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What We Read Today 06 January 2016

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".).


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Today's topics include:

  • Birth Defect Virus

  • Worst U.S. Metros for Renters

  • Rent Burdens by State

  • 50% Probability of a Down Year for U.S. Stocks

  • Abbott and Costello Discuss Unemployment 

  • Drinking Toilet Water

  • Is North Korea Faking It?

  • The Decline of Saudi Arabia

  • U.S. Gasoline to Get Cheaper

  • And More

Articles about events, conflicts and disease around the world


  • Why we all need to start drinking toilet water (BBC)  With severe droughts and rising populations, we will have to accept “toilet-to-tap” schemes. Cities like Perth in Australia are leading the way.  Still, for some people, the prospect of drinking recycled wastewater is literally hard to swallow. But many  cities are already incorporating recycled wastewater into the water supply. Not only is recycling becoming a necessity, a sustainable water future will demand it. 

  • The logic behind escalating tensions in the Middle East (Al Jazeera)  The escalating tension between Saudi Arabia and Iran is the story of a declining state desperately seeking to reverse the balance of power shifting in favor of its rising rival.  History teaches us that it is not rising states that tend to be reckless, but declining powers. Rising states have time on their side. They can afford to be patient: They know that they will be stronger tomorrow and, as a result, will be better off postponing any potential confrontation with rivals.


  • Fill 'er up! Gasoline prices set to tank (CNBC)  Cheap gasoline prices are about to get a lot cheaper, as U.S. refiners are creating a fuel glut from the global oversupply of oil.  The average national retail price for unleaded regular fell below $2 a gallon this week, a seven-year low. Also, new government data showing the biggest buildup in supply since 1993 sent prices in the wholesale and futures market sharply lower. That should translate to cheaper prices at the pump in a matter of days.  See also Crude oil slides by five percent as gasoline spike paints bleak outlook (Reuters

  • Can Courts Stop Obama's Gun Rules? It's Unlikely (Bloomberg)  Gun-rights advocates are already suggesting that they’ll go to court to challenge President Barack Obama’s newly announced executive action on background checks. But what exactly, is the challenge going to be? And will it work?  Harvard Law professor Noah Feldman says challenges will be "difficult" but not "impossible", in some cases.

  • Alabama chief justice orders halt to same-sex marriage licenses (Reuters)  The chief justice of the Alabama Supreme Court ordered the state's probate judges on Wednesday not to issue marriage licenses to same-sex couples, despite a ruling by the U.S. Supreme Court last year legalizing gay marriage.  Chief Justice Roy Moore said the U.S. Supreme Court decision is at odds with earlier opinions by the state's highest court, resulting in "confusion and uncertainty" among probate judges.

  • 10 Worst Metro Areas for Cash-Strapped Renters (Make Room)  People often think that renters in big, expensive cities have the most trouble affording their homes. With eye-popping rents in places like San Francisco and New York, it’s an easy assumption to make. But the rental housing crisis isn’t limited to high-cost areas. You’re actually more likely to devote a big chunk of your pay to rent if you live in a smaller city like New Orleans or New Haven, Conn.  There is an attractive slide show for the ten cities.  See also Rent burden across the U.S..


  • Meet the Two Brothers Making Millions Off the Refugee Crisis in Scandinavia (Bloomberg)  Hero Norway provides lodging and food for refugees which is paid for by the Scandinavian governments.  The twp brothers, Roger and  Kristian Adolfsen, own Hero Norway and a bevy of other education and hospitality related companies.  The business operation plan is cost plus 3.5%.  In 2015 revenue is expected to reach $63 million.


  • US sees Assad staying in Syria until March 2017 (Associated Press)   The Obama administration has a vision for Syrian leader Bashar Assad's departure. Even if it works, the president won't be around to see the plan through.  An internal U.S. timeline for a best-case Syrian political transition, obtained by The Associated Press, sets a date of March 2017 for Assad to "relinquish" his position as president and for his "inner circle" to depart. That is two months after President Barack Obama leaves office and more than five years after Obama first called for Assad to leave.  Syria, according to the would-be American strategy, would hold votes for a new president and parliament in August 2017 — some 19 months from now.


  • Iraq offers to mediate between Saudi Arabia, Iran (Associated Press)   Iraq, on Wednesday 06 January, offered to mediate between Saudi Arabia and Iran after tensions soared following the kingdom's execution of a Shiite cleric and attacks on two Saudi diplomatic posts in the Islamic Republic.  The standoff has seen Saudi Arabia sever diplomatic ties with its longtime regional rival and could hinder efforts to resolve the conflicts in Syria and Yemen, where Riyadh and Tehran back opposite sides, as well as affect the implementation of the Iran nuclear deal.

North Korea

  • North Korea nuclear H-bomb claims met by skepticism (BBC News)  International skepticism and condemnation have greeted North Korea's claim to have successfully carried out an underground hydrogen bomb test.  If confirmed, it would be North Korea's fourth nuclear test since 2006 and mark a major upgrade in its capabilities.  But nuclear experts have questioned whether the size of the blast was large enough to have been from an H-bomb.  See also North Korea nuclear test: UN vows new measures (BBC News). 

Opinion: A bear market in stocks just became more likely (Mark Hurlburt, Market Watch)  The stock market’s plunge on the first trading day of the year markedly increases the odds of a bear market in 2016.  That’s because the stock market’s direction in any given year’s first trading day is more often than not a good indicator of how it does for the rest of that year. That relationship is significant at the 95% confidence level that statisticians often use to conclude that a pattern is genuine.  Consider the historical odds of a full-year gain when the first day is positive: 74%, compared with 51% when the stock market fell on the first trading day of the year. (See chart below.)

Other Economics and Business Items of Note and Miscellanea

This would be the world of unlimited wants described by economics, but with a distinction between the wants satisfied by humans and the work done by our machines. It seems to me that the only way that world would work is with alternative forms of ownership. The reason, the only reason, for thinking this better world is possible is that the dystopian future of capitalism-plus-robots may prove just too grim to be politically viable. This alternative future would be the kind of world dreamed of by William Morris, full of humans engaged in meaningful and sanely remunerated labour. Except with added robots. It says a lot about the current moment that as we stand facing a future which might resemble either a hyper-capitalist dystopia or a socialist paradise, the second option doesn’t get a mention.

COSTELLO:  I want to talk about the unemployment rate in America  .
ABBOTT: Good Subject.  Terrible Times.  It’s 5.6%.
COSTELLO:  That many people are out of work?
ABBOTT: No, that’s 23%.  
COSTELLO: You just said 5.6%.
ABBOTT:  5.6% Unemployed.
COSTELLO:  Right 5.6% out of work. 
ABBOTT: No, that’s 23%.
COSTELLO: Okay, so it’s  23% unemployed.
ABBOTT: No, that’s 5.6%. 
COSTELLO:  WAIT A MINUTE. Is it 5.6% or 23%? 
ABBOTT: 5.6% are unemployed.  23% are out of work. 
COSTELLO: If you are out of work you are unemployed. 
ABBOTT:  No, Congress said you can’t count the “Out of Work” as the unemployed.  You have to look for work to be unemployed.
ABBOTT: No, you miss his point.
COSTELLO:  What point?

ABBOTT:  Someone who doesn’t look for work can’t be counted with those who look for work. It wouldn’t be fair. 
COSTELLO: To whom?
ABBOTT: The unemployed.  
COSTELLO: But ALL of them are out of work.  
ABBOTT: No, the unemployed are actively looking for work. Those who are out of work gave up looking and if you give up, you are no longer in the ranks of the unemployed. 
COSTELLO: So if you’re off the unemployment roles that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don’t look for work?
ABBOTT: Absolutely it goes  down. That’s how it gets to 5.6%. Otherwise it would be 23%. 

COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?  
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if you stop looking for a job?
ABBOTT: Bingo.  
COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to have people stop looking for work.
ABBOTT: Now you’re thinking like an Economist. 
COSTELLO:  I don’t even know what the hell I just said!  
ABBOTT: Now you’re thinking like a Politician.

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