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 dayin the early am at GEI News (membership not required for access to "The Early Bird".).
The Nobel Prize in Physiology or Medicine 2015 (Press Release, NobelPrize.org) The Nobel Assembly at Karolinska Institutet has today decided to award the 2015 Nobel Prize in Physiology or Medicine: One half jointly to William C. Campbell and Satoshi Ōmura for their discoveries concerning a novel therapy against infections caused by roundworm parasites; and the other half to Youyou Tufor her discoveries concerning a novel therapy against Malaria. The award to Dr. Tu is the first for research on traditional Chinese herbal medicines.
The Economic Case for Mars Colonisation (The Market Mogul) The privately funded race to colonize Mars is currently being led by Silicon Valley’s poster boy Elon Musk and Amazon’s CEO Jeff Bezos. Even Hollywood has adopted the trend with its recent film, ‘The Martian’, starring Matt Damon. And yet, the typical citizen is still unsure as to whether the furore around Mars is simply the fanciful indulging of a sci-fi influenced wealthy technocracy, or a genuine long term option for human activity worthy of their attention. This 10-minute read puts out the economic considerations that will determine the eventual outcome.
Trans-Pacific Currency Deal Puts Yellen's Fed in the Spotlight (Bloomberg) As part of the Trans-Pacific Partnership (TPP) deal, emerging markets want to know what Federal Reserve Chair Janet Yellen is thinking. As a sidebar to the largest trade pact in two decades, the U.S. and 11 other Pacific Rim countries agreed not to manipulate foreign-exchange rates and to consult on monetary policies. Economies like Vietnam and Malaysia, which rely heavily on exports, promised not to devalue their currencies in order to gain a competitive advantage. In exchange, they want to get more insights into U.S. monetary policy. An interest rate hike, the first in almost a decade, will probably prompt capital to flee developing nations, causing their currencies to slump. Econintersect: Does TPP give the Fed a third mandate?
Justice Department about to free 6,000 prisoners, largest one-time release (The Washington Post) The Justice Department is set to release about 6,000 inmates early from prison — the largest ever one-time release of federal prisoners — in an effort to reduce overcrowding and provide relief to drug offenders who received harsh sentences over the past three decades. The inmates from federal prisons nationwide will be set free by the department’s Bureau of Prisons between Oct. 30 and Nov. 2. The early release follows action by the U.S. Sentencing Commission — an independent agency that sets sentencing policies for federal crimes — which reduced the potential punishment for future drug offenders last year and then made that change retroactive. The commission’s action is separate from an effort by President Obama to grant clemency to certain nonviolent drug offenders, an initiative that has resulted in 89 inmates being released early. The panel estimated that its change in sentencing guidelines eventually could result in 46,000 of the nation’s approximately 100,000 drug offenders in federal prison qualifying for early release. The 6,000 figure, which has not been reported previously, is the first tranche in that process.
Ackman: Bloomberg will run for president, and win (CNBC) Wall Street guru Bill Ackman thinks former New York Mayor billionaire Michael Bloomberg will run for president. Bloomberg was originally a Republican but elected mayor twice asan Independent. Ackman thinks he will run for President as a Democrat.
South Carolina cleans up, but worries remain amid floods (Associated Press) Owners of inundated homes were keeping close watch on swollen waterways as they pried open swollen doors and tore out soaked carpets. So far, at least 17 people have died in the floods in the Carolinas, some of them drowning after trying to drive through high water. Epic amounts of rainfall were received in South Carolina with up to 30 inches over four days likely in some areas. Near the state capital of Columbia 20 inches was measured in a 24 hour period from Saturday into Sunday and another measuring station reported 17 inches in as many hours. See also South Carolina flooding: Dams breached, more trouble ahead (CNN)
Europe-U.S. data transfer deal used by thousands of firms is ruled invalid (Reuters) The EU's highest court struck down a deal that allows thousands of companies to easily transfer personal data from Europe to the United States, in a landmark ruling on Tuesday that follows revelations of mass U.S. government snooping. Many companies, both U.S. and European, use the Safe Harbour system to help them get round cumbersome checks to transfer data between offices on both sides of the Atlantic. That includes payroll and human resources information as well as lucrative data used for online advertising, which is of particular importance to tech companies. But the decision by the Court of Justice of the European Union (ECJ) sounds the death knell for the system, set up by the European Commission 15 years ago. It is used by over 4,000 firms.
Obama is right to be cautious in Syria (The Washington Post) Eugene Robinson says the Obama Plan for Syria is a waiting game and "not one that promises to have much immediate impact on the course of the brutal civil war", while the Putin Plan is "far bolder and much more likely to produce results on the ground — but only in the short term." Robinson's implication is that in the long run Obama will be the best rewarded of the two.
Ukraine crisis: Pro-Russian rebels 'delay disputed elections' (BBC News) Pro-Russian rebels in eastern Ukraine say they have agreed to postpone until February disputed elections that had been planned for the next few weeks. The move was announced by two senior separatist representatives of the self-proclaimed republics in the Donetsk and Luhansk regions. Kiev says any polls held not according to Ukrainian law would be "fake". The disagreements have hindered progress towards ending the conflict in which nearly 8,000 people have died. Moscow denies sending troops and heavy weapons to the separatists. However, the Kremlin admits that Russian "volunteers" are fighting alongside the rebels in the Donetsk and Luhansk regions.
Obama considering plan to leave significant force in Afghanistan (The Washington Post) President Obama is seriously weighing a proposal to keep as many as 5,000 U.S. troops in Afghanistan beyond 2016, according to senior U.S. officials, a move that would end his plans to bring U.S. troops home before he leaves office. The proposal presented in August by Army Gen. Martin E. Dempsey, then-chairman of the Joint Chiefs of Staff, would focus the remaining American force primarily on counterterrorism operations against the Islamic State, al-Qaeda and other direct threats to the United States.
Other Economics and Business Items of Note and Miscellanea
The Phrase that Initiates Recessions (Acting Man) Hat tip to Talk Markets. The first time we heard this phrase was in late 2000, in an interview with the CEO of a telecom equipment provider. Paraphrasing: “It’s as if someone had just thrown a light switch – orders have suddenly disappeared”. The next time we heard the phrase uttered was in late 2007 – this time in connection with a mortgage credit company. Ever since, we have filed it away as an anecdotal reference to the onset of recessions. And lo and behold, the phrase is popping up again in a district manufacturing survey. See US Manufacturing Recession Draws Eerie References to 2009 (Wolf Street)
Bernie Sanders and Robert Reich Are Confused by Economics. And Government. And Reality (TownHall.com) The title of the article is undoubtedly true but unfortunately the author is confused by ideology. A key element of his discussion is opposition to public utilities - he spends a great deal of effort to attack the concept of net neutrality. Econintersect: Market forces based on competition are very effective; market forces based on power and control by "some" can be very inefficient (and, in general, the fewer the "some" the more inefficient).
For a long time, economists believed there was a tradeoff between pursuing policies to stabilize the economy or bring about a more equitable distribution of income and long run economic growth. Addressing equity issues such as inequality would bring up an “equity-efficiency” tradeoff. If such a tradeoff exists, then the pursuit of a more equitable distribution of income would harm economic growth. When this was coupled with the view that the benefits of increased growth to those in the lower parts of the income distribution are much, much higher than the benefits of redistributing income, the result was that many economists abandoned calls for a more equitable distribution of income in favor of promoting growth.
9 Campus Scams Every Student (and Parent) Needs to Watch For (Money Talks News) Students — young adults on their own for the first time — can be attractive prey for financial tricks and foul play. Here’s how to spot the red flags. There are five described in the video below plus four more added in the article.
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