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What We Read Today 28 July 2015

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.

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).


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Articles about events, conflicts and disease around the world


  • Report: Lawmakers take aim at Endangered Species Act after Citizens United (Al Jazeera)  This year has seen 66 legislative attacks on act, compared with annual average of five before 2011.  This continues an American tradition of fighting conservation related legislation since at least the late 19th century when strong interests opposed early National Park legislation.
  • Chinese Stocks Just Created a New Headache for Janet Yellen (Bloomberg)  China has just added a new conundrum for the Federal  Reserve monetary policy. The dependence of the China’s stock market on official support was exposed Monday with the biggest drop since 2007 amid speculation aid had been dialed back. The Shanghai Composite Index fell 1.7% Tuesday even after China pledged to keep up efforts to “stabilize” the market.  China’s actions in the past month add a new asset to those whose prices depend on policy-maker fiat -- from European and Japanese government bonds to U.S. mortgage securities.  Econintersect:  And even Shakespeare had advice for Janet Yellen:  "All the world’s a stage..."
  • Virgin Galactic spacecraft crash 'due to braking error' (BBC News)  The verdict is human error caused the accident.  Investigators say a Virgin Galactic spaceship crash was caused by structural failure after the co-pilot unlocked a braking system early.  The National Transportation Safety Board (NTSB) says resulting aerodynamic forces caused the brakes to actually be deployed, tearing apart the craft.



  • Kurdish peace 'impossible' - Turkey's Erdogan (BBC News)  The Turkish president has said his country cannot continue the peace process with the Kurds amid attacks by Kurdish militants on Turkish targets.  There has been a recent series of clashes between Turkish forces and Kurdish PKK militants.  Turkey has also been hit by attacks by by Islamic State-linked militants - including one that left 32 dead in the town of Suruc last week.  Turkey considers both the PKK and IS terrorist organisations.



  • Analyst Who Predicted Bottom for Shanghai Stocks Sees Further 14% Plunge (Bloomberg)  Chinese stocks will decline by about 14 percent over the next three weeks as the market demonstrates a trading pattern that mirrors the U.S. crash in 1929, according to Tom DeMark, who predicted the bottom of the Shanghai Composite Index in 2013.  Today the Shanghai Composite declined another 1.7%, bringing the two-day decline for this week to more than 10%.

  • China and Greece Signal a New Round of Deflation (Phoenix Capital Research, Zero Hedge)  Back in 2007, current First Vice Premiere of China, Li Keqiang, admitted to the US ambassador to China that ALL Chinese data, outside of electricity consumption, railroad cargo, and bank lending is for “reference only.”  So here is some "real" data:


Puerto Rico

  • Puerto Rico’s economy, crime to blame for middle class exodus (Al Jazeera) Puerto Rico's economy has shrunk for nearly a decade. According to a former staffer at the International Monetary Fund, that’s a remarkable feat for “an economy suffering neither civil strife nor overt financial crisis.”  Squeezed by high taxes and jobless rates, workers take advantage of their U.S. citizenship ndseek better quality of life on the U.S. mainland and the island's birthrate has plummeted.  But this is not the first time such an event has occurred in the U.S. and its territories:  According to a November 2014 report from the Federal Reserve Bank of New York, “The Causes and Consequences of Puerto Rico’s Declining Population,” Arkansas (in the early 1950s) and Wyoming (in the late ’80s) saw population losses more than double Puerto Rico’s. New York City lost more than 10 percent of its population in the 1970s.

Twitter's Sales Exceed Analysts' Estimates; Shares Jump (Bloomberg)  After hours trading saw Twitter stock (NYSE:TWTR) jump as much as 10% after Twitter Inc. reported second-quarter sales that topped analysts’ projections, a bright spot for the growth-challenged company.  Econintersect:  The market reaction must be considered as muted compared to the huge moves that occurred following the earnings reports for January (shares +25%) and April (shares -25%).  See also Twitter Surges, Then Fades After Hours On User Growth Confusion: The Full Quarter In 6 Charts (Zero Hedge).

Click for latest chart at CNN Money.

EU - U.S. Divergence (Holger Zschaepitz, Twitter)  Retweeted by Vytautas Vakrina.

Ruble Weakens as Oil Rout Continues (Holger Zschaepitz, Twitter)  Retweeted by Edward Hugh (who has contributed to GEI).

Other Economics and Business Items of Note and Miscellanea

Computer model could explain how simple molecules took first step toward life (R&D)  Nearly four billion years ago, the earliest precursors of life on Earth emerged. First small, simple molecules, or monomers, banded together to form larger, more complex molecules, or polymers. Then those polymers developed a mechanism that allowed them to self-replicate and pass their structure on to future generations. We wouldn't be here today if molecules had not made that fateful transition to self-replication. Yet despite the fact that biochemists have spent decades searching for the specific chemical process that can explain how simple molecules could make this leap, we still don't really understand how it happened.  The new model describes how complex molecules can be formed and reproduced in a "soup" of simple carbon structures through an endless cycle of days and nights as would have existed in the first many millions of years on earth.

 Econintersect:  When this editor was a young graduate student he was trying to find a way to measure the emission spectra of excited acetylene molecules ( a simple carbon compound containing two carbons and two hydrogen atoms).  The experiment involved firing an electrical dischareg in a quartz container holding the acetylene.  The idea was that the discharge would raise the energy of the acetylene molecules which would then decay back to lower energy states emitting light.  The light could then be measured by a spectrograph as it passed through the quartz wall.  Problem:  The quartz wall was very quickly covered with a brown film that did not allow the desired light emission to pass.  This resulted from the rapid reaction of the excited (highly chemically reactive) acetylene molecules to form polymers.  The way to proceed with this endeavor would have been to try to use a dilute mixture of acetylene in an unreactive gas like neon or argon, excite the mixture, subtract the emission spectrum of the inert gas (the background emission) and then analyze the spectra that remained.  But this young scientist was impatient and moved on to an unrelated experiment.  

What is a sideline to this story (actually maybe the most important part) is that a year or so later I recounted the acetylene experience to a fellow graduate student.  A few years after that he called me one day and asked if I would start a business with him as a full partner.  He had a financial backer who would support his development of a coating process for "tin" cans for food using acetylene and electrical discharge plasmas.  I didn't feel I wanted to part with my then current corporate career and I declined.  It was only about five years after that my friend called again - he had developed the process and sold it to a major U.S. corporation.  His share of the sale was close to $25 million - in the mid 1970s, so worth north of $80 million today, adjusted for inflation.

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