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What We Read Today 29 March 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:

  • Trolls are Winning the Internet

  • Is the U.S. Retirement Market a Ponzi Scheme?

  • Can Trump Fix Government By Running it Like a Business?

  • The Fed's pension fund is flashing a warning sign about the Trump trade

  • US drillers buy protection against low oil prices

  • OPEC Cuts are Backfiring

  • GOP Lawmaker Wants a Select Committee on Russia

  • What's the Future of Obamacare?

  • Will Obamacare Actually Grow in Some Red States?

  • Why Trump Can't Bring Back Coal Jobs

  • Natural Gas is Winning the War on Coal

  • Why Rolling Back Climate Regs Will Hurt Low Income and Disadvantaged Communities

  • There is More Good New for Macron

  • China’s influence on global finance grows as US scales back input  

  • What a World Led By China Might Look Like 

  • Growth of Chinese Corporate Credit 

  • China’s biggest property developer unveils plan to scale back debts 

  • And More

Articles about events, conflicts and disease around the world

Global

That threatens to keep oil flowing from U.S. fields throughout 2017, even if prices fall.

It's another sign that U.S. drillers are making it harder for OPEC and 11 other exporting nations, including Russia, to reduce huge stockpiles of crude through coordinated production cuts.

U.S.

  • GOP lawmaker calls for select committee on Russia (The Hill)  Rep. Carlos Curbelo (R-Fla.) told The Hill on Wednesday that he supports empaneling a bipartisan independent select committee to investigate Russian involvement in the 2016 presidential election as questions over House Intelligence Committee Chairman Devin Nunes's (R-Calif.) handling of the issue continue to mount.  Curbelo said a congressional select committee — which would work independently of the House and Senate Intelligence committees — would “give greater credibility and independence to the investigation”.

  • Here’s when we’ll know the future of Obamacare (The Washington Post)  President Trump and his fellow Republicans have failed, at least for now, in their bid to repeal Obamacare entirely, but they still have plenty of ways to cripple the law without pulling it off the books (excerpt below).  Now the Congressional Budget Office (CBO) noted in its recent analysis that the market would "probably be stable in most areas" under current law.  (Econintersect:  The CBO did what they usually do - extrapolated from the recent history.  But the GOP can do things differently going forward - see excerpt from the WaPo article below).

By blocking funding for subsidies or refusing to enforce the individual mandate, the administration and congressional Republicans could undermine the law's insurance exchanges -- government-established marketplaces where individuals can buy health insurance from private companies, often with the help of federal subsidies. The exchanges and an expanded Medicaid program are the main programs in Obamacare, officially known as the Affordable Care Act, aimed at expanding coverage to the uninsured.

  • The States Where Obamacare's Footprint Might Get Even Bigger (The Atlantic)  Defeat of the Republican health-care bill in Congress has given new momentum to the push to expand Medicaid in several states, including deep-red Kansas.  In some red states (like Virginia and North Carolina) the legislatures are fighting the expansion, while in others (like Maine and Kansas) it is the governor 'holding the line'.  But in some states, like, Georgia and Utah, the statehouse and the legislature are working together on possible expansion.

  • Trump promised to bring back coal jobs. That promise ‘will not be kept,’ experts say. (The Washington Post)  See also next three articles.  President Trump lifted a moratorium on federal coal leases Tuesday, paving the way for excavation of a fossil fuel on public land in the West that few mining companies seem to want.  With coal miners gathered around him, Trump signed an executive order rolling back a temporary ban on mining coal and a stream protection rule imposed by the Obama administration. The order follows the president’s campaign promise to revive the struggling coal industry and bring back thousands of lost mining jobs in rural America.  But the demand for coal is falling for at least the past 10 years.

coal.us.2000.2015

  • Montana tribe sues Trump administration for lifting coal moratorium (Reuters)   A Native American tribe in Montana filed a lawsuit against the Trump administration on Wednesday, challenging its decision to lift a moratorium on coal leases on public land without first consulting with tribal leaders.  The Northern Cheyenne Tribe, located in southern Montana, said the administration lifted the moratorium without hearing the tribe's concerns about the impact the coal-leasing program has on the tribe, its members and lands.  Earlier this month, the tribe sent a letter to Interior Secretary Ryan Zinke, who signed the order lifting the moratorium on Tuesday, asking to meet with him to discuss the issue. Zinke did not respond to the letter.  Tribal Chairman Jace Killsback said:

"It is alarming and unacceptable for the United States, which has a solemn obligation as the Northern Cheyenne's trustee, to sign up for many decades of harmful coal mining near and around our homeland without first consulting with our Nation." 

Unfavorable market conditions have largely been responsible for the decline in coal use. Rolling back these environmental regulations is a regrettable attempt to prop up a dying industry while diverting potential investment away from renewable resources whose deployment would promise greater economic and job gains as well as widespread human health and climate benefits.

Coal generation has fallen dramatically in recent years, from 42 percent of power generation in 2011 to 30 percent in 2016, when for the first time the U.S. generated more electricity from natural gas. Investors are nervous about the coal industry’s future, and market capitalization of coal producers has fallen by over 90 percent since 2011.

  • Trump’s Plan Won’t Reverse Coal’s Decline (FiveThirtyEight)  Ben Casselman says Trump's actions may slow coal's decline but it will not reverse it.  Economics, not politics are driving the situation:  natural gas, solar and wind are cheaper.  Here is how natural gas has been eating away at coal:

France

Click for larger image.
macron.le.pen.odds.2017.mar.29

China

  • China’s influence on global finance grows as US scales back input (Financial Times)  Donald Trump's isolationist strategies are palying right into China's hands.  World finance ministers will next month descend on Washington for the spring meetings of the International Monetary Fund and the World Bank. For the first time since they were founded, it is not clear that some ministers will be welcomed. This month, Donald Trump, U.S. president, submitted a budget that cut World Bank contributions by $650m and reduced US participation in the IMF. As the U.S. scales back its participation on the global stage, China has been scaling up. Ever since the financial crisis, Chinese institutions have been providing lifelines to foreign countries and billions of dollars in development finance. China’s central bank, the People’s Bank of China, is playing a growing role in providing a backstop for international liquidity. In the wake of the financial crisis, Zhou Xiaochuan, the PBoC governor, raised eyebrows when he said:

“the desirable goal of reforming the international monetary system . . . is to create an international reserve currency that is disconnected from individual nations and is able to remain stable in the long run, thus removing the inherent deficiencies caused by using credit-based national currencies”.

  • What a World Led By China Might Look Like (The Atlantic)  The thrust of increasing Chinese influence in the world is primarily economic and not political as has been the American emphasis.  The article essentially debates whether the rise of China and the fading of America will be ubiquitous or a varied experience with 'winners' on both sides.

  • China’s biggest property developer unveils plan to scale back debts (Financial Times)  Evergrande, China’s largest property developer, said it would start paying down debt after revealing that net profit halved last year from a year earlier, largely as a result of soaring debt repayments. With gross debt of $94 billion, Evergrande is the country’s most indebted real estate company and holds roughly the same amount of debt as the government of Hungary. A property bubble and rising corporate indebtedness are among the biggest risks facing the Chinese economy, according to government officials and independent economists.

Evergrande’s net debt of $50bn was 777 per cent of its equity at the end of 2016. The sector average was 90 per cent as of last June, according to data from Wind Information.

On Tuesday, the company said net profit fell 51 per cent in 2016 from a year earlier to Rmb5.1bn ($740m), due to a doubling in interest payments to holders of perpetual bonds — a form of borrowing with no repayment deadline.

Payments to perpetual bondholders rose by Rmb5.56bn over the year, almost matching the fall in net profit.

Click for large image.
china.corp.credit.1985.2016

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

  • Trolls Are Winning the Internet, Technologists Say (The Atlantic)  Technology has exceeded the boundaries of civil discourse and trolls may push the rest of us toward a “Potemkin internet,” a mere shell of the web we know today.  One thing the author suggests is to not respund to trolls - they are simply looking for recognition.

  • WARNING: U.S. Ponzi Retirement Market In Big Trouble, Protect With Precious Metals (SR Srocco Report)  The data below shows net withdrawals from pension plans for 2012 and 2013, the last years reported to date.  See first graphic below.  This report also mentions that the U.S. retirement market is "propped up by" public debt (second graphic below).  Econintersect: This report is ignorant of the accounting involved:  public debt = private savings.  Can the author(s) esplain where money comes from?  Hwo money is created?  Doubtful.

  • Can Trump Fix Government By Running it Like a Business? (The Atlantic)  This author suggests that past administrations have attempted reform by taking cues from the private sector with mixed results. It might be even harder for a White House that lacks experience in government to achieve success.  Econintersect:  One way the federal government will fail following a business strategy would be to try to make a profit - that would bankrupt the rest of us, the private sector.  Unless, of course, the U.S. were to also run a current account surplus and then, rather than bankruptcy, we would simply experience lower standard of living.  To understand why our government is so inept, there is no sign that anyone in government understands these laws of accounting,

  • The Fed's pension fund is flashing a warning sign about the Trump trade (Business Insider)  The Trump trade is to sell bonds and buy stocks.  That was a good strategy until about a week ago as stocks have rallied and bonds have fallen.  But the Fed's own asset allocation in its penssion fund has moved counter to the 'Trump trade' since the election, with allocation to stocks continuing a multi-year decline and fixed income rising very slightly. 


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