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:
American Women Meet Historic Soccer Defeat
The Shame of Student Debt
Top Financial Stocks for 2016
U.S. Stocks are in a Long-term Bullish Pattern
Why Empathy Can Be Bad
Family Tree of Modern Economics
Developed Economies Have Income Inequality Problem
Oil's Big Surge
EU Issues a Tssk, Tssk!
ISIS Uses Human Shields in Syria Retreat
Afghan ISIS Leader Reported Killed
Green Water in Rio
Articles about events, conflicts and disease around the world
Income inequality: Why so many households are not advancing (McKinsey) Incomes from wages and capital were flat or fell for two-thirds of households in 25 advanced economies between 2005 and 2014—an explosive increase from less than 2 percent in the previous decade. While it is widely assumed that children will grow up to be better off than their parents, the reality is that a new generation of young people in advanced economies risks ending up poorer. Podcast and transcript available here.
Oil up 2 percent on short covering, hope for producer action (Reuters) Oil rose about 2 percent on Friday, clinching its biggest weekly gains since April, after a short covering rally was triggered by comments from Saudi Arabia's oil minister in the previous session about possible action to help stabilize the market. Crude pared some gains after data showed U.S. oil drillers added rigs for a seventh straight week, the longest recovery in the rig count in more than two years. They added 17 rigs, the biggest increase since December. Brent crude futures settled 93 cents higher at $46.97 at barrel after touching $47.05, the highest in more than three weeks. U.S. crude settled up $1 at $44.49 after touching its highest level since July 22 at $44.60 per barrel. Econintersect: These prices are up well over 10% from lows touched on Monday morning.
Clintons earned $10.75 million in 2015, paid 34.2 percent federal tax rate (Reuters) In 2015, the Clintons made $1 million in charitable contributions, mostly to the Clinton Foundation; former President Bill Clinton brought in nearly $5.3 million in speaking fees; and the former secretary of state reported income of $3 million from publisher Simon & Schuster for her book on her tenure at the State Department. Clinton's running mate, U.S. Senator Tim Kaine of Virginia, along with his wife, Anne Holton, released 10 years of tax returns. They paid a federal effective tax rate of 20.3% in 2015.
US oil rig count jumps higher for the 7th-straight week (Business Insider) he US oil rig count rose for the seventh-straight week last week, according to the latest data from oil driller Baker Hughes out Friday. This week the rig count jumped by 15 to 396, the highest level since February 26. Last week, the rig count rose by 7 to 381, the highest total since March 18. The rig count has been steadily ticking higher in recent weeks amid what had been a bit of recovery in oil prices through the spring, though last week the price of oil fell below $40 briefly for the first time in months. Econintersect: Two points: (1) The mention of "a bit of recovery" is covering a doubling of oil prices in the first half of this year. (2) The "jump" in rig count is put in perspective by the graph below:
Trump backs away from labeling Obama founder of Islamic State (Reuters) Republican presidential candidate Donald Trump on Friday backed away from repeated remarks labeling President Barack Obama and Democratic candidate Hillary Clinton as the founders of Islamic State, saying they were sarcasm. Trump used the unfounded description of Clinton and Obama on Wednesday night and all day on Thursday during campaign appearances in Florida, including in an interview on Thursday with radio talk show host Hugh Hewitt.
Olympic soccer shocker: Sweden upsets U.S. women in quarterfinals (The Washington Post) For the first time in its distinguished history, the U.S. women’s soccer team has failed to advance to the semifinals of a major tournament. The four-time Olympic gold medalists were upset by Sweden on penalty kicks, 4-3, following a 1-1 draw Friday at Mane Garrincha Stadium in Brasilia.
Afghan envoy says regional Islamic State leader killed by U.S. drone (Reuters) The leader of Islamic State's branch in Afghanistan and Pakistan has been killed in a U.S. drone strike, the Afghan ambassador to Pakistan said on Friday, though the American military said it could not confirm that. If true, the death of Hafiz Saeed Khan would strike a blow to efforts by Middle East-based Islamic State - also known as ISIS and Daesh - to expand its control over territory and its jihadist brand into Afghanistan and Pakistan. It would also mark the second U.S. killing of a prominent militant in the region within months. In May, a U.S. drone killed Afghan Taliban leader Mullah Akhtar Mansour in a strike in Pakistan. Islamic State this week took credit for an attack on a hospital that killed at least 74 people in the Pakistani city of Quetta. A Pakistani Taliban faction also claimed responsibility.
Organizers shut pool to treat green water (Reuters) Another symptom of the very troubled Rio Games: Olympic organizers canceled diving training on Friday morning and shut the pool in an attempt to restore the water to its original blue color, three days after its emerald hue stirred concern among competitors. The pool turned green on Tuesday, becoming the subject of numerous jokes and creating a headache for organizers. An adjacent pool used for water polo and synchronized swimming has also started to change color. Despite promises to restore the color of the pool at the Maria Lenk Aquatic center by Wednesday evening, organizers were still trying to adjust its chemical levels, a spokesman for Rio 2016 told a news conference.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
A shameful graph (Rodger Malcolm Mitchell, Monetary Sovereignty) RMM contributes to GEI. Rodger says:
When you visualize the things that make America special compared to other large nations, like China and India, advanced education is one of the first things that comes to mind.
So it is sad that Americans believe making advanced education difficult to afford, somehow is normal or acceptable.
Weighed down by their own loans, many parents lack the means to fund their children’s educations without sinking even deeper into debt.
School loans increasingly belong to Americans over 40. This group accounts for 35 percent of education debt, up from 25 percent in 2004
Student loan balances average $20,000 for Generation X adults — those from 35 to 50 years old.
Gen-X parents who carry student debt and have teenage children have struggled to save for their children’s educations. Many oftheir children will need to borrow heavily for college, thereby perpetuating a cycle of family debt.
Student debt is surpassing groceries as a primary expense, with the gap widening most for younger families.
Top 10 Financial Stocks for 2016 (Investopedia) Financial stocks have struggled to gain traction in 2016. As of Aug. 4, 2016, the financial sector has eked out a gain of just 0.59% year-to-date (YTD), underperforming the Standard and Poor’s (S&P) 500 index by 6.67%. Financials have faced considerable headwinds from record low interest rates that have squeezed profits; steep declines in commodity prices that have raised concerns about exposure to soured loans; and Brexit, which has created uncertainty in regards to the operation of the financial systems of the United Kingdom and the European Union. Here are three of the stocks, go to article for remaining seven:
CME Group - up 15.41% YTD plus a dividend yield of 2.1%.
NASDAQ Inc - up 23.78% YTD plus a dividend yield of 1.8%.
Navient Corp - up 27.16% YTD plus a dividend yield of 4.5%.
Stocks Are Breaking the Glass Ceiling: 6 Reasons to Be Bullish (Advisor Perspectives) Martin Pring thinks now is the wrong time to be super bearish. He suggests that based on market patterns back for more than 80 years, the long-term trend for stocks should be higher from here. Econintersect: We have this week cut our allocation to stocks from 40% to 20% and increased cash to 65%. That of course is a short-term move and we will likely increase allocations to stocks on any significant correction.
Against Empathy (Boston Review) Paul Bloom, Professor of Psychology & Cognitive Science at Yale University, argues that rationality leads to far better results for individuals and society than does empathy. He doesn't think it is good to be devoid of empathy (that would be sociopathy, and, in the extreme, even psychopathy); but he argues that empathy without logic leads to some undesirable results:
Most people see the benefits of empathy as akin to the evils of racism: too obvious to require justification. I think this is a mistake. I have argued elsewhere that certain features of empathy make it a poor guide to social policy. Empathy is biased; we are more prone to feel empathy for attractive people and for those who look like us or share our ethnic or national background. And empathy is narrow; it connects us to particular individuals, real or imagined, but is insensitive to numerical differences and statistical data. As Mother Teresa put it, “If I look at the mass I will never act. If I look at the one, I will.” Laboratory studies find that we really do care more about the one than about the mass, so long as we have personal information about the one.
In light of these features, our public decisions will be fairer and more moral once we put empathy aside. Our policies are improved when we appreciate that a hundred deaths are worse than one, even if we know the name of the one, and when we acknowledge that the life of someone in a faraway country is worth as much as the life a neighbor, even if our emotions pull us in a different direction. Without empathy, we are better able to grasp the importance of vaccinating children and responding to climate change. These acts impose costs on real people in the here and now for the sake of abstract future benefits, so tackling them may require overriding empathetic responses that favor the comfort and well being of individuals today. We can rethink humanitarian aid and the criminal justice system, choosing to draw on a reasoned, even counter-empathetic, analysis of moral obligation and likely consequences.
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