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.
NASA's Asteroid-Capture Mission May Test New Method to Defend Earth (Mike Wall, Space.com) NASA has programs with the objective of preventing future asteroid impacts. If large enough such an impact could recreate a global extinction such as the one which ended the age of dinosaurs 65 million years ago. The latest investigation is exploring the use of gravitational forces to deflect a threatening asteroid into a moon orbit.
IBM discovers first new class of polymers in decades (David Szondy, gizmag) It is very strong, brittle like glass but can form extremely strong, light-weight composites with carbon fibers with strength of metal, Yet the composites are self-healing when cracked, unlike metal.
Resveratrol is a naturally occurring plant chemical found in the skin of grapes, red wine, peanuts, cocoa powder, and certain berries and roots. There's interest in the chemical because of its proposed antioxidant, anti-inflammatory, and potential anticancer effects.
Combine that with a possible role in extending lifespan (there'ssome evidence for this in yeast and flies), and you can see why this common substance has captured the imagination of medical researchers and the public alike.
But despite all this interest, there's little research linking resveratrol to favourable health outcomes when it's a normal part of the diet.
U.S. Drought Map (Earth Observatory, NASA) Follow details of official weather forecast and long-range projections published at least once a week (usually late Monday or early Tuesday at GEI News, written by climate economist Sig Silber) The latest report was a special update for 15 May.
Click on map for larger image at NASA.gov.
Today there are 11 articles discussed 'behind the wall'. The last one is a mini-article length discussion of credit contraction in the Eurozone.
Please support all that we do at Global Economic Intersection with a subscription to our premium content 'behind the wall'.
China’s Ongoing Battle with Illegal Fundraising (Sara Hsu, The Diplomat) Fraudulently collecting money for investments that is subsequently diverted to personal use is a widespread practice in China. The government has in the past and has again started am "Anti-Illegal Fundraising Publicity Campaign". Money collected from investors has been spent on such things as an $11 million wedding and spending some part of $55.7 million stolen on cosmetics, clothing and luxury cars.
Curtailing the Subsidy War Within the United States (Edward Alden and Rebecca Strauss, Council on Foreign Relations) Money spent on corporate subsidies would be better spent on infrastructure, education and lowering overall tax levels. The subsidy wars between various sates and local governments are largely a waste of money as far as the economy is concerned - a waste in two ways: money spent where it adds little to the economy and not spent where it would add growth. See also blog article.
Analysis of Wind, Solar PV and Conventional Power Production in Germany in April 2014 (Bernard Chabot and BC Consult, Renewables International) Wind and solar sources provided 19.7% of electricity generation in April for Germany. But there were times when the two renewables reached as high as 60-70%. Managing such a variable production presents challenges to the German grid and generation industry. One factor is that only 17% of the hours in April saw conventional power plants able to operate profitably because of inefficiency when running with lowered output.
Click on graph for larger image.
Washington state defies minimum wage logic (Katie Lobosco, CNN Money) Why are there so many cases where reality disagrees with seemingly logical theory? Take minimum wage for example. Washington state has the highest minimum wage ($9.32) in the country and is growing small business jobs more rapidly than any other state. San Fransisco has the highest minimum wage ($10.74) of any city and has added more jobs in the past year than any other city. See also next article.
A Terrifying GIF Of An ice Age Ripping Through The US (Leslie Baehr, Business Insider) This dramatic gif shows a simulated time lapse of a glacial advance over a time of tens of thousands of years. This simulation shows glaciers extending much farther south than recent glacial periods (last 600,000 years) have reached.
The Modern portfolio Theory Flat Earth Society (Vitaliy Katsenelson, Institutional Investor) Katsenelson says that the beauty of MPT (modern portfolio theory) is that it "turns investing into a math problem, with elegant equations, that always spit out precise, albeit random, numbers". He has another great quote from John Maynard Keynes this time: "I'd rather be vaguely right than precisely wrong."
Is It Time to End Fractional Reserve Banking? (John Aziz, Pieria) Aziz says full reserve banking is an appealing concept but has never existed in the history of the world. So if you wanted another big economic experiment this would be a huge one. But when he analyzes what problems we have now and have occurred in recent decades they have had little to do with fractional reserve banking. Read also the comments. The second commenter observes that fractional reserve banking does not in fact exist in modern banking because central banks provide limitless reserves and depositor's funds are protected by deposit insurance schemes.
Can Europe’s creditless recovery continue? (Houses and Holes, from Elliot Clarke, Westpac, Macro Business) Why is it expected that the ECB (European Central Bank) will take steps to increase liquidity ("ease") at the June meeting? This article from Westpac shows the astounding shrinkage of credit across the Eurozone in recent years. Econintersect has annotated two of the graphs to focus attention of key data. For the first graph, the three vertical orange lines mark the dates at which credit growth for different credit classifications most recently turned negative to stay (to date). Reading from right to left:
* Consumer credit, May 2011, most recently down 4% y-o-y
* Non-Financial Corporate, April 2012, most recently down 7% y-o-y
*Financial Institutions, July 2013, most recently down 15% y-o-y
Mortgage credit growth has managed to remain positive, currently up 1% y-o-y.
The credit contraction has shown wide geographic extent; only France has avoided going into contraction with growth hovering around zero for the most recent four months. The status for countries shown in the following graph (emphasized by vertical orange lines) and reading from left to right with the date the current contraction started:
*Spain, May 2011, most recently down 10% y-o-y
*Euro area, July 2012, most recently down 3% y-0-y
*Italy, March 2013, most recently down 3% y-o-y
*June 2013, most recently down 4% y-o-y
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