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What We Read Today 04 July 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:

  • Is Gold Headed for a New Record Price?

  • Could you understand English of 200 Years ago? 400? 1,000?

  • Companies Mislead Investors by Improperly Valuing Assets

  • Sunscreen Selection Can be Problematic

  • Stop Speaking English to Live Longer?

  • Emirates Warn Citizens Not to Wear their Native Robes in America

  • London Luxury Home Prices Fall after Brexit

  • Italian Referendum Bigger Risk to Europe than Brexit

  • Terrorist Bombers Return Home to Saudi Arabia

  • India's IPO Boom

  • Taiwan Manufacturers Expect Exports to Grow

  • China's Capital Outflows Driven by Residents

  • Australia's Indecisive Election

  • Trickle Down Economics: "Dead, Buried and Cremated"

  • And More

Articles about events, conflicts and disease around the world


  • Charges weighed after Ohio incident triggers Emirati warning on robes (Reuters)   The mayor of an Ohio town at the center of an incident that prompted the United Arab Emirates to warn citizens against wearing traditional robes abroad apologized and said on Monday some of those involved could face criminal charges.  Police in Avon, Ohio, last week pinned to the ground and handcuffed an Emirati businessman, Ahmed Al Menhali, after receiving reports he was pledging allegiance to Islamic State militants while speaking on his cellphone in a hotel lobby.  According to Avon Mayor Bryan Jensen and Julia Shearson, head of the local branch of the Council on American-Islamic Relations, the 911 calls were placed by relatives of a female clerk at the hotel who was unnerved by his appearance.

  • Low income US households get $0.08/month in Fed housing subsidy; 0.1%ers get $1,236 (boing boing)  Hat tips to Roger Erickson and Fadhel Kaboub.   America is in the grips of one of the worst housing crises in its history, with 1 in 3 households spending more than 30% of their income on mortgage or rent payments; the US government has two kinds of housing subsidy, one for poor renters and the other intended for middle-income mortgage payers, but guess who gets most of the money?  First compare the two programs. The US spends $51B on all rent subsidies -- Section 8 housing, Homeless Assistance Grants, and public housing projects. But the price-tag from the two largest home ownership subsidies is $90B, just for Mortgage Interest Deductions and Property Tax Deductions.  Who gets the mortgage deductions? Because of the way they work, the bigger your mortgage is, the bigger your deduction is. 90% of the $90B goes to households earning $100K/year or more; households earning less than $50K/year get less than 1% of that money.  But the numbers get more skewed as you climb America's steep wealth-inequality ladder. By the time you get to the richest 0.1% of earners, the tax credit is worth $1236/month on average -- while the rental subsidy delivers$0.08/month per household to the nation's low-income renters.  Econintersect:  There is not enough information presented here to verify the numbers.

The rubric for Mortgage Interest Deduction programs is that it increases home ownership, but empirical research shows that it does nothing of the sort -- it just makes rich people richer.

A campaign called Turn It Right-Side Up seeks to reverse these upside-down tax subsidies. They're planning to make this a key issue in the 2016 elections.


  • London luxury property prices plummet after Brexit vote (boing boing)  1 in 6 listings of the "reduced" listings on Zoopla were cut since the Brexit vote (it's not clear whether this is unusual, though). There's also the undeniable fact that a lot of City bankers will be leaving the country, relocated at employer expense, and their houses will go on the market.

  • Brexit Strategies to Decide Race to Be Next U.K. Prime Minister (Bloomberg)   The race to succeed David Cameron as U.K. prime minister effectively became a proxy for the broader battle over how to manage withdrawal from the European Union, with Conservative Party candidates setting out their positions on what can be achieved and how fast.  Pitches from all five candidates have focused on when Britain should trigger Article 50 of the Lisbon Treaty -- the formal start of two years of negotiations with the EU -- and what level of single-market access Britain should seek, as well as how much control it will have on migration and the fate of citizens of other EU countries who are already in the U.K. They have to appeal to party lawmakers and activists, many of whom want a full and rapid departure from the EU, while avoiding too many promises they’ll struggle to keep.


  • Citi:  Italian Referendum Bigger Risk to Europe than Brexit (Breitbart News)  Italy’s upcoming referendum will deal with major Senate reforms which, if approved, could improve the stability of Italy’s political machine and give Renzi some breathing room.  If the referendum fails, Renzi’s government will fall, and Italy will return to the sort of political anarchy that followed the ousting of former Prime Minister Silvio Berlusconi.  Analysts suggest that with Eurosceptics holding momentum, the reforms may very well fail.  That would simply reinforce the growing momentum across Europe to allow citizens to decide whether or not to stay in the beleaguered EU, and analysts suggest that after Brexit other countries across Europe will likely hold their own referendums.  Eurosceptic parties across the continent and groups in France, Slovakia, the Netherlands, Denmark, and Sweden are asking for their own referendums in what is being called Europe’s “Patriot Spring.”

Saudi Arabia

  • Suicide bombers hit three Saudi cities (Reuters)  Suicide bombers struck three cities across Saudi Arabia on Monday, in an apparently coordinated campaign of attacks as Saudis prepared to break their fast on the penultimate day of the holy month of Ramadan.  The explosions targeting U.S. diplomats, Shi'ite worshippers and a security headquarters at a mosque in the holy city of Medina follow days of mass killings claimed by the Islamic State group, in Turkey, Bangladesh and Iraq. The attacks all seem to have been timed to coincide with the approach of Eid al-Fitr, the holiday that celebrates the end of the fast.  In the only one of the three attacks that appeared to have caused many casualties, a suicide bomber detonated a bomb near the security headquarters of the Prophet's Mosque in Medina, the second-holiest site in Islam.  Saudi-owned al-Arabiya television said an initial death toll from the Medina blast included three suicide bombers and two security forces officers.


  • Buhari Learns A Bitter Lesson: Economics is No Respecter of Presidents (Nigeria Today)  When Karl Marx, 1818-1883, pronounced that “Men make history, but not just as they please” (VBQ p 93), he must have had leaders like Buhari in mind. Nigerians were aware that Buhari, until he went to London for “God-knows-what”, was adamantly opposed to the devaluation of the naira for reasons that were badly explained because he is not an economist.


  • India IPO deals jump in H1, another $6 billion worth seen in the second half (Reuters)  A surge in first-half India IPO activity is likely to pale in comparison to the second half which could see over $6 billion in deals, banking sources said, with investors encouraged by a pick-up in economic growth and unfazed by Britain's vote to leave the European Union.  Interest in Indian listings was strong even in the immediate wake of the British decision. Last week staffing firm Quess Corp saw its $60 million IPO oversubscribed 144 times while shares in city gas distributor Mahanagar Gas jumped 30% in their market debut on Friday.  Larsen & Toubro Ltd, whose software services unit, L&T Infotech, announced on Monday the launch of an $183 million IPO on 11 July, was also upbeat.


  • Almost 60% of manufacturers expect exports to grow in H2: survey (Focus Taiwan)  Nearly 60% of Taiwanese manufacturers expected their exports to rise in the second half of the year amid improved economic sentiment at home and abroad, according to a Chung-Hua Institution for Economic Research (CIER, 中經院) survey.  The economic think tank said 59.8% of the polled manufacturers in its semi-annual survey said their exports would increase in the coming six months, up from 45.2% who felt that way in a similar survey conducted six months ago.  About one in six respondents (16.1%) said they expected their outbound sales to fall, compared with 26.8% who were pessimistic in the previous survey.


  • China economy news: Capital outflows driven by residents, Goldman Sachs says (CNBC)  China has suffered from outflows from its foreign reserves for months. Goldman Sachs and Standard & Poor's can't agree why.  Capital outflows from the world's second-largest economy have been sizeable recently, as reflected in the country's foreign exchange reserves, which analysts use in the absence of official figures detailing the flow of capital.  China's foreign exchange reserves fell to $3.19 trillion in May, the lowest since December 2011, down $27.9 billion from the previous month and the largest monthly drop since February, Reuters reported in early June, citing central bank data. Data for June are due on Thursday.


  • This parliament – hung or unhung – will bring us another continuous election campaign (The Conversation)  The irony of stridently warning people against voting for minor players and then, all charm, ringing those players when you personally might need their votes may be lost on Malcolm Turnbull. After all, a politician’s skillset includes being able to stand on your head without going red in the face.  As he waits impatiently for the results in the ten outstanding seats, Turnbull doesn’t know whether, if he survives in government, he’d have the slimmest majority (76 of 150 seats) in the House of Representatives, or be coping with a hung parliament. His calls indicate he is planning for the latter while desperately hoping for the former.  Turnbull bunkered down on Monday but Bill Shorten returned to the still-warm campaign trail in western Sydney to flaunt his unexpectedly extensive gains.

  • Australian political deadlock puts AAA rating at risk (Reuters)  Australia could be a step closer to losing its vaunted triple A credit rating after a deeply divided electorate left the country in limbo and foreshadowed a hung parliament where no party holds outright power.  The uncertain outcome of Saturday's federal election heightened fears Australia could be consigned to three years of minority government and paralysis on budget reform.

  • 'Jobs and growth'? Trickle-down economics finally dead, buried and cremated (Crikey)  In a stinging critique on Sky news yesterday, Victorian Liberal president Michael Kroger complained that the Turnbull government had not sold its company tax cut plan properly. In particular, Kroger said that the government had not given figures for how many jobs the tax cut would create.

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

Gold Rally

  • Companies may be misleading investors by not openly assessing the true value of assets (The Conversation)  This discussion concerns Australia but the applicability is global.  Misleading accounting is an all too common practise.

  • Use sunscreen to ward off cancer 'epidemic'—but choose wisely (CNBC)  Some sunscreens do not meet stated specs.  Ready to have fun in the sun this summer? After breaking out the bikini and packing up the cooler, don't forget to apply the sunscreen.  More than 5 million cases of skin cancer get diagnosed annually—and according to the American Cancer Society that number is more than breast, prostate, colon and lung cancer cases combined. Experts say it means would-be sunbathers need to be more vigilant about taking precautions.


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