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What We Read Today 11 May 2014

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 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.

  • Can Oysters Help Save Us From Rising Sea Levels? (Anna Brones, Care2) Because of over harvesting, once plentiful oyster reefs no longer moderate storm surges as they once did. This article suggests that selected restoration projects could reestablish needed reef barriers.
  • The Big Three (Simon Constable, Barron's) Constable interviews George Evans, portfolio manager of Oppenheimer International Growth (ticker: OIGAX), who picks three non-U.S. stocks: one a large fiber optic and broadband network owner, a second a major enterprise software company and a Swiss pharma company. If those companies don't work out for readers he also mentions two large alcoholic drink companies whose stock may rise even more than he projects if investors need to drown their sorrows over the big three suffering downfalls.
  • Pay close attention to what’s motivating market commentary (Barry Ritholtz, The Big Picture) Many who write about investing, or talk on TV, or produce/edit content of various sorts, have other things in mind other than your best interests. This is a message repeated by weekly GEI contributor Jeff Miller. Ritholtz categorizes many of the "Pied Piper" types out there who can do you more harm than good if you pay attention to them.
  • Coming in May on FRONTLINE (Patrice Taddonio, PBS.org) This week will see the first two hours of a two-part four hour presentation by Frontline on "The United States of Spying". The programs will cover both the government surveillance activities of NSA and also private sector information collection on individuals. Click on image below to access the 3-minute trailer for the program.

us-of-spying

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  • The diminishing usefulness of the Fed Funds rate (Walter Kurtz, Sober Look) Interbank loans are now about 25% of what they were six years ago, greatly diminishing the impact that the Fed Funds rate can have on the broader spectrum of lending in the economy. Two other tools may find increased usage to regulate interest rates: interest paid on excess bank reserves and the reverse repo facility which has been scaling up in the past 6-9 months. The later is likely to become a major tool for interest rate management in the future.

reverse-repo-fed-volume-sober-2014-may-10

Rising inequality ultimately is a political decision. The fractile nature of our income distribution tells us that the top 1% absorbs the gains of the top 10% and much of that groups wealth flows to the top .01%. Inequality does not stimulate growth. It certainly does not create a happy society. The economy grew faster in the 1950s, when top marginal tax rates were over 90%, than they have ever since. We could raise taxes on incomes of over $1 million and reduce them for the great majority of citizens. Why don't we?
  • Net neutrality pressure mounts inside, outside FCC (Tony Romm, Politico) A proposal by FCC chairman Tom Wheeler (a communications industry lackey) is drawing widespread criticism. The proposal would allow internet service providers like Comcast, AT&T and Verizon to charge companies for faster delivery of their content. This has been followed by GEI News here and here.
  • The World’s Shocking Financial Ignorance (Cullen Roche, Pragmatic Capitalism) If you wonder why the world doesn't seem to have a clue about money and banking, then you haven't read this article. The world can't even do elementary financial arithmetic. For more see The Atlantic.
  • Bitcoin's latest move: Less bullish than you think (Mike McAra, Futures Magazine) Bit coin surged to a greater than 50% gain in five days starting 11 April 2014, hitting $550 10 April intraday. In the four weeks following it is back down to the $420 to $430 region.

bitcoin-april-may-2014

  • Most Corn on the Cob Isn’t GMO (Experimental Working Group, Care2) This article says that sweet corn is such a small crop that it hasn't gotten the attention if the GMO engineers. However, it is lacking any research references or links so perhaps we should take this with a grain of salt? If so I also like butter on my corn-on-the-cob.
  • ZIRP Era in Pictures (Gary Tanashian, Notes from the Rabbit Hole) Hat tip to Talk Markets. We are so habituated to ZIRP that we forget how things used to be. Gary Tanashian has delivered a graphic reminder.

  • New Jersey Backs Off $3.2 Billion Emerging-Markets Bet (Boris Kirby, Bloomberg) The New Jersey Pension Fund was one of the largest institutional investor in emerging market ETFs but has cut back significantly. The $77 billion dollar fund has had as much as $3.2 billion invested in emerging market ETFs but had cut that down to $1.8 billion as of 31 March. This news comes out just as the market has started to rebound, up 10% from a low reached at the beginning of February.
The Big Bang theory offers an explanation for how the early universe expanded and cooled and how matter congealed, from a primordial soup into stars, planets, and galaxies. What it describes, then, is the aftermath of the Bang. But it is effectively silent on why or how that first massive expansion happened or where all the original matter came from.

A theory of cosmic inflation proposed by Alan Guth 35 years ago (and not widely considered for much of the time since) gets closer to a description of how the Big Bang proceeded from the first instant after if commenced (but does not go completely to "ground zero"). The theory is based on Einsteins theory of gravity and describes the progression of the "explosion" in terms of an "inversion" of gravity to a repulsion (normal gravity is an attraction). If such a condition occurred then there should be evidence remaining with ripples detectable in gravity waves. See a companion article to this one: A new look at the Big Bang, moments later (Carolyn Y. Johnson, The Boston Globe), describing how a group of scientists at Harvard have detected the effects the very early gravity event.

  • A Patent Surfaces Detailing a Facebook Smartphone (Nick Bilton, The New York Times) This is apparently only one of many patents that Facebook has filed or had issued for unique smartphone designs and functions. There have been rumors for years that Facebook was working on a "Facebook smartphone". This is an obvious confirmation.

facebook-smartphone-patent


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