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What We Read Today 17 December 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:

  • Is the Trump Rally Over?

  • Stocks Suffer Worst Week Since the Election

  • Yield Curve Flattens Following Fed Rate Hike

  • Trump Tap Fiscal Hawk for Budget Director

  • Trump Signals Cuts for Medicare and Social Security

  • Trump's Misspelled Tweet is without Precedent

  • Pentagon Says that China Will Return Seized U.S. Drone

  • Trump Aid Says His Boss Got the Drone Returned

  • Forex Markets Indicate Brexit will be Harder on the EU than on the UK

  • Syrian Rebels Accuse Iran of Interfering with Aleppo Evacuation

  • Aleppo Evacuation Deal Reports

  • And More

Articles about events, conflicts and disease around the world




  • Trump taps Mulvaney for budget director (The Hill)  President-elect Donald Trump has nominated  fiscal hawk Rep. Mick Mulvaney (R-S.C.) to be the director of the Office of Management and Budget, he announced Saturday morning.  From the Trump statement:

    “We are going to do great things for the American people with Mick Mulvaney leading the Office of Management and Budget.  Right now we are nearly $20 trillion in debt, but Mick is a very high-energy leader with deep convictions for how to responsibly manage our nation’s finances and save our country from drowning in red ink.”

    Econintersect:  Not only is the swamp not being drained but it is really beginning to smell bad, which is a difficult thing to achieve in winter.  See next article.

  • Trump's pick for budget chief could signal major shift on Medicare, Social Security (The Hill)  Unlike Mulvaney and many conservatives in Congress, during the campaign Trump did not embrace massive changes to Medicare and Social Security and specifically rejected raising the retirement age for the popular programs.  But Trump's decision to tap Mulvaney as his director of the Office of Management and Budget (OMB) has changed perceptions of how committed the incoming administration is to reducing the nation's debt.  Econintersect:  Reducing the nation's debt is done by removing money from the economy.  This is not something to try when the economy is struggling.

  • Donald Trump accuses China of 'unpresidented' act over US navy drone (The Guardian)  President-elect Donald Trump has risked further inflaming US relations with China, after he used Twitter on Saturday to accuse China of an “unpresidented [sic] act” in its seizing of an unmanned American submarine this week.  The tweet was later reissued with the correct spelling of “unprecedented”. The tweet containing the error was deleted.  His message – itself without precedent given his status as a president-elect commenting on an international incident before assuming power – was likely to worsen fears of increased US-China tensions under his presidency that have grown over his rhetoric on trade and policy towards Taiwan.  Trump said, misspelling “unprecedented”:

“China steals United States Navy research drone in international waters – rips it out of water and takes it to China in unpresidented act.” 

  • Pentagon Says China Will Return Seized Drone as Trump Joins Row (Bloomberg)  The Pentagon said China will return a U.S. Navy underwater drone after its military scooped up the submersible in the South China Sea late this week and sparked a row that drew in President-elect Donald Trump.  Pentagon spokesman Peter Cook said in a statement on Saturday, referring to the unmanned underwater vehicle the U.S. said had been operating in international waters:

“Through direct engagement with Chinese authorities, we have secured an understanding that the Chinese will return the UUV to the United States.” 


  • Trump aide credits president-elect for China returning drone (The Hill)  A top aide to Donald Trump suggested that the president-elect was integral in getting China to return the U.S. Navy underwater drone it seized two days before.  Trump spokesman Jason Miller tweeted that Trump "gets it done", linking to a story about China indicating it would return the unmanned underwater vehicle (UUV).


  • Brexit Briefing: Maybe It’s the Euro You Should Worry About, Not the Pound (Daily FX)  Hat tip to TalkMarkets.  Thursday’s European Council meeting, at which the heads of state and government of all 28 EU member states came together in Brussels with the EU institutions’ officials, was a shambles. First, there was squabbling between officials and the European Parliament over who should be involved, and to what extent, in the divorce proceedings between the UK and the EU.  Second, the EU leaders spent precisely 20 minutes discussing Brexit. For sure, the refugee crisis and alleged ceasefire violations in Eastern Ukraine are important but Brexit presents an existential crisis for the European Union so you might think it worth more than what was described as a “short informal meeting”.  The markets have issued the opinion that the EU has greater exposure resulting from Brexit than does the UK, as exemplified by the nearly 8% decline in the euro vs. the pound over the last 6 weeks.

Click for large image.


  • Syrian rebels blame Iran for slowing Aleppo evacuation (The Hill)  Syrian rebel forces have accused Iran and Shi'ite militias of slowing down the vital evacuation efforts of Aleppo, Reuters reported on Saturday. According to the rebels, Iran maintained that people should be able to leave from two besieged Shi'ite villages before the Aleppo evacuation could resume.

  • Deal reached that could restart Aleppo evacuation (Associated Press)  Rebel and government forces agreed Saturday to allow "humanitarian cases" to leave two besieged government-held Shiite villages in northwestern Syria, a step that would allow the resumption of civilian and rebel evacuations from eastern Aleppo which were suspended a day earlier, Hezbollah's media arm and a monitoring group said.  The opposition's Britain-based Syrian Observatory for Human Rights said the evacuation of some 4,000 people, including wounded, from the villages of Foua and Kfarya was expected to start Saturday. It later reported that 29 buses were heading toward the two villages to start the evacuation process, adding that insurgents in the area rejected allowing 4,000 people to leave and saying they will only allow 400 people to be evacuated.

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

  • Three Men Bet Big on a Climate Change-Proof Ski Resort (Bloomberg)  In the far northern reaches of New Hampshire, the defunct Balsams Resort is about to receive a $1.5 billion rehab and expansion investment.  Experienced ski resort executives plan to make the resort into a major ski destination, with new 3,300 acre - 2,000 foot vertical terrain with 3,450 top elevation.  They will include all-weather artificial surface skiing for year-round activity.  They will even have air-conditioned skiing for mid-summer enjoyment.  When finished the resort will have a gondola, 22 other lifts, 1.500 acres of groomed skiing, 1,000 acres of glades.  One negative is that the resort is 2 hours farther north from Boston than other major ski areas.  That will be a negative when winter is holding forth further south.  But when it isn't, the Balsams could have a waiting line just to get into the area before one even gets to the lifts.

  • Why Central Banks Should Offer Bank Accounts to Everyone (Evonomics)  The author offers a proposal to reform the current monetary system where money exists almost exclusively in the form of commercial bank-issued credit.  He proposes to use the internet as a means for the money "wholesalers" (the central banks) to "sell" directly to the public in competition with the "retail" banks that have a monopoly today.  The idea is that "[y]our bank shouldn't get government favours that you can’t get".  He suggests that banking would become much more efficient, with lower costs, and too big to fail exposures substantially reduced, maybe even eliminated.  What would result would be a low cost loan system for very secure loans (central bank) and a higher cost loan system for riskier lending.  Thus systemic risk would be removed from the bifurcated objectives of the current banking system.  Risk would be isolated where risk belongs - in risky loans and "speculation".  See Econintersect note that follows this discussion.  See also a related suggestion by Kenneth Rogoff:  Rogoff Opens a Can of Worms and U.S. Banks Take the Bait (GEI News).

  • Econintersect note:  Not discussed in the preceding article is the idea that central banks could also assume the role of a public bank.  This was proposed (not necessarily for the first time) by John Lounsbury in 2013 A Nonpareil Public Bank: The Fed and elaborated on by Ellen Brown Amend the Fed: We Need a Central Bank that Serves Main Street.

  • Mapping the Growth of Disability Claims in America (Bloomberg)  Disability claims are highest were unemployment is high.  In 1990 fewer than 2.5% of working-age Americans were “on the check.” By 2015 the number stood at 5.2%. That growth has left the fund in periodic need of rescues by Congress—most recently in 2015, when the Bipartisan Budget Act shifted money from Social Security’s old-age survivors’ fund to extend the solvency of the disability fund to 2023.

Click for larger image.

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