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What We Read Today 16 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.

  • Kentucky Sues DEA To Free Its Impounded Hemp Seeds [Update] (Ryan Grim and Matt Ferner, Huffington Post) If a government official breaks a law he is likely to be fired (or worse). U.S. federal law classifies industrial hemp as a controlled substance since it is a low psychoactive member of the cannabis family, the most famous member being marijuana. The U.S. law is one of the most restrictive in the world. The problem here is not the DEA, it is a U.S. law that doesn't make sense. See Wikipedia for descriptions of the many industrial and commercial product uses of hemp, one of the most environmentally friendly bio crops that can be grown. Econintersect message to U.S. Congress: Fix the stupid law, stupid!

  • Feds Lurch Closer to Rewriting Rules of Internet (Julianne Pepitone, NBC News) Fast lanes on the internet took a step closer to reality on Thursday (15 May 2014), The FCC (Federal Communications Commission) approved a preliminary proposal that would allow companies that could afford to pay extra to buy faster delivery on the internet. Companies like Netflix could deliver video content at speeds then companies like Econintersect could not afford to use. The FCC says it is also considering changing the classification of internet services providers to a utility (like telephone and electric service) It is argued that this would assure fair access to all internet traffic generators and allow small start-ups to continue to have the ability to compete with the "big boys". See recent GEI News articles here and here for news about the darker side potential of changing net neutrality rules.
  • Trading Ban American Airlines Retirement Accounts (AAII Investor Update) Over the past three years approximately 1,300 American Airlines employees from trading into their retirement plan mutual funds over the past three years due to excessive activity. The mutual fund company involved is T. Rowe Price. Although most mutual funds have this clause in their agreements it is rare that it is exercised. Mutual fund management is not organized for handling frequent trading. Those who wish that feature should use ETFs which are structured to be able to handle rapid trading patterns. A problem for many retirement plans is that they have mutual fund options only and the ETFs are not available for traders.
  • World Court to Target UK for War Crimes in Iraq (Sarah Lazare, Common Dreams) Hat tip to Rob Carter. Then International Criminal Court (ICC) has announced a preliminary investigation into allegations of atrocities 'involving systematic detainee abuse' by UK soldiers in the city of Basra in southern Iraq. The events being investigated occurred between 2003 and 2008. The US. has never agreed to be be under the jurisdiction of the ICC.
  • Sudan judge sentences Christian woman to death for apostasy (MSN News) A Christian woman, eight months pregnant, has been sentenced to hang in three days under the Islamic sharia law of Sudan. Her crime? Being a Christian when her father was Muslim. Under Sharia law the religion of the father is required for the child and changing from Muslim religion is a capital crime. Under Sudanese law President Obama would be sentenced to death. The woman can avoid the death penalty by recanting Christianity and returning to Islam. In any case she will receive 100 lashes for adultery because her marriage to a non-Muslim carries that penalty under sharia law.

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  • Russia Dumping US Treasuries? But Why the Heck in Belgium? (Wolf Richter, Testosterone Pit) Did Russia plan the Ukraine crisis before it actually broke? Between 13 October and 13 November 2013 Russia sold $10 billion U.S. Treasury securities on the way the shedding almost $50 billion by 14 March 2014. That was a decline by 1/3 in five months. The Ukraine crisis did not emerge full force until the latter half of November - see next article.


However, the sales had little impact on international markets for Treasuries because Belgium, as agent for the EU, bought up four time as much as Russia sold (over $200 billion).


  • Timeline: Ukraine's political crisis (Al Jazeera) The Ukrainian crisis did not really start to emerge until 21 November 2013 when former President Viktor Yanuukovich announced abandonment of a trade agreement with the EU, seeking closer ties with Moscow. Between 13 October and 13 November 2013 Russia started aggressively dumping U.S. Treasury bonds. Is that a coincidence or was Russia anticipating in October actions that would precipitate a crisis with the U.S.? Or would plotting be a better word? See immediately previous article.
  • Confusion (Frederick J. Sheehan, Aucontrarian) Frederick Sheehan has contributed to GEI. Sheehan sees a massive shortcoverung rally driving the 10-year higher to yields below 2%. Sheehan views that as the last great mortgage refinancing opportunity before "the great inflation grows obvious". See also next article.
  • The Great Debate© – Bond Bubble? (John Lounsbury and Ted Kavadas, GEI Analysis) Confusion about interest rates is nothing new. To wit, read this debate between two confused observers more than 3 1/2 years ago.
  • More signs of US inflation stabilizing (Walter Kurtz, Sober Look) Kurtz thinks the spike in the latest PPI (Producer Prices Index) represents an inflection point ending a more than two year disinflationary trend and suggests that inflation has bottomed in the U.S. for the latest cycle. See GEI Analysis for detailed analysis.


  • The Library of Congress Wants to Destroy Your Old CDs (For Science) (Adrienne Lafrance, The Atlantic) Some 20-year old CDs won't play anymore. They just weren't built to last. A group at the Library of Congress is researching old CDs to determine how they might be preserved.
  • Picture this: U.S. cities under 12 feet of sea-level rise (Nickolay Lamm, MSN) Without dikes and retaining barriers coastal U.S. cities would be transformed if arctic ice caps were substantially melted. Lamm has collected illustrations of what scenes in 12 U.S. cities might look like if the mid-range of sea level rises (12 feet) were experienced. Click on picture of the Jefferson Memorial in Washington DC to view a slide show at MSN.


  • The Oh-So-Fragile Class of 2014 Needs to STFU And Listen to Some New Ideas (Olivia Nuzzi, The Daily Beast) Christine Lagarde decided not to serve as commencement speaker at Smith College after students petitioned against her appearance. Condoleezza Rice withdrew from the Rutgers commencement for a similar reason. The author laments the unwillingness of millennials to listen to anything that they do not totally agree with. After all, isn't that the essence of intellectual curiosity? If such behavior continues it is possible that ex-presidents may also have to decline to attend some college commencements, although not all of them being rejected by the same institutions. Will we face the day when loss of intellectual curiosity is followed by the loss of intellect altogether? Or have we already achieved a certain level of that result?
  • Paul Ryan's Approach To Poverty Is Straight Out Of The 19th Century (Arthur Delaney, Huffington Post) In spite of the contentious title this is a worthwhile read. It structures the debate between the need for personal responsibility and the need for social safety nets within meaningful contexts. The article falls short of articulating how the two can/should be brought together but a thoughtful reader will come to the conclusion that bringing the two to common ground is the key to resolution of the seeming conflict. Overcoming the moral hazard of welfare and also assuaging the damage of apparent lack of compassion is what the common ground should strive to achieve.
  • Markets expect June action from the ECB (Walter Kurtz, Sober Look) Rumors of mounting support from Germany for ECB easing next month has decimated the euro in trading this week. From a high near 1.3990 last Friday morning the EUR/USD pair dropped 2.04% to close at 1.3704 Thursday 15 November. This is a sharper drop than the one that occurred two months ago the last time the forex market was rocked by similar rumors. In that case it took almost four weeks weeks for a decline of 1.93%. Tuesday and Wednesday this week it looked like the pair might be putting in a bottom but Thursday saw another big decline.


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