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What We Read Today 13 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:

  • Google pays academics millions for key support

  • Zuckerberg couldn't buy Snapchat years ago, and now he's close to destroying it

  • Grocery chain many have never heard of is about to be one of the biggest in the US

  • Tall men more prone to aggressive prostate cancer

  • Blood from young animals can revitalise old ones

  • New Senate Republicans healthcare bill already in trouble

  • Analysis | 8 over-the-top claims in President Trump’s Reuters interview

  • President Trump: Trump Jr's meeting 'opposition research'

  • One chart blows up Trump's promise that his budget will eliminate the deficit

  • Decoding Yellen's Message 

  • Britain Is Shamed and Brussels Triumphant. But Is That Good for Europe?

  • Britain concedes it will have to pay EU exit bill

  • Trump, Macron look past differences on Paris climate pact

  • Trump likely to say Iran complying with nuclear deal: U.S. official

  • U.S. prepares new sanctions on Chinese firms over North Korea ties - officials

  • Liu Xiaobo’s death holds a message for China

  • And More

Articles about events, conflicts and disease around the world

U.S.

  • New Senate Republicans healthcare bill already in trouble (Reuters)  Senate Republican leaders released on Thursday a revised plan to dismantle the Obamacare law, playing to the party's disparate factions by letting insurers sell cheap, bare-bones policies while retaining taxes on the wealthy, but quick criticism showed the healthcare overhaul is already in jeopardy.  With Democrats united against it, McConnell cannot afford to lose more than two Republican senators to win passage. But moderate Susan Collins and conservative Rand Paul voiced opposition to even bringing the new plan up for debate.

  • Analysis | 8 over-the-top claims in President Trump’s Reuters interview (The Washington Post)  In an increasingly rare interview with a nonconservative journalist, President Trump sat down with Reuters for an extended chat Wednesday amid a ton of controversy stemming from Donald Trump Jr.'s emails.  This article reviews 8 Trump statements during the interview.

  • President Trump: Trump Jr's meeting 'opposition research' (USA Today)  President Trump on Thursday defended his son's campaign season meeting with a Russian lawyer whom he believed had political dirt on Hillary Clinton – calling it a normal practice in a U.S. presidential election. Trump said at a joint news conference with French President Emmanuel Macron: 

"It's called opposition research.  Politics is not the nicest business in the world,"

The White House projects that the budget could tip into a surplus of $16 billion by the 2027 fiscal year, from a $585 billion deficit in the most recent year, but the CBO's estimates suggest a deficit of $720 billion in 2027.

Click for large image.

If we assume that Yellen is referring to a range of 1.25-1.75% as an appropriate Fed Funds rate, based on statistical analysis of data since 1955, we forecast that real GDP growth rate is likely to average somewhere between 2.00-2.50% for the foreseeable future. For perspective, the graph below plots the range of expected GDP growth vs historical secular (3-year average) GDP growth. In years past, such a slow rate of growth (highlighted in yellow) was considered nearly recessionary.

Today’s comments are not a revelation. The Fed is currently forecasting long term economic growth of 1.90%. Those trading on hope and momentum are translating her message as a green light to buy stocks because the Fed will remain ultra-accommodative. While it is nice some see a silver lining in her message, one must remember that equity valuations are perched at levels that imply tremendous economic and earnings growth. If what Yellen is saying is true, equity holders are grossly overpaying for a stream of future earnings that will most certainly be disappointing.

Conversely, the message in Yellen’s testimony is bond friendly. In fact, we argue that continued stagnation and weak price growth could result in even lower yields than those we have seen over the past five years.

EU

  • Britain Is Shamed and Brussels Triumphant. But Is That Good for Europe? (Bloomberg Businessweek)  A few capital cities acquire political personalities of their own, not always lovable ones. Donald Trump ran against “Washington” as much as he did against Hillary Clinton. For many people in Europe, “Brussels” is a political character—a bureaucrat plotting an ever-closer European union. That caricature has just staged a recovery that would put Lazarus to shame.  See next article.

UK 

  • Britain concedes it will have to pay EU exit bill (Financial Times)  Britain has for the first time explicitly acknowledged it has financial obligations to the EU after Brexit, a move that is likely to avert a full-scale clash over the exit bill in talks next week. In a written statement to parliament touching on a “financial settlement”, the government recognised on Thursday

“that the UK has obligations to the EU . . . that will survive the UK’s withdrawal — and that these need to be resolved”.

France

  • Trump, Macron look past differences on Paris climate pact (Associated Press)  President Donald Trump and French President Emmanuel Macron set aside lingering differences on climate change during their meeting in France on Thursday, asserting that it shouldn't prevent them from working together toward a post-war roadmap for Syria and to enhance Mideast security.

Iran

  • Trump likely to say Iran complying with nuclear deal: U.S. official (Reuters)  U.S. President Donald Trump is "very likely" to state that Iran is adhering to its nuclear agreement although he continues to have reservations about it, a senior U.S. official said on Thursday.  Under U.S. law, the State Department must notify Congress every 90 days of Iran's compliance with the so-called Joint Comprehensive Plan of Action (JCPOA). Trump has a congressionally mandated deadline of Monday to decide.

China

  • Exclusive: U.S. prepares new sanctions on Chinese firms over North Korea ties - officials (Reuters)  Frustrated that China has not done more to rein in North Korea, the Trump administration could impose new sanctions on small Chinese banks and other firms doing business with Pyongyang within weeks, two senior U.S. officials said.

  • Liu Xiaobo’s death holds a message for China (The Economist)  Liu Xiaobo, who died on July 13th, was hardly a household name in the West. Yet of those in China who have called for democracy, resisting the Communist Party’s ruthless efforts to prevent it from ever taking hold, Mr Liu’s name stands out. His dignified, calm and persistent calls for freedom for China’s people made Mr Liu one of the global giants of moral dissent.  Mr Liu, an academic and author specialising in literature and philosophy, was eight years into an 11-year sentence for subversion (see our obituary). His crime was to write a petition calling for democracy, a cause he had been championing for decades—he was prominent in the Tiananmen Square protests of 1989. 

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

  • Google pays academics millions for key support (The Times)  One has to wondere how academia (as well as media) have any credibility left when reading this item.  Google has paid millions of dollars to academics at British and American universities for research that it hoped would sway public opinion and influence policy in favour of the tech giant.

A watchdog identified 329 pieces of research funded directly or indirectly by Google since 2005 in key public policy areas where regulatory changes could cost it a fortune in fines and lost earnings. The authors, who received payments of between $5,000 and $400,000, did not disclose Google’s funding in two thirds of cases. Emails suggest that some researchers shared papers with Google before publication, seeking suggestions for changes.

  • Zuckerberg couldn't buy Snapchat years ago, and now he's close to destroying it (CNBC)  In late 2013, Snap (SNAP) CEO Evan Spiegel reportedly rebuffed a $3 billion takeover offer from Mark Zuckerberg.  In the time since Spiegel spurned Zuckerberg, Facebook has turned Instagram -- a photo-sharing service it acquired in 2012 for just $1 billion -- into both a key growth driver and a Snapchat-killer.  And it's done it with product updates -- from photo filters to digital sunglasses -- that appeal to the same youthful demographic Spiegel used to build up Snapchat.

This week, Snap shares fell sharply below their IPO price of $17 a share, after one of the investment banks that helped take the company public downgraded its stock over worries about Instagram.

  • Grocery chain many have never heard of is about to be one of the biggest in the US (Business Insider)  European grocer Aldi says it has a plan to become the third-largest grocery chain in the U.S. by store count within the next four years.  The discount chain is investing $3.4 billion to expand to 2,500 stores - up from 1,600 stores today - by 2022, the company said last month.  The aggressive expansion plan would make Aldi the third-largest supermarket chain, behind Walmart and Kroger.  Aldi U.S. CEO Jason Hart said in a statement:

"We pioneered a grocery model built around value, convenience, quality, and selection, and now Aldi is one of America's favorite and fastest-growing retailers.  We're growing at a time when other retailers are struggling. We are giving our customers what they want, which is more organic produce, antibiotic-free meats, and fresh healthier options across the store, all at unmatched prices up to 50 percent lower than traditional grocery stores."

  • Tall men more prone to aggressive prostate cancer (The Times)  Taller men are more likely to develop aggressive prostate cancer, according to a new study.  Every additional 10cm (3.94 inches) of height increases the risk of developing a more aggressive form of the disease by 21%, and increases the chance of dying from it by 17%, University of Oxford research found.

Scientists believe the link could be down to higher levels of certain hormones in taller men, but said genetic factors or even nutrition in early life could play a role. However, their work established a correlation, but not a causal relationship.

  • Blood from young animals can revitalise old ones (The Economist)  Mammalian bone density usually drops with age. A gerontologist called Clive McCay showed that linking an old rat to a young one boosted the density of the oldster’s bones. In 1972 another paper reported, even more spectacularly, that elderly rats which shared blood with young ones lived four to five months longer than similarly old rats which did not.  The question is now being ecxplored if simialr effects occur with humans.


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