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 dayin the early am at GEI News (membership not required for access to "The Early Bird".).
After Trump's Election Upset, A New Focus On Social Media Data (Benzinga) In the wake of Donald Trump’s election upset, the political establishment that predicted a Hillary Clinton victory has been wracked by doubt and self-reflection. Commentators have taken particular ire with pollsters, as most leading models showed Clinton ahead in the polls up until late election night. Since then, there has been renewed attention on how to read the lay of the land in politics, and some in the big data space are pointing to social media analytics as a better dowsing rod for America’s opinions than traditional polling models. Andy Swan, CEO of Likefolio, a data company that provides social media sentiment analysis for products of publicly traded companies, is one such voice. Here is a social media 'mention' map which correlates well with election voting results:
Why it won't be easy for Trump to repeal Dodd-Frank (CNBC) Like a number of his other grandiose campaign promises, Donald Trump likely will find that peeling apart Dodd-Frank gradually will be easier than tearing it asunder. The president-elect pledged during the campaign to repeal the bank reforms that came about after the 2008 financial crisis, though it may be a stretch to call the promise a "cornerstone" of the potent populism on which the Republican won the presidency. Since the election, bank stocks have rallied both on anticipation that Trump's policies would spur inflation and higher interest rates, as well as on the belief that he will roll back some of the more onerous regulations instituted with Dodd-Frank. However, much of the voluminous act already has been implemented, making rollbacks costly, difficult to implement and, at some level, superfluous. Erasing Wall Street reforms also seems somewhat inconsistent with the core of Trump's message.
What if the push against “normalizing” the potential horrors of a Trump administration ends up making the actual administration seem better by comparison?
In the 10 days since Donald Trump was elected to the presidency, critics — liberal and conservative alike — of Donald Trump and his inner circle have warned that his presidency will violate, undermine, and permanently weaken democratic norms. Comparisons have been made to the rise of Putinist autocracy in Russia (here at Vox and elsewhere), to the slow descent of Turkey into authoritarianism under Recep Tayyip Erdogan, to Nazi Germany.
People fret that the Trump administration will crack down on a free press; that it will only serve to enrich itself; that it will try to keep itself in power indefinitely. You’ve probably seen warnings that we shouldn’t even assume there will be another presidential election in 2020, because President Trump might have found a way to suspend or amend the Constitution by then.
Given everything that’s happened this year — including what the past two weeks have revealed about the Trump administration-in-waiting — it’s hard to say that planning for the worst-case scenario is irrational.
But what if the reality of the Trump administration turns out to be not quite the worst-case scenario? What if it is simply very bad in less unprecedented ways? Won’t that seem, by comparison, normal?
Euro zone nations turn to hedge funds to meet borrowing needs (Reuters) Euro zone governments are increasingly relying on hedge funds to help them meet their borrowing needs, which risks leaving them vulnerable to a debt market sell-off driven by a class of investors dubbed "fast money" for their speculative approach. With banks playing a less active part in the sovereign debt market because of pressures on their balance sheets, several countries have turned to hedge funds to sell their targeted amount of bonds, according to data, officials and bankers. Hedge funds tend to look for quick returns on investments, which could increase the volatility of government bond markets as they face several tests of sentiment in coming months. Econintersect: As a consequence of not having sovereign currencies, euro zone countries are turning to what might be likened to payday lenders for their financing.
Germany wrestles with brown coal headache (Financial Review) For the first time, targets have been set for individual sectors of the German economy, handing the energy industry the task of cutting CO2 emissions by 2030 by 61-62% from 1990 to play its part in a national goal for a 55% reduction. That is on the way to Germany's ambition to shrink nationwide emissions by 80-95% by mid-century.
Iran's Guards using Trump victory to claw back power (Reuters) Donald Trump's victory and the war on Islamic State have given Iran's hard-line Islamic Revolutionary Guard Corps what it sees as a unique opportunity to claw back economic and political power it had lost. Sidelined after a nuclear deal was reached with Iranian reformist leaders and the administration of President Barack Obama and major nations, the IRGC is determined to regain its position in Shi'ite Iran's complex governing structure. Republican Trump said in the campaign that he would abandon the 2015 deal that curbed Iran's nuclear ambitions in return for the lifting of economic sanctions. His tough stance, in contrast to Obama's olive branch, is expected to empower hard-liners who would benefit from an economy that excludes foreign competition.
Commentary: Putin will pay a high price for Trump’s friendship (Reuters) Successful politicians usually enjoy their fair share of luck along the way. With the election of Donald Trump, Vladimir Putin received the luckiest break of all. Instead of continued isolation, the Russian president will get yet another reset, with several long-term goals – a recognized zone of influence, non-interference in domestic affairs, an equal relationship with the United States – within his grasp. If Trump truly is a dealmaker, however, Putin will have to sacrifice some of the core policies – anti-Americanism, economic protectionism – that have facilitated his consolidation of power. New complexities to old problems also are likely to arise in any rapprochement with the United States, most notably in eastern Ukraine. Before Putin counts his winnings – which could be substantial – it is necessary to consider what the consequences of success might mean for him.
Modi's Key Aid Blames Poor Planning for India's Currency Crisis (South China Morning Post) A member of parliament and one of Prime Minister Narendra Modi’s top aides has blamed poor planning and execution by the government for the banknote crisis that has engulfed India, with tens of thousands of people queueing up outside banks and empty ATMs following New Delhi’s decision to replace large-denomination notes with new ones. “I am appalled by the lack of preparation,” said Subramanian Swamy in an exclusive interview to This Week in Asia. A dogged crusader against corruption, who is often called India’s Trump for his campaign against the high and the mighty and serial muckraking, said Modi’s banknote ban was expected as fighting “black money” – as unaccounted wealth is called in India – was the ruling Bharatiya Janata Party’s (BJP) key electoral plank.
Look Now: A Once Beloved Japan ETF Rises Again (Benzinga) Through the first half of this year, Japanese stocks and the relevant exchange-traded funds disappointed investors, as the yen surged on safe-haven demand. A simple look at year-to-date data proves that point, but looks can be deceiving. Yes, the Guggenheim CurrencyShares JapaneseFXY 0.25% is up 8 percent year-to-date, making it one of this year's best-performing currency ETFs. And yes, the WisdomTree Japan Hedged Equity FundDXJ 0.77% is down 4.4 percent this year, but that scenario is rapidly changing for the better.
Other Scientific, Health, Political, Economics, and Business Items of Note - plus Miscellanea
Why has the ACLU recently gained so many members? (Rodger Malcolm Mitchell, Monetary Sovereignty) In the week since Donald Trump’s election, there’s been a dramatic surge in donations to the American Civil Liberties Union, Planned Parenthood, the Sierra Club and other progressive organizations which have pledged to resist any moves by the new administration that would undercut their causes. The ACLU unleashed feisty fundraising appeals, including one warning that if Trump implemented certain campaign promises, “We’ll see him in court.” The result, according to the ACLU, has been the largest surge of support in its 94-year history, including roughly 120,000 donations totaling more than $7.2 million. For more see also ACLU, other groups report post-election surge of donations (AP, The Washington Post)
Presidential Candidate Support by Income Level (Twitter) Hat tip to Frances Coppola. Trump support strongest at median household incomes up to 2x that level. This is where incomes have not grown for 50 years while the economy per capita has more than doubled. See preceding item. Karma is relentless.
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