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What We Read Today 03 December 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

Global

  • Latest indictment in Fifa corruption scandal names 16 new officials (The Guardian)   The US Department of Justice unsealed a 92-count indictment in federal court on Thursday against 16 new defendants as part of its broadening Fifa corruption investigation.  The defendants are all current or former members of Concacaf and Conmebol and include top officials in both regional soccer federations. All are charged with racketeering, wire fraud and money laundering all in a scheme to enrich themselves.  US attorney general Loretta Lynch said on Thursday:

“The betrayal of trust set forth here is outrageous.  The scale of corruption alleged herein is unconscionable. And the message from this announcement should be clear to every culpable individual who remains in the shadows, hoping to evade our investigation: you will not wait us out. You will not escape our focus.”

  • The slow-burn, devastating impact of tobacco plain packs (The Conversation)  It is three years since Australia fully implemented its historic tobacco plain packaging law. From December 1, 2012, all tobacco products have been required to be sold in the mandated standardized packs, which, with their large disturbing graphic health warnings, are anything but “plain”.  Ever since, there have been frenzied efforts by the tobacco industry and its ideological baggage carriers to discredit the policy as a failure.  But data indicates no such thing.  Data released this month from a national schools survey involving more than 23,000 high school children found smoking rates were the lowest ever recorded since the studies first commenced in 1984 (see graph). This momentum is starving the tobacco industry of new smokers, which is one important reason why all tobacco companies are now busily acquiring e-cigarette brands.

smokers.youth.australia

Must we change? Can we change? Will we change?

  • Turning to the Non-Bees for Crop Pollination (R&D)  A  new study published in the Proceedings of the National Academy of Sciences and synthesizing 39 field studies on 17 crops from five continents has found bee population decline might not signal a detrimental risk for crop production. Nature has a safeguard in the form of non-bee pollinators.  The researchers write:  

Many of the world’s crops are pollinated by insects, and bees are often assumed to be the most important pollinatorsTo our knowledge, our study is the first quantitative evaluation of the relative contribution of non-bee pollinators to global pollinator-dependent crops.”  

  • Sea level rise is real – which is why we need to retreat from unrealistic advice (The Conversation)  Coastal communities around the world are being increasingly exposed to the hazards of rising sea levels, with global sea levels found to be rising faster over the past two decades than for the bulk of the 20th century.  But managing the impacts of rising seas for some communities is being made more difficult by the actions of governments, homeowners – and even some well-intentioned climate adaptation practitioners.  Coastal adaptation policies usually carry political risk. One of the main risks is when communities end up divided between those wanting a response to the growing risks of coastal flooding, and those more concerned about how their own property values or insurance premiums might be hit in the short-term by such action. For some, the biggest threat is seen to be from sea level rise adaptation policies rather than sea level rise itself.

U.S.

  • Former Massey CEO found guilty of conspiracy in West Virginia mine blast (Reuters)  Former Massey Energy Chief Executive Don Blankenship was found guilty in federal court on Thursday of conspiring to violate safety standards at the Upper Big Branch mine, the site of a 2010 blast that killed 29 people.  The jury found Blankenship not guilty of making false statements and of securities fraud.

  • F.B.I. Treats San Bernardino Attack as Possible Terrorism Case (The New York Times)   The married couple, The suspects, Syed Rizwan Farook, 28, and Tashfeen Malik, 27,  who police say killed 14 people at a social services center had built more than a dozen pipe bombs and stockpiled thousands of rounds of ammunition, officials said Thursday, and they fired as many as 150 bullets at victims and police officers in a rampage that shattered a quiet day and ended in their own deaths.  The F.B.I. is treating the shooting as a potential terrorist act, though they are far from concluding that it was.  The suspects’ extensive arsenal, their recent Middle East travels and evidence that one had been in touch with people with Islamist extremist views, both in the United States and abroad, all contributed to the decision to refocus the investigation. But officials emphasized that they were unclear what set off the attack, and said they were not ready to call it terrorism.  Econintersect:  Earlier reports that their were three shooters appear to have been wrong.

  • Dick Cheney Busted, Forever (The Huffington Post)  On Thursday, Cheney's family unveiled the official bust of the former vice president in the U.S. Capitaol Building, an honor afforded to all holders of the office. 

cheney.bust

EU

  • European Central Bank extends asset purchases to March 2017 and cuts interest rates to new record lows (City A.M.)   The European Central Bank (ECB) has ramped up its asset purchase program to the tune of €360 billion (£257 billion, $381 billion), its president Mario Draghi announced today.  The program will now run until the end of March 2017 instead of September 2016 as initially planned, but will stay at a rate of €60 billion. It will take the value of the program up to €1.5 trillion from €1.1 trillion. The ECB also added regional government bonds to the list of eligible assets it can buy, so it can now buy the bonds of Paris or Milan local governments.  Draghi also said the ECB would be reinvesting money it gets when the debt it purchases expires, as was done with the asset purchase program in the UK.

  • Denmark 'votes No' on adopting EU rules (BBC News)  Danes have rejected adopting EU rules on cross-border policing in a referendum that could have seen the country take closer ties with the bloc, results suggest.  Denmark's centre-right government had wanted to abandon some Danish opt-outs from EU home affairs legislation.  But with most votes counted, about 53% said No to the proposals. 

Japan

  • Forced to confess (The Economist)   Crime rates are lower in Japan than almost anywhere else—the murder rate is less than a tenth of America’s. Those arrested for minor wrongdoing are treated with exceptional leniency. Less than one in 20 Japanese deemed to have committed a penal offense go to prison, compared with one in three of those arrested in America, where the average jail term is much longer. In Japan the emphasis is on rehabilitation, especially of young offenders. The rates of recidivism are admirably low, partly because the state is adept at involving families in reforming those who stray.  Yet the state’s benign paternalism has a dark side. The chief reason the system looks good is that Japan is a remarkably safe society. And where once police worked closely with local communities to solve crimes, now they struggle to catch criminals. The system relies on confessions, which form the basis of nine-tenths of criminal prosecutions. Many confessions are extracted under duress. Some of those who admit guilt are plainly innocent, as recent exonerations have shown.  For more on this read Wrongful Convictions and the Culture of Denial in Japan (Wrongful Convictions Blog). 

China

  • For China, the End of the Beginning on Road to a Global Currency (Bloomberg)   After a struggle of more than half a decade, China this week overcame doubts and objections to qualify for official reserve status for its currency, the yuan. Now, the real battle begins.  Chinese officials who want a much bigger role for market forces -- including central bank Governor Zhou Xiaochuan and his deputy Yi Gang -- have used the goal as a lodestone for their ideas. In their campaign, the reformers won approval for gradually opening up the financial system to foreign participation and letting the private sector set interest rates.  With the IMF’s decision on Nov. 30 to endorse the yuan for inclusion alongside the dollar, euro, pound and yen in the International Monetary Fund’s global currency basket, known as Special Drawing Right, or SDR, the reformers in one sense realized their ambition.

Australia

  • A European Union-Australia trade deal may heal a troubled history (The Conversation)  For decades, trade relations between the European Union and Australia have been marked by sourness and rancour. So Prime Minister Malcolm Turnbull’s announcement last month that Australia will begin working towards a “comprehensive and high-quality” Free Trade Agreement with the EU marks a gradual thawing in relations.  An agreement will ensure trade and investment relationship reaches its full potential by removing trade barriers and expand service linkages and investment ties, while enhancing “regulatory cooperation in specific sectors of interest to business”. The process is expected to take between five and seven years.


Light Vehicle Sales Per Capita: Another Look at the Long-Term Trend (Doug Short, Advisor Perspectives)  DS is a regular contributor to GEI.  Doug has a good discussion of the trends in light vehicle sales in the U.S.  The graph below shows a 40-year down trend in sales per capita.  He doesn't discuss this point, but part of the contribution may be from cars simply being built with more quality over time, leading to a longer useful life.

vehicle.sales.per.capita

Other Economics and Business Items of Note and Miscellanea

New Report: Innocents Who Plead Guilty (Wrongful Convictions Blog)   Of more than 1,700 known exonerations in the U.S. since 1989, persons innocent of the crime pleaded guilty in 261 or 15% of the cases. The November 2015 newsletter of The National Registry of Exonerations (NRE) sheds light on the non-intuitive decision to plead guilty when innocent, the systemic pressures that prompt it, and why an unknown number of wrongful convictions based on false guilty pleas may never be identified or corrected.  About 95% of criminal felony and misdemeanor convictions in the United States now come by way of a guilty plea. The trend of case resolution by plea negotiation has diminished the percentage of cases that are resolved by jury or bench trial. As the report points out, guilty pleas usually result in lighter sentences — sometimes much lighter — than a conviction at trial, which is one of the incentives to plead guilty, even for the innocent.

The Cities With the Highest Credit Scores (Credit.com, MSN News)  All ten are in the heartland (upper midwest).  There is a correlation between being missed by the housing bubble and high credit scores - no surprise there.  Watch slide show to see the top ten.

The Greatest Collection of Cabin Inspiration Ever Assembled (Outside)  Nice slide show.

How well do you really know your country? Take our quiz (The Guardian)  Most people around the world are pretty bad when it comes to knowing the stats behind the news. Ipsos surveyed people in 33 countries around the world on issues ranging from immigration to obesity - how does your knowledge compare to theirs?

The unintended consequence of 401(k) auto-enrollment (Employee Benefit News)   Auto-enrollment, codified in law by the Pension Protection Act of 2006, was drafted with the best of intentions — to increase Americans’ retirement savings — but it has had the unintended consequence of impairing plan effectiveness. By proliferating small accounts in plans, auto-enrollment has caused a decrease in average account balances throughout the U.S. retirement system. Adding to the urgency of this issue is the rising rate of auto-enrollment adoption across defined contribution plans of all sizes, but particularly among larger plans.  According to Form 5500 data, DC plans with auto-enrollment, across all industries, have average account balances which are 7% lower than those without auto-enrollment. When we look at individual industries, the impact of auto-enrollment on average account balances is much more pronounced.  The largest difference mentioned in the article is 164% difference for educational service companies.

Hoverboarding at Venice Beach (The New York Times)


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