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1 The spectre of US default — again (Linda Yueh on BBC) It’s almost hard to believe, but it’s happening again. US Treasury Secretary Jack Lew warns that the world’s largest economy may default by the end of the month if the $16.7tn debt limit is not raised. Lew says that he will rely on accounting measures to pay the bills for a few weeks. This is a replay from last year. Recall then, as now, that there’s been (and still is) a lot of uncertainty as to when the US Treasury will exhaust those “extraordinary measures”. The US government can’t borrow once it hits the debt ceiling but it receives around $7bn in revenues every day, which is how the government managed for a while.
What if the US government fails to pay money to its creditors when it is due? There’s general agreement that, hard though it seems to not pay contractors, like defence companies, not paying hospital bills, or even not paying individuals their pensions, would not be the default everyone is so worried about. It would have consequences – personal and economic, of course. A technical default is when an interest payment on debt is missed. Whether this is no worse than a missed credit card payment is up to markets.
If the US misses an interest payment, the major ratings companies (S&P, Fitch, Moody’s) may downgrade America from AAA (or AA+ as it were for S&P) into what’s called ‘selective default’ or ‘SD’ until the payment is made. A credit event is a default that triggers payout on default insurance. This is roughly what a CDS (credit default swap) is, a contract that pays if the insured government or company defaults. There’s about $3.63bn of such contracts around.
What happens if the US really does default? Frankly, no one really knows. The US is so integral to global markets that the prospect of it being in default even briefly is difficult to contemplate. It would make all other defaults (Lehman, Greece) pale in comparison.
2 Catholics at odds with the church ( Lizzy Davies in The Guardian) Most Catholics disagree with what the church teaches them about contraception, divorce and abortion, according to a survey that reinforces the gap between the Vatican and its global flock before an extraordinary synod this year that many hope will lead to reform. The survey commissioned by the US Spanish-language network Univision, found that, of all the subjects covered, the church’s teaching on contraception was most out of step with the thinking of ordinary Catholics, with 78% of respondents worldwide supporting the use of artificial birth control.
More than half (58%) disagreed with the church’s stance that divorcees who remarry are ineligible for Communion. And 65% of the respondents said abortion should be allowed – 8% in all cases and 57% in some. Respondents in the two African countries polled – Uganda and the Democratic Republic of the Congo – gave answers that were consistently closer to church teachings. Support for contraception there, while still significant at more than 40%, was less than half that recorded in some European and most Latin American nations, where it topped 90%.
On the subject of gay marriage, Catholics were more aligned both with each other and with church teaching. Two-thirds (66%) of respondents opposed it, though the levels of resistance varied from 99% in Uganda to 27% in Spain – by far the lowest recorded. Additionally, in all countries except Spain a majority of those polled said they did not think the church should perform marriages between two people of the same sex.
Pope Francis has called bishops to Rome in October for an extraordinary synod, only the third in history, to discuss how the church should respond “in the context of the pastoral challenges facing the family today”. While expressing his firm opposition to women’s ordination, gay marriage and abortion, the Argentinian pontiff has also said the church needs to be less obsessed with doctrine and more focused on pastoral care if it is to hold on to its existing members and reach new ones.
3 Smartphones make you tired, unproductive (Melissa Korn in The Wall Street Journal) For a productive day at work tomorrow, give the smartphone a rest tonight. Reading and sending work email on a smartphone late into the evening doesn’t just make it harder to get a decent night’s sleep. New research findings by researchers from University of Florida, Michigan State University and University of Washington show it also exhausts workers by morning and leaves them disengaged by the next afternoon.
Prior studies have shown that staying focused and resisting distractions takes a lot of effort, so when smartphone use interferes with sleep, it takes a toll the next day. “The benefit of smartphone use may…be offset by the inability of employees to fully recover from work activities while away from the office,” the researchers write.
After accounting for sleep quality, the researchers found that work-related smartphone use in the evening was associated with fewer hours of sleep. The subjects who recorded shorter nights also reported depleted reserves of self-control, and those who felt morning exhaustion also indicated they were less engaged during the day, a domino effect that shows how an unending workday ultimately leads to poorer work.
Another study measured how late-night tech use—on smartphones, laptops, tablets and TV—can disrupt sleep and next-day work engagement. In her book, “Sleeping With Your Smartphone,” Harvard Business School professor Leslie Perlow studied executives at Boston Consulting Group who were given a chance to disconnect on a regular basis. The executives became more excited about their work, felt more satisfied about their professional and personal lives and even became more collaborative and efficient.
The fix, researchers say, is to put down the phone and enjoy the evening. But that’s easier said than done, so long as managers send emails at 10:30 p.m. and expect responses by 10:31 pm. Barnes says real change will have to come from the top, with managers setting an example by not sending those messages in the first place, or at least toning down expectations on response time.