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What We Read Today 06 May 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:

  • Big Slump for Bank Stocks

  • What is the Story for Active vs. Passive Investing?

  • Controlling Free Speech:  Advertisers Rule

  • Panama Papers Source Speaks Out

  • Muslims in America

  • Immigrants and the Economy

  • Economic Myths in Politics

  • People are Quitting their Jobs - and That's a Good Thing

  • The Single Largest Threat to the World Economy

  • The Muslin Lord Mayor of London

  • India:  Dogs Kill More People than Terrorists

  • China has a Lake Full of Dead Fish

  • Video from the Fort McMurray Wildfire

  • And More

Articles about events, conflicts and disease around the world


  • Panama Papers source breaks silence, denies being a spy: Sueddeutsche Zeitung (Reuters)   Sueddeutsche Zeitung said on Friday that the source of millions of documents leaked to the German newspaper from Panamanian law firm Mossack Fonseca had sent them a manifesto, saying his motivation was the "scale of injustices" the papers revealed.  The source had never before publicly stated why he leaked the documents, now known as the Panama Papers, said Sueddeutsche Zeitung (SZ), one of Germany's most reputable newspapers.  In an 1,800 word manifesto published on the SZ website on Friday, the source, calling himself "John Doe", praised others who have leaked secret and sensitive documents, such as Edward Snowden, who revealed details of the U.S. government's mass surveillance program.


  • By the numbers: Muslims in America (PBS, Washington Week)  There are 3.3 million Muslims in America, 1% of the population.  By 2050 that is projected to double to 2% of the population.  Other facts:  There are 5,900 Muslims in the U.S. military (0.5%) and 900 Muslim police officers in New York City (2.6%).

  • Do Immigrants Make Americans Worse Off? (Foundation for Economic Education)   In an interview with the Washington Post, economist Michael Clemens points us to research by economist Jennifer Hunt showing that the wage effects of immigration encouraged more Americans to stay in school. This is wise because even immigration critic George Borjas’s long-run estimates suggest that immigrants raise the wages of people with high school diplomas.  There is a small reduction in wages for college graduates, as well, but for the American economy writ large, immigration from 1980 to 2000 didn’t change wages. In a dissent from Borjas’ “pessimistic” case, economist Giovanni Peri has estimated that immigration between 1990 and 2006 raised American wages by 0.6%.  Immigrants don’t just affect wages. They also affect prices. Economist Patricia Cortes finds that more immigrants mean that immigrant-intensive goods and services get cheaper. These lower prices raise standards of living; Cortes reports that immigration between 1980 and 2000 “decreased the prices of immigrant-intensive services by at least a city average of 9-11%.”

  • Two killed in shopping mall shootings in Maryland (BBC News)  A man is in custody after two people were killed and three injured in two shootings at shopping centres in Maryland near Washington.  The man arrested, a police officer, is also wanted for the fatal shooting of his estranged wife on Thursday.  One person was killed and two more people are in hospital after being shot outside a shopping mall in Bethesda.  In Friday's second incident, a woman was shot and killed eight miles (13 km) away shortly afterwards.

  • The Economy Is Rigged, and Other Presidential Campaign Myths (Greg Mankiew, The New York Times)  Econintersect:  Common sense here that is largely ignored by presidential candidates because there is not much common sense about the economy among potential voters.   We propose a new oxymoron label for "common sense". 

  • Obama touts job growth, asks Congress to take action on tax evasion (USA Today)  President Obama celebrated 74 straight months of private-sector job creation and called on Congress to pass legislation to combat money laundering and tax evasion while addressing reporters at an impromptu news conference at the White House on Friday.  He called on Congress to increase infrastructure funding, raise the minimum wage, ratify trade deals, and pass tax reform, adding:

"There are folks out there who are still hurting, and so we've got to do everything we can to strengthen the good trends and to guard against some dangerous trends in the global economy." 

  • Great news! More people are quitting their jobs (Business Insider)  More people quit their jobs when employment opportunities are good.  The level of job leavers has finally gotten back to what it was before the Great Recession, indicating opportunities are good for those already employed to improve their positions by changing employers.  Today's numbers are comparable to the average for non-recessionary periods for the last 35 years.




  • Khan leads in bid to become London's first Muslim mayor (USA Today)   Labour Party candidate Sadiq Khanis leading with nearly all the votes counted for mayor of London on Friday as he seeks to become the first Muslim to run the British capital.  The latest results showed that Khan had 44% of votes as the first choice for mayor while Goldsmith had 35%.  Voters had to vote for their first and second choice for mayor. A candidate who gets 50% of first choice votes will be elected. If no candidate gets 50% of first choice votes, the second choice votes will be counted and the winner declared among the top two candidates.

Khan, 45, is the son of a bus driver from Pakistan. His closest rival is Conservative Party candidate Zac Goldsmith, whose father was a billionaire financier, James Goldsmith. Khan was the bookmakers' favorite to succeed flamboyant American-born Mayor Boris Johnson.

Goldsmith has been accused of running a negative campaign against Khan after he and Prime Minister David Cameron accused Khan of sharing a platform with people with extremist views. Khan has said he never hid the fact that he dealt with “some pretty unsavory characters" during his work as a human rights lawyer and during three years as the chairman of the human rights organization Liberty.


  • Turkey's Erdogan takes tough EU line after PM quits (BBC News)  Turkey's president has told the EU it will not change its anti-terror laws in return for visa-free travel.  "We'll go our way, you go yours," Recep Tayyip Erdogan said.  The EU says Turkey needs to narrow its definition of terrorism to qualify for visa-free travel - which is part of a larger deal between the sides aimed at easing Europe's migration crisis.  Mr Erdogan was speaking a day after PM Ahmet Davutoglu, who largely negotiated the EU deal, said he was stepping down.


  • Do India's stray dogs kill more people than terror attacks? (BBC News)   In March, the civic authorities in one of India's richest cities made a startling disclosure in the country's top court: dog bites in Mumbai had killed more people in 20 years than the two deadly terror attacks in the city - the 1993 serial blasts and the 26/11 attack in 2008.  According to the municipality's petition in the Supreme Court, 434 people had died from rabies - a fatal viral infection which is almost 100% preventable - transmitted by dogs between 1994 and 2015. (In comparison, the two attacks killed 422 people.) More than 1.3 million people had been bitten by dogs in the city during the same period.  India has some 30 million stray mutts and more than 20,000 people die of rabies every year. Last year, Global Alliance for Rabies Control reported that India accounted for 35% of human rabies deaths, more than any other country.


  • 35 tons of dead fish wash up in China lake (USA Today)  hirty-five tons of dead fish washed up in a lake in China this week.  Residents of Haikou city on China’s southernHainan island began noticing the dead white and yellow fish on Wednesday.  The fish — members of the herring family — were likely pushed up an estuary by a tidal surge and then got caught in a pumping system that deposited them in the lake, according to, a local news website.


Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea

  • Bank stocks tracking for worst week since early January (CNBC)  This week has not been kind to bank stocks.  The SPDR S&P Bank ETF (KBE) was down more than 4% for the week, putting it on track for its worst weekly performance since the week of Jan. 8, when it lost more than 8%.  The index also traded below its 50-day moving average on an intraday basis for the first time since April 8.

  • Which wins over 5 years: Active or passive? (Financial Planning)  This study examined the average returns for each of those strategies (active and passive), as opposed to the top 10 funds of each (see next article). The result: By and large, passive won out in three-year and five-year time frames.  Even in small-cap stocks, which are usually cited as an area where active managers will win out because the indexes cannot match their expertise, passive won the race. Indeed, in small-cap growth and small-cap value, over three and five years, average passive funds beat their actively managed counterparts.  For emerging markets passive also won, bu in the mid-cap category had superior returns for both 3-years and 5-years for actively managed funds.

  • Slideshow Active/Passive Tango: Who’s Leading? (On Wall Street)  This study compiled the top 10 active funds and the top 10 passive funds ranked by three-year returns. While double-digit returns are the rule of the day, they are a bit higher on the active side.   It is noted that investors often forget to account for expenses. They can’t be overlooked, of course, because this isn’t not just about how well a fund performs, it’s about how much of the gains your clients get to keep. All data is from Morningstar.  Econintersect:  The top 10 active funds are all in Health Care, Technology and Biotech.  So this result is not about the superiority of active vs. passive management but reflects sector outperformance.

  • Slideshow Active ETFs: Top performers over 3 years (Financial Planning)  Many ETFs are passively managed (set to mirror an index).  But as more than a few actively managed ETFs have come into existence the question of which are the best performers has arisen.  That is the focus of this study.  Econintersect:  Only one of these ETFs outperformed the S&P 500 index and 1/3 have negative 3-year returns.  Looks like passive management clearly wins the day for ETFs.

  • Cartoonist Fired From Farm News for Pro-Farmer Cartoon (The New York Times)  Hat tips to Bill Black and Roger Erickson.  After 21 years and 1090 cartoons, the Farm News in Iowa fired Rick Friday because an advertiser canceled ad placements after his factually correct cartoon was published (see below).  Click on cartoon to see post on Facebook.


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