Economist 8/12/14

  1. IRAQ depends on the Tigris and Euphrates rivers for drinking water, supplying industry and irrigating massive swathes of farmland. The two rivers account for 98% of the country’s surface water. Until recently the government’s greatest concern has been the fact that the source of neither river is in the country. In the past few decades dams and diversions across Turkey and Syria have steadily reduced the quantity of water reaching Iraq.Both waterways flow through areas of northern Iraq controlled by the Islamic State (IS), an extremist group.Mosul is not the only dam for which IS has fought. IS has already taken control of a number of government wheat-storage sites in Ninewa, Kirkuk and Salaheddin provinces.
  2. “icequakes” are the sudden movements of ice and frozen, saturated earth. While a large earthquake can trigger tremors in distant, tectonically active regions, earthquakes and icequakes have been considered unconnected events.Zhigang Peng, a seismologist at the Georgia Institute of Technology in America, and colleagues noticed that glacial calving—the falling of large chunks of ice from the end of a glacier into the sea—can be triggered by earthquakes that originate thousands of kilometres away.On analysing the data from 42 Antarctic seismographs, they found 12 clear signals that marked the occurrence of icequakes within six hours of the Chilean quake.
  3. CANADA’S long and troubled history with its First Nations (native Indians) hit a new bump this month with a fight over whether First Nations’ chiefs and councils should make public their salaries and expenses. A transparency law passed last year required Canada’s 634 First Nations communities to publish these details online by August 1st. But the deadline passed with barely one-third of communities complying. The federal government is threatening to cut funding to the dissidents.Greater compliance may now be unlikely, given the furore caused by the whopping pay-packet of the chief of an 82-member First Nation in British Columbia.First Nations’ groups counter that the Kwikwetlem case is an outlier, that they already provide salary and expenses details privately to the federal government and that they are now being held to a higher standard of transparency than other levels of government.
  4. A paper examined the records of 2,846 American mutual funds between the start of 1996 and the end of 2008, overseen by 1,825 managers. Turnover was high; fewer than a quarter of the managers lasted more than five years. Just 195 of them lasted a decade.In their last year in charge of their funds, these neophytes underperformed the veterans. However, the veterans did not outperform consistently; what they did do was avoid periods where they did particularly badly.The key to a long career in the mutual-fund industry seems to be related more to avoiding underperformance than to achieving superior performance.” In general, fund managers have access to the same information as their peers and, for liquidity reasons, tend to focus on the largest stocks in the market; this makes it very difficult to perform better than the benchmark, particularly after costs and fees are deducted.
  5. Argentina defaulted on part of its foreign debt.President Cristina Fernández de Kirchner has run by choosing to scotch last-minute talks and defy an order by Thomas Griesa, a New York judge, to settle with hedge funds that are demanding full repayment of their Argentine bonds.Instead, the president has opted to try to turn this battle into a nationalist epic. That offers an immediate, albeit slight, political dividend: her approval rating has crept up to over 40%. In this she is being true to type. In 11 years in power the Kirchners have preferred nationalism and confrontation to pragmatism and professional competence, while focusing relentlessly on the short term.Even before the default, the economy was set to contract by about 1.5% this year. Businesses are laying off workers, or cancelling overtime. The current account and the public finances are both in deficit. Inflation is at 39%.

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