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What We Read Today 03 August 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


  • Outlook Mixed After TPP Talks End (Voice of America)  There was no consensus Monday on how soon talks to conclude the Trans-Pacific Partnership trade pact could be revived after the 12 parties failed to reach a deal at what was intended to be the concluding round last week in Hawaii.  “The timing really is a challenge at this point, really driven by electoral politics,” Asia Trade Center executive director Deborah Elms told VOA via Skype.  Upcoming elections this fall in Canada and next year in the U.S. are creating headwinds for approval in those countries even if the conferees come to a final agreement later this year.
  • How one local man's immunity to ticks could save us all (Poughkeepsie Journal)  Ticks that are carrying Lyme disease bite this man and die before they have the opportunity to transfer any of the disease organisms (spirochetes).  This disease, which is endemic in parts of the U.S. and Europe, has thus far evaded an effective vaccine.  But the immune system of Richard Ostfeld, a disease ecologist at the Cary Institute of Ecosystem Studies in Millbrook, NY may provide clues to vaccine researchers. For decades, he has studied ticks and tick-borne diseases, primarily in the forests and fields of the mid-Hudson Valley and has been bitten so many times that his immune system has developed an "acquired immunity".  It is believed that this immunity attacks the ticks through their saliva, producing a fatal reaction.  According to this article, scientists funded by the European Union began an effort in 2013 to pursue a vaccine that would operate by this mechanism.


  • California wildfires torch 134,000 acres -- and counting (CNN)  Wildfires engulfing parts of California could intensify Monday, with gusty winds potentially fanning fires caused by lightning strikes.  More than 9,300 firefighters are now battling at least 21 wildfires, according to the California Department of Forestry and Fire Protection, or Cal Fire.  The largest inferno, the Rocky Fire, has already incinerated 54,000 acres in three counties. As of Sunday night, it was only 5% contained and was feeding on the state's drought to grow.
  • Climate change: Obama unveils Clean Power Plan (BBC News)  The aim of the revised Clean Power Plan is to cut greenhouse gas emissions from US power stations by nearly a third within 15 years.  The measures will place significant emphasis on wind and solar power and other renewable energy sources.  Opponents in the energy industry have vowed to fight the plan, saying Mr. Obama has declared "a war on coal". Power plants fired by coal provide more than a third of the US electricity supply.  Not part of the president's plan are potential efforts to deal with carbon already in the atmosphere and that still to be added by what scientists have called "climate intervention".  See Sig Silber article in GEI News:  New Approach to Dealing with Climate Change? 
  • U.S. Coal Giant Greets Obama Climate Rules With Bankruptcy (Bloomberg)  The second-biggest U.S. coal producer filed for bankruptcy hours before the EPA was due to publish new rules.  Alpha Natural Resources (NYSE:ANR) declared bankruptcy this morning to get out from under $3.3 billion in debt accumulated over the past several years. Econintersect:  Of course, the rules to be implemented over future years had little to do with the bankruptcy.  Energy economics is killing coal.



  • Former Libor ‘Ringmaster’ Hayes Gets 14 Years for Libor Rigging (Bloomberg)  Former UBS Group AG and Citigroup Inc. trader Tom Hayes, the first person to stand trial for manipulating Libor, was sentenced to 14 years in prison after being found guilty of conspiracy to rig the benchmark rate.  After a week of deliberations, jurors unanimously found that the 35-year-old worked with traders and brokers to game the London interbank offered rate to benefit his own trading positions. Judge Jeremy Cooke’s sentence after the verdict is among the longest for financial crime in the U.K.


  • Greek Tragedy (The Monthly)  One of the best interview articles yet on former Greek finance minister Yanis Varoufakis, it contains the first detailed account of what transpired on the morning following the Greek referendum when Varoufakis resigned.  This article also does an exceptional job of detailing the nature of the corruption in Greece and how the sources of corruption have been a major opponent for Syriza.  One interesting detail explained was what happened when Mr. Varoufakis cut salaries of Troika "functionaries" paid by Greece (averaging "something like €18,000 a month")  by the same 40% average that were forced on the lowest Greek pensioners, with some reduced now to about €1oo a month.  The Troika overruled him, even though his office was by law responsible for setting the salaries. 



China’s securities regulator said Friday it has launched a probe into automated trading and has restricted 24 stock accounts suspected of influencing stock prices. The government didn’t name any of the parties behind the restricted stock accounts. Citadel said Sunday that one of the accounts at a unit that helps clients buy and sell securities was among them.

  • Citadel account suspended in China amid ‘spoofing’ probe (Financial Times)  The investigation which has shutdown one of Citadel's accounts was focused on a HFT (high frequency trading) practice known as "spoofing" in which an investor submits a buy or sell order but then withdraws it before a sale is completed — a practice that can mislead investors by creating the false impression that a stock is trading at a particular price.
  • Chinese Textile Mills Are Now Hiring in Places Where Cotton Was King (The New York Times)  One benefit for the U.S. that might accrue from the TPP (Trans Pacific Partnership) which currentky has negotiations suspended (see article under 'Global'):  Manufacturing jobs now in China moving to the U.S.  Why?  China is not part of the proposed "free trade" agreement and Chinese companies would lose access to countries with 40% of global GDP, including the U.S., if their production remained in China.  And, in the textile industry, Chinese costs are rising while U.S. costs are declining, even with average manufacturing wages in the U.S. now more than $23 an hour.  This article claims that it now costs 96 cents to manufacture in China (and costs are rising) for $1 in the U.S. where costs are steady or falling.  For textiles U.S. costs are 30% lower than China.

Hotels: Best Week Ever, On Pace for Record Occupancy in 2015 (Bill McBride, Calculated Risk)  A record 79.1% occupancy rate was reported by U.S. hotels last week.  Average daily room rates have been rising and are up more than 27% from the same week in 2009 to $125.04.  Revenue per available room for the same period increased 50% to $98.91.


Past stock-market performance tells you nothing about future results — literally nothing (Sam Ro, Business Insider)  Sam Ro gives one example where past performance has absolutely no predicitve value for projecting future performance:  All the five year periods in which returns were between 60% and 100% were defined and then those returns plotted against the returns realized in the siuxth year.  Econintersect caution:  This says nothing about predictive ability of any other performance and period to predict results about future results.  This is simply a nice anecdote.


Other Economics and Business Items of Note and Miscellanea

  • Guns, motor vehicles and the deaths of young people (The Hill)  While total gun fatalities have remained largely level since 2000, total deaths due to vehicles have declined. The largest drop in motor vehicle deaths, more than 25 percent, has occurred since 1980. If current trends persist, the total of motor vehicle crash deaths will soon drop below the number caused by guns.  Meanwhile, Congress has prohibited the CDC (Center for Disease Control), the agency that would normally collect information on causes of death and injury from conducting research that "may be used to advocate or promote gun control".  See also article at GEI Opinion by Elliott Morss, written a week before this article was published:  Guns Are Dangerous, Like Autos - Why Not Regulate, Like Autos?

"This solar flow battery design can potentially be applied for grid-scale solar energy conversion and storage, as well as producing 'electrolyte fuels' that might be used to power future electric vehicles." 

  • Study: Adirondackers Support Return of Cougars (Adirondack Almanack)  A survey of residents and visitors in the Adirondack Park in 2013 by the Wildlife Conservation Society and across New York States in 2014 by Cornell University reveals that more than 75% favor return of the cougar to former wilderness habitats such as exist in the Adirondacks.  At the same time up to 41% of the respondents indicated they would change some behaviors relating to self, children and/or pets if cougars did become reestablished.  The high support was shown only for "natural repopulation", not for intentional releases.  The animals are occasionally verified as far east as Connecticut (one was killed when struck by a car on the Merritt Parkway in 2011).  In all verified cases, DNA has indicated the animals were migrants from the mountain west.  The cougar (also called mountain lion, puma, panther, painter, catamount) is the second largest native cat to the modern western hemisphere - the jaguar is larger - and males can weigh up to 220 lbs.   See articles about the Adirondacks and the cougar posted in the past at GEI News:  Adirondack Slides (2013) and U.S. Says Eastern Cougar Extinct. GEI Editor Disagrees (2011).  The picture below is of a cougar in captivity from the 2011 article.


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