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What We Read Today 12 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:

  • Hidden Trigger For Another (Flash) Crash: Passive Investing

  • Private Equity and Passive Investors Are on a Collision Course

  • Billionaire Tom Steyer Kicks Clean Coal While It's Down

  • How economics became a religion

  • The 5,700-Point Move In The Dow You Probably Didn't Notice

  • Global Warming May Put Cork in Wine Industry

  • Cryptocurrencies Are Getting Crushed

  • Trillion-Ton Iceberg Breaks Off Antarctica

  • Mapmakers already updating charts after iceberg breaks off Antarctica

  • McConnell’s health gambit ripples in Kentucky

  • Trump FBI Pick Throws Support Behind Mueller's Russia Probe

  • Conservative groups urge lawmakers to gut climate programs in U.S. military

  • The county that gave Clinton only 5 votes

  • Failing or Doing Fine?  How Obamacare’s Marketplaces Are Shaping Up for 2018

  • Steve King: Build border wall with funds from Planned Parenthood, food stamps

  • Trump Needs to Come Clean. Democrats Need to Be Careful.

  • State Dept. spent $15K on Trump hotel rooms: report

  • Former President Jimmy Carter Just Made a Solar Farm to Power Half His City

  • Disturbing pay trends in Britain

  • Why Many American Jews Are Becoming Indifferent or Even Hostile to Israel

  • Integrating Renewable Energy into Grid a Viable Option for India

  • Bank of Canada Raises Rates for First Time in 7 Years

  • And More

Articles about events, conflicts and disease around the world

Global

  • Global Warming May Put Cork in Wine Industry (R&D)  Warming temperatures in the Mediterranean may hamper the European wine industry.  A team of researchers studied the impact of growing temperatures on the labor output and productivity of manual agricultural grape-picking workers in the wine industry of Cyprus, who often work in conditions of up to 96 degrees Fahrenheit.  They discovered that the slightly increased temperatures result in a decline of worker’s productivity, resulting in an up to 27% labor loss.

  • Cryptocurrencies Are Getting Crushed (Bloomberg)  The cryptocurrency Cassandras are starting to look right.  The sector has lost about a third of its market value since peaking in early June, pushing it into what traditional equity market analysts label as a bear market. Bitcoin, the largest of the digital currencies, is down about 20% from its peak of $3,000, reached June 12. Smaller rivals such as ethereum and ripple are getting hit even harder.

U.S.

  • McConnell’s health gambit ripples in Kentucky (The Hill)  In McConnell's home state, the ACA law has led to a drop in the rate of uninsured people from 20.4% of the state’s population in 2013 to 7.8% in 2016, according to Gallup — the largest reduction of any state in the country.  That doesn’t mean ObamaCare is necessarily popular in Kentucky, but the fight over healthcare does pose some risks for McConnell, who is up for reelection in 2020. Democrats fought hard to defeat McConnell in 2014 and lost. They would love to find a way to defeat him in three years by putting healthcare front and center.

  • Trump FBI Pick Throws Support Behind Mueller's Russia Probe (Bloomberg)  The federal investigation of Russia’s role in the 2016 election that Donald Trump frequently dismisses as a “witch hunt” got a key endorsement Wednesday, from the president’s own pick to lead the FBI.  Former Justice Department official Christopher Wray told senators at his confirmation hearing that special counsel Robert Mueller, the head of the probe that’s now touching the president’s oldest son and son-in-law, is a “consummate straight shooter”.  Pressed to directly address Trump’s criticisms, Wray added,

"I do not consider Director Mueller to be on a witch hunt."

  • Conservative groups urge lawmakers to gut climate programs in U.S. military (Reuters)  A coalition of 14 conservative groups urged U.S. lawmakers on Wednesday to support an amendment to the House of Representatives' annual defense bill that would prevent the Pentagon from implementing climate-change and green energy policies meant to save taxpayers money and protect the planet.  In a letter to the lawmakers, the groups said many climate programs ...

"... are likely to undermine military readiness by diverting scarce resources."

  • The county that gave Clinton only 5 votes (The Hill)  Hillary Clinton received a number of votes that amounted to less than 2% of King County, TX total population.  Donald Trump got the votes equivalent to 52%.  In 1960 JFK got 77% of the vote here (less than Trump's 97%, but still a polar reversal between the two parties).  Other areas have similar polarization and shifts:

When Richard Nixon won the White House in 1968, he scored a narrow plurality over Hubert Humphrey in Prince George’s County, Md., just across the Anacostia River from the nation’s capital. Forty-eight years later, Donald Trump won 8.4 percent of the vote there, his worst performance outside Washington, D.C., where he won just 4.1 percent of the vote.

As the American electorate grows more diverse, and as a rising generation of millennials begins supplanting formerly dominant baby boomers, two nations that live side by side are increasingly walling themselves off from each other.

  • Failing or Doing Fine?  How Obamacare’s Marketplaces Are Shaping Up for 2018 (Bloomberg)  Based on the latest data, most of the 12 million people who got health insurance through Obamacare’s individual marketplaces will have the same number of companies to choose among next year as they did in 2017. These maps will change as insurers finalize their plans before signing contracts in the fall.  Following graphic is interactive with county-by-county data in the Bloomberg article.

Click for larger image.
aca.marketplace.2018.map

On Tuesday, the House Appropriations Committee introduced a spending bill that would allocate $1.6 billion toward building the wall separating the U.S. from Mexico. The funding is part of the total $13.8 billion for Customs and Border Protection.

King said he supports the spending measure, but he would prefer an additional $5 billion for the wall — and suggested taking the extra funding from Planned Parenthood and federal welfare programs.

The e-mails the younger Trump received from music promoter Rob Goldstone, who promised official Russian "documents and information that would incriminate Hillary," may have just been an opportunist trying to curry favor with the presumptive Republican presidential nominee. But Goldstone's successful effort to set up a meeting between members of the campaign's inner circle and a lawyer with Kremlin connections puts the lie to Team Trump's longtime defense in the brewing scandal: no contact, no collusion.

  • State Dept. spent $15K on Trump hotel rooms: report (The Hill)  The Department of State paid more than $15,000 for rooms at the Trump International Hotel & Tower Vancouver upon its opening, according to The Washington Post.  The Post obtained the bookings through a Freedom of Information Act (FOIA) request and noted that aspects of the invoice from Vancouver’s U.S. Consulate General had been redacted.

The State Department refused to give more details about why the agency was at the hotel, but noted that Foggy Bottom helps with trips abroad. President Trump’s two oldest sons, their wives and Trump’s younger daughter, Tiffany, attended the hotel’s opening.  The $15,000 expenditure is Foggy Bottom’s first disbursement to a property bearing Trump’s name since the president took office, the Post reported.

The State Department declined to answer the newspaper’s questions about who stayed at the Vancouver hotel. 

  • Former President Jimmy Carter Just Made a Solar Farm to Power Half His City (Futurism)  This year, former U.S. President Jimmy Carter leased 10 acres of land to build a solar farm with the capacity to meet more than 50%  of the energy needs of his hometown, and he also installed 324 solar panels on his presidential library which will supply about 7% of the power for that facility.

UK

Earlier this month (July 3, 2017) the British Office of National Statistics (ONS) released a research report – Wage growth in Pay Review Body Occupations – which basically summarises what has gone wrong with the world under neo-liberalism. While the Report is about the UK, which has particular characteristics, the trends identified are almost universal and reflect the dominance of the ‘free-(not!)-market’ austerity mentality that has crippled progress around the world. It also helps us understand why the British economy is stalling again and why the latest data on household spending is so disturbing. These trends have nothing to do with Brexit. They are all down to misguided government policy (austerity) and erroneous strategies that seek to generate fiscal surpluses when the non-government sector needs to also run surpluses (and the two aspirations are not simultaneously achievable). British workers are paying for this incompetence. The economists who gratuitously hand out the spurious advice, unfortunately do not lose their jobs.

Israel

  • Why Many American Jews Are Becoming Indifferent or Even Hostile to Israel (Mosaic)  Hat tip to Roger Erickson.  ll told, the two Jewish communities of the United States and Israel constitute some 85 percent of the world’s Jews. Although other communities around the globe remain significant for their size or other qualities, the future of world Jewry will likely be shaped by the two largest populations—and by the relationship between them. For that reason alone, the waning of attachment to Israel among American Jews, especially but not exclusively younger American Jews, has rightly become a central focus of concern for religious and communal leaders, thinkers, and planners in both countries.

Kremlin compares Trump Jr. email saga to soap opera (The Hill)  

  • Kremlin officials on Wednesday compared the uproar over Donald Trump Jr.’s meeting with a Russian lawyer offering damaging information on Hillary Clinton to a predictable soap opera plot.  "This is the next, predictable spin to the plot following the bilateral meeting," Kremlin spokesman Dmitry Peskov said, according to The Los Angeles Times.  "Once again, you shouldn’t drag us into this TV show, we don’t want to participate," he said.  Peskov also said on Wednesday that the Kremlin does not know Veselnitskaya and was not involved with the meeting. 

India

  • Integrating Renewable Energy into Grid a Viable Option for India (R&D)  India may be able to integrate 175 gigawatts (GW) of renewable energy into their electricity grid by 2022.  This would amount to 24% of India's total electrical power.  The U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) have confirmed the technical and economic viability of integrating the renewable energy into the grid with an advanced weather and power system modeling.  

The researchers found that power system balancing—where supply of electricity meets the demand—with 100 GW solar and 60 GW win is achievable with minimal renewable energy curtailment, the amount of renewable energy generated that cannot be used due to grid limitations.

India’s current power system is dominated with coal but has the flexibility to accommodate the variability associated with the renewable energy targets.

Canada

  • Bank of Canada Raises Rates for First Time in 7 Years (Bloomberg)  Canada cautiously became the first Group of Seven country to join the U.S. in raising interest rates on Wednesday, feeding speculation the world’s central bankers are entering a tightening cycle.  The central bank raised its benchmark rate to 0.75 percent from 0.5 percent, while adding an element of prudence by warning future rate hikes will be “guided” by the data.

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

  • Hidden Trigger For Another (Flash) Crash: Passive Investing (Wealth Management)  Passive investors don't recognize they are actually making active management decisions without understanding what they own.  Passive investors are making the decision to own what other passive (index) investors own.  Thus they are loading up on market risk.  See also next article below.

“Donald Trump has used the phrase ‘clean coal’ probably a thousand times, and it doesn’t exist in the real world right now.  There is no such thing as clean coal outside the political context.”

  • How economics became a religion (The Guardian)    Hat tip to Roger Erickson, whose brief commentary is quoted below.  This article posits that economics' moral code promises salvation, its high priests uphold their orthodoxy. But perhaps too many of its doctrines are taken on faith.  Roger Erickson wrote:

'The failure of this grand narrative is not, however, a reason for students of economics to dispense with narratives altogether. Narratives will remain an inescapable part of the human sciences for the simple reason that they are inescapable for humans. It’s funny that so few economists get this, because businesses do. As the Nobel laureates George Akerlof and Robert Shiller write in their recent book, Phishing for Phools, marketers use them all the time, weaving stories in the hopes that we will place ourselves in them and be persuaded to buy what they are selling. Akerlof and Shiller contend that the idea that free markets work perfectly, and the idea that big government is the cause of so many of our problems, are part of a story that is actually misleading people into adjusting their behaviour in order to fit the plot. They thus believe storytelling is a “new variable” for economics, since “the mental frames that underlie people’s decisions” are shaped by the stories they tell themselves.'  Note: 'Phishing for Phools' may be ordered from Amazon.

  • The 5,700-Point Move In The Dow You Probably Didn't Notice (Rob Isbitts, Forbes)  RI has contributed to GEI.  From March 1 through July 7 of this year, the Dow Jones Industrial Average moved by just over 5,700 points. That’s about one-quarter of its value as of the end of that period. The reason you didn’t see screaming headlines about it is because that Dow-points marathon run was a mix of up days and down days. In fact, from start to finish, the Dow’s total move was only about 300 higher.  I bring this up because the current market environment has morphed into one that resembles a football running back who takes the ball, runs to his right, sees tacklers awaiting so he cuts back to the left, sees more tacklers, and continues to scamper, just to get back to the line of scrimmage.


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