Welcome to the weekly roundup of great articles, facts and figures. These are the weekly finds that made our eyes pop.
Financial Sector Continues to Grow
Like a suffocating monster, the financial sector continues to grow, now 8.4% of total GDP.
New research by New York University economist Thomas Philippon suggests that the financial sector is enormously outsized. He finds that, despite all the advances in information technology since the 1980s, the financial sector has become steadily less efficient: All that it has been gained from increased computing power and vast communications networks has been taken away, and then some, “by increases in trading activities whose social value is difficult to assess.”
The upshot, says Mr. Philippon, is that finance’s share of GDP really ought to be about two percentage points lower than it is now. The industry’s travails may be far from over.
Half of American's Can't Come Up with $2k in Emergency Bucks
No surprise, but a new study shows half of the population cannot scrape up $2,000 dollars for an emergency. The Wall Street Journal:
The survey asked a simple question, “If you were to face a $2,000 unexpected expense in the next month, how would you get the funds you need?” In the U.S., 24.9% of respondents reported being certainly able, 25.1% probably able, 22.2% probably unable and 27.9% certainly unable. The $2,000 figure “reflects the order of magnitude of the cost of an unanticipated major car repair, a large copayment on a medical expense, legal expenses, or a home repair,” the authors write. On a more concrete basis, the authors cite $2,000 as the cost of an auto transmission replacement and research that reported low-income families claim to need about $1500 in savings for emergencies.
Financial fragility isn’t limited to low-income groups.
Huge Percent of Those Who Lost Jobs Pushed into Part Time Work
The Altanta Fed dug out a startling statistic when looking at lost income for workers.
In the above chart, the fraction of re-employed workers who lost a full-time job during 2007–09 and were working at a part-time job at the time of the 2010 survey was 20 percent—well above historical levels.
Murdoch's Phone Hacking Victims Total 800
This is just disgusting. The U.K. police are announcing 800 people have been victims of tabloid/Fox News media mongol, Robert Murdoch.
The police said Saturday the final number of victims of phone hacking by Rupert Murdoch’s News of the World will be around 800 people, far fewer than originally thought.
The Scotland Yard officer leading the investigation into the scandal at the now-defunct tabloid said police had been in touch with everyone whose mobile phone voicemails were illegally accessed.
As late as a month ago Scotland Yard had said it identified 5,800 potential hacking victims, based largely on names found in the notes of Glenn Mulcaire, a private investigator jailed for phone-hacking in 2007.
Bloomberg Blasts Back at the Fed
We already covered Bloomberg's report, but after the Fed claimed it was egrecious errors, Bloomberg blasted back:
While Bernanke’s letter and an accompanying four-page staff memo posted on the Fed’s website didn’t mention any news organizations by name, Bloomberg News has published a series of articles this year examining the bailout. The latest, “Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress,” appeared Nov. 28.
“Bloomberg stands by its reporting,” said Matthew Winkler, editor-in-chief of Bloomberg News, who responded to the criticisms today on “Surveillance Midday” with Tom Keene.
Here is a point-by-point response by Bloomberg News to the Fed staff memo.
Give it Up for Fracking
In spite of the EPA acknowledging fracking is polluting ground water, various special interests still try to deny it's happening.
The U.S. Environmental Protection Agency announced Thursday for the first time that fracking — a controversial method of improving the productivity of oil and gas wells — may be to blame for causing groundwater pollution.
The EPA's found that compounds likely associated with fracking chemicals had been detected in the groundwater beneath Pavillion, a small community in central Wyoming where residents say their well water reeks of chemicals. Health officials last year advised them not to drink their water after the EPA found low levels hydrocarbons in their wells.
The EPA announcement could add to the controversy over fracking, which has played a large role in opening up many gas reserves, including the Marcellus Shale in the eastern U.S. in recent years.
The industry has long contended that fracking is safe, but environmentalists and some residents who live near drilling sites say it has poisoned groundwater.
Masters Degree, $50k in Debt, No Good Job
What this story ignores is the never ending use of immigration to displace U.S. workers as well as the catering to international students at universities. With that, guess who can't get a job even with a Masters degree.
Laura Sayer, unsure of what she wanted to do after graduating from college in 2006, figured a master’s degree was “a safe bet.”
With $5,000 in undergraduate loans from her time at the University of Cincinnati, Sayer was set back $50,000 more after completing the Interdisciplinary Master’s Program in Humanities and Social Thought at New York University. The 27-year-old now makes about $45,000 a year as an administrative assistant for a nonprofit group, a job that didn’t require her advanced degree.