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What We Read Today 21 July 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:

  • Primary Source of Electricity in Every District in Every State

  • Would You Buy a $13,000 Smartphone?

  • Cashless Society is All About Control

  • About Political Debates on the Internet

  • Whistleblowers:  Who Are They and Why Should You Care?

  • Was There Really Any Wrongdoing in the Great Financial Crisis?

  • Why are Global Bond Yields Still Falling?

  • Rich Countries are Poor at Fostering Wellbeing

  • Republicans Struggle with Unity

  • As Soon As Tomorrow Clinton Could Name Her VP Pick

  • Federal Judge Rules 81-Year-Old Administrative Judge System is Illegal

  • 10 Most Livable Neighborhoods in the U.S.

  • Draghi Says 'Wait and See' on More Stimulus

  • The Economist Says Brexit Will "Hobble the Globval Economy"

  • Who is the UK's New Prime Minister?

  • France and Ireland Tell UK to Hurry Up with Brexit

  • New 'Cuban Missle Crisis' in Asia, Says China

  • And More

Articles about events, conflicts and disease around the world

Global

  • Global bond yields fall on expectation of monetary loosening (The Economist)  Global bond yields, which have drifted down for the past three decades, slumped to all-time lows in July 2016. Several factors have pushed down yields, including deficient demand, weakening demographics and unprecedented easing from central banks. A renewed slump since the UK's Brexit vote appears to be a sign that markets are expecting another round of monetary easing. The prolonged period of low interest rates will continue and could eventually tempt more countries to follow the lead of Canada and the UK, and lift government spending.  Econintersect:  A move away form various flavors of fiscal austerity could 'burst the bond bubble'.  But central banks could also move to a new level of unconventional monetary policy that could accomplish the same thing.  We will have at least one opinion article on how this might unfold in the next few days.

  • Rich Countries Often Fail to Bolster Well-Being, Boston Consulting Says (Bloomberg)  The SEDA, or Sustainable Economic Development Assessment ranks more than 160 countries across 10 areas including economic stability, health, governance and environment. It uses two measures, the first a current score taking into the most recent data and a rolling score that assesses how countries can convert economic growth into well-being over an eight year period from 2006 to 2014.

Click for larger image.

global.wellbeing.map.600x500

U.S.

  • Sources say Hillary Clinton has narrowed her VP search down to three main contenders (Business Insider)  Hillary Clinton's vice presidential search is centering on three main contenders, with an announcement expected as soon as Friday as the Democrat prepares for her party's national convention next week in Philadelphia.  The three candidates are Virginia Sen. Tim Kaine, a former governor, mayor and one-time Catholic missionary fluent in Spanish; Agriculture Secretary Tom Vilsack, an ex-Iowa governor and longtime Clinton ally; and Labor Secretary Tom Perez, a progressive champion who would be the first Hispanic on a major-party ticket.  Sources would not rule out that one or more other names could be in the mix before the decision is made.  Sen. Elizabeth Warren (D, MA)  was mentioned specifically.

  • Judge Rules Administrative Court System Illegal After 81 Years (Armstrong Economics)  Hat tips to John Hemington and Roger Erickson.  Here is an excerpt:

A federal judge’s ruling against the Securities and Exchange Commission for using its own Administrative Law judges in an insider trading case is perhaps the beginning of the end of an alternative system of justice that took root in the New Deal. Constitutionally, the socialists tore everything about the idea of a Democracy apart. It was more than taxing one party to the cheers of another in denial of equal protection. It was about creating administrative agencies (1) delegating them to create rules with the force of law as if passed by Congress sanctioned by the people; (2) the creation of administrative courts that defeated the Tripartite government structure usurping all power into the hand of the executive branch, as if this were a dictatorship run by the great hoard of unelected officials.

Not discussed in the coverage of this story is that the Administrative Law Courts are a fiefdom, to put it mildly. They have long been corrupt and traditionally rule in favor of their agencies, making it very costly for anyone to even try to defend themselves.

  • "Make Republicans Whole Again!" A divided party struggles to rally behind Trump (Reuters)  Over three days in Cleveland this week, Republican leaders sought to sell a story of unity. They repeatedly said the party was getting ever closer to rallying behind Trump, who is running on the slogan "Make America Great Again!" and whose candidacy has divided many and exposed deep discontent among Republicans with their leaders.  But in a few minutes on Wednesday night that show of unity was blown apart in spectacular fashion.  Cruz's non-committal speech infuriated Trump supporters among the thousands of delegates cramming the floor of the Quicken Loans Arena in Cleveland. But their angry jeers triggered recriminations from other delegates who supported Cruz.

  • 10 Most Livable Neighborhoods in the U.S. (AARP)  This list favors "the heartland" with 5 neighborhoods, then east coast with 3 and west coast only 2.

What does it take to be a top-10 neighborhood? Proximity to jobs helps. Plenty of housing, especially apartments and condos. Amenities of all kinds that are easy to reach. Healthy lifestyles are a big plus. All factors built into the Livability Index come into play. Not every top neighborhood scores well in every category: Crime is a problem in some, traffic in others. But these neighborhoods have special qualities that help them rise to the top of our list.

EU

  • Draghi Stops Short of Pledging Fresh Stimulus (The Wall Street Journal)  European Central Bank President Mario Draghi stopped short of pledging fresh stimulus for the eurozone economy on Thursday, after the ECB left interest rates on hold at its first policy meeting since Britons voted to leave the European Union.  Draghi said a reassessment would take place in September.

UK

  • HSBC had investigated foreign exchange trade and found no breach of conduct (City A.M.)   The Financial Times reported today that an internal investigation by HSBC three years ago found nothing wrong with the transaction.  The bank allegedly conducted the review after a foreign exchange scandal erupted in 2013, but found no breach of conduct from the transaction, which is said to have boosted sterling ahead of a deal, netting the bank $8m in profit.  Yesterday two HSBC currency traders, including its London-based global head of foreign exchange, were charged by New York investigators looking into rate-rigging, currency fixing and manipulation.  Econintersect:  Of course HSBC found nor 'breach of conduct':  they made a big profit.

  • EIU global forecast - Brexit will hobble the global economy (The Economist)  A summary:

The UK's decision to leave the EU will be harmful for the global economy. Since the referendum on June 23rd sterling has fallen by more than 10% against the US dollar and has yet to find a floor, and bond yields in developed markets have collapsed to new lows amid a frantic search for safe-haven assets. The first-round effects of the referendum will be relatively mild. Although the UK is the world's fifth-biggest economy, The Economist Intelligence Unit forecasts that it will shrink by 1% in 2017, but this is insufficient on its own to trigger a regional or global downturn. But nothing about Brexit will be resolved quickly. The mechanism through which it will occur, the legislation governing the UK's future relationship with Europe and the impact of this new relationship on the global economy are all months or years away from being settled. It is this deep sense of uncertainty that will hobble the global economy, dampening consumer and business sentiment, deferring investment decisions and weighing on commodity prices.

France

  • France Demands Explanations From May Over Delays to Brexit Talks (Bloomberg)  France and Ireland are concerned about the effects of an extended period of doubt about how the UK will prceed following the Brexit approval referendum.   French President Francois Hollande demanded an explanation from the British government of why it is stalling on its exit from the European Union.  Hollande and Irish Prime Minister Enda Kenny called on the U.K. to start the Brexit process as soon as possible and said they both have specific concerns to be addressed during the talks. Britain’s two closest neighbors said their counterpart Theresa May needed to trigger the exit mechanism quickly to allow “orderly negotiations to begin” after a meeting in Dublin Thursday. The French leader returns to Paris to meet with May later in the day.

China

  • New 'Cuban Missile Crisis' Looms in Asia: China Media (NBC News, MSN News)  U.S. plans to install a sophisticated missile-defense system in South Korea could trigger a nuclear showdown similar to the Cuban missile crisis 60 years ago, Chinese state media warned Thursday.  Washington and Seoul announced July 8 a plan to install the Terminal High Altitude Area Defense (THAAD) anti-missile system to counter the increasing threat from North Korea's missile and nuclear program.  The system's radar coverage can also be extended to monitor Beijing's missiles, according to Chinese critics of the plan.

  • Independent Chinese PMI gauge suspended indefinitely (Financial Times)  The China Minxin purchasing managers’ index (PMI) has been suspended indefinitely ahead of its release scheduled for today, the second suspension within a year for an early indicator of business activity in China.  It has consistently reported lower business activity than the government's official PMI reports.

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

  • What is your Primary Power Source (Barry Ritholtz, The Big Picture)  The primary electricity power plant source for every 3-digit zip code on the 50 states has been shaded in on the map below.  Note the large areas already getting more energy from wind and solar than any other source.  Many of these are rural areas.  More surprising, there are areas getting more electricity from bio mass than any other source.  Can we presume this is not wood burning?

  • A £10,000 smartphone with military grade security specs and end-to-end encrypted VOIP and messaging. But can it play Pokémon Go? (City A.M.)  That's about $13,000 (depending on the exchange rate of the day) for a cell phone.  It’s essentially two phones inside one case, capable of switching from a full-featured, top of the range smartphone to a sort of handheld fortress. Slide a physical switch on the phone’s back and it enters Secure Shield mode, which runs on its own physical hardware inside the case and allows you to make end-to-end encrypted VOIP calls and messages.  It's just the device for paranoid billionaires and incipient coup leaders.

  • Why the cashless society? To track and control your life (Rodger Malcolm Mitchell, Monetary Sovereignty)  RMM has contributed to GEI.  Mitchell makes the case that not only will criminal anonymity be no more if all transactions become digital but everything that anyone does involving payments becomes a matter of record.  And this, he says, creates a system that enables control of everything you do that involves spending or receiving money.  Econintersect:  Mitchell doesn't discuss the possibility that barter transactions could become more common, especially for criminal activity.

  • Virtue Signaling: Why Political Debates on the Internet Are So Often Pointless (Foundation for Economic Education)  Many 'discussions' in social media are not about exchanging information or ideas; rather they are focused on self-validation.  Dan Sanchez says that just as holding a comforting false belief is rock-bottom cheap, so is expressing a socially-advantageous false belief.  He quotes economist Bryan Caplan:

“...irrationality, like ignorance, is sensitive to price, and false beliefs about politics and religion are cheap. If you underestimate the costs of excessive drinking, you can ruin your life. In contrast, if you underestimate the benefits of immigration, or the evidence in favor of the theory of evolution, what happens to you? In all probability, the same thing that would have happened to you if you knew the whole truth.”

whistleblowers.video

  • Was There Wrongdoing Done in the Financial Crisis? (Bloomberg)  This is a Richard Bowen interview from 15 March 2015.  Econintersect:  Why isn't this a national scandal?  We suggest that the ghost of Ayn Rand is the "invisible hand" in American government.


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