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What We Read Today 06 April 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:

  • Video of Ethiopian Maid Falling 7 Stories in Kuwait City

  • Could Climate Change Lead to Rougher Air Travel?

  • Unwinding the Fed Balance Sheet

  • What Could the Fed Buy with its Balance Sheet Assets?

  • Does the Fed Threaten Global Liquidity?

  • Senate Goes Nuclear

  • Gorsuch SCOTUS Nomination Approved

  • Young Americans are Killing Marriage

  • Ethics Panel Opens Investigation into Nunes

  • "We've had One of the Most Successful 13 Weeks in History":  Donald Trump

  • GOP Proposes High Risk Health Insurance Pool

  • Discussion of High Risk Health Insurance Pools

  • "Steps Underway to Boot Assad": Rex Tillerson

  • Philippines' Duterte Orders Occupation of Isles in Disputed South China Sea 

  • Trump welcomes China's Xi as trade, North Korea issues loom

  • How Xi Jinping became one of modern China's most powerful leaders

  • China Tipped to Boost Liquidity Again as Bank Tax Payments Loom

  •  DNA Research Sheds Light on Migration Pattern of Early Farmers

  • And More

Articles about events, conflicts and disease around the world

Global

  • DNA Research Sheds Light on Migration Pattern of Early Farmers (R&D)  New DNA research has led credence to a theory that the spread of agriculture throughout Europe followed migration into the Mediterranean from the Near East much earlier than previously thought.  Researchers from the University of Huddersfield in the U.K. believe the migration pattern began more than 13,000 years ago during the Late Glacial period—thousands of years earlier than what was widely believed.

The researchers believe that initially the migrants were hunter-gatherers, but later developed a knowledge of agriculture from other populations from the Near East—where farming began.

They also concluded that during the Neolithic period—approximately 8,000 years ago—they began to colonize other parts of Europe, taking their farming practices with them.

The researchers used almost 1,500 mitochondrial genome lineages to date the arrival of people in different regions of Europe.

They found that in central Europe and Iberia, these could mainly be traced to the Neolithic period, but in the central and eastern Mediterranean, they predominantly dated to the much earlier during the Late Glacial period.

U.S.

  • Senate goes 'nuclear' to advance Trump Supreme Court pick (The Hill)  The Senate voted Thursday to move forward with Neil Gorsuch’s Supreme Court nomination after Republicans took a historic step that lowers the vote threshold for high court nominees to a simple majority.  Senators voted 55-45 to end debate on Gorsuch’s nomination, setting up a final confirmation vote for Friday. Thanks to a procedural move that changed Senate rules earlier Thursday, a simple majority was needed to move forward.  Democrats had successfully blocked Gorsuch’s nomination from getting 60 votes earlier, prompting Republicans to employ the "nuclear option," which effectively ends filibusters for all Supreme Court nominees.  See also GOP goes 'nuclear' and permanently damages Senate, Supreme Court.

  • Young Americans Are Killing Marriage (Bloomberg)  There's no shortage of theories as to how and why today's young people differ from their parents.  As marketing consultants never cease to point out, baby boomers and millennials appear to have starkly different attitudes about pretty much everything, from money and sports to breakfast and lunch.  New research tries to ground those observations in solid data. The National Center for Family and Marriage Research at Bowling Green State University set out to compare 25- to 34-year-olds in 1980—baby boomers—with the same age group today. Researcher Lydia Anderson compared U.S. Census data from 1980 with the most recent American Community Survey data in 2015. 

  • Ethics panel opens investigation into Nunes (The Hill)  The House Ethics Committee announced Thursday that it is investigating whether Intelligence Committee Chairman Devin Nunes (R-Calif.) made unauthorized disclosures of classified information while overseeing his panel’s investigation of Russian interference in the 2016 election.

A joint statement from House Ethics Committee Chairwoman Susan Brooks (R-Ind.) and the panel’s ranking Democrat, Rep. Ted Deutch (Fla.), said the investigation will focus on whether Nunes violated federal law and the chamber’s rules during a press conference where he announced that intelligence agencies incidentally collected information about associates of President Trump.

Nunes pointed to the House Ethics Committee investigation earlier Thursday when explaining his decision to temporarily step aside from the Russia investigation.

  • Trump: We've had 'one of the most successful 13 weeks' in history (The Hill)  President Trump on Thursday insisted he’s had “one of the most successful” starts as president in U.S. history, dismissing the chaos and stalled legislative agenda that has marred his first 100 days in office.  The president cited positive numbers on job creation, negotiations on presidential aircraft prices and his planned military buildup.  Trump’s first weeks in office have been anything but smooth. 

  • House Republicans propose federal high-risk pool in bid to jump-start Obamacare replacement bill (CNBC)   House Republican leaders, looking to jump-start their floundering effort to repeal and replace Obamacare, on Thursday said they were proposing creating a $15 billion federal high-risk pool that would provide insurance coverage to Americans with pre-existing and often serious health issues.  Speaker Paul Ryan said the provision would "lower premiums" for other, healthier people who buy individual health plans by shifting the risk of covering higher health-care users to the federal risk pool.  Econintersect:  We await analysis of just how significant $15 billion would be.  That is much less than 1% of total annual health costs (approximately 0.5%).  See next article for some perspectives.

  • High-Risk Pools For Uninsurable Individuals (Kaiser Family Foundation)  In the U.S. and other developed nations, population health care spending is highly concentrated:  in any given year, the healthiest 50% of the population accounts for less than 3% of total health care expenditures, while the sickest 10% account for nearly two-thirds of population health spending (Figure 1).  Referring to the preceding article, this article does not address specifically the medical costs for all people with pre-existing conditions or the potential costs for all uninsured people with prexisting conditions.  But, using numbers from the excerpts from this article (below) and sources elsewhere (linked below) we offer this speculation (concluding that $15 billion per year is probably more than 3X lower than needed, possibly even much more than that):

    From this Kaiser Foundation article:

    Who is included in the high-cost and low-cost groups changes from year to year.  Most people are healthy most of the time, but illness and injury can and do onset unexpectedly for millions of people.  Some high-cost conditions, such as hemophilia or HIV, persist and require treatment for extended periods, even a lifetime.  Other high-cost conditions may improve or resolve, allowing patients to return to low annual health care spending.  In any given year, among the 50% least expensive people in a year, 73% will remain in that group for a second year; similarly, of people who are among the most expensive 10% of the population in one year, only 45% would still be in that group the following year.

     A Kaiser Family Foundation study found that 27% of adults under the age of 65 have health conditions that, prior to the ACA,  would have rendered them uninsurable if they had sought coverage in the non-group market.

Click for larger image.

Syria

  • Tillerson: Steps Underway to Boot Assad (The Daily Beast) Secretary of State Rex Tillerson on Thursday said that steps are already underway for organizing an international coalition to remove Syrian President Bashar al-Assad after the regime used a chemical attack on civilians. Asked whether Assad has to be removed from power, Tillerson told the press that

“Assad’s role in the future is uncertain, clearly, and with the acts that he has taken, it would seem that there would be no role for him to govern the Syrian people.” 

Philippines

  • Philippines' Duterte orders occupation of isles in disputed South China Sea (Reuters)  Philippine President Rodrigo Duterte on Thursday ordered troops to occupy uninhabited islands and shoals it claims in the disputed South China Sea, asserting Philippine sovereignty in an apparent change of tack likely to anger China.  The firebrand leader, who on the campaign trail joked that he would jet ski to a Chinese man-made island in the South China Sea to reinforce Manila's claim, also said he may visit a Philippine-controlled island to raise the national flag.  The islands are in the Scarborough Shoals and Spratley Island groups.  The announcement came as China's premier, Xi Jinping, was traveling to the U.S. to meet with U.S. president Donald Trump.

south.china.sea.territorial.limits

China

Xi was born in June 1953, just four years after the People's Republic of China was established by Chairman Mao Zedong.

He is one of China's "princelings," the sons and daughters of former revolutionary leaders who have risen into high positions within the party.

His father was Xi Zhongxun, a revolutionary fighter and former Chinese vice premier, who also pioneered China's early experiments with capitalism, helping to establish Shenzhen's Special Economic Zone.

As with many Chinese leaders, little is known about Xi's early years until his father and family fell out of favor during the chaotic upheaval of the Cultural Revolution.

  • China Tipped to Boost Liquidity Again as Bank Tax Payments Loom (Bloomberg)  China’s central bank is expected to resume cash injections to the financial system this month as tax demands on commercial lenders spur another round of tight liquidity.  The need for lenders to park corporate tax payments with the central bank could drain hundreds of billions of yuan in the second half of April, ending a period of relative calm in China’s money markets. The People’s Bank of China has refrained from adding cash to the system for nine days, the longest stretch since it started daily open-market operations at the beginning of last year, citing a relatively high level of liquidity.

  • Trump welcomes China's Xi as trade, North Korea issues loom (Reuters)  U.S. President Donald Trump welcomed Chinese President Xi Jinping to his Florida retreat on Thursday for face-to-face meetings where Trump will raise concerns that Beijing should rein in its trade practices and do more to curb North Korea's nuclear ambitions. 

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

  • A maid begged for help before falling from a window in Kuwait. Her boss made a video instead. (The Washington Post)  A maid fell seven stories from a Kuwait apartment building while her employer videographed her pleading for help before the fall, apparently declining to provide aid.  The maid survived the fall with a broken arm, landing on an awning.  This article decribes the essentially slave labor conditions and abuse of domestic help throughout the oil-rich Arab world.

  • Climate Change Could Lead to Rougher Air Travel (R&D)  Stronger wind shears within the jet stream caused by climate change may lead to increased severe turbulence in the near future.  Researchers from the University of Reading believe turbulence strong enough to catapult unbuckled passengers and crew around the aircraft cabin may become twice or even three times as common due to climate change.  Econintersect:  This article does not square with research showing that climate change is not increasing the frequency of extreme weather events.  See Climate Change And Extreme Weather: The Data.

  • What can the Fed buy with its behemoth balance sheet? (CNBC)  Officials at the Federal Reserve want to start winding down the massive $4.5 trillion balance sheet the central bank has built up, about 4X larger than the average pre-crisis balance sheet. The news came Wednesday when minutes from the Federal Open Markets Committee's March meeting were released.  The first graphic below shows just how much $4.5 trillion could buy in the stock market.  The second graphic below compares the total assets of the Fed (which have been level for more than 2 years) with those of the European Central Bank (ECB) and the Bank of Japan (BoJ), both of which are still rising.  A further note from this article is that "the Fed's assets are worth about nine times the annual sales of Wal-Mart, which led the S&P 500 last year. It's equal to the total sales of the top 33 companies, or the bottom 441 on that list".

    Econintersect:  Of course the Fed is not likely to use its assets to buy stocks (which the BoJ has done and is doing); buying stocks would not shrink the balance sheet, unless the stocks purchased fell in value after purchase.  The Fed will unwind its balance sheet by selling the securities it holds (treasuries and MBS - mortgage backed securities).  That will remove the highest liquidity assets from the financial sector (cash) and increase the private sector holdings of less liquid instruments (treasuries and MBS).  This is highly restrictive (tightening) monetary policy so it is likely to be done extremely slowly unless high inflation (above 3%) sets in, fiscal deficits become much larger, and/or unemployment becomes very low (less than 4% with rising labor force participation).  Under current conditions we would be surpised if the Fed balance sheet were reduced by more than $100 billion a year, perhaps even less than that.  See also next article.

Click for large image.


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