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What We Read Today 20 May 2015

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 every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).


Every day most of this column ("What We Read Today") is available only to GEI members.

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The rest of this post is available only the GEI Members.  Membership is FREE -  click here.

Articles about events, conflicts and disease around the world


“I don’t know, I hate to admit it, but in terms of this framework, do I trust President Obama, or do I trust the Ayatollah? In terms of what the framework actually says? I’m not so sure I’m trusting President Obama on this.”

Saudi Arabia

  • Drill deeper than oil for Saudi prosperity (Financial Times)  Saudi Arabia desperately needs energy reforms, as it is very wasteful in energy usage and is far from supporting government incomeneeds at current prices.  The country has its first double digit deficit this year and the country continues to consume more than 25% of production in a highly inefficient manner.  With a geographic advantage for developing cheap renewables, the kingdom should be aggressively pursuing energy diversification.  The country also needs economic diversification as well.  With a possibly miscalculated oil price war againts U.S. shale (see article discussed later, below) some adjustments will be needed to sustain the relatively high Saudi standard of living and to attack a relatively high poverty level.  See next article.
  • Saudi Arabia's riches conceal a growing problem of poverty (The Guardian)  In a country with vast oil wealth and lavish royalty, an estimated quarter of Saudis live below the poverty line.  Millions of Saudis struggle on the fringes of one of the world's most powerful economies, where jobs and welfare programmes have failed to keep pace with a population that has soared from 6 million in 1970 to 28 million today.  The current oil price war is making it difficult to attempt any action here.  See previous article.





The 'Shocking' Cost of Letting Companies Pollute for Free (Bloomberg)  Researchers at the IMF (International Monetary Fund) calculate that the cost to the global economy by pollution from energy sources amounts to more than $5 trillion annually.  This is an uncompensated amount in the amount paid for the energy so it amounts to a tax on the global economy, amounting to more than 6% lost from global GDP.  We will have more on this research in upcoming News, Opinion, Analysis and/or Features at GEI


Crude rally about to sputter? (Walter Kurtz, Sober Look)  Did Saudi Arabia miscalculate to production costs for U.S. shale production?  Kurtz says that "the current price environment US firms are pushing rig efficiency to new levels and the cost curve is expected to shift lower."  See FT article in news list above.


Moore's Law Keeps Going, Defying Expectations (Scientific American)  Gordon Moore, co-founder of Intel, made an empirical observation half a century ago:  Processing power (the number of transistors per unit area of an integrated circuit) doubles every two years.  In 1965 he projected that would continue for another decade.  After 50 years it is still happening.  Actually there are versions of Moore's law that quote the doubling period as 18 months to include the speed of resistors improving as well as the density.  The density plot over a 40-year period is shown in the graph from Wikipedia.  When will Moore's Law end?  See next article.

Click for larger image at Wikipedia.

The end of Moore's law (The Economist)  The end of Moore's Law has been predicted frequently in the past (including by Gordon Moore himself) but this article suggests that economic reasons may curtail the continuation before physical factors reach their limits.  Two factors are mentioned:  (1) the cost of continuing may become greater than the benefit and (2) the processor is no longer the limiting factor in computing.  With regard to the second point, The Economist says that cloud computing has shifted the limits to the size of the servers and storage.  In other word, the size and speed of the distributed operating unit (desk top, notebook, etc.) is less important than the size of the warehouse it interacts with.

Which States’ Tax Laws Widen Inequality (The Wall Street Journal)  Federal tax laws have an element of income redistribution to mitigate against economic forces that increase income inequality.  Some states have tax laws that reinforce the federal bias toward income redistribution and some reinforce inequality forces by their tax codes.  The biggest effects are for states that undo nearly 1/3 of the redistribution produced by the federal codes.


Other Economics and Business Items of Note and Miscellanea

  • Cancer: The Ken Burns Promo and The Smoking/Obesity Connection (Elliott R. Morss, Ph.D.)  Elliott Morss has contributed to GEI.  Dr. Morss reviews the changes in cancer occurrences and survival rates over a period of more than 40 years (1971-2012) and finds some distressing results.  For a number of cancer types occurrence has grown much faster than population, which causes him to question how cancer research monies are spent.  He discusses a Ken Burns documentary on cancer which was sponsored by companies involved with cancer treatment and questions objectivity (lack of emphasis on the need for researching causes - over emphasis on treatment).  This is too brief a summary to really appreciate the thoroughness of the work.  Click on the headline link above.
  • A Look Inside Osama bin Laden's Library in 8 Clippings (Bloomberg)  On Wednesday, the Office of the Director of National Intelligence released pages and pages of documents found during the raid of Osama bin Laden's compound in Abbottabad, Pakistan, in 2011. The revelations ranged from alarming plans to kill Americans to a list of software manuals he kept. This article has eight highlights.
  • The fascinating maths and economics of slot machines (The Guardian)  An investigation by the Verge has shed light on the business of slot machines in US casinos.  For example, slots today pay out many more small "hits" (45% of spins) compared to infrequent, large "hits" only based on behavior studies with pigeins (the feathered kind, not the human casino customers).

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