Saturday, 9 January 2016

China's make believe growth figures and other news and views

The country that tricked the world - China’s stock market took a breather Friday after plunging this week, pulling global markets down with it. But the financial turbulence rocking China has brought to the surface a deeper fear: That its economy is sinking, and that its downfall will derail the still-fragile economic recovery going on in other parts of the world. What makes those fears worse is that few people have a good understanding of how well China’s economy is really doing. The country’s official growth figures paint a rosy picture that any country would aspire to: In the third quarter, China said its economy expanded 6.9 percent from the previous year, far above U.S. growth of 2 percent. But how much should we believe those figures? “Not a lot,” says Mark Williams, the chief Asia economist at Capital Economics, a research consultancy based in London. “They are absolute make-believe,” says Leland Miller, the president of China Beige Book International, which compiles private surveys on the Chinese economy. Williams’ firm -- which set up its own measure for Chinese economic growth in 2009 based on figures like cargo freight volumes – believes China’s economy is likely growing at 4 or 4.5 percent. The chart below shows how his firm's estimates for China's growth have recently sunk below the official figures:

Less Work, More Leisure - The next Administration should make reducing work time a major focus. In addition to mandated paid sick days and paid family leave—proposals that have received some welcome attention thus far on the presidential campaign trail—policymakers should go much further and enact measures aimed at shortening workweeks and work years. Reducing our workweek and work years will lead to a whole host of benefits, including reduced stress and higher levels of employment.

Police raid on New Zealand journalist ruled unlawful in case which has implications for the UK - A New Zealand journalist has successfully stopped police viewing his computer records and notepads in a case which could have implications for the UK. Nicky Hagar sued the New Zealand government and police after a raid on his home. Police targeted him because he was given emails hacked from the computer of blogger Cameron Slater which were used as part of his book Dirty Politics. They revealed how government figures used Slater to damage their opponents. Instead of tackling the issues raised by Hagar, police raided his house and seized his computers and various documents in a bid to uncover the source who had hacked Slater's computer. Hagar sought judicial review and won meaning that police were not allowed to view his journalistic material, even though his source may have acted illegally.

Trump likes to sleep in his own bed and it may cost him votes -  U.S. presidential candidates are spending long days on the campaign trail and their nights in a succession of budget hotels, often in small towns. Not Donald Trump. After nearly every rally, the billionaire real estate developer hops into one of his planes or helicopters and returns to New York so that he can sleep in his own bed in his marble-and-gold-furnished Trump Tower apartment in Manhattan.

Warm Weather "added nearly 100,000 jobs in December" - In a research note released February last year, Chicago Fed economists Justin Bloesch and François Gouri provide an insightful methodology for examining the impact of weather on economic indicators. ... Plugging in the December temperature and snowfall data to the output of the model from Bloesch and Gouri, we find that the weather can explain about 97,000 of job growth. This would imply that without the weather distortion, the economy would have added 195,000 jobs. While we don’t want to give a false sense of precision, this seems like a reasonable approximation. Before the sharp acceleration the past three months, job growth was trending at around 200,000 a month.
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