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What We Read Today 14 June 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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Topics today include:

  • Should Facebook Buy Twitter?

  • Fertility Time Bomb in Drinking Water

  • Has Single-Payer Health Care Arrived?

  • The Nightmare of Inheriting Millions

  • Articles about Fiduciary Responsibility

  • Oil Keeps Sliding Lower

  • Donald Trump and Barack Obama on 'Radical Islam'

  • Net Neutrality Rules Win in Court

  • Renewables Will Be Top U.S. Power Source is 15 Years

  • Brexit Turmoil

  • Would 80 Million in UK Be Too Many?

  • Syria, Russia and Iran Huddle

  • And More

Articles about events, conflicts and disease around the world

Global

  • Oil slides as rising chance of Brexit spooks investors (Reuters)  Oil prices fell more than 1% on Tuesday, down for a fourth straight day, pressured by investor nervousness over Britain's vote next week on whether to leave the European Union, which overshadowed signs of a return to health for crude after a two-year glut.  Brent crude oil futures LCOc1 fell 72 cents to $49.63 a barrel by 12:49 p.m. EDT (1649 GMT), while U.S. crude futures CLc1 lost 45 cents to $48.33.

U.S.

  • Obama, Clinton Assail Trump Over Using ‘Radical Islam’ Label (Bloomberg)  President Barack Obama launched a broadside rejection of Donald Trump’s demand that the U.S. label Muslim terrorists as "radical Islamists", arguing the presumptive Republican presidential nominee risks emboldening America’s enemies and antagonizing an entire faith.  Watch the following video from Fox News:

  • Appeals Court Hands Obama Administration Major Win In Net Neutrality Case (Huffington Post)   In a long-awaited decision, a federal appeals court on Tuesday upheld the Obama administration’s net neutrality rules, dealing a punishing blow to telecom and cable companies that have sought to overturn the regulations.  Characterizing the government’s net neutrality effort as an “attempt to achieve internet openness” and “the principle that broadband providers must treat all internet traffic the same regardless of source,” the U.S. Court of Appeals for the D.C. Circuit concluded that the rules are authorized under current law.  The Obama administration’s rules prevent internet service providers from charging content producers for faster or more reliable service, a practice known as “paid prioritization.” The rules also ban blocking and purposefully slowing the traffic of lawful services, and apply to both mobile and fixed broadband service. 

  • Renewables Will Replace Gas as Top U.S. Power Source in 2031 (Bloomberg)  Renewables will overtake natural gas as the dominant source of electricity generation in the U.S. in 2031, even without subsidies as wind and solar costs plunge, a Bloomberg New Energy Finance analysis showed.  This U.S. shift will be driven by $745 billion in investments in renewables through 2040, outstripping the projected $95 billion that will be spent on building new fossil-fuel plants, said Elena Giannakopoulou, lead economist at BNEF. Solar and wind capacity will become cheaper than gas or coal without any incentives after 2020.

UK

  • ‘Insularity is not the way forward’: three university vice-chancellors on Brexit (The Conversation)  University leaders voice concerns over a possible Brexit and how it would impact student mobility, research funding and the attractiveness of UK universities.

  • As Brexit polls shift, investors should brace for turmoil (MarketWatch)   Are you ready for an earthquake to hit financial markets next week? Is your portfolio prepared for turmoil?  It had better be.  The chances are suddenly rising sharply that the British will shock the world and vote to leave the European Union in their June 23 referendum. The “Leave” campaigners are sounding optimistic and the people I know in the “Remain” campaign are starting to panic.  A string of polls has shown the Leave campaign pulling level or even ahead. The bookmakers are slashing their odds on so-called “Brexit.” In a few days, they’ve plunged from 3-to-1 to 7-to-4 — equivalent to a jump in the chance of Britain leaving the EU from 25% to 36%.

  • How likely is a UK population of 80m – and would it really be a problem? (The Conversation)  Stay in the EU and the UK’s population could rise to 80 million people, claim those campaigning for Brexit. But looking at all the evidence and projections, it is highly unlikely that this will happen. And even if it does, I’m not sure it’s a problem.  The latest population projections released by the Office for National Statistics (ONS) in October 2015 showed that the UK population is projected to increase by 9.7 million over the next 25 years, from an estimated 64.6 million in mid-2014 to 74 million in mid-2039.  Around half of this growth is projected to come from natural increases (an excess of births over deaths) and the other half from positive net migration – more people arriving in the UK than leaving. But leave campaigners have suggested that this population growth might be underestimated, and the UK population could reach nearly 80 million, fuelled by high levels of migration.  The author suggests the highest number would not present any sort of problem for Great Britain which would still be less densely populated than some of its European neighbors.

uk.pop.growth.scenarios

Syria

Iran

  • Iran denounces Orlando terror attack, ignores gay venue (Al Monitor)  Homosexuality is illegal in Iran and is usually tried under the crime of sodomy, rape or adultery and usually carries the punishment of flogging and even possibly the death penalty. While Iran has outlawed homosexuality, it has a different view of transgender issues and even subsidizes sex change operations. Because of this, it has one of the highest sex change rates in the world.  The subject of homosexuality was completely missing from from official accounts of the event in official Iranian press.  At a June 13 news conference, a spokesman for Iran’s Foreign Ministry condemned the terrorist attack at an Orlando nightclub:

“The Islamic Republic of Iran, based on its principles of condemning terrorism and its determination to completely and seriously confront this phenomenon, condemns the latest terrorist attack in Orlando.”
 

  • Why many Iranians are feeling the Bern (Al Monitor)  In Iran, apparently, Bernie Sanders represents the "real America".  Foad Shams is an Iranian journalist who supports US presidential candidate Bernie Sanders and has written about him in the Iranian press. When asked what is it about the Democratic hopeful that interests him, Shams told Al-Monitor:

“The image of an alternative America is the most attractive feature of the Sanders campaign. Sanders is an alternative voice. In fact, he has managed to change the general narrative about the United States. We Iranians have two different — but equally wrong — images in our heads regarding the United States.  On the one hand, we have the image that is propagated by Iranian state television and other official media outlets inside Iran that depicts the United States as the absolute evil. The other image is the one propagated by Hollywood and some foreign media outlets that present America as heaven on earth and a place where everyone is happy.  However, the image that Sanders presents of the United States — its people and their demands — is real.”
 

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

  • Should Facebook Buy Twitter? (Seeking Alpha)  Twitter has been the weakest growth story in the social media space.  The author thinks that "if Twitter is to succeed, the odds are greatest under Facebook's wings".  He thinks the deal makes sense for Facebook as well.  And Facebook has plenty of cash to do the deal outright with a premium paid to Twitter shareholders, although a mixed cash and stock deal might make more sense.

  • Fertility timebomb found in drinking water (Daily Mail)  Hat tip to Sig Silber.  The fertility of a generation of men is being put at risk because a hormone found in the Pill is getting into drinking water, scientists fear.  Pollution due to the chemical, a powerful form of oestrogen, is causing up to half the male fish in our lowland rivers to change sex, research shows.  Experts believe the hormone could be getting into drinking water and affecting men's sperm counts. They say sewage treatment does not remove the chemical entirely from drinking supplies, although the water industry insists there is no evidence of a risk to health.  A study to be published by the Environment Agency later this month says entire fish stocks in some stretches of water are irreversibly affected. Scientists believe the synthetic oestrogen can feminize-fish at levels as low as one part per billion.

  • Has the single-payer era arrived? (Employee Benefit Adviser)  With insurance companies pulling out of Obamacare health insurance exchanges we are ending up with a de facto single carrier payer system, just not the one that proponents of such systems have imagined.  So the system is one where the "benefits" of the American single payer system will be whatever profit the private insurer wants is added to health care costs:

What is now happening is the last carrier standing will adjust the pricing accordingly, to price for the risk and profit. This carrier is now in a position where competition is eliminated; they will set the price for care and we will all pay. “We” defined as those working and paying taxes as well as premium for our employer-sponsored plans.

  • I inherited $15 million and it has mostly been a nightmare (MarketWatch)  Sudden wealth can be overwhelming.  Advisors can treat you like a "spoiled child" if you are the offspring of the deceased, like an ignorant irritation in other cases and actually abused financially on occasion.  The solution is to quickly get some basic investment principles training and learn how to interview possible advisors.  An important factor is to make sure you are advised according to a fiduciary standard — that is, a legal duty to act solely in your interest.  See more on this later, below.

  • The average 401k account holds $96,000: How does yours stack up? (MSN Money)   Last year the average 401(k) balance stood at $96,288, down from $102,682 in 2014, according to Vanguard. The median balance was $26,405 vs. $29,603 previously.  Overall this decline reflects major pressures holding down retirement savings. For starters, market returns have been anemic recently—the typical 401(k) saver chalked up a slightly negative return of -0.4%, although five-year total returns averaged 7.3%.  Auto-enrollment has also dampened 401(k)s balances. As more new workers are auto-enrolled into their plans, participation rates have climbed to nearly three-quarters of eligible workers vs. two-thirds in 2006. But workers tend to be enrolled at a low 3% contribution rate, and they generally tend to stick at that level for the long term.  According to Vanguard senior research analyst Jean Young, the lead author on the report:  “As the effects of auto-enrollment kick in, there are more small balances.” 

  • 7 dirty words I can’t say because I’m a fiduciary (Rob Isbitts, MarketWatch)  RI has contributed to GEI.  See also next article for details about fiduciary duty and the battle in Washington over whether your "financial advisor" should be a fiduciary.  Here are the seven words (and phrases) Isbitts says a fiduciary should never use:

  • Guarantee

  • High return

  • No risk

  • Free

  • Leading (as in we are the leading company that does blah blah blah)

  • Endorsed by

  • Maximize

  • Last Week Tonight with John Oliver: Retirement Plans (HBO) (YouTube)  Saving for retirement means navigating a potential minefield of high fees and bad advice. Billy Eichner and Kristin Chenoweth share some tips.  A focus of this episode is the damage that fees can do to an investment plan.  One example shown is that a retirement plan with a gross return of 7% annually for 50 years ends up 3x the size of a plan that grows by 5% a year.  This was used to show what the affect of 2% investment fees would be. 


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