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What We Read Today 05 May 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:

Questionable crash indicator 'Hindenburg Omen' was triggered this week

Where Has All the Volatility Gone?

Skew Index

Tesla Has a Lot More in Store Than the Model 3

Physician Wealth and Debt Report 2017

Suddenly, Oil Below $40 a Barrel Doesn't Seem So Far-Fetched

Trump does not think U.S. should copy Australia's health system: White House

Republican Obamacare replacement could bar aid to NY and California insurance buyers because of abortion rule

Make Pregnancy Expensive Again: A Woman's Guide to the New Health Bill

How One Major Internet Company Helps Serve Up Hate on the Web

Solid U.S. Job Market May Be Undercutting Trump's Tax-Cut Case

The 26-year-old from Bristol who fought against terrorism, but is now being treated like a criminal

Do We Know What Kind Of Brexit Theresa May Really Wants?

Saudi Arabia, US in talks on billions in arms sales

Record Number of Climbers to Attempt to Scale Everest

And More

Articles about events, conflicts and disease around the world

Global

  • Suddenly, Oil Below $40 a Barrel Doesn't Seem So Far-Fetched (Bloomberg)  About $7 million worth of options changed hands Friday that will pay off if West Texas Intermediate crude falls beneath $39 a barrel by mid-July, according to data compiled by Bloomberg. WTI, which hovered around $46 Friday, hasn’t traded below $39 since April 2016, though it’s been dropping like a stone in recent weeks.  More than 14,000 August $39 puts changed hands, almost 20 times the number of contracts previously outstanding for the bearish option.

 

U.S.

President Donald Trump was simply saying nice things to an ally when he called Australia's universal healthcare system better than the U.S. system, and he does not think his country should adopt a similar approach, the White House said on Friday.

  • Republican Obamacare replacement could bar aid to NY and California insurance buyers because of abortion rule (CNBC)   An abortion provision in the Republican health-care bill has set up a Catch-22 for California and New York residents that could leave millions of them ineligible for federal aid to help pay for health insurance.  Both states currently mandate that individual health plans sold in the states cover abortion services.  But the GOP's Obamacare replacement bill would bar federal subsidies from being used to help pay premiums for health plans that offer coverage for abortions in most cases, except for ones involving rape, incest or where the life of the mother is in danger.

  • Make Pregnancy Expensive Again: A Woman's Guide to the New Health Bill (Bloomberg)  Prior to the passage of the Affordable Care Act in 2010, women who sought to purchase health insurance regularly confronted some harsh market conditions. Insurance companies in the era before Obamacare often wouldn't underwrite pregnant women or would issue policies that excluded care during pregnancy. Having delivered a child via cesarean section, as more than 1 million women do every year in the U.S., also pushed women into a higher-cost category, or disqualified them altogether. Post-partum depression was considered a pre-existing condition. So was infertility, a history of abnormal pap smears, and in certain states, even sexual assault or domestic violence. 

By guaranteeing maternity care and making coverage available for people with pre-existing conditions, Obamacare largely did away with the markup on women's health insurance. Critics groused that this shifted the burden unfairly to men and women who didn't plan to have children; in March, for instance, Illinois Representative John Shimkus, a Republican, said one of his primary objections to Obamacare was "men having to purchase prenatal care."

There are alternatives to employer-provided insurance and coverage purchased on the individual market. Many women have health insurance through Medicaid, a program that expanded under Obamacare. Maternity care is covered by Medicaid, and about half the births in the U.S. are paid for by Medicaid, according to an estimate from the George Washington University School of Public Health. 

But the AHCA would limit how much Medicaid will reimburse states, which in turn "will force states to make trade-offs,” said Salganicoff. “There’s no specific determination of what states need to cover. Pregnant women may not be affected by the cap; there are plenty of related services—lactation consultants, parenting classes, breast pumps—that could be scaled back.” 

The AHCA also prevents Medicaid from reimbursing Planned Parenthood for medical services for one year, which in light of the threat to maternity coverage could be a double-whammy for women. Planned Parenthood sees 2.5 million patients every year. Most are women, and almost half are covered by Medicaid. 

Based in San Francisco, Cloudflare operates more than 100 data centers spread across the world, serving as a sort of middleman for websites — speeding up delivery of a site’s content and protecting it from several kinds of attacks. Cloudflare says that some 10 percent of web requests flow through its network, and the company’s mainstream clients range from the FBI to the dating site OKCupid.

The widespread use of Cloudflare’s services by racist groups is not an accident. Cloudflare has said it is not in the business of censoring websites and will not deny its services to even the most offensive purveyors of hate.

  • Solid U.S. Job Market May Be Undercutting Trump's Tax-Cut Case (Bloomberg)  President Donald Trump’s economic team says it won’t be satisfied until Americans workers earn more -- and aggressive tax cuts are essential for those fatter paychecks.  But with unemployment at its lowest rate since before the financial crisis, the world’s biggest economy may already be nearing top speed. That means a big fiscal boost resulting from tax changes could stoke inflation to levels that would prompt the Federal Reserve to raise borrowing rates faster than anticipated. If that happens, Trump’s ambitious growth goals could be jeopardized.  For more on the latest employment data see April 2017 BLS Jobs Situation Improved This Month

Click for large image.

UK

  • The 26-year-old from Bristol who fought against terrorism, but is now being treated like a criminal (The Canary)  Bristolian Josh Walker went out to northern Syria to fight against Daesh (Isis/Isil) in 2016. He stayed there for six months, living and fighting alongside some of the most effective ground forces in the battle against Daesh terror. But upon his return to Britain, he didn’t receive the hero’s welcome he might’ve expected. Instead, he will appear in court on 5 May to face terrorism-related charges.

Walker is one of a number of British volunteers who have joined the fight against Daesh alongside the Kurdish-led YPG forces of Rojava (in northern Syria). These forces have been defending a secular, multi-ethnic, and feminist experiment in direct democracy since 2012. They’re also among the most effective anti-Daesh ground forces, and are currently advancing on the self-proclaimed Daesh capital of Raqqa as part of the Syrian Democratic Forces (SDF).

The first contacts between the lead European Commission Brexit negotiators and the UK prime minister Theresa May appear to have got off to a disastrous start. There is some speculation that the entire Brexit negotiations could break down before they have really begun.

On this scenario, the UK could be heading for the kind of catastrophic ‘over the cliff’ hard Brexit that the UK government has always refused to rule out. Some in the City financial sector and in big business have reacted with horror as has the opposition Labour Party.

 Saudi Arabia

  • Saudi Arabia, US in talks on billions in arms sales (CNBC)   Washington is working to push through contracts for tens of billions of dollars in arms sales to Saudi Arabia, some new, others in the pipeline, ahead of U.S. President Donald Trump's trip to the kingdom this month, people familiar with the talks told Reuters this week.   Saudi Arabia is Trump's first stop on his maiden international trip, a sign of his intent to reinforce ties with a top regional ally.  The United States has been the main supplier for most Saudi military needs, from F-15 fighter jets to command and control systems worth tens of billions of dollars in recent years. Trump has vowed to stimulate the U.S. economy by boosting manufacturing jobs.  Washington and Riyadh are eager to improve relations strained under President Barack Obama in part because of his championing of a nuclear deal with Saudi foe Iran.

Nepal

  • Record Number of Climbers to Attempt to Scale Everest (Bloomberg)  The Nepalese Tourism Department issued a record 371 permits this year to people to scale the 8,850-meter (29,035-foot) mountain. An equal number or more Nepalese Sherpa guides will accompany them.  Last year, the government issued permits to 289 climbers. Some mountaineers blamed crowding and poor planning for bottlenecks that delayed climbers at high altitudes and possibly contributed to several deaths.

The increased number of climbers this year is likely because of people who were unable to climb in 2014 and 2015 who returned, said Dinesh Bhattarai, chief of the Tourism Department that handles all mountaineering affairs in Nepal.

The 2015 season was scrapped after 19 climbers were killed and 61 injured by an avalanche at the base camp triggered by a massive earthquake. In 2014, an avalanche at the Khumbu Icefall killed 16 Sherpa guides.

Click for larger image.

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

  • The "Hindenburg Omen" correctly called stock market crashes in 1987 and 2008, but has only been correct at predicting plunges about 30 percent of the time.

  • The signal is still watched by traders and chart analysts for indicating signs of weakness ahead, but not necessarily a crash.

  • Where Has All the Volatility Gone? (Investopedia)  In early April, the SKEW Index - a measure of volatility based on S&P 500 options (see next article) - hit a record high suggesting the probability of a black swan event was greater than ever. Then a week later the Credit Suisse Fear Barometer traded up to pre-Brexit highs and as the U.S. equity rally stalled investors put one hand on the panic button. Then, just like that, it disappeared.

On Thursday, gold futures hit a six-week low, trading to $1,225 an ounce as investors gave up on the benchmark safe haven trade. After a run up in March, with gold trading as high as $1,297 an ounce, the hard commodity has fallen 5.5 percent and is on track to record its third consecutive weekly loss. The CBOE VIX Index has followed suit, falling to a 10-year low, trading below 10 for the first time since 2007.

  • Skew  Index (Investopedia)  The SKEW index is a measure of potential risk in financial markets. Much like the VIX index (see preceding article), the SKEW index can be a proxy for investor sentiment and volatility. 

The SKEW index is calculated using S&P 500 options that measure tail risk - returns two or more standard deviations from the mean - in S&P 500 returns over the next 30 days. SKEW values generally range from 100 to 150 where the higher the rating the higher the perceived tail risk and chance of a black swan event. A SKEW rating of 100 means the perceived distribution of S&P 500 returns is normal, and therefore the probability of an outlier return is small. 

  • Tesla Has a Lot More in Store Than the Model 3 (Bloomberg)  After Tesla Inc. reported earnings on Wednesday, Elon Musk cracked open the lid on his box of secrets.  While most investors focused on rising costs and execution risk as he prepares for his most important product launch, the CEO dropped a pile of hints about what new adventures may be in store for the darling of America’s electrified future. Here are 5 of the 14 noteworthy nuggets from this article: 

  1. Model 3 ramp up is “close to the bullseye.”

  2. The Model Y, a compact SUV, is coming in 2019—on a new platform.

  3. Reservations for the Model 3 are increasing, despite Tesla’s best efforts to switch to Model S.

  4. The solar roof is on track to begin production this quarter.

  5. Energy storage is about to take off. 

  • Physician Wealth and Debt Report 2017 (Medscape)  The survey for Medscape's Physician Compensation Report 2017 covered more than 19,200 physicians.  Results show physicians are better planners and smarter with their money than many might think.  Among the interesting findings:  physicians' incomes have increased by nearly 43% since 2011 (average increase of of 6.1% per year) - first graph below.  There is a wide range of average compensations depending on specialty - second graph below.  More than 2/3 of physicians accept patients from Medicare and Medicaid - third graph below.


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