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What We Read Today 01 December 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 Monday, Wednesday, and Friday in the late afternoon New York time. For early morning review of headlines see "The Early Bird" published Monday through Friday in the early am at GEI News (membership not required for access to "The Early Bird".).


Most of this column ("What We Read Today") is available only to GEI members.

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Topics today include:

  • ​Goldman Warns That Market Valuations Are at Their Highest Since 1900

  • The True Aryans: Who Were They Really and How Were Their Origins Corrupted?

  • Stiglitz Says Bitcoin 'Ought to Be Outlawed'

  • Which mutual funds are YTD leaders?

  • Are US Equities Destined For Negative Returns In The Next 7 Years?

  • America sold nearly $42B in weapons to foreign countries in 2017

  • El Niño Might Speed Up Climate Change

  • Flynn enters guilty plea, will cooperate with Mueller

  • This is how long it takes to sell a house

  • Last-minute provision in Senate tax bill could 'devastate' renewable energy

  • 2020 and the Fight Within the Democratic Party

  • Confidence in the Economy Rises Over Thanksgiving Week

  • Someone Should Explain To The Germans And Dutch How The Euro Works In Their Favor

  • US official: Niger OKs armed drones for takeoff from its capital

  • India and the Iranian-Saudi Divide

  • China Export Outlook Remains Strong

  • And More

Articles about events, conflicts and disease around the world


Of that total, $32.02 billion came through Foreign Military Sales, $6.04 billion was through Foreign Military Financing and $3.87 billion in cases funded through other Defense Department authorities, according to a Wednesday announcement from the State Department.

Regionally, sales made through FMS and FMF totaled roughly $22 billion for Central Asia/Near East; $7.96 billion to the Indo-Pacific; $7.3 billion to Europe; $641.6 million to the Western Hemisphere; and $248.6 million to Africa.

By certain measures, the most recent El Niño, which held sway in 2015 and 2016, was one of the three strongest on record, along with episodes in 1982–1983 and 1997–1998. Although its impacts on land were not clearly stronger than those of the other events, it appears it was the major culprit for a record increase in CO2 during its reign. “CO2 emissions from fossil fuels and industry did not really change from 2014 to 2016,” says climate scientist Pierre Friedlingstein at the University of Exeter in England, and an author of the 2017 carbon budget report released by the Global Carbon Project in November. So the dramatic increase, he says, must be due to how land and sea responded to El Niño.


  • Flynn enters guilty plea, will cooperate with Mueller (The Hill)  President Trump’s short-lived first national security adviser, Michael Flynn, on Friday morning pleaded guilty to lying to FBI agents in one of the most dramatic developments yet in special counsel Robert Mueller’s investigation into Russian interference in the U.S. election.

As part of the plea agreement, Flynn has agreed to cooperate fully with Mueller's investigation. For the time being, at least, he will remain free — although the charge he faces carries a maximum penalty of five years in prison.

Flynn is the first official to hold a formal office in the Trump administration to be brought down by the Mueller probe, which is examining potential ties between the campaign and Moscow during the 2016 campaign.

  • A new provision in the tax cut bill that is headed for a vote in the Senate could undercut the financing mechanism that has been a major driver in the rapid growth of renewable energy projects.

  • Four trade organizations representing a broad swath of the renewable energy industry sent an urgent letter to members of the Senate, asking them to reconsider the Base Erosion Anti-Abuse Tax (BEAT) provision, which they say could have a “devastating” effect on renewable energy projects.

  • The BEAT provision is designed to make it harder for corporations to dodge taxes, but it would also sweep up tax credits — such as the renewable energy Production Tax Credit (PTC) for wind power projects and the Investment Tax Credit (ITC) for solar projects — making the credits more difficult to monetize.

  • 2020 and the Fight Within the Democratic Party (The Real News Network)  Hat tip to Roger Erickson.  Nina Turner talks with Paul Jay about the struggle within the Democratic Party in the lead-up to the 2020 elections.  Econintersect:  This segment makes it look like the Democrats are trying to "out-Trump" the GOP:

  • Confidence in the Economy Rises Over Thanksgiving Week (Gallup)  Americans' confidence in the economy spiked last week, with Gallup's U.S. Economic Confidence Index averaging +11 for the week ending Nov. 26 -- an increase of seven points from the previous reading of +4.


  • Someone Should Explain To The Germans And Dutch How The Euro Works In Their Favor (Seeking Alpha)  Hat tip to Roger Erickson.  The euro and the ECB aren't all that popular in the center countries like Germany and the Netherlands because it is seen as a mechanism that obliges them to bail out economically weaker countries.  But this is a completely false perception of disadvantage, in spite of the repeated bailouts of euro prephery countries; the arrangement creates prodigious trade surpluses for Germany and the Netherlands (see graphics below).  Summary:

  • The workings of the European Monetary Union are still not well understood by many citizens, especially in countries which are the main beneficiaries of the euro.

  • The system is rife with dysfunctions that are only papered over by economic tailwinds and vigorous ECB action.

  • But fundamentally, not much has changed and the system is very fragile to adverse economic shocks.

  • The first of these is a product of the euro itself and is very predictable, a tightening ECB because policy is too loose for the central countries.



  • US official: Niger OKs armed drones for takeoff from its capital (Defense News)  A U.S. official says the Pentagon has received permission from the government of Niger to begin flying armed drones from the capital, Niamey.  The arrangement reflects an expanding U.S. military campaign against extremists in Africa and is based on a recently signed government-to-government memorandum of understanding.

The U.S. official says armed drone flights could begin as early as next week or at least by the end of December. The arrangement limits the drones to defensive missions. The official was not authorized to discuss the matter publicly and so spoke on condition of anonymity.


  • India and the Iranian-Saudi Divide (Foreign Affairs)  For decades, India’s commitment to nonalignment has granted it close relationships with states that are at odds with one another. During the Cold War, India refused to ally with either the Western capitalist countries or the Soviet-led Communist bloc, making use of its postcolonial legacy to nonviolently push for cooperation among the countries of the so-called Third World. Today, in the Middle East, India has successfully maintained ties with Iran, Israel, and Saudi Arabia - three countries that are locked in competition.  

Given that the rivalry among those three states could eventually lead to war—endangering India’s interests in the Middle East, where it sources most of its energy and where millions of Indian emigrants live—New Delhi must carefully navigate the growing divide in the Persian Gulf. If it does so successfully, it can avoid getting entangled in regional tensions and consolidate its position as a key player in the Middle East.


  • Export Outlook Remains Strong (The Daily Shot)  China’s trade partners’ economic activity keeps improving (white line), suggesting that export orders should remain robust.

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

  • Returns likely to be lower across all assets in medium term

  • Risk scenario sees inflation jump that ushers ‘fast pain’

  • The True Aryans: Who Were They Really and How Were Their Origins Corrupted? (Ancient Origins)  Today, the word ‘Aryan’ is loaded with all sorts of negative connotation, largely due to Nazi ideology, Aryans have become associated with racial hierarchies that consider white, blonde, blue-eyed peoples superior. This served as a very useful propaganda tool for couching racist sentiments in seeming historic realities. However, it is not factual.  Only in the late 19th early 20th centuries did Aryan become equated with Germanic or Nordic peoples. Prior to this corruption, Aryan referred to an archaic language whose speakers are thought to have spread and influenced languages from Central Asia throughout the Indian subcontinent.

Starting in approximately 1500 BC, nomadic cattle herders from Central Asia began to cross the Hindu Kush Mountains and to settle in the verdant Indus Valley. These nomads were, of course, the Aryans. Popular myth has it that the Aryans were unstoppable invaders, proto-Mongols, who took over the Indian subcontinent and led the Indus Valley Civilization to collapse. There is not much evidence to support this theory. Rather, it seems that over time the Aryans filled the void left by the collapse of the Indus Valley Civilization.

  • Which mutual funds are YTD leaders? (Financial Planning)  Of the 20 top mutual funds with at least $500 million in assets, 12 were focused on foreign assets, with 10 even more narrowly focused on emerging markets. Of the other eight funds, six were focused on tech.  Here are the top 5 (3 YRS are average annual returns):

  1. Matthews China Investor (MCHFX)  YTD: 57.6%; 3 YRS: 14.2%

  2. Fidelity Select Technology (FSPTX)  YTD: 56.5%; 3 YRS: 22.9%

  3. Baille Gifford Emerging Markets (BGEDX)  YTD: 54.1%; 3 YRS: NA

  4. Fidelity China Region (FHKCX)  YTD: 51.4%; 3 YRS: 11.3%

  5. Oppenheimer Global Opportunities (OPGIX)  YTD: 51.1%; 3 YRS: 22.8%

  • US Equities Destined For Negative Returns In The Next 7 Years? (ValueWalk)  With the S&P 500 up 260% since March 2009, investors have been well rewarded for holding US stocks in the recent past.  However, the prime time of US stocks has come to an end. In a white paper titled The S&P 500: Just Say No, investment research firm GMO projected that returns on US equities would be -3.9% over the next seven years.  See first graphic below.  In their Q3 2017 outlook, Goldman Sachs found that valuations at current levels led to equity returns being single digits or negative over the following decade 99% of the time.  See second graphic below.  This article suggests that the best investments will be in emerging markets and commodities.

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