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What We Read Today 18 August 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:

  • What Comes of Solar Power When the Sun's Eclipsed

  • Record Low Volatility

  • Neo-Nazis Expose the Internet's Big Weakness

  • Women Gain in Traditional Businesses for Men

  • The Growing List of Money Managers Cutting Their Exposure to Junk Bonds

  • Getting to the core of global inflation

  • Crude Market Shows Enduring Strength Beyond Seasonal Peak

  • Parents in these places spend the most on their children’s education

  • Steve Bannon Out as White House Chief Strategist

  • Trump Resurrects Anti-Muslim Myth in Wake of Barcelona Attack

  • One in Eight American Adults Is Now an Alcoholic, Study Says

  • What Happens When Refugees Come to the United States

  • Women Charge Past Men in U.S. Job Market as Economy Lumbers On

  • July 2017 BLS Jobs Situation: Interesting This Month.

  • No Holiday Revenge for EU as Brexit Talks Are Delayed

  • Publics Worldwide Unfavorable Toward Putin, Russia

  • And More

Articles about events, conflicts and disease around the world

Global

  • Getting to the core of global inflation (Reuters)  Stock markets have spent the year rising on bets of a resurgence in inflation, while central bankers trying to manage the global economy have spent the same time repeatedly reassuring everyone it's just around the corner.  Policymakers gathering at an annual monetary retreat in Jackson Hole, Wyoming in the coming week no doubt will be collectively pondering why the textbook rule that says low unemployment leads to labour shortages, then higher wages, and then in turn higher inflation, isn't working.  Yet the global economy is growing strongly. Apart from the risk of a stock market correction, there is no evidence of disinflationary threats like those that emanated from the financial crisis that started to smoulder a decade ago.  The latest Reuters Polls of more than 500 economists covering more than 45 economies around the world showed almost no move in inflation expectations since the start of the year.

Come September, the reality may hit that prospects for sweeping U.S. tax cuts, one of President Donald Trump's biggest election promises and the basis of a surge in business confidence since he won the White House, have stalled.

If the stock market gets a chill, the Fed may no longer be able to rely on an argument regularly touted by New York Fed Chief William Dudley that looser financial conditions justify the case for tighter monetary policy.

But the weak inflation trend is not confined to the United States, Europe and, of course Japan. With few exceptions, national statistics show inflation remains low just about everywhere.

Physical differentials -- the price gap between individual grades of crude and widely traded markers like Brent or West Texas Intermediate -- have strengthened over the last two weeks, according to data compiled by Bloomberg. That’s happening even for barrels due to be shipped in late September and October, typically a period of weaker demand due to seasonal refinery maintenance.

"The improvement seen in the physical crude market is persisting beyond the usual summer demand season," said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd.

U.S.

  • Steve Bannon Out as White House Chief Strategist (NBC News)  Steve Bannon, the embattled White House chief strategist, is leaving President Donald Trump’s administration, the White House announced Friday.  Bannon has had a rocky tenure in the West Wing, where he clashed with many of Trump’s other top aides, including the president’s son-in-law Jared Kushner and National Security Adviser, H.R. McMaster.  White House press secretary Sarah Huckabee Sanders said in a brief statement to reporters:  

“White House Chief of Staff John Kelly and Steve Bannon have mutually agreed today would be Steve's last day.  We are grateful for his service and wish him the best."  

  • What Happens When Refugees Come to the United States (NBER)  Are refugees a burden on the taxpayer? New evidence suggests that, with a long enough perspective, the answer is no. William N. Evans and Daniel Fitzgerald, in The Economic and Social Outcomes of Refugees in the United States: Evidence from the ACS (NBER Working Paper No. 23498), find that over their first 20 years in the United States, refugees who arrived as adults aged 18-45 contributed more in taxes than they received in relocation benefits and other public assistance. They also find that the younger the refugees were when they resettled in America, the more likely they were to catch up with their native-born peers educationally and economically.

  • Women Charge Past Men in U.S. Job Market as Economy Lumbers On (Bloomberg)  Women are returning to the U.S. labor force in greater numbers this year, helping arrest an ugly decline in the so-called participation rate. Just how much additional support they can lend the economy over the longer term depends on their continued involvement.  The share of 25- to 54-year-old women either employed or actively looking for a job rose to a seven-year high in July, while the rate among prime-age men merely ticked up for the first time since January, according to Bureau of Labor Statistics data released last week. The 0.3 percentage point increase for females narrowed the gap between the two groups to 13.2 points, the lowest in records to 1948.  For comprehensive analysis of U.S. employment, see July 2017 BLS Jobs Situation: Interesting This Month.

UK

  • No Holiday Revenge for EU as Brexit Talks Are Delayed (Bloomberg)  When European Union officials found themselves forced to work on a public holiday this week after the British government published an important Brexit document, they may have been tempted to exact a spot of revenge.

Instead, the EU decided to accept the U.K.’s request to delay the start of the next round of Brexit negotiations to enable British officials -- 98 of which attended the Brussels talks in July -- to put their feet up on Britain’s Aug. 28 “summer bank holiday,” according to two people familiar with the plans.

Russia

  • Publics Worldwide Unfavorable Toward Putin, Russia (Pew Research Center)  Around the world, few people trust Russian President Vladimir Putin to do the right thing when it comes to international affairs. A global median of roughly one-in-four (26%) say they have confidence in the Russian leader. Doubts about Putin’s handling of foreign policy, however, do not necessarily coincide with perceptions of Russia as a security risk.  Few see Russian power and influence as a major threat.

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

  • What Comes of Solar Power When the Sun's Eclipsed (Bloomberg Businessweek)   The last time a total eclipse cast a shadow across the entirety of the U.S., from West Coast to East, was 99 years ago. Back then, the modern power grid was just getting started, and harnessing the sun’s energy on a widespread scale was little more than a notion in the minds of scientists. On Aug. 21, when the moon will completely obscure the sun across a swath of the U.S., the rare daytime darkness will affect a real -- though still small -- segment of the energy supply.

  • Record Low Volatility (The Daily Shot)  Up to last week the number of days with market declines of 1% or more was at record lows. Will the trend change going forward?

  • Neo-Nazis Expose the Internet's Big Weakness (Bloomberg)  An obscure internet executive’s decision to shut down a neo-Nazi website has rightly sparked a debate about how to govern the global computer network. On a technical level, though, it also demonstrates how vulnerable this supposedly resilient mode of communication has become.  In fact the supposedly distributed communications system has become far too centralized and therefore susceptible to severe censorship.

The Daily Stormer, which spreads neo-Nazi propaganda using cartoon frogs and anime avatars, was far from the most beloved page on the web. The site had already relocated to a Russian domain after multiple U.S. registrars canceled its name registration. Then Matthew Prince, CEO of content network provider Cloudflare, delivered the decisive blow, explaining in a company-wide email that "the people behind the Daily Stormer are assholes and I’d had enough.”

Cloudflare was capable of shutting down The Daily Stormer thanks to the critical role the company plays in our internet infrastructure. 

  • The Growing List of Money Managers Cutting Their Exposure to Junk Bonds (Bloomberg)  Investors overseeing about $1.1 trillion have been cutting exposure to the world’s riskiest corporate debt as rates grind too low to compensate for potential risks.  Even after a selloff last week amid rising tensions between the U.S. and North Korea, a Bloomberg Barclays index of global junk bonds still yields 5.3 percent, 100 basis points below the average for the past five years.


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