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What We Read Today 18 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".).


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

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Topics today include:

  • Top ETFs of 2015

  • Growth of Passive Investing

  • Swanson's Law

  • Energy Revolution

  • Solar PV Soon to Be Cheapest Even Far from Equator

  • Withholding Indicating Recession

  • Some Oil is Worth Less than Nothing

  • OPEC Members Facing Bankruptcy

  • OPEC Suggests Non-Mmebers Should Give Up

  • Iran Pours Oil on the Fire

  • Are Net Worth and Wealth Equivalent?

  • And More

Articles about events, conflicts and disease around the world


Oxfam presents the statistic, which is derived from data published in Credit Suisse's Global Wealth Databook(pdf), as a measure of wealth. But it's technically a measure of net worth: assets minus debts. As such, what it's picking up isn't just massive inequality in wealth, but also massive inequality in the ability to access credit.

So for the purposes of Oxfam's calculation, a farmer in China's rural Sichuan province with no debt but also very little money is wealthier than an American who just graduated from medical school with substantial debt but also a hefty, six-figure income. By any sensible standard, the medical student is richer, but because her student debt still outweighs her financial assets, the net worth measure counts her as poorer than the Chinese peasant.

  • Energy revolution needed to power the future (Financial Times)  The need for more innovation in energy was one of the strongest points of agreement at the Paris talks. Some have suggested that the most important news to come out of the conference was not the final accord, signed with great fanfare by the governments of 195 countries, but the commitments made by governments and wealthy individuals to research and develop technologies that can help the climate.  Energy innovation is a concept that has become almost universally popular — among all from the most traditional of oil companies to the most radical of environmental groups.  For all the rising enthusiasm, though, investing in innovation remains a hazardous and uncertain business in energy, as in other industries.  See more about solar energy later, below.

  • Oil price crash: rout reaches $27 as Opec warns US shale will be forced to relent (The Telegraph)  Opec said persistently low prices would finally begin to bite for rival producers in 2016, forcing the US and Canada to cut back on production this year.  Econintersect:  As OPEC members face bankruptcy they suggest their opponents should give up.




  • The Case Against Bernie Sanders (New York Magazine)  Jonathan Chait argues that Bernie Sanders is overkill and his solutions are not benign.  Here is part of his argument:

Sanders’s core argument is that the problems of the American economy require far more drastic remedies than anything the Obama administration has done, or that Clinton proposes to build on. Clinton has put little pressure on Sanders’s fatalistic assessment, but the evidence for it is far weaker than he assumes. Sanders has grudgingly credited what he calls “the modest gains of the Affordable Care Act,” which seems like an exceedingly stingy assessment of a law that has already reduced the number of uninsured Americans by 20 million. The Dodd-Frank reforms of the financial industry may not have broken up the big banks, but they have, at the very least, deeply reduced systemic risk. The penalties for being too big to fail exceed the benefits, and, as a result, banks are actually breaking themselves up to avoid being large enough to be regulated as systemic risks.

  • Withholding Tax Collections Now Suggest Recession  (Lee Adler, Wall Street Examiner)  The growth rate of withholding taxes has turned negative. If that sticks, it will spell big trouble for the markets.  Full report for paid subscribers only.

  • The North Dakota Crude Oil That's Worth Less Than Nothing (Bloomberg)  Oil is so plentiful and cheap in the U.S. that at least one buyer says it would need to be paid to take a certain type of low-quality crude.  Flint Hills Resources LLC, the refining arm of billionaire brothers Charles and David Koch’s industrial empire, said it would pay minus $0.50 a barrel  Friday for North Dakota Sour, a high-sulfur grade of crude, according to a list price posted on its website. That’s down from $13.50 a barrel a year ago and $47.60 in January 2014.  Oil is now valued on transportation and refining costs and those are now greater than refined products can be sold for for some crudes.  Econintersect:  Just when we are getting used to negative interest rates we now have negatively priced commodities.  Should we call this oil situation a requirement to pay a 'disposal fee' after it is pumped out of the ground?



  • Sanctions relief could strengthen hand of Iran’s reformers, but perils remain (The Washington Post)  When Iranian voters rallied behind Hassan Rouhani in 2013 as their surprise choice for president, they picked a reformer who promised to end the crushing pain of international sanctions. On Saturday, Rouhani delivered, securing the long-sought economic relief that Iran craved and the country’s enemies desperately opposed.  Yet, it is still unclear whether Rouhani’s windfall — up to $50 billion in unfrozen assets and freedom from severe trade restrictions — will be enough to secure a future for his presidency and the more moderate, pragmatic Iran he is seeking to build.

  • Iran Gives Order to Boost Crude Oil Output Amid Global Glut (Bloomberg)  Iran’s oil ministry issued an order to increase production by 500,000 barrels a day as the country moved ahead with plans to add supply to a glutted market even at the risk of contributing to a price collapse.

Swanson’s Law provides green ray of sunshine for PV (Ed Crook, Financial Times)  See next article for description of Swanson's Law (SL).  Here Ed Crook observes the variability of SL in the real world.  But, even so industry executives predict that in ten years’ time photovoltaic (PV) solar could be competitive without subsidy even in cold and grey northern Europe, through continued improvements in the existing technologies.


Swanson's law (Wikipedia)

Swanson's Law is an observation that the price of solar photovoltaic modules tends to drop 20 percent for every doubling of cumulative shipped volume. At present rates, costs halve about every 10 years. [1] The Law is named after Richard Swanson, the founder of SunPower Corporation a solar panel manufacturer. Swanson's Law has been compared to Moore's Law.Crystalline silicon photovoltaic cell prices have fallen from $76.67 per watt in 1977 to $0.36 per watt in 2014.[2][3][4]

The term Swanson's Law appears to have originated with an article in The Economist published in late 2012.[2][3] It is a misnomer in that Swanson was not the first person to make this observation. The method used by Swanson is more commonly referred to as learning curve or experience curve analysis. It was first developed and applied to the aeronautics industry in the mid-1930s,[5]and saw its first widespread application to the photovoltaics industry in the mid-1990s.[6]

swansons law 

Other Economics and Business Items of Note and Miscellanea


  • Cocaine 'can cause brain to eat itself' say experts (The Telegraph)  A study on mice suggests that high doses of drug can trigger out-of-control autophagy - a process by which cells literally digest themselves.  When it is properly regulated, autophagy provides a valuable clean-up service - getting rid of unwanted debris that is dissolved away by enzymes within cell ''pockets''.

  • 25 Surprising Facts About the World, Courtesy of Ken Jennings (Conde Nast Traveler, MSN)  Some real curiosities in a nice 25 slide show.

  • New Pacer ETF Hedges Dollar's Swings Against The Euro (Ky Trang Ho, Forbes)  KTH has contributed to GEI.  Pacer ETFs — a newcomer to the ETF industry — launched two new Europe ETFs in December: The Pacer Trendpilot European Index ETF (PTEU) and the Pacer Autopilot Hedged European Index ETF (PAEU).  PTEU uses complicated technical signals to change its hedging position depending on whether the stock market outlook is bullish or bearish. PAEU switches between a currency hedged or unhedged position depending on how the euro and U.S. dollar are trading against each other.

  • Why 2016 Will Be a Record Year for Bank Mergers (Investopedia)  Bank mergers have been growing every year since the Great Recession and will continue to do so in 2016, according to bank analyst Richard Bove.  And big banks will have a much better year in 2016, Bove says, barring a recession.


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