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What We Read Today 14 October 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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The rest of this post is available only the GEI Members.  Membership is FREE -  click here

Topics today include:

  • The Universe Just Grew by 1,000%

  • Money Managers/Advisors May Lose $20 Billion Due to New Fiduciary Rule

  • Is Denial on the Rise in America?

  • Bargains in Deferred Stock Closed-End Funds

  • How Can We Keep Getting 'Once-in-a-Thousand Years' Market Shocks?

  • More than 1 Million in Obamacare to Lose Coverage

  • Citigroup, While on the Ropes, had Major Role in Setting Up Obama Admin for First Term

  • Pense Promises Evidence to Refute Trump Accusers

  • More Trump Accusers Appear While He Denies All

  • Clinton May Suffer from Trump Scandals

  • Ten Solar Installations Could Power all California Single Family Homes 24/7

  • UK Brexit Team Loaded with Pro-Brexit Ministers

  • Nigeria's President Make Extreme Sexist Remarks about his Wife Standing Beside Angela Merkel

  • Russia Prepares for War

  • Japan is Celebrating Trump's Decline

  • And More

Articles about events, conflicts and disease around the world


  • More than 1 million in Obamacare to lose plans as insurers quit (Bloomberg, MSN News)  A growing number of people in Obamacare are finding out their health insurance plans will disappear from the program next year, forcing them to find new coverage even as options shrink and prices rise.  At least 1.4 million people in 32 states will lose the Obamacare plan they have now, according to state officials contacted by Bloomberg. That’s largely caused by Aetna Inc., UnitedHealth Group Inc. and some state or regional insurers quitting the law’s markets for individual coverage.

  • WikiLeaks Bombshell: Emails Show Citigroup Had Major Role in Shaping and Staffing Obama’s First Term (Pam and Russ Martens, Wall Street on Parade)  The Martens have contributed to GEI.  The Martens say that leaked emails show, that in spite of Citigroup requiring tens of billions of dollars just to stay in business and in spite of the bank "serially charged by its regulators for abusing its customers and targeting the poor and financially uneducated", "Barack Obama gave executives of that bank an outsized role in shaping and staffing his first term".  The Martens say:

"...key executives at the bank had played major roles in raising funds for the Barack Obama campaign so it was richly rewarded for that."

“Well, just stay tuned.  I know that there's more information's going to be coming out that'll back his claim that this is all categorically false. … We're simply not going to allow the slander and lies emerging from the Clinton political machine and being propagated in the media to distract attention from the real issues affecting the American people.”

  • Trump on accuser: 'Believe me, she would not be my first choice' (The Hill)  Donald Trump again vehemently denied claims of sexual assault and harassment Friday, this time knocking his accusers' appearances in his defense.

  • Trump faces two new groping accusations as presidential campaign reels (Reuters)  Two more women came forward on Friday with allegations that Donald Trump had groped them, including a contestant on his reality show, "The Apprentice," as the Republican presidential candidate said accusations of sexual misconduct against him were part of a plot to discredit him a month ahead of the election.  Summer Zervos, who competed on the television show's fifth season in 2006, gave a news conference with celebrity attorney Gloria Allred in Los Angeles, saying Trump tried to get her to lie down on a bed with him when she met him in 2007 to discuss a possible job.

  • Trump's scorched earth becomes new worry for Clinton World (The Hill)   The scorched-earth playbook employed by Donald Trump’s presidential campaign is stirring alarm among allies of Hillary Clinton, with some fearing the negativity will depress turnout on Election Day.  Some Clinton supporters say they’re concerned that voters are nearly fed up with the constant accusations and name-calling that has defined the campaign.

  • Elizabeth Warren asks Obama to replace SEC's Mary Jo White (Investment News)  Sen. Elizabeth Warren has asked President Barack Obama to replace SEC Chairwoman Mary Jo White, despite two straight years of record-level enforcement actions by the agency.  In a letter to the president Friday morning, Ms. Warren focused on Ms. White's “refusal to develop a political spending disclosure rule and repeated actions to undermine the agency's mission of investor protection and the administration's priorities”.  Ms. Warren (D, Mass.), argues that the disclosure rule would increase transparency for investors by requiring companies to report political contributions. 

  • World's Largest Solar Project Would Generate Electricity 24 Hours a Day, Power 1 Million U.S. Homes (EcoWatch)  The race to build the world's largest solar power plant is heating up. California-based energy company SolarReserve announced plans for a massive concentrated solar power (CSP) plant in Nevada that claims to be the largest of its kind once built.  The output will be sufficient to power close to 14% of all owner-occupied residences in California.  This article does not provide a cost estimate for the electricity.


  • U.K.’s May Loads Team for EU Talks With Pro-Brexit Ministers (Bloomberg)  The U.K.’s exit negotiations with the European Union will be controlled by a select group of 12 ministers that includes all of the most Euroskeptic members of Theresa May’s cabinet, a further sign that the premier may be planning a clean break with the EU.  The committee will “oversee the negotiations on the withdrawal from the European Union and formation of a new relationship between the United Kingdom and the European Union; and policy on international trade,” according to an unpublished U.K. government document obtained by Bloomberg.


  • Nigeria's President Buhari: My wife belongs in kitchen (BBC News)  Nigerian President Muhammadu Buhari has responded to criticism from his wife by saying she belongs in his kitchen.  On a visit to Germany, he said: "I don't know which party my wife belongs to, but she belongs to my kitchen and my living room and the other room."   Mr. Buhari was standing next to Chancellor Angela Merkel, who reportedly glared at him.  Aisha Buhari had said she might not back her husband at the next election unless he got a grip on his government.


  • The Russian Emergencies Ministry has launched a sweeping nationwide civil defense drill set to involve 40 million people.

  • Citing routine drills, Russia has even moved missiles within striking range of NATO targets, into the Kaliningrad enclave bordering Poland and Lithuania.

  • Moscow abruptly left a nuclear security pact, citing U.S. aggression, and moved nuclear-capable Iskandar missiles to the edge of NATO territory in Europe. Its officials have openly raised the possible use of nuclear weapons

  •  Russia is ordering all of its officials to fly home any relatives living abroad, fearing a global war. Politicians and high-ranking figures allegedly received a warning from President Vladimir Putin to return to the “Motherland.”

  • The  European Union is less likely to ease sanctions on Moscow over Ukraine, now that Russia has intensified air strikes on E.U. and U.S.-friendly rebels in Syria. They are even considering more punitive steps.

  • The United States is threatening retaliation for “alleged” Russian cyber attacks. The United States government had better produce the evidence before taking any retaliatory actions otherwise it risks further embarrassment on the world diplomatic stage at the hands of the Russians, which can only bolster the Russian position at the expense of the United States international diplomacy.


  • The Deeper Trump Sinks, The Easier Japan Breathes (South China Morning Post)  Donald Trump is widely seen in Japan to have done poorly in the second US presidential debate. That has come as an added relief to many Japanese – closely watching the debate that started at 10am local time on a national holiday – as he refrained from tearing into Japan, unlike the first debate.  After his repeated attacks on Japan over trade – accusing it of deliberately weakening the yen – and demanding it pays more for US military presence on its soil, Trump had softened his tone over the last few months. However, he returned to the topic in the first debate, saying US allies “do not pay us” for US protection and, “we can’t defend Japan, a behemoth, selling us cars by the million”.

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

  • Universe Has 10 Times More Galaxies Than Researchers Thought (Scientific American)  The observable Universe contains about two trillion galaxies—more than ten times as many as previously estimated, according to the first significant revision of the count in two decades.  Since the mid-1990s, the working estimate for the number of galaxies in the Universe has been around 120 billion. That number was based largely on a 1996 study called Hubble Deep Field. Researchers pointed the Hubble Space Telescope at a small region of space for a total of ten days so that the long exposures would reveal extremely faint objects.  Econintersect:  To date, it appears that the size of the universe has been limited only by our ability to see into space.  There is no observational reason that the universe could not be infinite.  (There may be a theoretical one.)


  • Analyst: Brace yourself for a BIG, post-DOL rule revenue dip (LifeHealthPro)  A new report from the global management consulting firm A.T. Kearney makes a jaw-dropping forecast: a precipitous, $20 billion dip in industry revenue resulting from the pending phase-in of the Department of Labor’s fiduciary rule.  The rule requires all actions taken and services offered to be "in the best interest of the client".  Econintersect:  It might be convenient to surmise that the new rule will add that $20 billion back into client accounts, but that is not necessarily so.  One would first have to quantify what value to clients is being lost under the new advisory requirements.

  • Truth or Denial:  From Climate Change to Anti-Vaccine Movement, Is Denial on the Rise in America?  ( The Washington Post)  Don't miss this great article, comparing the debates of today to some of the great scientific debates of history.

  • Looking for yield at a fair price? Try preferred stock from closed-end funds (Investment News)  Looking for yield in a closed-end fund these days is like buying a pen at Tiffany's — you'll get what you're looking for, but you'll pay an awful lot for it.  But the preferred stock offerings of many closed-end funds could be a lucrative way to get yield at a reasonable price.  Closed-end funds, unlike their garden-variety open-end cousins, issue a set number of shares that trade on the stock exchange. Their share price can trade either above the value of their holdings (a premium) or below it (a discount).  Not surprisingly, many of the closed-end income funds with the highest yields are selling for big premiums. PIMCO High Income (PHK), for example, has a 12-month yield of 14.85%, but is selling for $9.66 a share — a hefty 45.92% premium over the fund's net asset value of $6.62 per share.  Buying closed-end fund at a premium doesn't always end in wailing and gnashing of teeth, but it's never good to pay too much for any investment. And, since many closed-end funds use leverage to boost their yield, overpaying for a leveraged investment can mean a long ride on the road to remorse. Some closed end funds are selling at a discount:

Emerging-market debt funds are selling at some of the steepest discounts. For example, MFS Emerging Markets Debt (MSD) currently sells for a 14.21% discount and yields 5.67%. Another: Legg Mason BW Global Income Opportunities (BWG), which sells at a 14% discount and yields 5.98%.

For those who prefer U.S. high yield, First Trust Strategic High Income II (FHY) sells at a 13.87% discount and yields 7.61%. Avenue Income Credit Strategy (ACP), a bank-loan fund, sells at a 12.21% discount and yields 9.06%. 

  • Once-in-4,800-Year Shock Is Bond Market’s Cold Case Two Years On (Bloomberg)   Two years since a burst of unprecedented volatility shook the $13.7 trillion U.S. Treasuries market, regulators still haven’t worked out what triggered it, let alone how to prevent a recurrence.  The Oct. 15, 2014 flash rally saw yields move by almost five standard deviations -- analogous to an event that should occur about one day every 4,800 years. A 2015 report by five government agencies found no smoking gun, and with insufficient data on trading at the time of the surge and then slump in Treasuries prices, the trail is running cold.  What is clear, analysts say, is that the next sudden swing could be even more extreme as algorithmic and electronic trading account for a greater share of transactions. Trading volumes are on the decline and liquidity -- the ability to trade large amounts of securities without triggering volatility -- is also waning. By one measure, the market’s depth makes it 50% more sensitive to price fluctuations than it was five years ago, according to JPMorgan Chase & Co. research.  Econintersect:  The designation of 5-sigma (5 standard deviations) is a consequence of the assumption of a probability distribution function - a case of the actual occurrences of large-change events being much more likely than the usually assumed Gaussian (bell-curve) function.  When reality doesn't fit the assumed theory, financial models don't try to develop new mathematics - they instead talk about black swans, improbable events (according to the theory) which somehow keep happening.  Chart below is from There are still a lot of unanswered questions surrounding last October's bond market 'flash crash' (Business Insider).  Second chart below, from this article, shows the daily market fluctuation, but not the flash crash.   Note: There is an apparent low liquidity spike anomaly in June 2016.  We have not found any discussion of a market event associated with this. 


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