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What We Read Today 15 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

  • This Electric Truck Will Probably Beat Tesla’s to Market

  • Thor Wants To Throw Down An Electric Hammer On Tesla

  • Vanguard to Launch Blockchain Platform

  • Crypto Currencies Webinar, Part 1

  • Why David Tice Says Stocks Could Fall 50%

  • Little Upside for High Junk Bonds

  • The DSGE Model Quarrel (Again)

  • Key to Trigger Market ‘Inflection' Is a 1% Real Fed Rate, JPMorgan Says

  • Eight planets found orbiting distant star, NASA says

  • WH hits Obama on economy: At least we agree it’s better under Trump

  • Paul Ryan And Top Republican Lawmakers Could Reap Personal Windfall From New Real Estate Tax Breaks

  • Janet Yellen: The Fed may be tightening, but quantitative easing's day will come again

  • Some Republicans are reconsidering the tax bill's attack on renewable energy

  • Trump’s other wall: Private immigration jails planned near sanctuary cities

  • Trump's approval rating is sinking to unthinkable levels in places you'd never expect

  • Alabama is a precursor to the black vote’s value in 2018 and 2020

  • These states are running out of CHIP funding

  • Here's the new Fed dot plot

  • Tim Rowland On Bears Ears, Vigilance and Overuse

  • 'Congratulations': EU launches next phase of Brexit but warns of tough talks ahead

  • Israel Draws a Redline in Syria

  • France cautious over U.S. 'evidence' on Iran weaponry in Yemen

  • NATO expresses 'serious concerns' Russian missile system violates arms treaty

  • The Kremlin’s latest crackdown on independent media

  • North Korea Vows 'Merciless Self-Defensive' Actions If US Imposes Naval Blockade

  • Made in China 2025 — Not to Worry!

  • And More

Articles about events, conflicts and disease around the world

Global

  • Eight planets found orbiting distant star, NASA says (CNN)  For the first time, eight planets have been found orbiting a distant star, Kepler-90, 2,545 light-years from Earth in the Draco constellation, NASA announced Thursday. It is the first star known to support as many planets as are orbiting our own sun, and researchers believe that this is the first of many to come.

Click for larger image.

U.S.

  • WH hits Obama on economy: At least we agree it’s better under Trump (The Hill)  White House press secretary Sarah Huckabee Sanders on Sunday took aim at former President Obama after he touted his administration's economic accomplishments.  The administration's spokeswoman accused Obama of trying to take "credit" for the financial success President Trump has ushered in since taking office.

sarah.sanders.obama.economy

  • Paul Ryan And Top Republican Lawmakers Could Reap Personal Windfall From New Real Estate Tax Breaks (International Business Times)  As Congress races to finalize a landmark $1.4 trillion tax bill, key Republicans legislators directly overseeing the initiative could reap a personal windfall from provisions designed to reduce levies on so-called “pass-through” income, according to federal records reviewed by International Business Times. Those lawmakers — including U.S. House Speaker Paul Ryan — together have tens of millions of dollars invested in scores of real-estate related pass-through corporations and partnerships, collectively earning them millions of dollars of annual income that could be partially exempted from taxes, depending on how the final legislation is structured.

  • Janet Yellen: The Fed may be tightening, but quantitative easing's day will come again (City A.M.)  The Federal Reserve may be in the middle of an historic reduction of its $4.5 trillion (£3.4 trillion) balance sheet, but quantitative easing’s day will come again, according to the central bank’s boss, Janet Yellen.  Speaking in October in Washington, Yellen said the federal funds rate, the key determinant of interest rates throughout the US economy, is unlikely to rise back to its previous levels of more than 4%.  Instead, the neutral rate at which Fed monetary policy is judged to be neither expansionary or contractionary is around 2.75%.

  • Some Republicans are reconsidering the tax bill's attack on renewable energy (Vox)  Lawmakers from states where wind and solar energy are booming want to preserve tax breaks for these industries.  The Senate version of the Republican tax bill undermines investment in wind and solar power, which now generate 7% of our electricity, while preserving billions in tax subsidies for fossil energy.

  • Trump’s other wall: Private immigration jails planned near sanctuary cities (The Hill)  While much attention has been paid to the debate over President Trump’s proposed border wall, it’s not the only anti-immigrant wall his administration wants to build.

In October, Immigration and Customs Enforcement (ICE) took steps to identify sites for new or expanded privately run immigrant detention centers in St. Paul, Chicago, Detroit, Salt Lake City, and Texas. The process took place with little fanfare and no public announcement from the Trump administration. But this expensive and dangerous expansion of privatized detention poses a grave threat to immigrants and communities across the country.

Trump's favorability rating among Fox News viewers was 58% — a substantial drop from the outlet's June and October surveys, which found Trump's favorability among Fox News viewers to be 90% and 74%, respectively.

 just 48% of Alabama voters approved of Trump. Meanwhile, 48% of Alabama voters disapproved of the job the president is doing.

60% of Iowans disapprove of the job Trump is doing. Just 35% approve, a sharp drop from his 43% approval in the poll's July edition.

  • Alabama is a precursor to the black vote’s value in 2018 and 2020 (Brookings)  High black voter turnout in the majority-black cities of Birmingham, Montgomery and Mobile, particularly among black women, was the difference in Democrat Doug Jones’ historic upset over controversial Republican Roy Moore in this past Tuesday’s special election for the Alabama Senate seat vacated by Attorney General Jeff Sessions.

All but 4 percent of African-Americans voted for Jones, and blacks accounted for roughly 30 percent of the Alabama electorate, according to a CNN exit poll. And 98 percent of black women (17 percent of the electorate) cast ballots for Jones. Certainly, Jones needed each vote—but astonishingly, if Moore courted just a slither of the black electorate, he would have won by a landslide.

Click for larger image.
chip.ends.map

We live in an age when a considerable duplication of services could be eliminated by merging the Congressional Record with the National Sex Offender Registry.

EU

  • 'Congratulations': EU launches next phase of Brexit but warns of tough talks ahead (Reuters)  The European Union agreed on Friday to move Brexit talks onto trade and a transition pact but some leaders cautioned that the final year of divorce negotiations before Britain’s exit could be fraught with peril.  EU leaders agreed in just 10 minutes that “sufficient progress” had been made after a deal on respective citizens’ rights, the Irish border and Britain’s outstanding payments, giving negotiators a mandate to move on to the main phase of talks.

Israel

“We will not allow [Iran] to entrench itself militarily in Syria, as it seeks to do, for the express purpose of eradicating our state.”

Iran

  • France cautious over U.S. 'evidence' on Iran weaponry in Yemen (Reuters)  France reacted cautiously on Friday to U.S. evidence which allegedly proved Iran supplied weapons to Houthi militia in Yemen, saying it was still studying information at its disposal and the United Nations had yet to draw any conclusions.  The United States on Thursday presented for the first time pieces of what it said were Iranian weapons supplied to the Houthis, describing it as conclusive evidence that Tehran was violating U.N. resolutions.

Click for larger image.
iran.missile.nikki.haley

Russia

“Allies have identified a Russian missile system that raises serious concerns.  NATO urges Russia to address these concerns in a substantial and transparent way, and actively engage in a technical dialogue with the United States.”

  • The Kremlin’s latest crackdown on independent media (Foreign Affairs)  Russian President Vladimir Putin signed into law legislation allowing the Russian government to designate media organizations that receive funding from abroad as “foreign agents.” Russia’s Justice Ministry, the agency tasked with identifying the specific media outlets to be targeted, has already notified Voice of America (VOA) and Radio Free/Radio Liberty (RFE/RL), both funded by the U.S. government, that they must register as foreign agents. The new law, however, is not limited to government-funded media: any organization receiving foreign funding or based outside of Russia could fall under the “foreign agent” classification. The New York Times, CNN, and European outlets could be targeted in the near future. The law also grants the Russian authorities an expansive mandate to block online content, including social media websites, whose activities are deemed “undesirable” or “extremist.”

Russia has framed the law as reciprocal retaliation for the U.S. Department of Justice’s requirement that RT America (formerly Russia Today), a Kremlin-funded and controlled TV channel and website operating in the United States, register under the Foreign Agents Registration Act (FARA). (The requirement came after RT was singled out in a January 2017 unclassified U.S. intelligence report on Russian interference as the “Kremlin’s principal international propaganda outlet.”) Yet this narrative is blatantly false. In reality, the law is part of a long-standing Kremlin project to muzzle independent media and civil society.

North Korea

  • North Korea Vows 'Merciless Self-Defensive' Actions If US Imposes Naval Blockade (International Business Times)  North Korea said on Thursday that any attempts by the United States government to impose a naval blockade on their country will be considered an "act of war" by North Korean leader Kim Jong Un.  Korean Central News Agency reported on Friday, citing a foreign ministry spokesperson, according to CBC:

"Should the United States and its followers try to enforce the naval blockade against our country, we will see it as an act of war and respond with merciless self-defensive counter-measures, as we have warned repeatedly." 

China

  • Made in China 2025 — Not to Worry! (Peter T. Treadway)  This article argues that there is little for the U.S. to worry about from Chinese competition provided we don't follow the "Bannon-Trump prescription":

The US will retain its top spot, or at least prolong its dominance, if it retains its traditional openness as argued above. Implementation of the Trump/Bannon anti-immigrant, closed-market policies will ensure that China overtakes the US in short order. And don’t think embargoing tech with China will significantly slow down the Chinese colossus. The example of North Korea should not be overlooked. North Korea, a small and impoverished virtual pariah with a bizarre economic system, has been able to master the technology of ballistic missiles. Does anyone seriously believe that slamming the technology door on a country like China is going to have any serious long run effects?

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

  • This Electric Truck Will Probably Beat Tesla’s to Market (Bloomberg)   Thor Trucks’ custom models, due out in 2019, are meant for short hauls.  The first model, ET1, uses a beach-ball-size electric motor and a couple of large battery packs to carry as much as 80,000 pounds of cargo, the industry standard for the highest class of truck. When it starts shipping in 2019, the ET1 will have a $150,000 starting price tag and a 300-mile range, meaning it’ll compete with medium-duty delivery trucks.  [Video below was Econintersect Video of the Day 14 December:  Thor Wants To Throw Down An Electric Hammer On Tesla.]

  • Vanguard to Launch Blockchain Platform (ThinkAdvisor)  Vanguard is launching a new platform that uses blockchain technology to simplify the process of sharing data with index providers. The platform, which it expects to introduce early next year, has the potential to reduce errors and increase cost savings and returns for investors.  Under the current system, Vanguard constantly receives updated files from index providers about corporate actions throughout the day, which are then manually processed. The data transmission usually involves multiple parties and distribution channels. The new platform will allow index data to move instantly between index providers and market participants through one decentralized database.  For more about blockchain see Crypto Currencies Webinar, Part 1.

  • Why David Tice Says Stocks Could Fall 50% (Investopedia)  Famed bearish investor David Tice gives 50% odds for a 25% rally, but 25% odds for a 50% correction.  A word of caution:

Tice predicted stock market declines of between 30% and 50% in 2012 and 2014, per CNBC, dramatic pullbacks that never came close to materializing. Instead, from their simultaneous bottoms on March 9, 2009, the S&P 500 Index (SPX), the Dow Jones Industrial Average (DJIA), and the Nasdaq Composite Index (IXIC) have advanced by 292%, 274% and 440%, respectively, through the open on December 11. 

  • The DSGE Model Quarrel (Again) (Naked Capitalism)  This is a great discussion of what is wrong with DSGE models (Dynamic Stochastic General Equilibrium models) along side what their defenders have to say, not in the main article but also in the comment thread following.

  • Key to Trigger Market ‘Inflection' Is a 1% Real Fed Rate, JPMorgan Says (Bloomberg)  This year’s boom in financial markets has taken things to "late cycle," but the cycle has a little ways to go yet, according to JPMorgan Chase & Co.  The key trigger for an "inflection point in risky markets and volatility" will be when cash rates adjusted for inflation are at 1%, JPMorgan strategists led by John Normand and Dubravko Lakos-Bujas wrote in a Dec. 8 note. Currently, the rate is about negative 0.5%, measuring the upper band of the Federal Reserve’s policy target minus the consumer-price index excluding food and energy.


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