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What We Read Today 08 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".).

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Topics today include:‚Äč

  • Emerging Market Currencies are Overvalued

  • Democrats Want to Change the Democratic Party. They Just Disagree on How.

  • Pew poll: Trump's approval rating hits new low

  • Stark Partisan Divisions Over Russia Probe, Including Its Importance to the Nation

  • Has Anyone Noticed That Trump's Economy Keeps Beating Expectations?

  • The Environmental Scandal in Scott Pruitt’s Backyard

  • Why America's drinking water crisis goes beyond Flint

  • Far away from any witnesses, my small town is being poisoned by fracking waste

  • Why Trump’s evangelical supporters welcome his move on Jerusalem

  • Americans were duped by bad actors in rooftop solar industry

  • North Korea says nuclear war inevitable because of military drills by US and South Korea

  • Double-clicking on the Chinese consumer

  • Shenzhen economy closing in on Hong Kong under revised calculation methods

  • Shenzhen is China’s most innovative city, says HSBC

  • It’s Time to Rewrite the Rules of Our Economy

  • Association of Warfarin Use With Lower Overall Cancer Incidence Among Patients Older Than 50 Years

  • How Expensive Are Stocks?

  • Diversification offers best value in 20 years

  • 22 Perfect Maps Of Places That Don't Actually Exist:  British North America (if the American Revolution had never happened).

  • And More

Articles about events, conflicts and disease around the world

Global

U.S.

  • Democrats Want to Change the Democratic Party. They Just Disagree on How. (Politico)  Ahead of a post-election report from a commission meant to foster party unity, Politico found a lot of disagreement and only some pockets of consensus.

  • Conservatives ramp up attacks on Mueller (The Hill)  Conservative efforts to discredit the Justice Department special counsel are intensifying as Robert Mueller’s investigation into Russian election meddling moves steadily closer to the White House.  Republicans on Capitol Hill are increasingly frustrated by what they view as a partisan exercise that’s rife with conflicts of interest. A half-dozen GOP lawmakers held a press conference on Wednesday to demand new investigations into Mueller’s team.

A conservative watchdog group has filed a lawsuit to pry loose information about special counsel investigators, and earlier this week blasted out emails obtained through a Freedom of Information Act request that the group claimed indicated prosecutorial bias.

Conservative media amplified the growing calls for Mueller to be fired, with Fox News going wall-to-wall with demands that the probe be shut down.

  • Has Anyone Noticed That Trump's Economy Keeps Beating Expectations? (Investors' Business Daily)  Normally, it takes months for a new administration's economic policies to take effect. But there was a sharp surge in business and consumer optimism, and the stock market has been on an upward trajectory, since the day Trump got elected. The IBD/TIPP Economic Optimism Index has been in positive territory for 15 months straight. What's more, Trump was able to take immediate executive action on regulations, which sent a signal to businesses, markets and consumers alike.  Now it appears that overall economic growth for the entire year could be, you guessed it, "unexpectedly" high.

  • The Environmental Scandal in Scott Pruitt’s Backyard (Politico)  It’s one of the dirtiest places in America. Former residents of Tar Creek, Oklahoma, want to know why Trump’s EPA chief didn’t prosecute allegations of wrongdoing during a federal buyout program.  Here is an example of environmental abuse of epic proportions - and apparently blatant corruption as well.  See also next article.

  • Why America's drinking water crisis goes beyond Flint (BBC News)  (Repeated from this morning's Early Bird.)  While Flint made headlines two years ago when 12 people died due to high lead levels in the city's water, more than 1,000 water systems across the US have drinking water that fails safety standards for lead.  Experts say the U.S. has a major national water contamination crisis.  See also Far away from any witnesses, my small town is being poisoned by fracking waste (The Guardian)

lead.on.water

The unfortunate reality of government action is that regulators are slow to react to new and emerging technologies. As rooftop solar has grown dramatically, so have the deceptive schemes and bad actors shilling for it. Federal and state regulatory and consumer protection agencies should consider how they can better protect consumers from bad actors in the industry. Simply put, just because we support using rooftop solar to reduce greenhouse gas production, doesn’t mean we should turn a blind-eye to shady business practices that hurt real Americans. 

North Korea

The foreign ministry said the military exercises involving hundreds of South Korean and US warplanes made the outbreak of war an “established fact.” It also blamed high-ranking US officials, including CIA Director Mike Pompeo, for “bellicose remarks.”

Two US B-1B heavy bombers joined large-scale combat drills over South Korea on Thursday.

The annual US-South Korean “Vigilant Ace” exercises feature 230 aircraft, including some of the most advanced US stealth warplanes, and come a week after North Korea tested its most powerful intercontinental ballistic missile (ICBM) to date, which it says can reach all of the United States.

China

  • Double-clicking on the Chinese consumer (McKinsey)  A rising post-90s generation is emerging as a strong engine of consumption, in one of four important new trends in the Chinese consumer landscape.

If you’re looking for evidence that Chinese consumers are confident, look no further than the one-day online-sales phenomenon known as Singles Day, which falls every year on November 11. Singles Day has morphed from being a day dedicated to lonely singles to becoming the largest e-shopping day globally. With an estimated $25 billion in sales, or over $1 billion in transactions per hour, Singles Day this year easily bested last year’s sales by close to 40 percent, and was larger than Black Friday and Cyber Monday in the United States combined.

In the first three quarters of 2017, the boomtown’s economic output rose 8.8 per cent year on year to 1.54 trillion yuan (US$232.66 billion). While the figure fell short of Hong Kong’s HK$1.94 trillion (US$248.27 billion) for the period – up about 7 per cent in nominal terms from the first nine months of 2016 – the gap between the pair is narrowing.

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

  • It’s Time to Rewrite the Rules of Our Economy (Economics)  Future economic historians may look back wryly at this period when we worshipped the divine right of capital while looking down on our ancestors who believed in the divine right of kings.  Business leaders making decisions to outsource jobs to low-wage countries or to replace workers with machines, or politicians who insist that it is “the market” that makes them unable to require companies to pay a living wage, rely on the defense that they are only following the laws of economics. But the things economists study are not natural phenomena like the laws of motion uncovered by Kepler and Newton.

Here is one of the failed rules of today’s economy: Human labor should be eliminated as a cost whenever possible. This will increase the profits of a business, and richly reward investors. These profits will trickle down to the rest of society.

The evidence is in. This rule doesn’t work. It’s time to rewrite the rules. We need to play the game of business as if people matter.

  • Diversification offers best value in 20 years (Charles Schwab)  With stock markets valued fairly relative to how they perform there is little reason not to be globally diversified. From a diversification perspective, there hasn’t been a better time in 20 years to be globally diversified.  (Econintersect:  A note of caution - correlation is a fickle characteristic.  Just when you think you have the perfect diversification correlations can change almost overnight.)

The trend in correlation among countries has fallen to the lowest levels since the mid-1990s, as you can see in the chart below. Many investors have never seen this low correlation before in their investing lifetimes.


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