Links for October 17, 2016

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But in early 2015, Walmart announced it would actually pay its workers more. That set in motion the biggest test imaginable of a basic argument that has consumed ivory-tower economists, union-hall organizers and corporate executives for years on end: What if paying workers more, training them better and offering better opportunities for advancement can actually make a company more profitable, rather than less? It is an idea that flies in the face of the prevailing ethos on Wall Street and in many executive suites the last few decades. But there is sound economic theory behind the idea. "Efficiency wages" is the term that economists — who excel at giving complex names to obvious ideas — use for the notion that employers who pay workers more than the going rate will get more loyal, harder-working, more productive employees in return. Walmart's experiment holds some surprising lessons for the American economy as a whole. Productivity gains have been slow for years; could fatter paychecks reverse that? Demand for goods and services has remained stubbornly low ever since the 2008 economic crisis. If companies paid people more, would it bring out more shoppers — benefiting workers and shareholders alike?

How Did Walmart Get Cleaner Stores and Higher Sales? It Paid Its People More

Good news: The stock market is dropping. The Dow Jones Industrial Average, while ending Thursday well off its early triple-digit decline, fell for the sixth time in nine days to close at its lowest level in 2½ weeks. Why is that good news? Because by dropping in October, the stock market creates the preconditions for a significant rally through the end of the year. This year appears to be quite closely following at least the beginnings of that script.

The stock market is setting itself up for a possibly monster year-end rally - MarketWatch

Now the idea of blockchain has gripped Wall Street's biggest institutions. Its enthusiasts think it could change the world. Sure, it would make contracts more enforceable and speed up the settlement of stock trades — hence the interest from big banks. But some see it going much further, cracking down on sex trafficking, music piracy, and child labor. And the key to all that — what attracts these different factions — is something that, on the surface at least, sounds rather banal: a digital ledger, like the one in your checkbook. "Blockchain is a truly extraordinary technology that does really mundane things," said Paul Brody, Ernst & Young's global blockchain leader. But for all the promise, these big questions remain: Who will foot the bill, and is it really as secure as supporters say?

What is blockchain? - Business Insider

Professional sport may appear a dream to those who watch it, but for those who live it, the experience can be a cruel shock: joyless, unrelenting, a betrayal of why they fell in love in the first place. "I used to love boxing when I was a kid," Fury has said. "It was my life. Then you finally get to where you need to be, and it becomes a big mess." For every O'Sullivan, who has managed to keep playing and keep winning at an age when previous greats were long spent, there are other great sporting talents who lacked the mental skills to back up the physical: former Manchester City midfielder Michael Johnson, unable to handle the pressure of expectation and injury; former Manchester United and West Ham midfielder Ravel Morrison, unable to match his off-field behaviour to his immense footballing gifts. "Pressure affects everybody, but people deal with it in different ways," says Johnson, dubbed the new Steven Gerrard at 19, retired from football at 24. "We all have different skill sets, whether it is football or any job, and I don't think I had the best skill sets to deal with it."

Nick Kyrgios: Is Australian world number 14 wasting his talent? - BBC Sport

With a population of just over 11,000, Dobbs Ferry, New York is your typical sleepy town, except for one thing. When the first school bell rings, kids are wide awake. Last September, Dobbs Ferry School District joined a small but growing cluster of schools around the US that have started pushing back their middle and high school start times in an effort to combat student grogginess. Bolstered by a mountain of sleep science research that says pre-teens and teenagers are some of the most sleep-deprived people and would actually do better in school with more rest, these forward-thinking schools are finally cutting worn-out students a break. They're letting kids sleep in. What happens when you start later? Dobbs Ferry Superintendent Dr. Lisa Brady tells Business Insider that prior to the 2015-2016 school year, middle schoolers started at 8:15 a.m. and high schoolers at 7:30 a.m. Under the new policy, each school now starts and ends 45 minutes later. Both schools have experienced tremendous benefits, Brady says.

School start times finally listening to sleep science - Business Insider

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Americans are addicted to their jobs. U.S. workers not only put in more hours than workers do almost anywhere else. They’re also increasingly retiring later and taking fewer vacation days. A new study tries to measure precisely how much more Americans work than Europeans do overall. The answer: The average person in Europe works 19 percent less than the average person in the U.S. That’s about 258 fewer hours per year, or about an hour less each weekday. Another way to look at it: U.S. workers put in almost 25 percent more hours than Europeans. Hours worked vary a lot by country, according to the unpublished working paper (PDF) by economists Alexander Bick of Arizona State University, Bettina Bruggemann of McMaster University in Ontario, and Nicola Fuchs-Schundeln of Goethe University Frankfurt. Swiss work habits are most similar to Americans', while Italians are the least likely to be at work, putting in 29 percent fewer hours per year than Americans do.

Americans Work 25% More Than Europeans, Study Finds - Bloomberg

As noted in last week's column, "When [the leaders] begin breaking down on volume, that will send a message that will speak unlike all of the personal opinions, predictions, and crystal balls in the world. The message will be that the speculative sentiment is warped, if not broken." The market is not there yet. In a number of cases, the speculative-growth-stock glamours have put in a couple of distribution days (centered selling). But so far this is not exactly the sort of heavy-volume, wide-range sessions that would signify a material break in the speculative sentiment.

If you want to know which way the market is heading, follow the leaders - MarketWatch

Sensirion, Swiss specialists in environmental sensing, and Clarity, provider of air quality monitoring and management services, are collaborating on PM2.5 (particulate matter at 2.5 microns) sensing technology. Under the agreement, Clarity has licensed the exclusive rights to the development, production and distribution of its optical PM2.5 sensor technology. Clarity’s technology fills the gap in the environmental sensor market for affordable, portable and reliable PM2.5 sensors, and complements Sensirion’s environmental sensing platform. The lightweight sensor is small enough to collect data on PM2.5 and PM10 unobtrusively, providing the same accuracy levels as industrial particulate matter monitors but at a factor 1000 lower cost and 100 th of the size.

Air quality sensor collaboration to focus on fine particulate technology | Smart2.0

Valeant Pharmaceuticals has announced that it will increase prices for much of its drug product line, contrary to what company executives told legislators in Congressional hearings earlier this year.

Valeant issues statement on price increases - Business Insider

More than 15,000 people have applied for just 78 jobs driving Britain’s newest intercity expresses, according to Richard Branson’s Virgin Trains, which is seeking to fill the posts.

Brits Still in Love With Trains as 15,000 Chase 78 Driver Jobs - Bloomberg

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The first is the influence of aggregate demand on aggregate supply. As Yellen notes, the traditional way of thinking about this relationship would be that demand, a short-run phenomenon, has no significant effect of aggregate supply, which determines long-run economic growth. The potential growth rate of an economy is determined by aggregate supply and the fluctuations around that long-term trend—recessions and expansions, according to this line of thinking. Basically, the ups and downs of the business cycle are determined by changes in aggregate demand. Yet the slow growth of the past several years has many economists rethinking this relationship. Yellen points to research that increasingly finds so called hysteresis effects in the macroeconomy. Hysteresis, a term borrowed from physics, is the idea that short-run shocks to the economy can alter its long-term trend. One example of hysteresis is workers who lose jobs in recessions and then aren’t drawn back into the labor market bur rather are permanently locked out, therefore increasing the long-run unemployment rate. Interesting new research argues that hysteresis may affect not just the labor supply but also the rate of productivity growth. If hysteresis is prevalent in the economy, then U.S. policymakers need to rethink their fiscal and monetary policy priorities.

Yellen poses important post-Great Recession macroeconomic questions - Equitable Growth

"The foundation has been laid for fully autonomous, it's twice as safe as a human, maybe better," Musk said during a media call Wednesday evening.  Tesla vehicles will now have eight surround cameras that provide 360 degrees of vision at up to 250 meters of range, the company said in its statement. The system will also include 12 ultrasonic sensors and an improved forward-facing radar that is capable of working in extreme weather conditions.  While Tesla cars will now have the hardware in place to be truly driverless, it's unclear when its cars will actually get this functionality.

Elon Musk: Fully autonomous Tesla will drive across the country by the end of 2017 - Business Insider

Even though they're cute, Tasmanian devils really do exhibit somewhat diabolical behavior. Turns out, these kitty-sized marsupials might just be fierce enough to stare down one of the nastiest health crises facing humanity: the rise of antibiotic-resistant pathogens, which kill 700,000 people per year globally and about 23,000 people in the United States. No, ERs and doctor's offices won't keep a pet devil around to bare its fangs at samples of hard-to-treat E. coli. What physicians may someday do is treat patients with antibiotics derived from compounds found in devil milk.

Adorable Tasmanian Devils Could Help Fight Superbugs | Mother Jones

After more than tripling in price this year, Lithium is no longer that dull commodity we take for granted in our consumer electronics: It’s the commodity powering the next, undeniable energy revolution. The tight supply picture emerging as electric cars, mega-batteries and massive energy storage solutions become the cornerstones of our lives could be on the edge of turning new lithium explorers into the next barons.

Tesla, Apple and Uber Push Lithium Prices Even Higher | OilPrice.com

Fox News' Chris Wallace emerged as one of the likely winners of the final presidential debate. Over the course of the debate's 90 minutes, the Fox News anchor's questions on major policy issues and top news stories ellicited praise on social media.

People are raving about the Fox News anchor who moderated the last presidential debate - Business Insider

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The International Monetary Fund may have gotten things about right in its annual Global Financial Stability Report, which was issued in October. It doesn’t sound an alarm but expresses concern. Short-term risks have actually abated, the IMF says, pointing to rebounding commodity prices, which help some key emerging markets, and the prospect of easier money in developed markets. But, it says, “medium-term risks continue to build.” It cites the unsettled political climate, which makes entrenched problems harder to tackle; some weak financial institutions in developed markets; and heavy corporate debts in emerging markets.

Where the Next Crisis Will Come From - Bloomberg

Some big percentage of voters will be disappointed with what the new president can achieve next year. But a larger percentage of investors may be even more dissatisfied with their financial advisers. A recent study from Natixis Global Asset Management shows that investor expectations about the total return they can squeeze from a portfolio remain sky high compared with what advisers believe is achievable. That means the coming year could be a tough one unless investors choke down a hard dose of reality.

You are probably way too optimistic about your investment returns - MarketWatch

Recently, many observers have been drawing parallels between China today and Japan in the late 1980s – just before its "lost decade", where the country experienced 10 years of secular stagnation. Indeed, the macroeconomic commonalities seem too great to be ignored: both had high saving and investment rates, along with a rapid accumulation of external wealth that funded purchases of prime assets around the world. "Bridges leading to nowhere" is often used to describe both countries' investment bonanzas.

No, China is not the ‘next Japan’

A mixed bag of Chinese economic data this week has unnerved global markets and clouded the outlook for China’s economic growth, days before the release of the country’s quarterly gross domestic product figures.

Conflicting Data Blurs China's Economic Outlook

The leading national contender to go gasoline- and diesel-free is Norway, where plug-in hybrids and all-electric are taking over the new car market the most rapidly. This year, a remarkable one in three new passenger cars sold in Norway was electric... What’s even more remarkable about this is that Norway is of the largest producer of petroleum in Europe. Fossil fuels comprise 45 percent of Norway’s exports and 20 percent of its GDP. As Fortune puts it, Norway’s plan is “the geopolitical equivalent of a drug dealer that refuses to touch their own product.”

Which will be the first country to ban fuel-burning cars: Norway, Germany, India?

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Why, then, do you see projections of a large debt increase? The answer lies not in a known factor — an aging population — but in assumed growth in health care costs and rising interest rates. And the truth is that we don’t know that these are going to happen. In fact, health costs have grown much more slowly since 2010 than previously projected, and interest rates have been much lower. As the chart above shows, taking these favorable surprises into account has already drastically reduced long-run debt projections. These days the long-run outlook looks vastly less scary than people used to imagine.

Debt, Diversion, Distraction - The New York Times

Business Insider obtained a copy of the note. In it, Bridgewater estimates the impact of the ECB reducing bond purchases.  "The question of what the ECB monetary policy past March will look like is growing in importance as we move closer to that date," the note said. "Though Mario Draghi understandably side-stepped the question, it is the growing elephant in the room." Bridgewater estimates that a reduction of the ECB's bond purchases to zero over a year would reduce gross domestic product growth by about 1%. A taper would be the same as raising interest rates by about 1.25%, according to the note. The ECB would usually only raise interest rates when it's trying to contain a fiery economy and inflation.  If the ECB tapers its bond buying, the euro would gain by between 5% to 10%, and inflation would fall by about 0.3% from about 1% today, the note said.  "These figures are approximate," the note said. "Nonetheless, it's clear that it would lead to big, bad outcomes."

Ray Dalio note on outcomes if ECB doesn't extend QE - Business Insider

Rule number one: Never short a company you can imagine on the cover of a great publication. While the influence of magazines and big newspapers may be waning, the point is to never bet against a best-of-breed company. Rule number two: Ask, can the company be taken over? If it can, then it's not a good short. Rule number three: Never short a stock because it seems overvalued. You'll never be as adept at calling the top as you think you are and some stocks, like Chipotle Mexican Grill (CMG) , have valuations that defy gravity. Rule number four: Never short with common stock when puts are available. For those not familiar with the options market, Cramer referred to his 2009 book, Real Money: Sane Investing in an Insane World. Rule number five: Never short a stock if everyone else is shorting it, too. Those other guys will break ranks and leave you holding the bag every time.

Jim Cramer's 'Mad Money' Recap: Here's How You Make Money Despite the Fed - Pg.2 - TheStreet

Nexium comes in many forms, including a less potent over-the-counter version. That costs between $25 and $50. There's also a prescription version with twice the strength. If you're getting that one through Medicare Part D, the government's program for prescription drugs, it could cost as much as $700. To try to understand why, we talked to pharmacists, and they all pointed to the same thing: It's the pharmacy benefit managers, or PBMs. PBMs are companies that manage insurance plans for the government, employers, and other payers. They're middlemen. For the insurance companies and employers, they help manage prescription claims. They do this in part by creating lists of drugs that will or won't be paid for and then use their scale to negotiate lower costs.

Pharmacists blame PBMs for high cost of Nexium - Business Insider

Coal prices have soared this summer, after new mining restrictions curbed production in China, the world’s biggest producer and consumer. Benchmark prices for thermal coal in Asia, Europe and the U.S. have climbed by more than a third since April, while the price of coal used in steelmaking is up 20% from its 2016 nadir in May. The rally is a stark reversal for the coal market, which has been in a protracted slide for much of the past five years.

China’s Coal-Market Reforms Fuel Rebound in Prices - WSJ