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What We Read Today 16 January 2016

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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Topics today include:

  • Record Low Baltic Dry Index

  • Is Bitcoin Dead?

  • Will the Fed Ease?

  • Iran Meets Terms of Agreement

  • Iran Oil Headed for India and Europe

  • New President in Taiwan

  • Why Cartels are Killing Mexican Mayors

  • Obama Declares State of Emergency in Michigan

  • Bill O’Reilly to Leave Country if Bernie Elected

Articles about events, conflicts and disease around the world


  • Obama declares emergency in Michigan over bad water - White House (Reuters)   President Barack Obama declared a state of emergency in Michigan on Saturday and ordered federal aid to be used to help state and local response efforts to an area affected by contaminated water.  Michigan Governor, Republican Rick Snyder, had asked the president to declare both an emergency and an expedited major disaster in the county where the city of Flint has been dealing with the fallout from lead-contaminated drinking water.

  • Gundlach Says Fed May Have to Ease Again: Barron's Roundtable (Bloomberg)  Weaker-than-expected market conditions will keep the Federal Reserve from raising rates as much as predicted in 2016 as company earnings and the global economy will remain strained, Wall Street strategists told Barron’s.  Jeffrey Gundlach, founder and chief executive officer of DoubleLine Capital, told Barron’s the Fed may be forced to ease again after lifting rates one more time, given the uncertainty in the economy. Investors shouldn’t ignore the divergence between junk bonds and the S&P 500 Index, which is pointing to a bear market, he said.

  • Senate to take up bill for more scrutiny of Syrian refugees (Associated Press)  The Senate will consider new rigorous screening procedures for Syrian and Iraqi refugees seeking to enter the United States as national security looms large for voters in an election year.  Propelled by the Islamic State group's attacks in Paris, the GOP-backed legislation raced through the House last November with 289 votes. That veto-proof margin included 47 Democrats despite the Obama administration's opposition to the measure.  The legislation will have a much harder time making it through the Senate in the week ahead.

  • Bill O'Reilly vows to flee to Ireland if Bernie Sanders wins (Fox News, YouTube)


  • Iran oil headed for India, Europe, with sanctions lifting (Reuters)  Iran expects the United Nations nuclear watchdog to confirm on Friday it has curtailed its nuclear program, paving the way for the unfreezing of billions of dollars of assets and an end to bans that have crippled its oil exports.  Tehran plans to lift exports by 500,000 barrels per day (bpd) post-sanctions and gradually raise shipments by the same amount again, adding to a global glut and likely putting more pressure on oil prices which have already dropped 70% since 2014, to below $30 per barrel.

  • Iran, U.S. announce prisoner deal; end of sanctions nears (Reuters)  In an unusual move, President Barack Obama pardoned three Iranian-Americans charged for violating sanctions against Iran, a lawyer for one of the men said, while prosecutors moved to drop charges against four Iranians outside the United States.  Iran will free five Americans including a Washington Post reporter and a Christian minister in a thawing of the cold relations between two countries which have frequently locked horns since Iran's Islamic Revolution of 1979.

  • Iran Has Met Terms of International Nuclear Agreement, IAEA Says (Bloomberg)   Iran has complied with the terms of an international agreement to curb its nuclear development program, triggering the lifting of international sanctions, the UN’s nuclear agency announced Saturday.  The International Atomic Energy Agency said it has concluded that the Islamic Republic curbed its ability to develop a nuclear weapon as required under an accord with world powers. The U.S. and five other world powers agreed in July’s accord to lift sanctions on Iran “simultaneously with the IAEA-verified implementation” of the deal.


  • Tsai Ing-wen elected Taiwan's first female president (BBC News)  Ms Tsai, 59, leads the Democratic Progressive Party (DPP) that wants independence from China.  In her victory speech, she vowed to preserve the status quo in relations with China, adding Beijing must respect Taiwan's democracy and both sides must ensure there are no provocations.  China sees the island as a breakaway province - which it has threatened to take back by force if necessary.


  • Why Cartels Are Killing Mexico’s Mayors (The New York Times)  The cartels no longer want just to operate profitable businesses, they want to run the country.  Econintersect:  Sounds something like the big banks in the U.S.

Other Economics and Business Items of Note and Miscellanea

Back in early August, the Baltic Dry Index was sitting at 1,222, and since then it has been on a steady decline.  Of course the Baltic Dry Index crashed hard just before the great stock market crash of 2008 too, but at this point it is already lower than it was during that entire crisis.  This is just more evidence that global trade is grinding to a halt and that 2016 is going to be a “cataclysmic year” for the global economy.


The world is suffering from a huge oversupply of mega ships that have been built to feed China’s demand for commodities. Vale the biggest iron ore miner in the world has built a fleet of 35 massive iron ore carriers, to ferry iron from Brazil to China.

From the start, I’ve always said the same thing: Bitcoin is an experiment and like all experiments, it can fail. So don’t invest what you can’t afford to lose. I’ve said this in interviews, on stage at conferences, and over email. So have other well known developers like Gavin Andresen and Jeff Garzik.

But despite knowing that Bitcoin could fail all along, the now inescapable conclusion that it has failed still saddens me greatly. The fundamentals are broken and whatever happens to the price in the short term, the long term trend should probably be downwards. I will no longer be taking part in Bitcoin development and have sold all my coins.

The Bitcoin experiment is six years old. There has been a significant amount of venture capital investment in the Bitcoin ecosystem. There are a number of well funded companies competing to build valuable businesses on top of this technology. We are invested in at least one of them. And the competition between these various companies and their visions has played a part in the stalemate. These companies have a lot to gain or lose if Bitcoin survives or fails. So I expect that there will be some rationality, brought on by capitalist behavior, that will emerge or maybe is already emerging.

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