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What We Read Today 03 March 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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Every day most of this column ("What We Read Today") is available only to GEI members.

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Topics today include:

  • Geologic Evidence of "Snowball Earth"

  • Bill Gross Explains Why the Global Economy is Running out of 'Fuel'

  • Romney and McCain Blast Trump, The Donald Fires Back

  • Battery Storage Revolution for Wind and Solar

  • U.S. Manufacturing PMI Review

  • What Age are People Marrying in the U.S.?

  • EU:  Economic Migrants vs. War Refugees

  • UK's Giant Floating Solar Farm

  • Petulant North Korea Fires More Projectiles

  • More Flap about Gerald Friedman, James Galbraith, the Romers and Bernie Sanders

  • Physics Does not Define What Time Is

  • Private and Public Capital

  • And More

Articles about events, conflicts and disease around the world

Global

  • The desert that revealed the ultimate ice age (BBC News)  Namibia in south-west Africa is world famous for its hot and sandy Namib Desert and its rugged Atlantic Skeleton Coast.  The last thing you might imagine is that the country also holds clues to the Earth's largest ice age. But it was here, 20 years ago, that geologists first recognized one of the most unusual events in our planet's history: the "Snowball Earth".  Econintersect:  There are great photos of the geologic formations that derive from 700 million years ago when the entire planet was encased in ice.

  • Bill Gross: Global Economy ‘Devolving’; Finance ‘Burning Out’ (ThinkAdvisor)  The credit-powered global economy is running out of fuel and will eventually stall out if economic and monetary policies don’t change, according to legendary bond fund manager Bill Gross.  He writes:

“This expansion appears to be reaching an ending of sorts, at least in its current form.  The ever expanding supply of available credit has facilitated economic prosperity much like the sun has been the supply center for energy/food and life’s sustenance." [But now] “finance itself is burning out like our future sun.”

U.S.

pmi.markit.services.2016.feb

  • Marrying Age (Flowing Data)  This is when Americans get married, displayed through an interactive graphic accessible by clicking on the graphic image below.

Click for interactive graphic at Flowing Data.
age.at.marriage.600x400
 

EU

  • EU's Tusk urges migrants to stop coming to Europe (Reuters)  EU Council President Donald Tusk told illegal economic migrants on Thursday not to risk their lives or money to make a perilous trip to Europe "for nothing" but said unilateral actions by European Union states to deal with the crisis must stop.  The ultimate aim was to eliminate the illegal sea transit of migrants from Turkey to Greece, Tusk said after meeting Turkish Prime Minister Ahmet Davutoglu in Ankara and Greek Prime Minister Alexis Tsipras in Athens, although he said no specific numbers had been agreed with the Turks.  Econintersect:  Mr. Tusk, how do you propose to distinguish between "economic migrants", which you have a legal basis for stopping, and "war refugees", which you do not.  Disclaimer:  Identification of what is legal and not legal is the opinion of an observer who does not have a law degree.

UK

  • UK to Unveil Largest Floating Solar Array in the World (R&D)   Workers with Ennoviga Solar and Lightsource Renewable Energy are set to unveil the largest floating solar array in the world, later this month. The five-year project was commissioned by Thames Water and the electricity produced by the array will go towards powering water treatment plants that support London and surrounding areas.  Officials with the $8.3 million project have noted that floating arrays have advantages over those on land, one of the most prominent being the constant cooling provided by the water below. Floating arrays are also easier and cheaper to build—individual panels are placed onto their platforms and floated out to the main unit where they are simply attached and anchored, which makes adding additional panels in the future a simple matter.  Another advantage is that they use space that is not being used for any other purpose.  Econintersect:  This project is throwing away a significant source of energy:  heat.  See Solar thermal energy (Wikipedia)

North Korea

  • North Korea fires projectiles after new U.N. sanctions (Reuters)   North Korea fired several short-range projectiles into the sea on Thursday, hours after the U.N. Security Council voted to impose tough new sanctions on the isolated state and the South Korean president vowed to end Pyongyang's "tyranny".  The firing escalated tensions on the Korean peninsula, which have been high since North Korea recent nuclear test and long-range rocket launch, and set the South's military on a heightened alert.  South Korea's Defense Ministry said it was trying to determine if the projectiles, launched at 10 a.m. (8.00 p.m. ET) from the North's east coast, were short-range missiles or artillery fire.  The firing came after the U.N. Security Council passed a unanimous resolution on Wednesday dramatically expanding sanctions on North Korea following its fourth nuclear test on Jan. 6 and a long-range rocket launch on Feb. 7.  Russian U.N. Ambassador Vitaly Churkin said North Korea's action showed it had not taken the proper lesson from the latest round of sanctions.

Mexico

  • Mexico government says it won't pay for Trump wall  (Associated Press)  The Mexican government has made its first direct response to Donald Trump's pledge to build a wall along the two countries' border — and make Mexico pay for it.  Mexican Treasury Secretary Luis Videgaray said late Wednesday to Milenio television:

"I say it emphatically and categorically: Mexico, under no circumstance is going to pay for the wall that Mr. Trump is proposing." 

Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea

  • James Galbraith Describes Major Forecast Failure in Model Used by Romers to Attack Friedman on Sanders Plan (Yves Smith, Naked Capitalism)  YS has contributed to GEI.  Smith summarizes the points made by Christine and David Romer very succinctly and then includes an article written by James Galbraith which criticises the analysis by Romer and Romer.  Econintersect:  As you read these articles (and the others we posted last week on this topic, remember that neither Friedman (who found favorable economic factors in Bernie Sanders economic plan) nor Romer and Romer (who said the favorable economic factors did not exist - or were at least much less than Friedman represented) are talking about the real economy.  This entire debate is about models and economic models disconnect from reality is legendary.  See the next article. 

  • Economic Forecasting Models and Sanders Program Controversy (Institute for New Economic Thinking)  Prof. Galbraith (who has contributed to GEI), starts his article with a discussion about the limitations of economic modeling (and ends with a chapter from his new book The End of Normal entitled "Broken Baselines and Failed Forecasts"): 

All forecasting models embody theoretical views. All involve making assumptions about the shape of the world, and about those features, which can, and cannot, safely be neglected. This is true of the models the Romers favor, as well as of Professor Friedman’s, as it would be true of mine. So each model deserves to be scrutinized. 

In the case of the models favored by the Romers, we have the experience of forecasting from the outset of the Great Financial Crisis, which was marked by a famous exercise in early 2009 known as the Romer-Bernstein forecast. According to this forecast (a) the economy would have recovered on its own, in full and with no assistance from government, by 2014, (b) the only effect of the entire stimulus package would be to accelerate the date of full recovery by about six months, and (c) by 2016, the economy would actually be performing worse than if there had been no stimulus at all, since the greater “burden” of the government debt would push up interest rates and depress business investment relative to the full employment level.

It’s fair to say that this forecast was not borne out: the economy did not fully recover even with the ARRA, and there is no sign of “crowding out,” even now. The idea that the economy is now worse off than it would have been without any Obama program is, to most people, I imagine, quite strange. These facts should prompt a careful look at the modeling strategy that the Romers espouse.

  • Hot black holes and the arrow of time (Aeon)  One of the biggest mysteries in modern physics is something that we experience literally every moment of our lives. Physics describes the world by means of formulas that tell us how things vary as a function of time, but it does not explain what time is.  This may be the ultimate unknown of the physical world:  What is time?  In the end, it seems that the heat of black holes is like the Rosetta stone of physics, written in a combination of three languages – quantum, gravitational, and thermodynamic – just awaiting decipherment in order to reveal the true nature of time.

  • Economics (Alfred P. Sloan Foundation)  The statement of purpose for the Sloan Foundation has put the cart before the horse, in our opinion.  We suggest that a better statement would state that the contributions of economics to "improving the American quality of life" would involve developing empirically based theories, not in using empirical data to support a priori theories.  The Sloan mission statement:

The Alfred P. Sloan Foundation believes that a theory-based, empirically-tested understanding of the U.S. economy is essential to improving the American quality of life. The Foundation funds grants for high-quality original research that promise to broaden that understanding or use it to improve American institutions. 

  • Private and Public Capital (Dan Kervik, Facebook)  DK has contributed to GEI.

private.public.capital.piketty


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