Investing in Water. The Autocrat Axis. Italy’s Fake News Leader.

“A lot of things in life are first-order positive and second-order negative. Heroin is an obvious one, sugar less so. We have trouble delaying gratification, so we do a lot of things that are first-order positive, second-order negative. We buy bigger houses than we need only to find that rising interest rates make the mortgage payment untenable. We buy the sexy car only to discover later that it depreciates faster than the commuter car.

A real advantage is conferred on people who can do things that are first-order negative, second-order positive. Especially if these first-order negatives are very visible costs with no immediate benefit in the short term and a non-linear benefit at some future time.” – Farnam Street

Nice Work Surviving the Non-Election Election: Heads of state like to congratulate each other on their elections, even when the elections are a sham. Thus the phone calls Tuesday between Chinese President Xi Jinping and Indian Prime Minister Narendra Modi, and Russian President Vladimir Putin and US President Donald Trump. Over the weekend, both Xi and Putin were overwhelmingly elected in predetermined, make-believe voting processes.

Modi’s phone call to Xi was two-fold: First, to congratulate him on his reelection; and second, to try burying the hatchet. Tensions arose last year between the two countries when Indian and Chinese troops confronted one another in a disputed part of their common border. In a statement Modi’s office said, “The two leaders agreed that as two major powers growing rapidly, bilateral relations between India and China are vital for the realization of 21st Century as ‘Asian Century.’” China’s state news agency said Xi told Modi China was “willing to keep up the good momentum of two-way cooperation” with India, and China was “ready to enhance communication on long-term strategic bilateral issues to promote political mutual trust.”

Trump called Putin to congratulate him on Sunday’s election victory. Trump predicted the two men will meet in person soon but did not mention anything about Russian cyber-attacks or the poisoning of a former Russian spy on British soil. Trump told reporters he wanted to talk to Putin about “the arms race, which is getting out of control.” He might have been referencing Putin’s recent boast that Russia has developed new classes of nuclear weapons that can strike the US.

New Look, Old Style in Italian Politics: Luigi Di Maio isn’t your father’s politician. He is today’s poster boy for Italy’s turbulent politics. The clean-cut 31-year-old college dropout, who hangs out at the local barbershop and was living at home 5 years ago, is the new face of the anti-establishment Five Star Movement, and could become Italy’s next prime minister after his web-based party won the most votes in the March 4 election.

During the campaign, the Five Star Movement earned huge support from the economically frustrated south by fueling anger and deliberately avoiding specifics on policy issues. Orchestrated mudslinging efforts were disseminated across a vast spectrum of Five Star blogs and supportive websites that were happy to pedal fake news. In the European Parliament, the Five Star Movement aligned with UKIP, the British party that spearheaded Brexit, and has in the past urged an exit from the euro and a tough line on immigration.

Di Maio, who had pledged to shun coalitions and never call members of parliament “Honorable,” now looks to form a government, probably by joining forces with the anti-immigrant, anti-euro and hard-right League (together the parties won more than 50 percent of the vote). Yet he works to reassure the EU and investors in London that his party isn’t dangerous. Appearing in Rome he tried to put the foreign press at ease, saying his priority was Italian stability and insisting “we don’t want anything to do with the extremist parties of Europe.” Di Maio may have campaigned as a revolutionary, but the new-kid-on-the-block is coming off more like an old-style centrist politician, thanks to guidance by the media consultant the party hired to coach candidates.

– More than 500 police and law enforcement agents are trying to find the unknown serial bomber who is believed to be behind five explosions this month in the Austin, Texas area. The fifth bomb went off early Tuesday in a FedEx package-sorting facility between Austin and San Antonio and is believed to be linked to the four earlier explosions in Austin. The individual who sent the latest parcel bomb had also shipped another “suspicious” package which was turned over to law enforcement.

– The World Health Organization (WHO) reports that contaminated meat shipped from a South African factory is causing a deadly food poisoning outbreak which is threatening 16 African countries. Listeriosis, which can have a long incubation period, has killed nearly 200 people since January 2017.

– Nicolas Sarkozy, France’s president from 2007 to 2012, has been taken into police custody and questioned about allegations that he received millions of euros in illegal election campaign funding from the late Libyan dictator Muammar Gaddafi. A French inquiry into alleged campaign funding from Libya was opened in 2013, but this is the first time Sarkozy has been questioned. The former president has repeatedly denied the allegations.

– On Monday, Pope Francis called exploiting women for prostitution a crime against humanity and rejected the idea that going to prostitutes could be considered harmless. His comments were made in a no-holds-barred question-and-answer session with young people from around the world who came to Rome to prepare for a bishops’ meeting scheduled for October at the Vatican. The straight-talking pontiff noted that in Italy it was likely that some 90 percent of male clients of prostitutes were baptized Catholics. He apologized to all who had been exploited and asked forgiveness from exploited women and society “for all the Catholics who carry out this criminal act.”

– Japan is nervously watching as China appears to be heading toward dominance of a much bigger area of the Pacific Ocean. China has stepped up military spending and already dominates the South China Sea, through which Japan’s trade with major markets, including Europe and the Middle East, flows. Now Japanese military experts are worried Beijing may be on the brink of opening access to the Pacific through a Japanese island chain that has marked the limit of China’s military influence for decades.

Forecast for Water Availability Is Bleak: The UN released its World Water Development Report in conjunction with Monday’s World Water Day. The launch of this flagship report on water issues happened at the World Water Forum in drought-plagued Brasília.

The report warns that unless action is taken to reduce the stress on rivers, lakes, aquifers, wetlands and reservoirs, more than 5 billion people could suffer water shortages by 2050 due to climate change, increased demand, and polluted supplies. Humans use about 4,600 cubic km of water every year, of which 70% goes to agriculture, 20% to industry, and 10% to households. Global demand has increased six-fold over the past 100 years and continues to grow at the rate of 1% each year. The world population today is 7.7 billion, with expected growth to reach between 9.4 and 10.2 billion, and with two out of three people living in cities. “Droughts are arguably the greatest single threat from climate change,” the report notes, as illustrated in Cape Town,  South Africa, where residents face severe water restrictions from the once-in-384-years drought.

Other frightening predictions are that rainfall is likely to diminish in drought belts encompassing Mexico, western South America, southern Europe, China, Australia, and South Africa. Also, water quality is deteriorating. Since the 1990s pollution has worsened in almost every river in Africa, Asia, and Latin America, driven mainly by agriculture runoffs of fertilizer and other agrochemicals. Industry and cities also pose a significant danger, as about 80% of industrial and municipal wastewater is discharged without treatment.

Global warming has made the climate unpredictable. But amidst the changing climate there should be one thing that remains unchanged, your underwear (unless it’s dirty of course). Mack Weldon has the constant you need out of your underwear: to be ridiculously comfortable. Try a pair today with Mack Weldon’s Try-On Guarantee that promises a full refund, with no return required, if you don’t love your first pair. You’ve never felt anything like it before. Use code DailyPnut20 for 20% off.

– Humans, Mr. Harari warned, “have created such a complicated world that we’re no longer able to make sense of what is happening.” And “We’re in an unprecedented situation in history in the sense that nobody knows what the basics about how the world will look like in 20 or 30 years. Not just the basics of geopolitics but what the job market would look like, what kind of skills people will need, what family structures will look like, what gender relations will look like. This means that for the first time in history we have no idea what to teach in schools.” (NYT)

– Now watch me whip whip, watch me nae nae. And now the hardest: watch me do the asian squat. Actually don’t, but try it yourself. It’s not easy. “This ability that comes so naturally to cavemen and to babies has been lost to many Western toilet sitters—and it’s not so easy to get it back.” (Atlantic)

– “In investing, a huge amount of effort goes into identifying and managing risk. But so little effort goes into doing the same for luck. Investors hire risk managers; no one wants a luck consultant. Companies are required to disclose risks in their annual reports; they’re not required to disclose lucky breaks that may have led to previous success. There are risk-adjusted returns, never luck-adjusted returns.” (Collaborative Fund Blog)

– Speaking of investing and being first-order negative, second-order positive, we heavily endorse this piece: Why You Need a Roth IRA. (Lifehacker)

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