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Wednesday, September 19, 2018

It's inevitable

What Happens When the Next Financial Crisis Strikes?
By Allan Sloan for ProPublica

Image result for Crash of 2008It came as a nasty surprise to almost everyone a decade ago when we found ourselves on the cusp of a worldwide financial collapse.

Most business journalists — including me — failed to see the 2008 disaster until it was almost upon us. But these days, predicting meltdowns has become positively trendy. 

With stocks at or near record levels, unemployment low and the economy booming, it’s become conventional journalistic wisdom to predict that evil days lie ahead. And not very far ahead. The recent New York Times editorial, “Inviting the Next Financial Crisis,” is just one example.

But I don’t think that today’s obvious problems will cause tomorrow’s crisis. Why? Because obvious problems usually don’t cause crises. You get a crisis when problems combine in unpredictable and unforeseen ways.

In 2008, complex financial instruments that almost no one understood — based on various pools of shaky loans — inflicted huge losses on giant companies like Bear Stearns, Lehman Brothers and American International Group almost overnight. 

Those institutions didn’t realize their portfolios were toxic until financial sepsis had already set in. Worse, a series of financial relationships among those players and others, intended to reduce risk, ended up accelerating it.

However, there is one clear and present danger to the financial system that almost no one seems to be discussing in public. 

In fact, multiple experts whispered about it to me and said they discuss it behind closed doors but don’t breathe a word elsewhere for fear of becoming the target of a presidential tweetstorm. So I’ll do it, at the risk of being called a peddler of “fake news.” I think the biggest danger of financial problems exploding into a worldwide meltdown involves … Donald Trump.

You Only Count as Dead if It Happens Right Away

For more cartoons by Ted Rall, CLICK HERE.

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Why some people don’t get colds

Fighting the cold virus and other threats, body makes trade-off, says study
Yale University

season 9 ugh GIF by Curb Your EnthusiasmA Yale research team has revealed how cells in different parts of the human airway vary in their response to the common cold virus. Their finding, published in Cell Reports, could help solve the mystery of why some people exposed to the cold virus get ill while others don't, said the researchers.

Rhinovirus is a leading cause of the common cold, asthma attacks, and other respiratory illnesses. 

When the cold virus enters the nose, cells that line the airways, known as epithelial cells, respond and often clear the virus before it can replicate and trigger symptoms. 

But in other cases, individuals exposed to the virus get either mildly or seriously ill. A team of researchers, led by Ellen Foxman, set out to determine why.

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The many faces of Florence

The list of risks from major storms expands.

Image result for manure lagoonsAs Hurricane Florence continues its wet, windy rampage, here's my attempt to gather some of the stray baggage that hurricanes leave us.

Bolstered projections—and populations 

In October 1954, Hurricane Hazel tore through the Caribbean and the Bahamas, killing as many as 1,000, mostly in Haiti. Hazel hit the Carolina coast, flattening beachfront structures from Myrtle Beach, South Carolina, north to the Outer Banks. The storm turned inland, with flooding rains contributing to 95 more deaths in the U.S. Remnants of the storm killed 81 more in the Toronto area, making Hazel a billion-dollar storm in Canada alone (in 2018 dollars.)

Two important differences separate a 1954 killer storm from a killer storm today: First, weather prediction and risk communication were still relatively primitive back then. Today the lifesaving role of both government and TV meteorologists has been key in keeping death tolls low.

But with climate change increasing the frequency and intensity of storms, even those lower death tolls are a hollow victory.

Tuesday, September 18, 2018

Payback time

One tiny tax reform, billions for America
By Gerald E. Scorse, Progressive Charlestown guest contributor

Image result for minimum ira distributionIt’s no secret that the federal government needs more revenue going forward. Congress could put the Treasury on autopilot to raise billions (and ultimately tens of billions) year after year. 

Guided by fairness, it could enact spend-down rules for non-retirement accounts that mirror those for retirement accounts: at age 70 ½, require minimum distributions and tax all gains at ordinary income rates.

Let’s look first at the tax policy drawn up by lawmakers to govern the original individual retirement accounts (IRAs) in 1974. Then let’s see how the same policy points to duplicate rules for regular, non-retirement holdings.

Congress gave generous tax breaks to IRAs all through the build-up years. In fact they’re tax-free, starting with contributions and including realized and unrealized capital gains, capital gains distributions, and dividends. If markets rose (a solid long-term bet), compounding would add hugely to the value of the breaks.

On the back end, legislators turned the accounts into a fair and far-sighted bargain. They elected to tax all withdrawals as ordinary income—including the capital gains, normally taxed at much lower rates (currently 15%). Under this mandate, taxes that were forgiven all along are continually recouped at ordinary income rates as retirees cash in.

The vetting process

Pic of the Moment

Support great local environmental journalism

Eat, drink and support environmental journalism. 

September 30 @ Troop PVD
2-3 p.m. VIP Hour | 3-5 p.m. Main Event

Enjoy tasty food from Troop PVD and cash bar with wine, cocktails, and Revival beer. Acoustic guitarist Gregory Peters will strum some tunes during the main event in the courtyard next to Troop PVD. Everything at this lively ultra-green party will be eaten, imbibed, recycled, or composted. All proceeds will be upcycled to support our environmental journalism.

Online ticket sales close Sept. 23. Questions? E-mail Joanna at Don't want to pay online? You can mail a check to ecoRI News, 10 Davol Sq., Suite 100, Providence, RI 02903.

Raffle Prizes include a kayak with gear from Ocean State Job Lot; gift cards to KNEAD Donuts, Pepe's Pizza and Matunuck Oyster Bar; tickets to performances at GAMM Threatre and Trinity Rep; gift baskets from Equal Exchange and Greenwich Cove Meadery, and original artwork by local artists. We'll also auction off a one-week stay at Cold Spring Resort in New Hampshire with a winter rental package and paddling trip from Ski Fanatics.

You can only win if you come to the Bash.

Thanks to our sponsors

What’s it worth to you?

URI professor awarded grants to understand the quantification of environmental values
Related imageCorey Lang is on a mission to understand what value people place on non-market goods like open space.

These goods typically have no observable monetary value associated with them, according to Lang, an associate professor of natural resource economics at the University of Rhode Island. But open space such as parks and recreational areas can influence the value people place on real estate and other goods.

“Preserved open space is a public good that isn’t bought and sold in a traditional market place, and thus there is no price on it, as there is for standard goods like milk,” Lang said. “Because there is no price, it’s difficult to infer how much people value open space, even though it’s clear they do.”

Lang was recently awarded two $500,000 grants from the United States Department of Agriculture to research trends associated with the value people place on non-market goods and their impact on the price of other goods and services.

Doggy of the week

Meet Jackson. 
Animal Rescue RI

Jackson is a 1 year old, medium sized American foxhound who is roughly 40 lbs.

This guy is super affectionate with people and he loves playing with other playful dogs.

He is both food and toy motivated, and he already knows his basic commands. 

Old joke: “how can you tell when a politician is lying?”

Corruption is hard to hide if you're a politician whose face is wide
California Institute of Technology

Image result for trump's faceAn old joke says if you want to know if a politician is lying, see if their lips are moving. 

New research shows that people can predict something about a politician's honesty just by looking at them, but it's not the lips they're noticing.

A series of studies conducted by Caltech researchers show that when people are shown photos of politicians they're not familiar with, they can make better-than-chance judgments about whether those politicians have been convicted of corruption. 

People can make these judgments even without knowing anything about the politicians or their careers. And one thing they seem to be picking up on is how wide the politicians' faces are.

The individual people making these judgments do only very slightly better than if they were making a random guess (although the difference is statistically significant). However, the judgments become much more accurate when they are combined across a group of people.

Face wideness -- technically, the facial width-to-height ratio -- has been shown in previous research to be correlated with aggressive behavior in men. 

That is, men with wider faces have a greater tendency to be aggressive and threatening toward others than do men with thinner faces. Studies have also shown that wide-faced men are perceived by others to be more threatening than men with thinner faces.