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What We Read Today 22 June 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".).


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

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Topics today include:

  • How Money Alters Behavior

  • Were Milton Friedman and Ben Bernanke Right After All?

  • Qualitative Easing vs. Quantitative Easing

  • Peak Apple?

  • Peak Facebook?

  • The Facebook Lawsuit No One Talks About

  • Payday Lending or Post Office Banking - Should There Be a Choice?

  • Cement and Climate Change

  • New High Energy Lithium Ion Battery

  • Blockchain is Over-Hyped

  • Several Views of U.S. Political Partisanship

  • What Would Friedrich Nietzsche Think of Brexit?

  • Leave Edges Ahead in last Polling Before the Vote

  • Is the Yen Overvalued or the Dollar Undervalued?

  • Gold Flees Shanghai Exchange

  • And More

Articles about events, conflicts and disease around the world


I’m fed up with the hype around blockchain. It’s not rocket science, it’s not revolutionary and it’s not even that smart. And it’s not going to change the world.

Anyone who has worked on payment systems – as I have – knows that a payment system consists of two essential components: a ledger, and a means of sending and receiving messages. In a minimalist world, that is all a payment system needs. The rest of the complexity in payment systems arises from incomplete networks, imperfect information and – above all – the need to protect against human fraud and error.

Blockchain is a stripped-down payments system. It consists of a distributed ledger and peer-to-peer messaging. Ok, so the private keys stuff is smart – though it is not without its problems. But it is still essentially a protected messaging service. It is not rocket science.


  • Supreme Court's Alito sells oil company shares, documents show (Reuters)  Judges' personal l wealth holdings can present many cases from which they must be excused to avoid possible conflicts of interest.

  • What Happens When One Party Doesn’t Care About Governing? (Washington Monthly)  When making government smaller involves making sure governmnet doesn't work properly to hasten the shrinkage of the institution, this article thinks that's a step too far.  (Econintersect:  We are reminded of a political cartoon we once saw, showing a candidate making a stump speech, saying:  "Government can't do anything right. Elect me and I'll prove it.")  From this article:

Over the course of the Obama presidency, we’ve watched as Republicans have thrown out many of the norms that have been established in order to keep our democracy functioning. It isn’t just things like shouting “You lie!” in a presidential address before a joint session of Congress. And it isn’t just a requirement that basically any vote (including presidential nominations) get a super majority in the Senate. It includes doing things like overtly undermining the executive branch during complex negotiations with other countries (i.e., Iran nuclear deal and Paris climate accord) and failing to give a Supreme Court nominee a hearing. Remember back during Obama’s first term when Republicans were taking the global economy hostage by threatening to not raise the debt limit? 

  • The roots of partisanship (Pew Research Center)  The problem in the middle for both Republicans and Democrats is that about 1/3 of those independents who self-declare as "leaners" do not think either party represents them well.  But it is more of a problem for the GOP.


  • Views of parties’ positions on issues, ideologies (Pew Research Center)  For many partisans, "political compromise means their party gets more".  And for some partisans, the only acceptable solution is no compromise.  This derives from each party's members perceiving the other party as having many extremists.


  • Nietzsche and the British Referendum (Project Syndicate)  Hugo Drochon, who teaches politics at the University of Cambridge, and is the author of Nietzsche’s Great Politics:

Today, as Europe faces difficult questions about its future, exemplified in the UK’s upcoming referendum on its European Union membership, perhaps Germany’s experience in the late nineteenth century can be brought usefully to bear. If so, there are few better guides to that experience – and our own – than Friedrich Nietzsche, one of the most perceptive thinkers of his time.

Nietzsche was a fearsome critic of the “blood and iron” power politics by which Bismarck had brought about German unity. He called it an example of the “slave morality” that he lambastes in his great work On the Genealogy of Morality – a “lowly” approach to morality, focused simply on relieving suffering.

In Beyond Good and Evil, Nietzsche went further, exploring how a superior political system – based on “master morality,” which transcends simplistic notions of “good” and “bad” to develop values from a position of nobility and strength – would look. He envisioned a united Europe, led by a trans-European cultural elite focused not on grandeur, but on the development of a new European culture.

Only through unification, Nietzsche argued, could continental Europe have a strong voice in world affairs. ..... The alternative – the power politics in which Bismarck was engaged – was “petty,” as it was premised upon European fragmentation and disintegration.



  • Final Brexit Appeals Made as ‘Leave’ Edges Ahead in Two Polls (Bloomberg)  Campaigners issued 11th-hour appeals as Britain prepares to vote on its membership of the European Union, with the two latest opinion polls showing a narrow lead for “Leave.”  An online survey by TNS on Wednesday put “Leave” two points ahead on 43%. It sampled 2,320 adults June 16-22. Luke Taylor of the polling company cautioned that “a late swing to the status quo” was possible. According to the survey, the voting intention figure for those likely to vote based on a turnout model from the last general election is 49% for “Leave” and 42% for “Remain.”  An earlier online poll published by Opinium showed 45% of respondents for “Leave” and 44% for “Remain,” a lead the company called “a statistical dead heat”. The poll, with a sample of 3,011 people, was conducted June 20-22.  The strong rally in the pound became shortlived after these results were announced.


  • Post-Brexit moves to Paris, Frankfurt would mean hefty pay cuts for UK bankers: data (Reuters)  London-based bankers considering a possible relocation if Britain votes out of the European Union would suffer pay cuts of up to 80% if they were to move to Frankfurt or Paris, data from salary-benchmarking site Emolument showed.  Analyzing 8,065 salaries for front-office banking roles in London, Frankfurt and Paris, Emolument found that London bankers earned higher salaries than their German or French peers, from entry-level analyst jobs right up to coveted managing director positions.  London-based associates earned £100,000 ($146,570) on average, compared with £71,000 and £70,000 pounds for their contemporaries in Frankfurt and Paris respectively, while directors earned £280,000 - £98,000 more than peers in Frankfurt and £114,000 more than Paris-based directors.


North Korea

  • Steely will seen behind Kim's push for North Korea weapons that work (Reuters)  WednesdayNorth Korea had what looks like the successful launch of a ballistic missile that reached an altitude of 1,000 km and got over half way to Japan's main island of Honshu.  Experts said the launch, which came after five failed tests including one earlier on Wednesday, marked progress in North Korea's weapons program, and underlined Kim's steely determination as well as his patience with scientists involved.  Econintersect:  Patience?  Has anyone asked if any engineers or scientists were executed to encourage better performance?  That would be consistent with past political actions by Kim Jong Un.


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

  • Even Small Children Are Less Helpful after Touching Money (Scientific American)  'Money is the root of all evil' is an expression derived from the Bible (1 Timothy 6:10).  One may want to debate this, perhaps that money can do good, or perhaps that there are causes of evil separate from money.  But there is scientific evidence that contact with money changes human behavior in many ways, both desirable and undesirable.  From this article:

Merely touching money has the power to alter our behavior. Money makes us more selfish, less helpful, and less generous towards others.One experiment, for example, had a pedestrian drop a bus pass in front of people who had just gotten money out of a cash machine or merely walked past the machine. People who had gotten money out of the cash machine were less likely to alert the woman that she had dropped her pass. While money can hamper helpfulness, it also confers psychological advances in the form of making people more persistent and more successful at solving challenging problems.

  • Ben Bernanke and Milton Friedman were Right: Helicopter Money or Qualitative Easing? (Hazel Henderson, JustMeans.Business.Better)  Quantitative Easing (QE), the process of increasing liquidity by creating excess reserves in the banking system, has not had a major impact on the 'real economy' (Main Street).  Hazel Henderson, who has contributed to GEI, suggests that 'nt' should be replaced by 'l' and the 'easing' should be 'qualitative', which she defines as increasing consumer liquidity.  She says the process should be that described originally by Milton Friedman in 1969 and later quoted by Ben Bernanke in 2002, before he became Fed chairman.  She starts her essay:

President Reagan’s famed economic adviser Milton Friedman often thought outside the economics box.  In 1969, Friedman proposed that the best way to stimulate economies was to take bundles of cash up in helicopters and throw them out for everyone.  His student, former Fed Chair Ben Bernanke, referring to Friedman’s idea, earned the nickname “Helicopter Ben.” 

  • Bug Bite Saliva Hijacks Immune Cells to Spread Virus (Scientific American)  A research paper in Immunity suggests that when immune cells travel to the itchy, red site of a mosquito bite, they may inadvertently be infected with a mosquito-borne virus and then help spread the infection throughout the body. The resulting higher viral loads make the recipient sicker than would be the case if the virus were introduced without a bite. This revelation points to a potential new target for combating mosquito-borne diseases: the bite site itself.

  • Is Tim Cook's Apple past its peak? (La Cross Tribune)  Apple could be long past its days of growing $100 billion a year. But that doesn't mean that $14 billion in growth is a failure.  Looking at the stock chart, Apple has had peaks before.  This article discusses why some think the latest is th last, and what might make them wrong.


  • Why We Have Hit Peak Facebook (Seeking Alpha)  The author says that Mark Zuckerberg is making the kind of moves at Facebook (NASDAQ:FB) that founders make when their stocks are about to roll over permanently.

  • CEO Mark Zuckerberg is making his company an autocracy, just like Rupert Murdoch's Fox.

  • Paying media companies for content, then trapping their users is not a business model.

  • Facebook's money and power may look unlimited, but that can change.

  • The Facebook Lawsuit No One Is Talking About (Seeking Alpha)  The cornerstone of Facebook's growth and dynamic profitability is the monetization of its wealth of data on its members. Facebook is the undisputed king of social media advertising.  But Facebook is being sued by advertisers for "overstating (and overcharging) by the Facebook Ads manager reporting tool" and for "overcharging by over 300% for the Facebook Ads campaigns".  The author here says:

Facebook (NASDAQ:FB) is getting sued. No big deal right? They always get sued for one reason or another right? Perhaps, but this lawsuit tackles the heart of one of Facebook's lifelines.

As of today, I have been unable to find any media organization that has picked up this lawsuit. Also, it is not mentioned specifically in eitherFacebook's 2015 annual reportits most recent quarterly 10-Q SEC filing or any other subsequent filings.

 Nearly 10 million households qualify as “unbanked,” meaning they don’t have any traditional banking products such as a checking account. Another 25 million are “underbanked,” meaning they have an account but still turn to payday loans or similar products. Together, these two groups comprise nearly a third of all households in the country. The so-called alternative products they rely on—payday loans, prepaid debit cards, check-cashing services—cost them almost $90 billion a year in interest and fees, or an average of about $2,400 per family.

The United States Postal Service would be a much friendlier lender. If the USPS were to offer debit cards, savings accounts, and small-dollar loans, it could save the average underbanked family more than $2,000 a year. Even if just a tenth of the 12 million people who take out payday loans every year instead got a small loan from the post office, they would save more than half a billion dollars.

  • Cement Industry Faces a Pivotal Moment on Climate (JustMeans.Business.Better)  Cement is a significant source of carbon emissions because of its use of lime, which is primarily calcium carbonate.  Not only is CO2 released during the manufacture of concrete raw materials and mixed cement products, as cement cures and ages it continuously emits CO2 from decomposition of the carbonate ion (CO3=).  All told, this produces 5% of global CO2 generation annually.  If this carbon were to be taxed the cement industry would become unprofitable or concrete would become too expensive for many current uses.  The author writes:

The industry is in urgent need of reinventing itself, and will need to invest in Carbon Capture & Storage (CCS) infrastructure at scale and develop products with low embedded carbon if it is to be ready for a low-carbon future. Although some companies are starting to take these steps, the current pace of change is not fast enough. CDP estimates that the carbon intensity of the industry needs to be reduced by 40% from current ‘best in class’ levels which many companies are not yet attaining.

  • Stanford Start-Up Amprius Aims to Mass Produce High-Energy Lithium Ion Batteries (Scientific American)  Solar power is cheap and getting cheaper.  It's utilization, however, is limited by the variable source of the power - the sun.   Stanford battery startup Amprius has developed a new large-scale manufacturing technique for advanced silicon electrodes that could actually enable mass production of high-energy lithium-ion batteries in the near future, and help bring the next generation of electric vehicles and consumer electronics, as well as improved solar energy storage, to fruition.  From this article:

Amprius’ innovation lies in its use of silicon nanowires in the negative side of a lithium-ion battery instead of the conventional carbon. Silicon has long been known to researchers for its potential to increase battery density because one silicon atom can hold on to four lithium ions, while it takes six carbon atoms to hold just one lithium ion. That’s a huge advantage. However, shuttling all of those lithium ions into and out of silicon causes it to swell to three times its original size, and inevitably causes the silicon to fracture and destroy itself after just a few cycles. To overcome the issues caused by silicon swelling, Amprius’ founder Professor Yi Cui developed a silicon nanowire electrode that leaves room for thin “hairs” of silicon to swell and shrink as they absorb lithium. The unique geometry allows the battery to cycle repeatedly without damaging the delicate silicon—and unlocks all of the energy density benefits of using silicon instead of carbon.

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