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.
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Topics today include:
Facebook Crushes Best Estimates
Facebook Proposes New Class of Non-voting Benficial Shares
Oil Still Climbing
Supreme Court on Verge of Further Embracing of Corruption Tolerance
A Hedge Fund 'Killing Field'
Trump Struggles to Explain Foreign Policy
Austria 'Abolishes' the Existence of Refugees
Brexit Debate is Hiding Economic Problems
Articles about events, conflicts and disease around the world
Facebook revenue smashes expectations as mobile ad sales surge (Reuters) Facebook Inc's (FB.O) quarterly revenue rose more than 50%, handily beating Wall Street expectations as its wildly popular mobile app and a push into live video lured new advertisers and encouraged existing ones to boost spending. Facebook also announced a proposal to create a new class of non-voting shares, which would be given as a dividend to existing shareholders. The company's shares rose 9.5% in after-hours trading on Wednesday. The dividend of non-voting shares would allow Chief Executive Mark Zuckerberg, who plans to give away the majority of his wealth, to sell part of his stake in Facebook without giving up any of his voting control. That way, Facebook said, Zuckerberg could remain in an "active leadership role".
Oil Climbs Above $45 Amid U.S. Crude Output Drop, Fed Statement (Bloomberg) Oil closed above $45 a barrel in New York for the first time since November after U.S. crude output dropped and Federal Reserve policy makers signaled they’re open to raising interest rates in June. Crude production fell to 8.94 million barrels a day last week, the least since October 2014. U.S. production is down almost 7% from its peak at the end of May last year.
Supreme Court justices seem skeptical of McDonnell’s conviction (The Washington Post) Supreme Court justices on Wednesday seemed highly skeptical of former Virginia governor Robert F. McDonnell’s 2014 corruption conviction for actions he took on behalf of a businessman who provided his family with more than $175,000 in benefits. Chief Justice John G. Roberts Jr. suggested that the law used to convict McDonnell might be unconstitutionally vague. Justice Stephen G. Breyer said he worried about prosecutors having too much power in deciding when politicians cross the line from political favors to criminal acts, even if it “will leave some corrupt behavior unprosecuted”. Econintersect: This is the age of corruption tolerance. The outcome of continuing will be the complete institutionalizing of corruption and, by a generalization of Gresham's Law, uncorrupted behavior will be driven out and extinguished.
Daniel Loeb warns of hedge fund ‘killing field’ (Financial Times) The first quarter was “one of the most catastrophic periods of hedge fund performance that we can remember since the inception of this fund,” in December 1996, Mr Loeb said. “There is no doubt that we are in the first innings of a washout in hedge funds and certain strategies.”
Trump struggles to explain 'America first' foreign policy (Associated Press) Donald Trump strained to lay out a clear vision of his "America first" foreign policy on Wednesday, vowing to substitute hard-headed realism for what he called a post-Cold War era replete with U.S. national security failures. Yet the Republican presidential front-runner outlined no strategy for how he'd make the United States at the same time a "consistent" and "unpredictable" force in the world.
Migrant crisis: Austria passes controversial new asylum law (BBC News) Austria has passed a controversial new law that restricts the right of asylum and allows most claimants to be rejected directly at the border. Rights groups say the law undermines the principle of protection from war and persecution. It comes days after Austria's far-right came top in the first round of a presidential election. Austrian officials say they are also considering building a fence at the main border crossing with Italy.
Brexit Shadow Hides Deeper Cracks in U.K. Economic Firmament (Bloomberg) Britain’s vote on its future in the European Union is diverting attention from deeper economic problems. As the country thrashes about in an identity crisis, risking a schism with its main trading partner, growth is losing momentum and continues to be lop-sided. Services, the engine of the economy’s recovery, expanded at the weakest pace in almost a year in the first quarter, while industrial production extended its decline. That underscores the fragility of the economy at a time when the Bank of England is warning uncertainty stemming from the June 23 referendum may already be having an effect. Added to that, some of the nation’s biggest companies are in crisis, with two retailing stalwarts appointing administrators in the past week and Tata Steel’s move to sell its U.K. business raising questions about the future of British industry.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Bizarre fourth state of water discovered (gizmag) Interstitial water exists trapped in crystal and those water molecules exhibit physical properties different from bulk water that exists in solid (ice), liquid and gaseous (water vapor) forms. The particular property displayed by single water molecules trapped in beryl crystal cages shows a phenomenon known as "tunneling". This refers to the property that some of the time the water molecule is seen in one cage and some other interval in time in an adjacent cage. This is also expressed in terms of position probability: A single water molecule has some probability of being in cage 1, another for cage 2, a third for cage 3, etc., with the sum of all probabilities equaling one - which means the water molecule has a 100% probability of existing somewhere. Since the energy barrier between cells is much larger than the energy of the water molecule the sharing of such multiple spaces by one molecule is said to be due to tunneling. This is all related to the Heisenberg Uncertainty Principle which requires when the energy of a particle is know quite exactly (the temperature is known) the spatial position must be relatively uncertain.
UAF School of Management suspends Economics major (The Sun Star) The UAF School of Management ceased admitting undergraduate students to its Economics program, due to continued budget reductions. Students currently enrolled in the economics program will be “taught out.” Classes supporting the major will be available until they graduate. The choice to suspend the program was made by Mark Hermann, dean of the school of Management. He was looking into whether the School of Management should make cuts to all of its programs equally or to a few specific programs.
Millennials are increasingly rejecting voodoo economics (The Washington Post) As my colleague Max Ehrenfreund noted, the latest youth poll from Harvard’s Institute of Politics suggests that young people are becoming more liberal. Compared with responses from the past few years, today’s 18-to-29-year-olds are more likely to believe “basic health insurance is a right for all people,” “basic necessities, such as food and shelter, are a right that government should provide to those unable to afford them,” and “the government should spend more to reduce poverty.” Supply side approaches to taxing and spending are also losing support.
Cartoon from Public Banking Institute E-mail
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