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What We Read Today 22 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".).


Every day most of this column ("What We Read Today") is available only to GEI members.

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Topics today include:

  • Cassini probe heads towards Saturn 'grand finale'

  • Two Regimes of Whistle-Blower Protection

  • An Absurd Unintended Consequence Of Abnormally Low Rates

  • Trump's 'big announcement' on tax to be broad principles: official

  • The White House Seems Excited to Shut Down the Government

  • Hundreds more lead hotspots are identified as Trump prepares to gut programs

  • American Airlines suspends employee after clash over pram

  • March for Science draws big crowds across U.S.

  • March for Science: Rallies worldwide to protest against political interference

  • German anti-immigrant party set to go further right after leader suffers defeat

  • PBOC’s Zhou Signals China 6.5% GDP Growth Target ‘Within Reach’

  • And More

Articles about events, conflicts and disease around the world


  • Trump's 'big announcement' on tax to be broad principles: official (Reuters)  President Donald Trump's promised "big announcement" next week on overhauling the U.S. tax code, a top campaign pledge, will consist of "broad principles and priorities",  an administration official said on Saturday.  The president unexpectedly said on Friday at a Treasury Department event that there would be "a big announcement on Wednesday having to do with tax reform".

  • The White House Seems Excited to Shut Down the Government (The New Yorker)   President Trump is getting desperate for a legislative victory, any victory.  While the potential for a government shutdown has been overshadowed by other events—Syria, North Korea, the attempted repeal of Obamacare—the Trump White House is suddenly seized with the issue.  A top White House official, who sounded excited by the coming clash, told the author:

“Next week is going to have quite high drama.  It’s going to be action-packed. This one is not getting as much attention, but, trust me, it’s going to be the battle of the titans. And the great irony here is that the call for the government shutdown will come on—guess what?—the hundredth day. If you pitched this in a studio, they would say, ‘Get out of here, it’s too ridiculous.’ This is going to be a big one.”

Click for large image.

  • American Airlines suspends employee after clash over pram (BBC News)  American Airlines has removed an employee from duty after an ugly clash over a baby's pram in San Francisco.  A passenger who uploaded video of the aftermath of the incident said a mother had been struck with the pram as it was forcibly removed by the employee.  The video shows the employee saying, "Hit me! Come on, bring it on", when challenged by another male passenger.  American Airlines said it was "deeply sorry for the pain we have caused" the woman passenger and her family.

  • March for Science draws big crowds across U.S. (Reuters)   Thousands of scientists and people from other walks of life turned out in Washington and New York on Saturday for Earth Day events that organizers have framed as a "celebration" of science to counter a growing disregard for evidence-based knowledge.  The "March for Science" festivities included "teach-ins" on the National Mall and parades in midtown Manhattan and hundreds of other cities and towns. The events were non-partisan, according to organizers, aimed at reaffirming "the vital role science plays in our democracy",  according to the march's website.  Still, the marches were effectively protests against steep cuts that President Donald Trump has proposed for federal science and research budgets and his administration's skepticism about climate change and the need to slow global warming.  See also March for Science: Rallies worldwide to protest against political interference (BBC News).


  • May's Conservatives at 50 percent in poll, highest since 1991 (Reuters)  Support for Theresa May's ruling Conservatives was at 50% in a Comres poll published on Saturday, putting the prime minister on course for a landslide election victory on June 8.  The main opposition Labour party was unchanged on 25%.  The poll for the Sunday Mirror newspaper of 2,074 people surveyed on April 19 and 20 put the Conservatives' vote share up 4 percentage points from last week and was the highest for the party in a Comres poll since 1991.


Support for the party, which attacks Chancellor Angela Merkel for having allowed more than a million migrants into Germany in the last two years, has tumbled in recent months after reaching the mid-teens in opinion polls last year.

Originally founded as an anti-euro party in 2013, the AfD is expected to enter the national parliament for the first time after September's election but is treated as a pariah by established political parties, which refuse to work with it. Its congress drew thousands of protesters to Cologne on Saturday.

Frauke Petry, the party's public face and under whose leadership the party has already shifted rightwards, shocked supporters on Wednesday by announcing she would not lead the AfD's campaign for a Sept. 24 federal election.


  • PBOC’s Zhou Signals China 6.5% GDP Growth Target ‘Within Reach’ (Bloomberg)   People’s Bank of China Governor Zhou Xiaochuan said the nation’s expected 6.5 percent growth target for this year is “within reach” and financial risks are well under control.  China is fully confident of preventing and eliminating systemic risks, and will keep pursuing a prudent and neutral monetary policy, the central banker said in a statement dated April 22 on the International Monetary Fund’s website during his Washington D.C. meeting with the IMF committee.

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

  • Cassini probe heads towards Saturn 'grand finale' (BBC News)   Cassini has used a gravitational slingshot around Saturn's moon Titan to put it on a path towards destruction.  Saturday's flyby swept the probe into an orbit that takes it in between the planet's rings and its atmosphere.

This gap-run gives the satellite the chance finally to work out the length of a day on Saturn, and to determine the age of its stunning rings.

But the manoeuvre means also that it cannot escape a fiery plunge into Saturn's clouds in September.

The US space agency (Nasa) is calling an end to 12 years of exploration and discovery at Saturn because the probe's propellant tanks are all but empty.

  • Two Regimes of Whistle-Blower Protection (Constantin Gurdgiev, Alternative Economics)  CG has contributed to GEI. Beyond aggregate losses, whistleblowers are significantly important to detection of fraud cases. A 2010 study showed that whistleblowers have been responsible for some 17% of fraud discoveries over the period of 1996-2004 for fraud occurrences amongst the large U.S. corporations. And, according to the Association of Certified Fraud Examiners (2014), “employees were the source in 49% of tips leading to the detection of fraud”.

In basic terms, there are two key approaches to structuring whistleblowers protection: belief-based regime (with “less stringent requirements for granting protection to whistle-blowers”) and fact-based regime (with greater hurdles of proof required from whistleblowers in order to avail of the legal protection). The authors’ “results suggest that the latter lead to better outcomes in terms of reporting behavior and deterrence.” The reason is that “when protection is relatively easy to (obtain as under belief-based regimes), fraudulent claims [by whistleblowers] indeed become a prevalent issue. This reduces the informativeness of reports to which prosecutors respond with a lower propensity to investigate. As a consequence, the introduction of such whistle-blower protection schemes might not lead to the intended reduction of misbehavior. In contrast, these effects are mitigated under a fact-based regime where the requirements for protection are more stringent.”

In a sense, the model and the argument behind it is pretty straight forward and intuitive. However, the conclusions are far reaching, given that recent U.S. and UK direction in advancing whistleblowers protection has been in favour of belief-based systems, while european ‘continental’ tradition has been to support fact-based thresholds. As authors do note, we need more rigorous empirical analysis of the effectiveness of two regimes in delivering meaningful discoveries of fraud, while accounting for false cases of disclosures; analysis that captures financial, economic, institutional and social benefits of the former, and costs of the latter.

  • An Absurd Unintended Consequence Of Abnormally Low Rates (Zero Hedge)  Hat tip to Dan Flemming.  The author starts with:  "Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing."  He explicitly expands on the historically low interest rates over most of the last decade and the devastating effect that has had on pension plans.  That has led to pension plans investing significantly in non-traditional assets (illiquid, untraded vehicles called "alts"), now up to 30% on assets averaged across all pensions.  This, combined with use of leverage in "reaching for yield", has put pension plans at risk of falling even further down the underfunded rabbit hole.  Public pensions (state and local governments) have the worst exposures.  The following Fed graph shows just how the pesopn debt problems exploded starting when the Fed slashed rates and enetered the era of ZIRP (zero interest rate policy):


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