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What We Read Today 22 April 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:

  • Your Real Tax Nightmare Could Be Something You Never Imagined

  • Is there a Fundamental Change in World Currency Markets

  • Explaining the Economics of Surge Pricing and Why it Polarizes Opinions

  • People are again Making Huge Profits on Selling Their Home

  • Linear Thinking is Limiting New Energy System Developments

  • Woman Who Ran Obamacare Now Works For Insurance Lobby and Talks About Huge Insurance Premium Increases

  • What Demographic Has Seen a 41% Rise in Suicides Since 2000?

  • RNC Delegate Says that 1,237 Delegates Does Not Mean a Trump Nomination

  • Why are Pros in Both Parties Worried about 2016?

  • Trump's $19 Trillion Switcheroo

  • London Mayor Tells Obama to Take His Kenyan Bias Elsewhere

  • U.S. Buying Heavy Water from Iran

  • And More

Articles about events, conflicts and disease around the world

Global

  • How to Transform Our Energy System (Scientific American)  The problems to be surmounted in developing a transformative energy system for the 21st century are handicapped by linear thinking, according to this article.  This problem is being addressed by prizes and challenges which are increasingly being offered by a variety of organizations, from innovative corporations like Google and Virgin, to government and educational institutions like the U.S. Department of Energy, theEuropean Union, and MIT.  One specific such program is XPRIZE which provided this statement with the article:

We at XPRIZE believe a new type of energy system is possible: one that is sustainable, accessible, reliable, and abundant. Even with the existing sunk costs of energy infrastructure, it is only a matter of time before more efficient, more dynamic, and more sustainable approaches to energy come to the fore. But climate change doesn’t wait for action. To act on climate now, we must embrace today’s tools that accelerate innovation, de-risk opportunities, and leverage diverse investment.

By enlisting the innovators of the world – from scientists to investors, tinkerers to entrepreneurs – we will see breakthroughs that protect our planet, all while empowering billions more people with economic opportunity.

U.S.

  • Hedge Funds Are Bearish on Dollar for First Time Since July 2014 (Bloomberg)   Hedge funds and other large speculators are betting on dollar weakness for the first time in almost two years.  Positions that benefit from losses by the U.S. currency exceeded those that benefit from from a rally by a net 21,567 contracts in the week ended April 19, a report from the Commodity Futures Trading Commission showed Friday. That’s the first time since July 2014 that the data haven’t shown net long positions for the dollar versus eight other major currencies.

bearish.dollar.2016.apr.22

  • Woman who ran Obamacare warns of BIG insurance prices hikes (CNBC)   Marilyn Tavenner's crystal ball didn't foresee the initial epic flop of HealthCare.gov when she actually ran the agency in charge of the website. Now, as an insurance lobbyist, she sees big jumps in Obamacare insurance premiums next year.  Econintersect:  Sounds like Tvenner is a "gun for hire" and has no trouble aligning with any boss.

  • US suicide rate surges, particularly among white people (BBC News)  The suicide rate in the US has surged to its highest level in almost three decades, according to a new report.  The increase is particularly pronounced among middle-age white people who now account for a third of all US suicides.  The Centers for Disease Control and Prevention (CDC) report did not offer an explanation for the steep rise.  However, other experts have pointed to increased abuse of prescription opiates and the financial downturn that began in 2008 as likely factors.  The report did not break down the suicides by education level or income, but previous studies found rising suicide rates among white people without university degrees.  Suicide rates among men are more than 3X higher than for women.  But, since 2000, the suicide rate for women has increased by 41% while for men the rise is less, 17%.

  • Go ahead, Donald, get 1,237; it won't matter: RNC delegate (CNBC)  Curly Haugland, a longstanding RNC official and an unbound delegate from North Dakota who will be on the convention rules committee in July, told CNBC that attaining 1,237 during the primaries does not secure the nomination.  Haugland said:

 "Even if Trump reaches the magic number of 1,237 the media and RNC are touting, that does not mean Trump is automatically the nominee.  The votes earned during the primary process are only estimates and are not legal convention votes. The only official votes to nominate a candidate are those that are cast from the convention floor."

  • Trump vs. Hillary – What Worries the Party Pros (Elliott Morss, Morss Global Finance)  The political  professionals are concerned that the primary processes are selecting candidates with high negativity ratings and not selecting the most electable.  Of course they are happy when the other party does that but not when it happens to their own.  Below is the graphic that summarizes poll results as presented by Real Clear Politics:

 

  • Trump Makes Dramatic Turnaround on Eliminating National Debt (Bloomberg)  Donald Trump has had a 14-figure change of heart in three weeks.  Last month, the Republican presidential front-runner made news when he told the Washington Post that he'd push to “get rid of the $19 trillion” national debt “fairly quickly”, estimating the effort could be completed “over a period of eight years”.  But in an interview with Fortune published April 21, Trump seemed to walk it back, rejecting the idea of eliminating the national debt within 10 years. “You could pay off a percentage of it“ in that time, Trump told the magazine, stressing that the “most important thing is to make sure the economy stays strong” and adding the debt could be paid off in “smaller chunks”, larger chunks and refinancing.  Econintersect:  Huh????

UK

  • Anger as London mayor tells 'part-Kenyan' Obama to butt out (Associated Press)  London Mayor Boris Johnson, a leader of the campaign for Britain to leave the European Union, faced a flurry of criticism Friday for suggesting U.S. President Barack Obama may have an "ancestral dislike of the British Empire" because of his Kenyan roots.  On a visit to the U.K., Obama weighed in on Britain's debate about European Union membership, urging U.K. voters to back staying in the 28-nation bloc.  See also next article.

  • Personal greeting, royal chauffeur kick off Obama's visit to Windsor (CNN)  He may not have been toting a cupcake with a candle, but President Barack Obama nonetheless made a showy entrance to Windsor Castle on Friday for a celebration of Queen Elizabeth II's 90th birthday.  Obama was kicking off a day of royal events that included a bedtime greeting for the young Prince George, third in line to the throne.  

Iran

  • U.S. to buy heavy water from Iran's nuclear program (Reuters)   The United States will buy heavy water from Iran's nuclear program and expects it to be delivered within weeks, U.S. officials said on Friday, a move that Republican lawmakers quickly criticized.  The U.S. Department of Energy, or DOE, will buy 32 metric tonnes of heavy water from Iran worth $8.6 million, a department spokeswoman said. Heavy water is a component of making nuclear weapons and nuclear energy, that is not radioactive.  Under last year's landmark nuclear deal between Iran, the United States and five other world powers, Tehran is responsible for reducing its stock of heavy water, which it can sell, dilute or dispose of, under conditions.  Iran is permitted to keep up to 130 tonnes of heavy water at present and up to 90 tonnes once its redesigned and rebuilt Arak nuclear research reactor is commissioned.

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

  • The real tax nightmare may still be on the way (Credit.com, MSN Money)  Among the reasons that you might be audited is one you may never have thought of:  The IRS charges you with woefully underreporting your earnings.  This can happen incorrectly in at least two ways, both involving identity theft:  (1)  Fraudsters can file a minimal income return under your name and social security number to collect a big refund; and (2) a criminal (needed to pass a background check for a financial transaction) or undocumented worker (needed a number to get a job). 

  • Peace breaks out in currency markets? (The Economist)  The curreny markets may be reflrcting more than more of continuing currency wars, with a temporary truce.  The Economist says:

... a truce been declared in the currency wars? At the start of the year, the dollar seemed bound to rise because the Federal Reserve was set on pushing up interest rates three or four times, while there were fears that the weakness of the Chinese economy might force the authorities to devalue the yuan. As it has turned out, the Fed has been sounding more dovish (perhaps because the US economy was weak in the first quarter with the Atlanta Fed's tracker looking at just 0.3% annualized growth); the dollar's rally has halted. And the yuan has risen, not fallen, against the dollar.  Meanwhile the efforts of the Bank of Japan and the European Central Bank to ease monetary policy via negative rates and quantitative easing have not led to a falling yen or euro; quite the reverse. Both currencies are up against the dollar this year.  But this may not be a truce in currency wars, but possibly a coming currency capitulation.  The Economist says:

 ... it is hard to argue that this is part of any obvious plan.

Markets may have realised that central bank actions are becoming steadily less effective;global growth forecasts are being revised down again. So if this is peace, it worryingly resembles Tacitus's remark that "they made a desert, and called it peace".

Peak pricing is triggered when there is too much demand and not enough cabs to service the additional demand. This is usually during peak travel hours; during office hours like 9 am or 6 pm, special events such as a strike or periods of extreme weather.  It is NOT at fixed times, but varies depending on the demand at the hour, the category you select and your location. For e.g.: 4 am may not seem like a peak time for traffic, but a large number of travelers who have an early morning flight to catch rely on us to ferry them to the airport, and hence you might find peak pricing.

  • Emergence of a New Economics (Schumacher Center for a New Economics)  There is an argument that the emergence of a new economics based on human dignity and sustainability is a phenomenon that emerged from the environmental crisis and the modern corruption of bankers and financial markets.  There is another argument that it goes back to the sinking of the SS Central America, carrying gold from Panama to New York, some of which came from the California Gold Rush. The ship went down in a hurricane off the Carolina coast in September 1857. More than 400 passengers and crew drowned.  It was a Victorian morality tale about the Central America which reached the art critic John Ruskin in Oxford just when he was beginning, disastrously for his career and reputation, to apply his principles of art and life to economics. So when the novelist William Makepeace Thackeray asked him for four articles on economics for his newspaper, The Pall Mall Gazette in London in 1860, Ruskin put the story at the heart of his first essay.  Econintersect:  This is the start of a very entertaining article.  Click here to read the rest.

  • U.S. Home Sellers in March 2016 Realized Highest Home Price Gains Since December 2007 (Realty Trac)  Distressed sales, including bank-owned sales, in-foreclosure sales and short sales, accounted for 18.2% of all single family and condo sales in the first quarter, up from 17.2% in the previous quarter — the second consecutive quarter with an increase — but still down from 20.8% in the first quarter of 2015. The distressed sales share peaked nationwide at 44.0% in the first quarter of 2009.  Econintersect:  As can be seen in the graphic below, there is still a large hangover from the housing boom bust whichrose sharply to peak from 4Q 2007 through 1Q 2009 and remained at an extreme level for almost 3 years thereafter.  The distressed sales levels over the past four quarters seem close to stable at about 4X pre-crisis levels.

distressed_sales_q1_2016


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