1 Home again, after college (The New York Times) Just when
parents thought they might finally be free of their children, many of this
year’s college graduates will pick up their degrees — and move back home. The
fragile economy could exacerbate the phenomenon of delayed adolescence, keeping
Americans in their late 20s and even early 30s dependent on their families for
years. But this is not necessarily the nightmare scenario it’s made out to be.
Our research shows that the closer bonds between young adults and their parents
should be celebrated, and do not necessarily compromise the independence of the
next generation.
Grown children benefit greatly from parental help. Young
adults who received financial, practical and emotional support from their
parents reported clearer life goals and more satisfaction than young adults who
received less parental support. This support ranged from room and board to
making a car available, to parents’ listening to their son or daughter talk
about the day. Twenty-five years ago, young people sought advice and help from
naïve peers. Today’s young adults may be savvier than their predecessors; they
receive advice and help from middle-aged adults with greater life experience
and material resources to offer.
This relationship has been evolving over the last
generation. In 1986, about half of parents reported that they had spoken with a
grown child in the past week. In 2008, 87% said they had. In 1988, less than
half of parents gave advice to a grown child in the past month, and fewer than
one in three had provided any hands-on help. Recent data show that nearly 90%
of parents give advice and 70% provide some type of practical assistance every
month. It turns out that many parents and children want this close contact. We
first observed a shift in this relationship in 1999, when the economy was
booming. Even before the cellphone era, many 20-something women talked with
their mothers several times a week.
2 Shaky euro makes Europeans hedge bets (The New York Times)
There is an unfortunate logic to bank runs. The rational thing for any
depositor to do is to join in the run if there is even the smallest possibility
that the bank really is in danger of failing. If you pull your money out and the
bank survives, the costs of your mistake are tiny compared to the costs if the
bank fails with your money in it. Right
now in Europe, there are trots — think of them as slow-speed runs — not on
individual banks but on national banking systems. Depositors are pulling money
out of banks in countries that may or may not be solid, and putting the money
into German banks.
That move sets in motion a daisy chain of loans that leaves
Germany’s central bank, the Bundesbank, financing the system. An interesting
question is whether the rate of withdrawals is accelerating. We don’t know.
These are numbers that come out with long and variable delays of weeks to
months. Certainly the numbers were large before worries about Spanish banks
intensified in May. It is conceivable that the trot could speed up even more
before the Greeks get around to their next election, two weeks from Sunday.
3 India growth rate down to 5.3% (BBC) The Indian economy
grew at the slowest rate since 2003 in the first three months of 2012, due to a
widening trade gap and poor investment. India's gross domestic product (GDP)
grew by 5.3% in the quarter compared with a year earlier, data showed. That is
down from 6.1% in the previous quarter. Analysts were expecting the same figure
for January to March. India is the third-largest economy in Asia but has been
struggling with inflation and currency weakness.
Since July last year, the Indian rupee has seen one of the
biggest declines among Asian currencies, dropping more than 27% against the US
dollar. "Shocking numbers as growth was even lower than lows witnessed
during the financial crisis," said Anubhuti Sahay from Standard Chartered
Bank in Mumbai. Domestic demand, which India's economy is largely reliant on,
has also slowed in part due to the political upheaval in the country.
India's economy is suffering from "policy incoherence,
shifting global risk appetite and a comatose government", said Rajeev
Malik, senior economist at brokerage CLSA. The Congress-led coalition
government is caught up in a slew of corruption scandals. Key policy reforms,
including allowing foreign investment in India's retail sector, have been
delayed in parliament for more than a year. This has worried foreign investors
and threatened the country's investment grade credit rating.
4 US GDP slower than thought (BBC) The US economy grew at an
annualised 1.9% in the first three months of 2012, less than the 2.2% first
thought. The slower growth rate - which was in line with forecasts - followed a
modest downward revision in consumer spending. The second official estimate of
gross domestic product (GDP) from the Commerce Department also showed that
after-tax corporate profits fell for the first time in three years. The
department said that after-tax corporate profits fell by 4.1%, the biggest fall
since the last three months of 2008.
The figures showed that consumer spending grew at 2.7%
instead of the previously estimated 2.9%, while a drop in government spending
from 3.9% to 3% also held back economic growth. In addition, businesses
restocked at a modest pace, reflecting weakening demand. Many economists expect
US economic growth to continue at about 2.5% for the rest of the year, a better
performance than the 1.7% growth recorded in 2011. That picture was enhanced by
news from US retailers, with many stores reporting stronger-than-expected sales
in May.
However, the fragility of the US economy was highlighted by
employment data, which showed private payroll growth rose only slightly in
April, and the Labour Department said claims for jobless benefits were higher
last week, suggesting a slowdown in the jobs market from its stronger showing
earlier this year.
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