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What We Read Today 10 July 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:

  • Comey’s private memos on Trump conversations contained classified material

  • Sharp Partisan Divisions in Views of National Institutions

  • Pence endorses repeal and delay strategy on ObamaCare

  • ICE Officers Told to Take Action Against All Undocumented Immigrants Encountered While on Duty

  • Trump’s Immigration Pick Attacked Obama Programs in Ghost-Written Senate Letters

  • Trump Treasury may reopen this loophole for companies stashing cash overseas

  • WH Contradicts Trump

  • White House: Trump, Putin talked sanctions

  • Republicans dismayed by Trump Jr’s meeting with Russian lawyer

  • Who is Russian laywer Natalia Veselnitskaya?

  • Statutory health insurance in Germany: a health system shaped by 135 years of solidarity, self-governance, and competition

  • China trial paves way for ‘unhackable’ communications network

  • It Takes a Theory to Beat a Theory: The Adaptive Markets Hypothesis

  • Two catalysts that could trigger a stock market correction

  • Fund manager MFS sued for self-dealing in its 401(k) plans

  • Is Silver Losing Its Luster?

  • Has social security Redistributed to Whites from People of Color?

  • And More

Articles about events, conflicts and disease around the world

U.S.

  • Comey’s private memos on Trump conversations contained classified material (The Hill)  More than half of the memos former FBI Director James Comey wrote as personal recollections of his conversations with President Trump about the Russia investigation have been determined to contain classified information, according to interviews with officials familiar with the documents.

This revelation raises the possibility that Comey broke his own agency’s rules and ignored the same security protocol that he publicly criticized Hillary Clinton over in the waning days of the 2016 presidential election.

  • Sharp Partisan Divisions in Views of National Institutions (Pew Research Center)  A majority of Republicans and Republican-leaning independents (58%) now say that colleges and universities have a negative effect on the country, up from 45% last year. By contrast, most Democrats and Democratic leaners (72%) say colleges and universities have a positive effect, which is little changed from recent years.

  • Pence endorses repeal and delay strategy on ObamaCare (The Hill)  Vice President Pence on Monday said congressional Republicans should pass a “repeal only” bill if they can’t come to a consensus on legislation to replace ObamaCare.  Pence said in an interview with Rush Limbaugh:

“If they can’t pass this carefully crafted repeal and replace bill — do those two things simultaneously — we ought to just repeal only.”

In a February memo, Matthew Albence, a career official who heads the Enforcement and Removal Operations division of ICE, informed his 5,700 deportation officers that, “effective immediately, ERO officers will take enforcement action against all removable aliens encountered in the course of their duties.”

  • The United States is one of the only developed nations that taxes businesses on income earned around the world.

  • President Obama attempted to turn the tide with a raft of sweeping regulations in April 2016.

  • The Treasury Department is rethinking a rule that deals with "earnings stripping" — companies loading up their U.S. operations with debt and moving profits to foreign subsidiaries.

wh.trump.disagree.2017.jul.10

  • Republicans dismayed by Trump Jr’s meeting with Russian lawyer (Financial Times)  Donald Trump’s attempts to move on from questions over Russia’s involvement in his election victory were dashed on Monday by mounting bipartisan concern over news that his eldest son met a Kremlin-connected attorney last year in the hope of receiving damaging information about Hillary Clinton. Amid conflicting explanations and a torrent of counter-attacking tweets from the president against targets from former FBI director James Comey to Mrs Clinton’s daughter, one Republican close to the White House derided the Trump team as “the Keystone Kops” and said:

“The administration is losing its credibility.”

Natalia.Veselnitskaya

Germany

Bismarck's Health Insurance Act of 1883 established the first social health insurance system in the world. The German statutory health insurance system was built on the defining principles of solidarity and self-governance, and these principles have remained at the core of its continuous development for 135 years. A gradual expansion of population and benefits coverage has led to what is, in 2017, universal health coverage with a generous benefits package. Self-governance was initially applied mainly to the payers (the sickness funds) but was extended in 1913 to cover relations between sickness funds and doctors, which in turn led to the right for insured individuals to freely choose their health-care providers. In 1993, the freedom to choose one's sickness fund was formally introduced, and reforms that encourage competition and a strengthened market orientation have gradually gained importance in the past 25 years; these reforms were designed and implemented to protect the principles of solidarity and self-governance

China

  • China trial paves way for ‘unhackable’ communications network (Financial Times)  Success of Jinan project points to commercial application for quantum communications.  This Chinese city has successfully trialled an “unhackable” communications network, raising hope of a rollout of the world’s first widescale commercial application of quantum communications.

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

After 2008, the wisdom of financial advisers and academics alike seemed naive and inadequate. So many millions of people had faithfully invested in the efficient, rational market: what happened to it? And nowhere did the financial crisis wound one’s professional pride more deeply than within academia. Th e crisis hardened a split among professional economists. On one side of the divide were the free market economists, who believe that we are all economically rational adults, governed by the law of supply and demand. On the other side were the behavioral economists, who believe that we are all irrational animals, driven by fear and greed like so many other species of mammals.

Like Herbert Simon’s theory of bounded rationality, the Adaptive Markets Hypothesis can easily explain economic behavior that’s only approximately rational, or that misses rationality narrowly. But the Adaptive Markets Hypothesis goes farther and can also explain economic behavior that looks completely irrational. Individuals and species adapt to their environment. If the environment changes, the heuristics of the old environment might not be suited to the new one. This means that their behavior will look “irrational.” If individuals receive no reinforcement from their environment, positive or negative, they won’t learn. This will look “irrational” too. If they receive inappropriate reinforcement from their environment, individuals will learn decidedly suboptimal behavior. This will look “irrational.” And if the environment is constantly shifting, it’s entirely possible that, like a cat chasing its tail endlessly, individuals in those circumstances will never reach an optimal heuristic. This, too, will look “irrational.”

But the Adaptive Markets Hypothesis refuses to label such behaviors “irrational.” 

  • Stocks have gone for a long period without a major sell-off and are vulnerable.

  • JPMorgan strategists point to the potential for earnings to miss expectations in the second half of the year, after a strong first half.

  • Citigroup strategists say rising interest rates could be a negative for stocks.

  • Fund manager MFS sued for self-dealing in its 401(k) plans (Investment News)  A major player in the retirement savongs space, MFS Investment Management, has been sued for self-dealing in its company 401(k) plans, becoming the latest fund firm to be targeted for stocking its retirement plan primarily with proprietary investments.  This sort of activity would be made much more unlikely under Obama era fiduciary rules which are now in question under the Trump administration.

The plaintiff in the lawsuit, Velazquez v. Massachusetts Financial Services Co. et al, claims the company "loaded" two MFS 401(k) plans, worth around $700 million total, with high-cost in-house funds that cost participants millions in lost savings.

  • SLV/silver prices crashed Friday trading down by as much as 4% intraday, before recovering slightly to close down by about 2.5%, the lowest level in roughly 15 months.

  • The gold to silver ratio is now at 78.42, an extremely elevated level that has repeatedly proven to lead to powerful rallies in silver, gold, miners and other gold/silver derivatives.

  • Judging by wage growth, CPI, and PPI, some of the most widely used inflation gauges suggest that inflation is relatively robust in the U.S. indicating that SLV/silver prices are undervalued.

  • Geopolitical events and technical indicators are providing additional support that silver/SLV may be undervalued and that a washout may have taken place in the silver futures market.

  • The takeaway: when there is blood in the streets, things always look scary and feel like the world you are trading in is falling apart. Nevertheless, those who buy at such times make money.

Click for larger image.

From its beginning, Social Security was designed to be redistributive. Its designers aimed to replace a higher share of preretirement income for those with lower earnings histories and to provide a near-universal base of protection against poverty in old age. The program has succeeded considerably on both those fronts. However, throughout much of its history, less attention has been paid to the many other forms of redistribution within Social Security. Some have been regressive, others progressive, and many tend to violate such norms and principles as equal justice for those equally situated.

soc.sec.race

soc.sec.di.race

soc.sec.oasdi.race 


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