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What We Read Today 17 January 2017

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:

  • Nonsense from Paul Krugman, 2013 Note

  • Self-Driving Electric Vehicles Could End Car Ownership as We Know It

  • Super Wave on Venus

  • Why Exercise is Not the First Line of Defense for Weight Control

  • NYC Victimized by For-Profit Mental Health Assessments

  • Geography of Income Inequality in the U.S.

  • Populism is Reshaping the West

  • Why Populism and Progressive Philosophy are Not Necessarily the Same Thing

  • Trump Wants to End the Clinton-Era Strong Dollar Policy

  • CBO:  Obamacare Repeal Could Increase Uninsured by 32 Million and Price Insurance Out of the Market

  • The Beginning of the End of Obamacare

  • Why Dow 20,000 is Overrated

  • Why Elizabeth Warren is No Longer the Leader of the Left

  • Over 2,500 U.S. Cities Ranked for Credit Card Debt

  • Personal Credit Card Usage Calculator

  • Why Trump Immigration Rhetoric Missed the Mark in Europe

  • May Just Softened Brexit and the Pound Surged

  • Rolls Royce Concealed Corruption

  • Deutsche Bank Agrees to Pay $7.2 Billion for MBS Fraud

  • Iraq Claims Momentum in Mosul

  • And More

Articles about events, conflicts and disease around the world

Global

Suppressed for generations, the greed and incompetence of the West’s elites allowed populism to re-emerge. But few understand it. Many confuse it with progressivism. Elites consider it “the bad thing”, when the proles slip their leash. Populism is reshaping western nations. We should understand it. To help us, here is a clear introduction in which a professor at Oxford reviews a new book about populism by a professor at Princeton.

U.S.

Obama also granted a full and complete pardon to Ret. Marine General James E. Cartwright for lying to the FBI in a probe of a leak of classified information about a covert U.S.-Israeli cyberattack on Iran’s nuclear program. A former vice chairman of the Joint Chiefs of Staff who was known as Obama’s favorite general, Cartwright pleaded guilty in October and was sentenced last week to two years in prison.

In addition, Obama granted clemency to about 200 low-level drug offenders who were sentenced under harsh drug laws and would have received lighter sentences if convicted today. In all, the president commuted 209 individuals and pardoned another 64. He is expected to grant more drug commutations on Wednesday.

  • Trump just signaled the death of Clinton-era strong dollar policy (CNBC)  President-elect Donald Trump's shock comment that the dollar is too strong suggests the U.S. is about to declare as dead a two-decade policy of publicly favoring a strong currency.  Trump's remarks also took a shot at one of the most crowded trades on the planet — long wagers on the dollar. That trade has been a bet that Trump's policies will reflate the economy, causing interest rates and the greenback to rise. But that dollar move is at odds with building a more powerful American manufacturing base, because a strong dollar makes exports more expensive for foreign buyers.  The dollar also threatens the economic health of emerging-market nations, as the cost of everything there rises, including servicing their dollar-denominated debt.  According to David Woo, Bank of America Merrill Lynch's head of global rates and foreign exchange research:

"There's no question that the Trump administration would not want a strong dollar. A strong dollar does nothing good for whatever Trump is basically trying to do. Yes, the U.S. fundamental story is bullish for the U.S. dollar, but the problem here is they actually don't want a strong dollar. I think it's going to go up. However, it's going to be a much more volatile climb."

  • Obamacare repeal would increase uninsured by 32 million, lead to double-digit price hikes, CBO says (CNBC)  Repealing portions of Obamacare would lead to 32 million more people becoming uninsured by 2026, and a doubling in the prices of premiums paid by those people who remain covered by individual health plans by that year, a new analysis says.  The Congressional Budget Office report projects that "the number of people who are uninsured would increase by 18 million in the first new plan year following enactment" of an Obamacare repeal bill along the lines of one that had been introduced in the House in 2015.  The report projects millions more people would leave the individual insurance market after that as prices skyrocket. Eventually, about three-quarters of the U.S. population would not even have access to an insurer selling such individual plans if the House bill were to be adopted, according to the nonpartisan CBO.  That bill was sponsored by Rep. Tom Price, R-Ga., who has been nominated as secretary of the U.S. Health and Human Services by President-elect Donald Trump.

  • The Beginning of the End of Obamacare (Investopedia)   The process of dismantling the 2010 Affordable Health Care Act, popularly known as Obamacare, has commenced as the Republican-led U.S. House of Representatives voted 227-198 to approve a measure to repeal the landmark health insurance law. (For more, see What If Obamacare Is Repealed?)  The measure did not get any votes from Democrats, and nine Republicans opposed it. The measure was approved in the Senate a day before.  While concerns loom that no alternative is readily available for a quick substitution, concerned committees have been instructed to plan legislation by a target date of January 27.

  • Dow 20,000 is overrated (Business Insider)  Because the Dow is a price-weighted average, the higher a specific stock is priced, the bigger the impact it has on the benchmark's price.  The Standard & Poor's 500 index is weighted by market cap, meaning that the bigger the size of a company, the bigger its impact on the index.

For example, while Goldman Sachs is the highest-priced stock in the Dow at $244.30 and accounts for 8.4% of the index, the bank carries only a 0.5% weighting in the S&P 500. Goldman has gained about 35% since the election and has been a big reason behind the Dow's approach to the 20,000 level.

General Electric, which is among the lowest-priced stocks in the Dow at $31.36, carries a 1.1% weighting in the Dow and a 1.4% weighting in the S&P 500.

In the same period in which the Dow has risen by 8%, the S&P 500 is up by about 6%.

  • Why Elizabeth Warren is no longer the darling of the left (CNBC)  Regardless of Chuck Schumer and Nancy Pelosi's titles—and to the comical dismay of corporate, establishment Democrats—Bernie Sanders has become the defacto leader of the Democratic Party.  Sunday in Warren, Michigan put an exclamation point on the sentence, as Sanders, alongside Schumer, brought out 8,000 people on a bitterly cold winter day to fight against Obamacare repeal.  Even the establishment media is waking up, granted a year too late.  Sanders has clearly displaced Warren as the leader of the left.  Joe Scarborough, echoing Mika Brzezinski's sentiment, said on Morning Joe Monday: 

"That's the future of the Democratic Party.  He sounds just as relevant today as he did a year ago."

But just as worrying as our debt is consumers’ denial or lack of awareness about what they really owe. In 2015, the Federal Reserve Bank of New York reported that the total amount of credit-card debt U.S. consumers claimed to have was 37 percent lower than the figure lenders reported.

Without an accurate knowledge of our balances, it’s impossible to create a realistic credit-card payoff plan. In addition, location plays a central role in how well consumers manage their credit-card debts — and how much they increase — depending on factors such as income and financial literacy. Drawing on TransUnion credit data, WalletHub’s analysts calculated the number of months required to pay off the average credit-card balances in 2,537 U.S. cities as well as the associated costs of doing so. Continue reading below for our findings, a full description of our methodology and expert insight. 

Source: Wallethub

EU

  • Trump Takes Immigration Rhetoric To Europe And Misses The Mark (vocativ)  In a Sunday interview with The Times of London and the German tabloid Bild, Donald Trump criticized German Chancellor Angela Merkel for making an “utterly catastrophic mistake” in admitting into Germany more than one million Syrian refugees since 2015 - “all of these illegals”. 

While the tit-for-tat slights will likely continue in the follow-up and aftermath of Trump’s official inauguration on Friday, the heated discourse reflects Europe’s deep-seated identity crisis as it splinters under the pressures of a new refugee population.

UK

  • Sharp GBP/USD Reversal as May’s Brexit Approach Softens (Daily FX)  The British Pound is rallying sharply this morning as UK Prime Minister Theresa May has formally announced that the government will seek parliamentary approval to trigger Article 50, the legal mechanism by which the UK could leave the EU. Whereas UK PM May is not saying anything different than she did just last week when she said, "We are leaving...We are coming out," the context in which it is occuring is now completely different. Brexit now appears 'soft' instead of 'hard.'  Chart below shows the one-day 1.7% rise for the pound.

  • Rolls-Royce leadership aware of potential corruption in 2010 (Financial Times)  Rolls-Royce leadership knew about potential corruption in 2010, but decided not to notify authorities, according to a court ruling.  The revelation raises questions over the conduct of Sir John Rose, once hailed as Britain’s leading industrialist, who led the group as chief executive from 1996 to 2011. Sir John could not be reached for comment. It came as Rolls-Royce “apologised unreservedly” on Tuesday and agreed to pay a total of £671 million ($1 billion) to settle wide-ranging allegations of corruption in Indonesia, Russia, China, Nigeria and Brazil.

Germany

Iraq

  • Iraqi Forces Claim They Have Momentum In Mosul Fight (vocativ)  Three months of intermittent progress and casualties suffered in the campaign to take the city of Mosul back from the Islamic State has finally begun to show some results. Iraqi forces, along with Kurdish peshmerga, Shiite militias and U.S. and other foreign air support have reportedly managed to capture most of the eastern half of the city.

The Iraqi army declared that it has completely liberated Mosul University, where ISIS had set up headquarters, and that Iraqi troops had found chemical weapons and other explosives in the compound. Brett McGurk, the U.S Special Presidential Envoy for Global Coalition to Counter ISIS, tweeted that the university was once among the largest research centers in the region. Images from the compound however show the university’s main library damaged by fire. It is not yet clear who torched the building, said to have held one of the largest collections of books in the country.

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

  • Commercial Banks As Creators of “Money” (Paul Krugman, The New York Times)  Krugman's research on international trade was worthy of a Nobel Prize but this 2013 piece is worthy of issuing a revocation.  :-)-    Here is some of the nonsense:

Banks are just another kind of financial intermediary, and the size of the banking sector — and hence the quantity of outside money — is determined by the same kinds of considerations that determine the size of, say, the mutual fund industry. 

  • The Exercise Paradox (Scientific American)  Studies of how the human engine burns calories help to explain why physical activity does little to control weight, and how our species acquired some of its most distinctive traits.  Subscription required to read article.

  • Dysfunction Disorder (ProPublica)  New York City paid millions for flawed mental health reports. Family court judges relied on them routinely. Parents and children lived with the consequences.  For-profit mental health service companies, such as Montego Medical Consulting profiled in this article, apparently existed only to skim public money, not to provide comeptent health services.  From this article:

In 2012, a confidential review done at the behest of frustrated lawyers and delivered to the administrative judge of Family Court in New York City concluded that the work of the psychologists lined up by Montego was inadequate in nearly every way. The analysis matched roughly 25 Montego evaluations against 20 criteria from the American Psychological Association and other professional guidelines. None of the Montego reports met all 20 criteria. Some met as few as five. The psychologists used by Montego often didn’t actually observe parents interacting with children. They used outdated or inappropriate tools for psychological assessments, including the drawing exercise.

The reviewers warned Family Court judges that they should regard the reports from Montego with extreme caution. They encouraged the city’s child welfare agency — known as the Administration for Children’s Services, or ACS — to consider ending its relationship with the company.

But the review was kept secret, and Montego continued for another two years under contract with ACS. In fact, the agency sent more families to Montego in the ensuing years than it ever had before, setting aside millions for the company to use to provide more mental health evaluations.

  • Income Inequality (inequality.org)  Income includes the revenue streams from wages, salaries, interest on a savings account, dividends from shares of stock, rent, and profits from selling something for more than you paid for it. Income inequality refers to the extent to which income is distributed in an uneven manner among a population. In the United States, income inequality, or the gap between the rich and everyone else, has been growing markedly, by every major statistical measure, for some 30 years.

High levels of income concentration are pervasive across the country, but there are important differences among states. Connecticut has the highest threshold for entry into the top 1 percent. At least $677,608 in annual income is needed to be a member of this elite group in that state. That’s three times the minimum needed to be among the top 1 percent in bottom-ranking Arkansas. (place cursor on each state for detailed data) - Available in interactive graphic here.

 top.1.pct.income.by.state.map


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