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What We Read Today 27 May 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:

  • Cellphone-Cancer Link Found

  • Ancient and Modern Ice on Mars

  • Neanderthals as Architects

  • Phone Scamming is Endemic

  • U.S. Has First Antibiotic Resistant Germ

  • Yellen Says Rate Hike is Probable

  • Trump Won't Debate Bernie Sanders

  • Trump Tells California 'There is No Drought'

  • Do CEOs Make 335 Times What Workers are Paid?

  • The History of CEO Pay

  • 20 Hottest U.S. Housing Markets

  • Banks are Rushing Back into Their Own Securitization of Low Credit Rating Mortages

  • Did Fannie and Freddie Cause the Last Housing Bubble?

  • Putin Targets Poland and Romania

  • Obama Visits Hiroshima

  • Doctors Want Brazil's Olympics Canceled

  • And More

Articles about events, conflicts and disease around the world


  • Report: 1st U.S. Case of Germ Resistant to Last-Resort Drug (R&D)  Officials are reporting the first U.S. human case of bacteria resistant to an antibiotic used as a last-resort drug.  Bacteria resistant to the colistin have been found in other countries but not in people in the U.S. The woman had not traveled recently outside the country.  The development of such bacteria could spread more generally among bacteria and the world may see larger numbers of germs impervious to all antibiotics.  The post-antibiotic age may be approaching.


  • Yellen: Rate hike probably appropriate in the coming months (CNBC)   Federal Reserve Chair Janet Yellen said Friday an interest rate hike is "probably" appropriate in the coming months if economic data improve.  She said in response to a question at Harvard's Radcliffe Institute for Advanced Study:

"It's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate." 

  • Trump decides he won't debate Bernie Sanders (The Hill)  Donald Trump on Friday said it would be “inappropriate” to hold a debate with Bernie Sanders, throwing cold water on an idea that had captivated the political world in recent days.   Trump said in a statement: 

"As much as I want to debate Bernie Sanders — and it would be an easy payday — I will wait to debate the first place finisher in the Democratic Party, probably Crooked Hillary Clinton, or whoever it may be". 

  • Trump tells California: 'there is no drought' (Associated Press)  Presumptive Republican presidential nominee Donald Trump told California voters Friday that he can solve their water crisis, declaring that: "There is no drought."  Speaking at a rally in Fresno, Calif., Trump accused state officials of denying water to Central Valley farmers so they can send it out to sea "to protect a certain kind of three-inch fish".

  • Energy speech leaves North Dakotans 'drunk on Trump' (CNBC)  Donalkd Trump's promise to get government out of the way of energy companies was greeted with hoots and hollers in shale-rich North Dakota, where the presumptive GOP presidential nominee presented his plan.  In his speech at an energy conference, Trump called for cutting regulations and for building the Keystone XL pipeline, which the Obama administration has blocked.

  • America’s 20 Hottest Real Estate Markets for May 2016 (  According to® asking prices for homes hit record highs in May, and homes zoomed off the market as fast as they’ve seen since the housing recovery began.  Half of the hottest housing markets are in California (many in the hardest areas from the last housing bubble) and four are in the heartland.

  • Banks Rush to Offer 3% Down Payment Loans (Realtor Mag)  Major banks are leaving the FHA (Federal Housing Administration) fold and issuing their own low down payment mortgages to borrowers with less than stellar credit scores.  In this article offerings from Wells Fargo, JP Morgan Chase and Bank of America are described.  This is exactly the path followed in the build-up to the housing market collapse of 2008.  See next article.

  • Did Fannie and Freddie Cause the Housing Bubble? (The Atlantic)  Two graphs tell the story.  From 2003 to 2006 FHA (Fannie and Freddie) mortgage issuance fell from nearly 50% of the market to less than 30% while bank issued mortgages that were securitized ramped up from about 15% to nearly 40% of the market.  The share of the market for non-securitized mortgages (the old fashioned kind where the lender usually holds the mortgage until it is retired) drifted lower during the bubble years, as well as in the aftermath.  (See first graph below.)  The second graph shows the increase in mortgage issuance outside of FHA agency during the bubble was up to an order of magnitude in volume for lower than prime loans.



  • Satellites Captured Doomed EgyptAir Jet’s Distress Signals (Bloomberg)   Constellations of European and U.S. satellites captured emergency distress signals from the doomed EgyptAir Flight 804 minutes after it fell off radar on May 19, according to the National Oceanic and Atmospheric Administration.  A device known as an emergency locator transmitter, or ELT, began radioing an automatic distress message at 2:36 a.m. local time, Lieutenant Jason Wilson, an operations support officer at NOAA, said in an e-mail.  Five satellites relayed signals from the beacon to a ground station in Cyprus. The satellites provided a location of a probable crash site in the Mediterranean Sea that is accurate to within about 5 kilometers (3.1 miles).


  • Islamic State: Commander in Falluja killed says US (Reuters)  The Islamic State group's commander in the besieged Iraqi city of Falluja is among 70 militants killed in coalition air strikes, the US military says.  Colonel Steve Warren said more than 20 strikes have been carried out in the past four days, destroying IS positions.  The raids are in support of Iraqi forces who are trying to retake Falluja from IS.


  • Putin says Romania, Poland may now be in Russia's cross-hairs (Reuters)   Russian President Vladimir Putin on Friday warned Romania and Poland they could find themselves in the sights of Russian rockets because they are hosting elements of a U.S. missile shield that Moscow considers a threat to its security.  Putin issued his starkest warning yet over the missile shield, saying that Moscow had stated repeatedly that it would have to take retaliatory steps but that Washington and its allies had ignored the warnings.  Earlier this month the U.S. military -- which says the shield is needed to protect from Iran, not threaten Russia -- switched on the Romanian part of the shield. Work is going ahead on another part of the shield, in Poland.


  • Hiroshima memory must never fade, Obama says on historic visit (BBC News)  Barack Obama has become the first serving US president to visit Hiroshima since the World War Two nuclear attack.  Mr Obama said the memory of 6 August 1945 must never fade, but did not apologise for the US attack - the world's first nuclear bombing.  Mr Obama spoke to two survivors and in an address called on nations to pursue a world without nuclear weapons.


  • Doctors: Postpone or move Olympics due to Zika (CNN)  The summer Olympic Games in Rio de Janeiro should be postponed or moved "in the name of public health" due to the widening Zika outbreak in Brazil, more than 100 prominent doctors and professors said Friday in an open letter to the World Health Organization.

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

  • Cellphone-Cancer Link Found in Government Study (The Wall Street Journal, MSN News)   A major U.S. government study on rats has found a link between cellphones and cancer, an explosive finding in the long-running debate about whether mobile phones cause health effects.  The multiyear, peer-reviewed study, by the National Toxicology Program, found “low incidences” of two types of tumors in male rats that were exposed to the type of radio frequencies that are commonly emitted by cellphones. The tumors were gliomas, which are in the glial cells of the brain, and schwannomas of the heart.

  • Evidence of Mars’ Ancient Ice Age Found (R&D)  Repeated measurements over many years have confirmed that Mars has a polar ice cap in excess of 300 meters thick and the surface water on the red planet is sufficient to coat the entire planet in about 1 meter of ice.  In such an ice age the planet would appear white or pink from earth.  The last such ice age on Mars ended about 370,000 years ago and the next one will start in about 150,000 years.

  • Stone rings in cave made by Neanderthals (USA Today, MSN News)  Complex oval structures deep underground in a French cave provide stunning new information about Neanderthals.  The structures are 176,000 years old, predating the first homo sapiens presence in Europe by at least 100,000 years.  Here are some of the abilities of Neanderthals indicated by the find:

  • They used fire - access to and working in the deep cavern without light is considered impossible;

  • They had a sense of measurements - the structures were built with hundreds of stalagmites all about 13 inches long;

  • They must have worked cooperatively to move about 2.4 tons of stalagmites through difficult passageways;

  • They had a sense of tools which would have been needed to remove the stalagmites from the cave floor and cut them to size and shape;

  • They had a sense of architectural or mechanical design as the structures included buttresses;

  • They had a process for planning - four piles of not yet used stalagmites were in the cavern. 

  • Phone Scam 'Onslaught' Has Authorities Scrambling (The Wall Street Journal)  Authorities are fighting a scourge of phone crime enabled by cheap technology that blasts out nefarious calls and hides wrongdoers’ whereabouts. The scammers are heavily targeting the elderly, sparking a push in Congress to fight back.  Callers often pose as cash-strapped grandchildren, tax collectors or providers of technical support.  Complaints to the Federal Trade Commission totalled 1.7 million for the first four months of 2016.  Fully robotic robocall schemes leave automated messages directing recipients to call back certain numbers.  Other schemes have live persons jump on the robo call once a target is engaged to make a live pitch.

  • Teaching Robots to Feel Pain to Protect Themselves (R&D)  The reason for giving robots pain sensors is the same as for existing biological adaptations—to ensure a reaction that will lessen the damage incurred by our bodies, and perhaps, even more importantly, to help us to remember to avoid similar situations in the future. In the case of the robots, the researchers have built an electric network behind the fingertip sensor meant to mimic nerve pathways below the skin in animals, allowing the robot to "feel" what has been programmed to describe various types, or degrees of pain.

  • Do CEOs Make 335 Times More Than Average Workers? (Mark J. Perry, Foundation for Economic Education)  MJP has contributed to GEI. The AFL-CIO released its annual report on CEO pay last week (see details here and here), and has calculated a CEO-to-worker-pay ratio of 335-to-1 for 2015, based on the average total compensation package for S&P 500 CEOs of $12.4 million last year, and average annual pay of $36,875 for America’s 99 million rank-and-file workers.  The ratio is lower when those who work above average hours are compared to CEOs and when employee fringe benefits are included in the compensation calculation.  Prof. Perry points out that the CEO compensation in total amounts to about $63 per year for each worker (3.5 cents an hour).  But what he doesn't point out is that in the years after WW II the CEO-to-employee compensation ratio was around 20 and as recently as 1980 near 40.  See next article.

  • Bonuses : What is to be Done? (Golden's Words)  Here is some smoothed data on CEO-to-employee wage ratios since 1950.  See next article for unsmoothed data (1965-2011).


  • Are they worth it?  (The Economist)  The ratio of CEO pay to that of the average employee has been volatile in the 21st century and is actually the lowest point since the bubble burst in 2000.

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