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What We Read Today 04 November 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:

  • Economists are to Blame for Many of Today's Problems

  • Can Central Banks Institute Digital Currency?

  • S&P 500 has Longest Losing Streak in 46 Years

  • Global Manufacturing is Improving

  • Trump is Closing Strong, but Can He Win?

  • Clinton No Longer Assured of Enough Electoral Votes, According to CNN

  • The Race is Now Within Normal Polling Error Margin

  • The Peso is Plunging - Fear of a Trump Win

  • Why the House Will Remain Republican No Matter Who Wins or by How Much

  • UK Courts Say Government Cannot Execute Brexit without Parliamentary Approval

  • Why Another Brexit Election May be Held

  • Erdogan is Throwing All Opposition in Jail

  • Iraqi Forces Have Liberated Mosul's Left Bank

  • Russian Oil Production Skyrockets

  • Ortega Eyes Landslide in Nicaragua

  • And More

Articles about events, conflicts and disease around the world

Global

  • Global Manufacturing Activity (Walter Kurtz, Sober Look, The Daily Slot)  Kurtz says the global manufacturing activity summary shows improvement that is unmistakable. 

global.mfg.pmi.2007.2016.oct

U.S.

  • Trump closing strong (The Hill)  Donald Trump is closing his campaign strongly, staying on message and keeping his impulses in check as he rides cresting momentum into Election Day.  Democratic presidential nominee Hillary Clinton now leads Trump by an average of just 1.7 percentage points nationally, according to the RealClearPolitics average of polls. Less than three weeks ago, Clinton led by 7 points on the same model.  Trump remains the underdog and has only a narrow road to victory. He must hold every state Mitt Romney won in 2012, add Ohio, Iowa and Florida, and then flip a blue state or two.  But the Republican's chances keep growing — and he has kept himself on message as media coverage has focused on Clinton and the FBI’s investigation of her private email server.

  • Clinton drops below 270 in CNN electoral map (The Hill)  Hillary Clinton has dropped below 270 electoral votes in CNN's electoral map when adding up the states that are either solidly Democratic or leaning in her direction.  The projection gives Clinton 268 electoral votes when using this measure, according to the latest snapshot of CNN's "Road to 270" map.   Donald Trump has 204 electoral votes when combining the states either solidly Republican or leaning in his direction.  The six remaining battleground contests are Arizona, Florida, Nevada, New Hampshire, North Carolina and the 2nd congressional district in and around Omaha, Neb.

  • Trump Is Just A Normal Polling Error Behind Clinton (Five Thirty Eight)  Even at the end of a presidential campaign, polls don’t perfectly predict the final margin in the election. Sometimes the final polls are quite accurate. An average of national polls in the week before the 2008 election had Barack Obama winning by 7.6 percentage points. He won by 7.3 points. Sometimes, however, the polls miss by more. Four years ago, an average of survey results the week before the election had Obama winning by 1.2 percentage points. He actually beat Mitt Romney by 3.9 points.  If that 2.7-point error doesn’t sound like very much to you, well, it’s very close to what Donald Trump needs to overtake Hillary Clinton in the popular vote. She leads by 3.3 points in our polls-only forecast.

pres.polls.history

  • 108-year-old fan celebrates second Cubs World Series title of her lifetime (Sports Illustrated)  Hazel Nilson was born on Aug. 21, 1908, a few months before the Cubs won the World Series, and she waited her entire life to watch them win it again.  Nilson, who is 108-years-old and now lives in New Hampshire, grew up within walking distance of Wrigley Field. She said she stayed up "long past my bedtime" on Wednesday to watch her favorite team win it all alongside her family at her assisted living home.

  • Why the House of Representatives will likely remain Republican (The Conversation)  How can one party win the vote and lose the election?  It's not clear which party will gain the most votes in 2016 but if the Democrats win by several million votes, the Republicans are still likely to retain control of the House of Representatives.  One reason is the event of split-ticket voting where an individual votes one party for president and another for congress.  This is considered more likely than usual this year.  The other is gerrymandering, where states controlled by one party construct irregularly shaped congressional districts so that voters for the other party are isolated in large majorities within a few districts, creating pluralities for them in most of the others.  For a discussion of this after the 2012 election, see The Gerrymander Triumph

  • Obama commutes sentences for 72 inmates (The Hill)  President Obama on Friday commuted the sentences of 72 inmates, the latest sign he is accelerating his clemency push during his final months in office.  It was the second time in the past eight days the White House announced that a large group of people, most convicted of nonviolent drug offenses, would be released from federal prison. The two batches totaled 170 inmates.  In total, 944 people have had their sentences cut short by Obama — more than the last 11 presidents combined — with 760 receiving commutations this year alone.

UK

  • British court delivers blow to E.U. exit plan, insists Parliament has a say (The Washington Post)   Britain’s plan for getting out of the European Union was thrown into doubt Thursday as a senior court ruled that Prime Minister Theresa May will need to get Parliament’s approval before she acts.  The surprise decision introduced new uncertainty to a process already fraught with complication and threatened to derail May’s timetable of triggering Article 50, the never-before-used mechanism for exiting the E.U., by the end of March.  It also boosted the odds that the prime minister, in office only since July, will have to call a fresh election next year to win the mandate she needs to launch E.U. divorce talks. 

Turkey

  • Erdogan Crackdown Has Turkey on Edge as Kurd Leaders Jailed (Bloomberg)  A Turkish court ordered the nation’s most prominent Kurdish lawmakers jailed, sharply escalating a crackdown personally led by President Recep Tayyip Erdogan and sending markets tumbling over fears of renewed violence and a possible rupture with the West.  Selahattin Demirtas and Figen Yuksekdag, co-chairs of the Peoples’ Democratic Party, or HDP by its Turkish initials, were two of 11 members of parliament to be detained in overnight raids on Friday. Erdogan accuses the party of close links to separatist PKK rebels and in May, at the president’s request, parliament passed a law stripping HDP lawmakers of their immunity from prosecution, enabling them to be charged with terrorism-related offenses.  The sweep comes amid an extraordinary assault on all forms of opposition in Turkey after a July 15 attempted coup. The government has sacked tens of thousands of civil servants for links to an Islamic movement led by U.S.-based cleric Fethullah Gulen, who the government says masterminded the failed putsch. But the crackdown soon extended beyond the Gulen network, as more than 100,000 people were fired from their jobs, suspended or detained in the months following the botched putsch, including prominent journalists, activists and academics with no known connection to Gulen’s group.

Iraq

  • Iraqi forces push deeper into eastern Mosul (Reuters)  Iraqi special forces said they recaptured six districts of eastern Mosul on Friday, expanding the army's foothold in the Islamic State bastion a day after its leader told his jihadist followers there could be no retreat.  An officer in the elite Counter Terrorism Service, which has spearheaded the Mosul offensive, said troops had launched a major operation against the militants who are now almost surrounded in their last major urban redoubt in Iraq.  CTS special forces took over Malayeen, Samah, Khadra, Karkukli, Quds and Karama districts, the army said.  They said "large sections of the Left Bank have been liberated".

Russia

  • Russian oil production (Walter Kurtz, Sober LookThe Daily Slot)  Here's another reason oil prices are falling.  Russia continues to agree with OPEC about the need to "cut" production while sharply raising its own output.

Nicaragua

  • Former U.S. Cold War Foe Ortega Eyes Landslide in Nicaragua (Bloomberg)  Nicaraguan President Daniel Ortega is set to win a third consecutive term in office on Sunday after the Supreme Court barred two opposition candidates from running and the U.S. expressed concern over democracy in the impoverished nation.  The man who defied the U.S. as the head of the Sandinistas during the 1980s has the backing of 52 percent of voters, compared with 4 percent for his closest rival, according to a Cid Gallup poll published last week. The other 40 percent say they won’t vote for anyone. Ortega’s wife, Rosario Murillo, is running alongside him for Vice President.

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

  • Why You Should Blame The Economics Discipline For Today’s Problems (Evonomics)  This is an excellent piece by John T. Harvey, a professor of economics at Texas Christian University and editor of the World Economic Review.  If the introduction below is not sufficient to get you to read this article, we suggest you conduct a mirror fogging test or check for a pulse.

We are experiencing deep economic problems and it is the fault of the economics discipline. Their macro theories suck. But, there is no mechanism forcing it to alter its models when they don’t appear to work. This is so because economists basically write for each other in a language only they understand and their jobs depend on impressing a limited number of journal editors and referees, not correcting real-world problems. The academic inbreeding that has resulted has led to dysfunctional theories and, despite the fact that there were economists who accurately forecast the Financial Crisis, because their work is incompatible with what is published in “good” journals it has been all but ignored. Economics is broken and there is no internal incentive to fix it.

  • Central bank digital currency: the end of monetary policy as we know it? (Bank of England Blog)  Hat tip to Neil Peters, via LinkedIn Econintersect Group.  This article proposes the application of blockchain technology by central banks to perform the exchange function of money.  Such a move (called CBcoin in this post) would divorce payments from private bank deposits and could even put an end to banks’ ability to create money.  Instead, there would be a separation of money, credit, and transactions which could offer a new toolkit for control of inflation other than the very "blunt" tool of interest rate variation.  When inflation is rising the amount of transaction flow could be restricted and when the economy is deflating (recessing) the transaction flow "spigot" could be opened up.  This offers the possibility of "rule-based" inflation control.  One such situation is discussed by the author:

The conflation of broad and base money, and the separation of credit and money, would allow the CB to control the money supply directly and independently of credit creation, calling for a reassessment of monetary policy along two dimensions. First, the prospect of direct control of the money supply might alter the relative merits of using interest rates or the money supply as the main policy instrument. If so, this newfound CB power could reopen the debate between advocates of rules versus discretion in the conduct of monetary policy. For instance, the signers of the Chicago Plan, in particular Milton Friedman, envisioned a constant money growth rule rather than the discretion over interest rates that has prevailed since CB independence in the 1990s.

Click for large image.


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