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What We Read Today 26 July 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.

  • Verizon to slow down speeds for some unlimited data subscribers (Marina Lopes, Thompson Reuters, MSN Money) Starting 01 October, Verizon will slow services for selected high volume users among their high speed wireless customers. The slowdown will occur when and where the network is experiencing high demand. The policy will impact customers who consume more than 4.7 gigabytes in a single billing period, who are on unlimited plans, who have fulfilled their minimum contract terms and are subscribing to service on a month-to-month basis. Other users might experience slower speeds when streaming high-definition video or during real-time online gaming as well.
A new study suggests that, in the search for extraterrestrial intelligence, CFCs should be considered evidence of highly civilized life forms, much in the way that scientists have suggested looking for infrared radiation in the past. And soon we'll have a means of sleuthing out possible exoplanetary pollutants: The researchers prove that the James Webb Space Telescope-the Hubble's grand successor, expected to launch in 2018-should be capable of detecting at least two kinds of CFCs, under certain conditions.
  • Why the Border Crisis Is a Myth (Veronica Escobar, The New York Times) A "boots on the ground" volunteer, who has lived for years in El Paso, says there is no emergency. Refugees are being handled smoothly by volunteer organizations just as immigrant waves always have been. Here is some of what she has to say:

To hear the national news media tell the story, you would think my city, El Paso, and others along the Texas-Mexico border were being overrun by children - tens of thousands of them, some with their mothers, arriving from Central America in recent months, exploiting an immigration loophole to avoid deportation and putting a fatal strain on border state resources.

There's no denying the impact of this latest immigration wave or the need for more resources. But there's no crisis. Local communities like mine have done an amazing job of assisting these migrants.

Rather, the myth of a "crisis" is being used by politicians to justify ever-tighter restrictions on immigration, play to anti-immigrant voters in the fall elections and ignore the reasons so many children are coming here in the first place.

In the last month, about 2,500 refugees have been brought to El Paso after crossing the border elsewhere. The community quickly came together to support the women and children and Annunciation House, the organization coordinating the effort.

Contrary to the heated pronouncements, this is nothing we haven't seen before. Groups of refugees arrive by plane and are processed byImmigration and Customs Enforcement. When they are released, Annunciation House takes them to a shelter where they get a shower, a place to sleep, meals and even health care - all provided by volunteers and private donations.

The families of the refugees also help, often paying for travel costs and taking them into their homes. The refugees then move on, to Florida, Georgia, New York or elsewhere.

While the numbers of refugees arriving in El Paso are a fraction of the number arriving in McAllen, in southern Texas, the chain of events is generally the same. Like El Paso, South Texas is not the permanent destination for these refugees. And the response from McAllen's citizens has been generous, too.

There are 19 articles discussed today 'behind the wall'.

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  • The Federal Government Emerges as Lone Star of the Dreary First Quarter (Eric Morath, The Wall Street Journal) Here is a picture of Matt Taibbi's infamous giant blood-sucking vampire squid taking a 20% parasitic drinl out of the otherwise productive economy. And the 19.6% came after finance had the second largest sector contraction in the first quarter. See second graph below.



  • The Muddled Case of Argentine Bonds (Floyd Norris, The New York Times) Hat tip to Pedro da Costa. According to Norris, the judge involved in the Argentine bond case appears to have limited (and dangerously inadequate) understanding of restructuring. The simple concept that restructuring bond obligations so that everybody gets something and life goes on is preferable to hostage taking by a few bond holders resulting in everybody getting nothing. Judge Thomas Poole Griesa has created a situation where banks will either have to violate his order or violate Argentine law. His rulings have been upheld by the Appeals Court but the Supreme Court has refused to take the case. Norris implies the ignorance of the judge is a bad thing but the inaction of the Appeals Court and SCOTUS is even worse. Read recent GEI Analysis articles about Argentina debt by Elliott Morss (here and here) and by Jeffrey Frankel.
  • The Elusive Earnings Recovery (The Daily Slot, email, no url) When was it austerity started in Europe? Late 2010 with Greece? Early 2011 with the ESM (European Stability Mechanism)? We think you can see the time frame on the following graph.


  • Monsanto is Messing With Animals’ Sperm (Mike Shedlock, MISH'S Global Economic Trend Analysis) Mike Shedlock has contributed to GEI. This piece is interesting from two viewpoints. First it discusses the proposals to change the classification of service jobs to manufacturing in order to make economic policies look better on paper. Is the reasoning that McDonald's workers are "manufacturing" hamburgers and sugar loaded drinks? The second aspect covered is Mish's repeated proposal for zero corporate income tax.
  • Study: Groundwater in Colorado River Basin disappears at shocking rate (Staci Matlock, Sante Fe New Mexican) Hat tip to Sig Silber. Severe drought and over-pumping have depleted groundwater in the southwest. Lake Mead is half empty and river flows are but a trickle. But new technology using satellites is able to monitor water level changes in real time for a large area. Just how it is done is a fascinating story. The satellites don't look toward the ground; they look at each other!


  • Email communication from John Fleck, Albuquerque Journal, via Sig Silber. The soutwast and California are not the only areas of the U.S. suffering from water depletion. The following map shows data obtained over several years from the paired satellites for the entire lower 48 states. The title Grace is the acronym for Gravity Recovery and Climate Experiment. You will be seeing this map again in Sig Silber's future weekly weather and climate update reports.


  • How Senator John Walsh Plagiarized a Final Paper (Jonathan Martin, Josk Keller, Matthew Ericson and Nick Corsanti, The New York Times) More than half of Sen. John Walsh's (D, MT) masters thesis was copied and only half was give attribution. Some of the most important parts were copied without attribution, as was the entire conclusions section. The NYT has a page-by-page presentation with highlights. See also the plagiarized Ph.D thesis of Germany's former Minister of Defense, Karl-Theodor zu Guttenberg.
  • Dow transports continue to outperform the market (The Daily Slot, email, no url) A great leading indicator is flashing a big green light for stocks.



  • World Oil Production at 3/31/2014–Where are We Headed? (Gail Tverberg, Our Finite World) Hat tip to Ian Campbell, GEI Discussion Group, LinkedIn. This is a comprehensive but very readable assessment of just where global oil production is headed. There are many excellent graphics, one of which is below. She shows why it appears the U.S. is in a bubble and is over producing very light oil of limited use as a transportation fuel as our systems are operating today. And that is the good news. She concludes:
Unfortunately, the limits we are reaching seem to be financial and political in nature. If these are the real limits, we seem to be not far away from the simultaneous drop in the production of many energy products. This type of limit gives a much steeper drop off than the frequently quoted symmetric "bell curve of oil production." The shape of the drop off corresponds to (1) the type of drop off experienced by previous civilizations when they collapsed, (2) the type of drop-off I have forecast for world energy consumption, and (3) Ugo Bardi's Seneca cliff. The 1972 book Limits to Growth by Donella Meadows et al. says (page 125), "The behavior mode of of the system shown in figure 35 is clearly that of overshoot and collapse," so it tends to come to the same conclusion as well.


  • The Southern Megalopolis: Using the Past to Predict the Future of Urban Sprawl in the Southeast U.S. (Adam J. Terando et al, PLOS One) The fastest growing regional metro over the next 50 years will be the southeastern U.S. complex along I-85 from Raleigh to Birmingham. Okay, so Birmingham is about 200 miles west of I-85 on I-65, but the urban complex connection is logical. The urbanized land area is projected to increase by 2.7 x along the I-85 corridor by 2060. See the following two articles for more.


which becomes this by 2060:


  • The Dozen Regional Powerhouses Driving the U.S. Economy (Richard Florida, CityLab, The Atlantic) The Bos-Wash "I-95 corridor" is the largest regional metro complex in the U.S. with 56.5 million people. The "I-85 corridor", stretching from Raleigh to Birmingham, is the second at 22 million. Should the "I-95 corridor" be expanded to include Richmond? And also the Norfolk area? If all those areas were added the population would increase to approximately 58 million. The future growth of the Bos-Wash megopolis should be relatively modest since the area is quite mature. If it grew at the high end of the population growth rate for the entire country (0.8% per year) then it would have about 81 million people by 2060 (84 million including the Virginia cities). The I-85 megopolis has been estimated to have a future growth up to 50% greater than the national average. (See here also for growth estimates.) If that were realized the Char-Lanta megopolis would have about 38 million people, still 1/3 smaller than the I-95 corridor is today.

Photo by NASA.

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