Celebrating Like It’s 1999 and 2007
July 31, 2019
“When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist.”
“A well-designed welfare state can actually encourage people to take chances with their jobs and be more, not less, open to changes.”
– Ha-Joon Chang (Andrew Yang before Andrew Yang)
Borrowing A Calm Before The Storm
In 2018 Jamie Dimon, CEO of the largest bank in the US, JPMorgan Chase, predicted a rise in interest rates, saying the yield on 10-year US Treasury bonds — the global benchmark for longer-term rates — could go above 5 percent. Yields on those bonds fluctuated between 1.37 percent in 2011 and 3.24 percent in November 2018. Eight months later the yield is hovering around 2 percent.
Most banks aren’t paying near that much interest to their depositors, but 30-year mortgage rates continue to be a fraction of long-run averages, and companies are paying very little to borrow money. Policymakers see low rates for borrowers as stimulating growth. It’s true that a decade of cheap money has been a boon for borrowers and helped the economy along; it’s also wreaked havoc on individual savings accounts and employee pension funds, and upended long-standing assumptions about managing money.
Anne Walsh, the chief investment officer of fixed income at Guggenheim Partners, says the longevity of low rates, and little likelihood of that changing anytime soon, has resulted in “a paradigm shift of epic proportion for investors.” In their quest to find more return, investors are tending to take on more risk. The fear is this could lead to the formation of bubbles and eventually destabilize the financial system.
- The Invention of Money: In three centuries, the heresies of two bankers became the basis of our modern economy. (New Yorker, $)
- Warren Buffett: This is the No. 1 mistake parents make when teaching kids about money (CNBC)
- Why you are getting 0% back on your money and what to do about it (Yahoo Finance)
- Investors Are Usually Wrong. I’m One of Them. (NYT, $)
- Why We Should Fear Easy Money: Cutting interest rates now could set the stage for a collapse in the financial markets. (NYT, $)
Deadly Defense of Land
- For the first time since the independent watchdog Global Witness began keeping track in 2012, the Philippines has outpaced Brazil to become the world’s deadliest country for people defending their land and the environment against miners, loggers, farmers, poachers and other extractive industries.
- The latest global total was 164 deaths, which is more than three defenders killed every week. The number of deaths is actually down from 201 in 2017; the decrease is believed to be partially due to efforts to raise international awareness by indigenous groups, NGOs, the UN and the media. (Guardian)
Ulaanbaatar’s Cold Hard Reality
- The coldest capital city in the world is Ulaanbaatar, Mongolia, where temperatures can drop to minus 20 degrees Fahrenheit at night. The population has tripled in the last three decades and infrastructure hasn’t kept up; people off the electric grid burn raw coal to cook and stay warm.
- Then there are emissions from the city’s coal-fired power plants, motor vehicle exhaust from hundreds of thousands of cars, and Ulaanbaatar’s location at the bottom of a valley that keeps pollutants near the ground. It’s a recipe for death by toxic air. In March officials banned household burning of raw coal, but will that fix the problem? (NPR)
Down And Drought
- The tiny Central American state of El Salvador is one of the most murderous in the world. Relentless bloodshed, gang violence, chronic unemployment and poverty have driven tens of thousands to migrate. It is also the most densely populated state with the region’s lowest water reserves, which are depleting rapidly thanks to the climate crisis, pollution and unchecked commercial exploitation.
- Most rainwater is lost due to widespread deforestation and eroded river basins. Nejapa is a small town not far from the capital city of San Salvador. Its biggest industrial water guzzlers and polluters are the local Coca-Cola bottling company and sugar cane plantations, corporate interests that ignore water rationing orders.
- Meanwhile, a lush forest known as the lungs of Nejapa is being chopped down to make way for gated housing developments with private underground wells. (Guardian)
Additional World News
- Prison Riot In Northern Brazil Leaves At Least 57 Inmates Dead (NPR)
- Afghan government and Nato killing more civilians than the Taliban: UN figures for first half of 2019 blame 717 deaths on pro-Kabul forces and 531 on militants (The Guardian)
- Johnson refuses to give details on his no-deal Brexit plans for farming: PM evasive during Wales visit after being told to ‘stop playing Russian roulette’ with sector (The Guardian)
Dollars Dollars Everywhere But Not A Cent To Spend
- In 1944 730 delegates from all 44 Allied nations traveled to the Mount Washington Hotel, a secluded resort in the mountains of Bretton Woods, New Hampshire, to hammer out a new financial system for the global economy. Out of the Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, came the World Bank, the International Monetary Fund and, most importantly, a new role for the US dollar: “international reserve currency.”
- The dollar became the main currency the world uses to trade and save. For this privilege the US pledged to fix the value of the dollar to gold at $35 an ounce. Other countries then fixed their exchange rate to the dollar, making it the central spoke of the system. This special role for the dollar has long made other countries jealous.
- In the 1960s, France’s minister of finance coined a special term to show their contempt for the dollar: “exorbitant privilege.” The original arrangement set at Bretton Woods is long gone, but the dollar remains the international reserve currency, giving the US government power over the financial system. That has allowed the government to sanction adversaries, like Iran and Russia. No wonder Vladimir Putin has been working to end Russia’s reliance on US dollars. (NPR)
- The American System Is Already Failing (NYMag, $)
Additional USA News
- 100 years ago, white mobs across the country attacked black people. And they fought back (CNN)
- Trump re-election campaign raises $460,000 from selling plastic straws: ‘Liberal paper straws don’t work,’ blurb reads in hopes of riling those who are keen to protect the environment from plastic (The Guardian)
I Think, Therefore I Walked
- Neuroscientist Shane O’Mara knows from cold, hard data that walking makes us healthier, happier and brainier. In his new book In Praise of Walking he illustrates how regular walking unlocks the cognitive powers of the brain like nothing else, and why people should exchange their gym kit for a pair of comfy shoes and get strolling.
- Neuroscience has identified overlaps between movement and mental and cognitive health. O’Mara explains: “It turns out that the brain systems that support learning, memory and cognition are the same ones that are very badly affected by stress and depression. And by a quirk of evolution, these brain systems also support functions such as cognitive mapping,” by which he means our internal GPS system.
- O’Mara personally witnessed the brain-healing effects of walking when his partner was recovering from an acute brain injury. (Guardian)
Additional Reads
- Here’s Why We’ve Failed to Figure Out Why Infrastructure Costs So Much (NYMag, $)
- What It’s Like to Join the Freemasons: “The only competition in Masonry is to see who can be the better person.” (The Atlantic)
- Woman Charged As Hacker In Capital One Data Breach Exposing Over 100 Million Customers (NPR)
- Why indoor air quality matters to our bodies and our brains: Improving indoor air quality may boost cognitive abilities as well as health. So how should buildings be designed to make us more productive? (BBC)
- How the sound in your office affects your mood: The acoustic properties of our homes, offices and public spaces can have a major impact on how comfortable we find them and may even affect the way we behave. (BBC)
- Study Asks If War Makes A Person More … Or Less … Religious (NPR)
- Author of Christian relationship guide says he has lost his faith: Joshua Harris says his marriage is over and apologises to LGBT+ people for promoting bigotry (The Guardian)
- Let us all praise loneliness: Now that I have kids, not to mention students and social media, I miss solitude. But I also miss being lonely (Salon)
- What songs make you work out harder? (BBC)
LAST MORSELS
“Once poor people are persuaded that their poverty is their own fault, that whoever has made a lot of money must deserve it and that they too could become rich if they tried hard enough, life becomes easier for the rich.” – Ha-Joon Chang