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What We Read Today 30 October 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 (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.

  • Nothing in Moderation (Thomas B. Edsall, The New York Times) On many political issues there is no middle any more. Surveys of voters and ratings of politicians find that extreme polarization is greater among the voters. An example is given on voter survey results on taxes (more-liberal and less-conservative). Question: why is it so often that data for the right is displayed on the left and date for the left is on the right? See also An Artificial “Disconnect” (David E. Broockman, UCal Berkeley)


  • Articles about conflicts and disease around the world


Finally, some good news in Liberia: WHO says rate of new cases appears to be slowing down (The Washington Post)

Millions of Doses of Ebola Vaccine to Be Ready by End of 2015 (Scientific American)

Child in New York City Showing Ebola Symptoms (Ideal Media)

President Obama’s Ebola comeback (The Washington Post)

Suspicion of authority is feeding America’s Ebola panic: More than 45 per cent believe they or their friends and relatives will get the disease (The New York Times)


Syria: "No (U.S. supported) Field Force To Liberate Damascus" (Moon of Alabama) Hat tip to Naked Capitalism.


ISIS militants execute more than 40 tribesmen in Iraq’s Anbar (Al Arabiya News)

Britain poised to send Apache helicopters to Iraq in battle against Isis: Move being considered because of fanatics' ability to change tactics quickly (Daily Mail)


Safe-Box Stampede Lays Bare Ukraine's Challenge After Vote (Bloomberg)


Hackers breach some White House computers (The Washington Post) Russia suspected.

Hong Kong

Hong Kong can’t afford to lose the Umbrella Movement generation (Quartz)

Latin America

The New York Times Claims Democratic Leaders in Latin America are “Military Dictators” (William Black, New Economic Perspectives)

There are 14 articles discussed today 'behind the wall'.

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  • 2.4% Mortgages Coming — and NO Inflation (Rick Ackerman, Rick's Picks) Rick Ackerman contributes to GEI. Rick says the 30-year U.S. Treasury bond interest rate will go below 2.4%. At the close Wednesday the rate was 3.06%. The high in 2014 has been 3.93% (January) and the low 2.92% (October). The multi-decade low was 2.53% (June 2012). So 2.4% does not seem so far out. What about lower rates - are they possible? What about going below 2.0%? Germany right now has 30-year yield of 1.76% and at the beginning of October his a modern-day low of 1.54% briefly. What about going below 1.5%? Japan right now has a 30-year yield of 1.62% (and has briefly been as low as 1.28%). In multi-generational debt deflation cycles interest rates can go lower than most now alive could ever have imagined.

Click for large image.

  • ECB Stress Tests: The View of an Insider (Yves Smith, Naked Capitalism) Contains an piece from Yanis Varoufakis which posits that the safety of banks passing the recent ECB stress tests is an illusion. Why? A majority of bank assets today are financial instruments. Loans (now a minority asset) are backed by tangible assets as security. Financial instruments are backed by a counterparty and counterparty risk is not part of the stress formula, just the security risks. When the next financial system collapse comes it will be brought on by counterparty failures (just like the last one). So this article suggests the tests are purely cosmetic and the pig lives on as before.
  • How the Fed got from eternity to here (John Authers, Financial Times) When QE3 began (also called QE∞ or QE infinity), it was expected by most to increase inflation, devalue the dollar and push interest rates up. The opposite happened. What does that tell us about the state of understanding of economics?


  • Euro vs $US (Warren Mosler, The Center of the Universe) This post contains a great line of seeming nonsense which actually makes perfect sense. You'll have to read Warren's article to see why.
I can see the euro going up in value until it becomes worthless.
  • What is secular stagnation? (Matthew Yglesias, Vox) The term was introduced in 1939 by economist Alvin Hansen when he discussed the problem of what happens to economic growth when population is declining. The term secular stagnation was again introduced by Lawrence Summers at an IMF Forum nearly a year ago. Summers discussed the possibility that demand might be independent of the amount of monetary stimulus that could be created. His address can be seen below. See reference Economic Progress and Declining Population Growth (Alvin Hansen, The American Economic Review - 1939). Yglesias discusses other theories of economic slowdown. But none of the slowdown theories discussed bear on the Irving Fisher theory of debt deflation that has been gaining interest and attention along with the thinking that Yglesias discusses.

  • Other Economics and Business Items of Note and Miscellanea

EU provisionally clears French, Italian budgets after tweaks (Reuters)

Governments sign deal against tax evasion (Financial Times)

Why Oil Prices Went Down So Far So Fast (Bloomberg)

IBM And Twitter Just Announced A Huge New Partnership (Business Insider)

Sea Monkeys Make the Ocean Go 'Round (JSTOR Daily)

How we beat the 1 percent: This is how the moneyed classes get dethroned (Salon) Hat tip to Doomstead Diner.

Midterms Prediction: Billionaires to Retain Control of Government (Reader Supported News)

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