 months a year for decades, corresponding to the annual risk of death reducing at about 2% per year. The ONS also provide 'cohort life tables' that make various projections about whether these trends will continue in the future: the 'central projection' says girls born now have a life expectancy of 94, with (according to my rough calculations) a median and mode of around 100, and men have a life expectancy of 91, with a median and mode of around 96. Under the 'high' projections, with the possibly implausible assumption that the increases continue at the same rate in the future, children born today will on average live more than 100 years. Good luck to them – heaven knows how long they will have to work for.

    However, that "3 months" is on an increasing curve; and of course, there's always the so-called singularity factor out there waiting.

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  3.    Is the economic recovery real? 3 stats to watch – Sep. 23, 2014

    The big news makers — employment, inflation and gross domestic product — are always important statistics, but if you really want to know where things are headed, there are a few lesser known indicators that give a fuller picture of the economy's health.

    To make some sense of it all, CNNMoney surveyed numerous economists. According to the experts, keep an eye on these three things.

    1. People's spending: …

    Bottom line: Not back yet

    2. Home buying and building: …

    Bottom line: Not back yet

    3. Manufacturing: …

    There are some concerns that the really strong U.S. dollar could hurt manufacturing, since it makes American goods a lot more expensive to people in Europe and other parts of the world, but so far there doesn't seem to be an impact.

    Bottom line: Good manufacturing rebound

    "…so far there doesn't seem to be an impact." Just wait.

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  4.    "Women are Japan's most underused resource" | Thomas Walsh at

    In our last batch of links, we mentioned that Japan should open up to an influx of young foreign workers. That goes hand-in-hand with changing the culture to allow more women to both work and to climb the corporate ladder. Of course, we aren't advocating for women to necessarily stop being housewives, per se. Stay-at-home moms are a great thing for those who are capable, etc. It should not be denigrated in any manner.

    Add your comment.

  5.    China flash PMI signals steepening job losses amid near stagnation of activity | Markit Commentary

    Another month of near stagnant business activity was reported at China's factories in September. Disappointingly weak growth of output and new orders caused firms to cut staff numbers at a faster rate than the prior month in an attempt to scale back capacity and cut costs. Prices meanwhile fell at an increased rate, in part due to more aggressive price discounting in the face of weak sales. More positively, export orders showed the largest monthly gain since early-2010.

    Falling prices do stimulate exports, but they cramp everything internally. China is apparently hitting a wall.

    The recent "stimulus" to banks to lend hasn't worked. They'll try infrastructure spending again, but one can only keep that up so long while much production results in waste.

    China is borrowing to do all of this. They can't go on this way indefinitely. They can't do it and remain balanced enough to stay standing.

    Are we wrong? Only time will prove that one way or the other.

    Add your comment.

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