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What We Read Today 12 September 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:

  • Kenneth Rogoff's Case for Electronic Money

  • Party Like It's 1929 04 1999

  • How Bad Might it Be for Stocks in Coming Years?

  • The Problem is Not Too Much Income Going to the Top

  • The Problem is Not Enough Income Going to the Middle and the Bottom

  • What Will Happen if All Earth's Ice Melts?

  • Clinton Campaign Promises More Health Status Info

  • Obama Will Veto 9/11 Bill - First Veto Override Likely

  • Wells Fargo Fired 5,300 Employees and Gave Their Exec $125 Million

  • How Food Information is Corrupted by Food Interests

  • Cameron Resigns from Parliament

  • Syria's Cease Fire Looks Very Shaky

  • Australia Needs Bank Reform Commission

  • And More

Articles about events, conflicts and disease around the world


  • Clinton Campaign Vows More Disclosure of Nominee’s Health (Bloomberg)  Hillary Clinton’s campaign promised to release more details about the state of her health in an attempt to tamp down backlash and speculation after the delayed disclosure of the Democratic presidential nominee’s bout of pneumonia.  Brian Fallon, Clinton’s press secretary, said the campaign erred in not releasing information sooner about the pneumonia diagnosis and the reason for the candidate’s abrupt departure from a Sept. 11 commemoration Sunday in New York.

  • White House: Obama will veto 9/11 bill (The Hill)  President Obama will veto legislation allowing the families of 9/11 victims to sue Saudi Arabia in U.S. courts, the White House said Monday.  This will very likely lead to the first override of an Obama veto since the bill passed both house unanimously.

  • Wells Fargo Exec Who Headed Phony Accounts Unit Collected $125 Million (Fortune)  In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear that Wells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.  Econintersect:  Fire the workers, golden parachute for the exec.

  • How Big Sugar Enlisted Harvard Scientists to Influence How We Eat—in 1965 (Bloomberg)   Econintersect:  Corruption of information about the food we eat is the same as corruption of the food.  From this piece:

The food industry has funded research in an effort to influence nutrition science and health policy for more than half a century, new research out Monday has found.

It's no secret that industry funds such efforts today: An investigation in June, for example, showed how the National Confectioners Association worked with a nutrition professor at Louisiana State University to conclude that kids who eat sugar are thinner than those who don't. 

An article by University of California-San Francisco researchers, published Monday in JAMA Internal Medicine, shows how far back such efforts go: In 1965, the Sugar Research Foundation, the precursor to today's Sugar Association, paid Harvard scientists to discredit a link now widely accepted among scientists—that consuming sugar can raise the risk of cardiovascular disease. Instead, the industry and the Harvard scientists pinned the blame squarely, and only, on saturated fat. 


  • David Cameron quits as MP to 'avoid being a distraction' to May (The Guardian)  David Cameron has stepped down as an MP after 15 years saying that he does not want his presence on the Conservative backbenches to serve as a “distraction” to Theresa May.  The previous Conservative leader, who has ended his career in Westminster politics just two months after leaving Downing Street, hinted that he did not want people to pore over any differences in opinion between himself and his prime ministerial successor. His departure will trigger a byelection in his Witney constituency in Oxfordshire.  Asked about whether his decision opened up the possibility that he was “snubbing” May, Cameron said he thought she had got off to a “cracking start”, before conceding:

“Obviously I have my own views about certain issues. People know that. That’s really the point. As a former PM it’s very difficult to sit as a backbencher and not be an enormous diversion and distraction from what the government is doing. I don’t want to be that distraction.”


A planned ceasefire between regime and opposition groups was struggling to take hold in several parts of Syria hours after it was due to take effect, with explosions reported on a supply line to rebel-held east Aleppo and in the southern town of Deraa.

Attacks were also reported in Homs, Hama and Deir Azzour after sunset on Monday, when the truce brokered by Russia and the US was due to begin. Hopes for the deal had been low over the weekend, with opposition groups insisting that none of its proponents could force each other to comply on contested issues, such as which areas remain valid bombing targets, or who should receive aid.



The move for an inquiry into how banks treat small business customers should not overshadow the ongoing call for a broader royal commission on banks.

Several financial inquries (outlined below) have failed to tackle the growing concentration in the Australian finance sector, or the need to separate general banking from investment banking as the reform process in the United States, UK and Europe is contemplating.

Calls for a royal commission are also underpinned by ongoing reports of misconduct within the banks, summarized in a timeline of bad behavior below.

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

  • The Case Against Cash (Kenneth Rogoff, Project Syndicate)  Prof. Rogoff wants to go to electronic money.  His summary:

Scaling back paper currency would hardly end crime and tax evasion; but it would force the underground economy to employ riskier and less liquid payment devices. Cash may seem like a small, unimportant thing in today’s high-tech financial world, but the benefits of phasing out most paper currency are a lot larger than you might think. 

  • Party Like It's 1999 (and 1929) (John Hussman, Hussman FundsAdvisor Perspectives)  John Hussman has been a bear at least since late 2011, but the S&P 500 has a total return of 92% since then, without a down year.  But like the boy who cried wolf, eventually Dr. Hussman's wolf may devour your sheep.  Perhaps that day is getting closer?  Econintersect cannot foresee what is coming, but we are assured that there will be market corrections (greater than 10% declines) and bear markets (greater than 20% declines) sometime in the future.  So with that caveat, below are Dr. Hussman's current analysis graphics.  What they are forecasting is an average annual return for the S&P 500 over the next 12 years in the low single digits starting in each of the next 5 years, followed by approximately 4 years with 12-year forward return estimates from 4-11%, and finally the final 3 years (2024-2026) with 12 year forward average returns from 1-4% per annum.  What is interesting is that his forecast does not have any 12-year negative return periods such as occurred in the early 1930s and again for 2000-2011.  So if Dr. Hussman's forecast has any accuracy, long term investors will not have any 12-year losses if they invest in the S&P 500 index.  Final caveat:  As index investing becomes more and more popular the indexes become less and less representing a market of stocks and more and more a unitary function.  In such a situation greater deviations from historical patterns can become more probable. 



  • The Great Income Stagnation (Project Syndicate)  This essay suggests that rising incomes for the 1% are not the problem.  Policy should be aimed at correcting the falling income for the 99% (or bottom 80%, 50% or whatever it is.  Laura Tyson and Anu Madgavkar conclude:

Recent debate about income inequality in the US and other developed countries has focused on the rapid surge in incomes for the few. But stagnating or falling incomes for the many add a different dimension to the debate – and demand different types of solutions that emphasize wage growth for the majority of the income distribution. With most households continuing to face stagnating or falling incomes – and with younger generations thus on track to be poorer than their parents – such solutions are urgently needed.

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