Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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opics today include:
Children Infected with Zika Tend Not to Get Seriously Ill
Nobel Prize in Medicine
Autophagy and Aging
Return of Fiscal Policy
Carmen Reinhart is Continuing to be Challenged by Basic Understanding of Money
Krugman's 2013 Attempt to Show Reinhart the Difference Between Money Issuers and Money Users
Rosetta Mission Ends with 'Belly Flop' onto Asteroid
Why is the Presidential Race So Close?
Comments on Donald Trump's Tax Returns
Roger Stone: Clinton's Run Will End Wednesday
WikiLeaks' October Surprise Announcement Relocated
New York State Orders Trump Foundation to Halt Activity
Senate Bill Would Void Forced Arbitration, Allow Customers to Sue Wells Fargo
Articles about events, conflicts and disease around the world
Due to a computer malfunction part of this section of today's post was lost.
Rosetta mission ends with comet crash (Physics World) The European Space Agency's (ESA's) seminal, 12-year-long Rosetta mission has concluded, as the probe made a controlled crash ("soft belly flop" at 2 mph) into the Ma'at region of comet 67P/Churyumov - Gerasimenko today. The agency confirmed the conclusion of the mission as the signal from Rosetta was lost upon impact at 11:19 GMT. Rosetta continued to take data and make measurements during its final descent, focusing on several "active pits" from which a number of the comet's dust jets originate. During its drop, the orbiter studied the comet's gas, dust and plasma environment very close to its surface, and took high-resolution images. All of the information has been relayed to Earth, and Rosetta researchers will now begin to dig through the last of the mission data. Pictured below: Images transmitted by Rosetta of its final landing site. In 2014 Rosetta landed a probe (named Philae) which transmitted data back from the asteroid surface (video below about Physics World Breakthrough of the Year 2014).
Rosetta's Final Path (YouTube) The landing of Rosetta on Comet 67P/Churyumov-Gerasimenko was a complicated process as this simulation of the last 10 days of flight indicates.
Why is the US Presidential Race So Close? (Project Syndicate) The author states that many people around the world are probably wondering why Hillary Clinton - who is obviously more prepared and better suited for the American presidency than her opponent, Donald Trump - isn’t waltzing to victory. Many Americans share the world’s bewilderment. The author gives a number of reasons (which may not be surprises to Econintersect readers):
Many Republicans have intense hatred of Hillary Clinton.
Many Americans have economic anxieties exploited by Donald Trump.
Trump is also tapping into an anti-immigrant, anti-elite "rage" that is not only gaining momentum in America but also in Europe.
Clinton suffers from a "packaged know-it-all, the super-smart girl who put off the boys in school".
Clinton has lost support (or failed to gain it) because of the FBI investigation of her e-mails.
Clinton continues to be held back by health questions,
Some comments on the New York Times story about Donald Trump's tax returns (John Hempton, Bronte Capital) JH is the former "resident expert on tax avoidance working for the Australian Treasury", who has contributed to GEI. He is commenting on Donald Trump Tax Records Show He Could Have Avoided Taxes for Nearly Two Decades, The Times Found (The New York Times). Hempton's analysis of the published records lead him to suggest that Trump might have used a means of avoiding having a huge tax bill on "forgiven debt" by creating a dummy corporation to purchase the debt at a huge discount (98% or 99%) and then hold the debt forever without collecting any recovery or writing it off. The process is known as "debt parking". This is a subterfuge which would violate the IRS prohibition of business arrangements with no other business purpose than tax evasion. Here is Hempton's conclusion:
Every tax system worth its salt has some rules on "effective debt forgiveness" to prevent debt parking. And - from my experience which is now over twenty years old - none of them work entirely.
Now if Donald really has all those tax losses its pretty clear that the debt must be parked somewhere.
There is a vehicle out there (say an offshore trust or other undisclosed related party effectively controlled by Donald Trump) - which owns over $900 million in debt and is not bothering to collect it.
I do not have the time or energy to find that vehicle. But it is there. Now that this blog has gone public journalists are going to look for it.
There is a Pulitzer prize for whoever finds it. Just give me a nod at the acceptance ceremony.
Roger Stone: Wednesday will be end of Clinton's campaign (The Hill) A top Donald Trump supporter ominously declared that Wednesday will be the end for Democratic presidential nominee Hillary Clinton. Roger Stone, a former adviser to the Republican nominee's campaign, tweeted late Saturday night that Clinton will be "done." WikiLeaks this summer released internal emails from the Democratic National Committee that were believed to have been stolen by Russian hackers. The anti-secrecy website's founder, Julian Assange, has said that it will release new material before the Nov. 8 elections. See next article.
'Specific info' forces WikiLeaks to move anticipated announcement to Berlin (Fox News) Julian Assange canceled a dramatic London balcony address on Tuesday in favor of a video presentation in Berlin after WikiLeaks developed "specific information" regarding Assange's safety, the leaked emails clearinghouse tweeted on Monday afternoon. Some believe the video announcement by the WikiLeaks founder could be an "October surprise" geared towards the U.S. presidential election. Supporters of GOP presidential candidate Donald Trump have said they believe the announcement will be damaging to the candidacy of Democratic rival Hillary Clinton.
New York Attorney General Orders Trump Foundation To Halt Activity(The Huffington Post) The Donald J. Trump Foundation is being ordered to cease its activities in New York state by Attorney General Eric Schneiderman. The charity was not properly registered under state law to conduct its activities and solicit donations, according to Schneiderman’s office.
Senate Dems' bill would let Wells Fargo customers sue (The Hill) The top Democrat on the Senate Banking Committee will introduce a bill to meant to let millions of Wells Fargo customers sue the bank for opening unauthorized bank accounts in their names. A bill from Sen. Sherrod Brown (D, OH) would target language in bank contracts that requires customers to opt for out-of-court settlements, called “forced arbitration" clauses.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Children Who Get Zika After Birth Tend Not to Fall Seriously Ill, Study Finds (The New York Times) Serious complications are rare among children infected with the Zika virus after birth, federal health researchers concluded in a study published on Friday - a rare bright spot in the unfolding story of the epidemic. About 160 teenagers and toddlers infected with Zika virus have been reported to the Centers for Disease Control and Prevention since 2015. The agency’s new study marks the largest survey yet of laboratory-confirmed cases in children. All of the infections were the result of travel, most commonly to the Dominican Republic and Puerto Rico. About 100 of the cases occurred in June and July alone. The report represents just a fraction of the actual number of children in the continental United States infected with Zika. The children, aged 1 month to 17 years, were initially identified because they had symptoms of infection; only those who became ill were included in the research. Yet most people who are infected have no symptoms at all.
The Nobel Prize in Physiology or Medicine 2016 (NobelPrize.org) In the early 1990's, Yoshinori Ohsumi used baker's yeast to identify genes essential for autophagy (process of self-eating cells). He then went on to elucidate the underlying mechanisms for autophagy in yeast and showed that similar sophisticated machinery is used in human cells. Ohsumi's discoveries led to a new paradigm in our understanding of how the cell recycles its content. His discoveries opened the path to understanding the fundamental importance of autophagy in many physiological processes, such as in the adaptation to starvation or response to infection. Mutations in autophagy genes can cause disease, and the autophagic process is involved in several conditions including cancer and neurological disease. See also next article.
Autophagy and Aging (Science Direct) Autophagy is the process of self-eating cells- see preceding article. This research showed that the process of autophagy contributes to longevity of life. Genetic inhibition of autophagy induces degenerative changes in mammalian tissues that resemble those associated with aging, and normal and pathological aging are often associated with a reduced autophagic potential. Pharmacological or genetic manipulations that increase life span in model organisms often stimulate autophagy, and its inhibition compromises the longevity-promoting effects of caloric restriction, Sirtuin 1 activation, inhibition of insulin/insulin growth factor signaling, or the administration of rapamycin, resveratrol, or spermidine. Here, we discuss the probable cause and effect relationship between perturbed autophagy and aging, as well as possible molecular mechanisms that may mediate the anti-aging effects of autophagy.
The Return of Fiscal Policy (Nouriel Roubini, Project Syndicate) Since the global financial crisis of 2008, monetary policy has borne much of the burden of sustaining aggregate demand, boosting growth, and preventing deflation in developed economies. Fiscal policy, for its part, was constrained by large budget deficits and rising stocks of public debt, with many countries even implementing austerity to ensure debt sustainability. Eight years later, it is time to pass the baton. Roubini says that there are signs this may be beginning to happen, but the steps are modest and so the results will be as well. He suggests that
"...at best, 0.5% of GDP of additional stimulus per year for a few years. This means that more stimulus, particularly spending on public infrastructure, will probably be warranted."
The Perils of Debt Complacency (Carmen Reinhart, Project Syndicate) Prof. Reinhart choses to argue with Robert Skidelsky who recently argued that "it is silly and passé for a country that can issue debt in its own currency to fret over medium-term debt levels" (The Scarecrow of National Debt). She says: "Call me old-fashioned, but that argument smacks of complacency and is not supported by evidence." (Econintersect: We say 'out of date' rather than 'old-fashioned', but let the Prof. use whatever term she prefers.) Then, as if to prove our point, she discusses inappropriately aggregated data (see next article) shown in graphic below, where sovereign currency issuer countries (Iceland, Sweden, Australia, New Zealand, UK, USA, Canada, Norway, Switzerland and Japan) are simply lumped together with currency using countries in her list of 22 countries. Seven of the top 11 growth countries are currency issuers. Eight of the bottom 11 are currency using countries. What competent researcher would fail to recognize such a pattern? Econintersect: A researcher that does not understand money and debt and one that can see that the data is a direct contradiction to her thesis.
Krugman: A Graph for Reinhart and Rogoff (GEI) This is a case study of the defective thing of Carmen Reinhoff in the preceding article. Paul Krugman has two graphs in his IMF Conference paper (14th Jacques Polak Annual Research Conference, November 7-8, 2013) which can serve as an object lesson in analysis for Harvard professors Carmen Reinhart and Kenneth Rogoff. The lesson is so simple that one would think it would be too obvious to be of note. Krugman presents a graph from a paper by David Greenlaw, James D. Hamilton, Peter Hooper and Frederic S. Mishkin (NBER Working Paper No. 19297, August 2013) who used it in support of their argument that there is a tipping point for high sovereign debt which will result in high interest rates - see first graph below. But when Krugman then presents a second graph of the same data, with the data points segregated into countries that are sovereign issuers of their own currency in one group and countries that use a currency that is issued by someone else. The relationship between debt and interest rates has two clearly defined different functions depending on the control point for the issuance of currency. All the flap over spread sheet errors in the Reinhart and Rogoff studies was a minor factor. The real question is the effect on their analysis if the two types of currency regimes were recognized. The preceding article is proof positive that Reinhart still is lacking basic understanding of monetary theory and function.
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