Thursday, February 22, 2018

End of February 2018 Links

  • "[V]irtually every large city, notable landscape feature, creature and weather pattern of North America — as well as myriad other words, concepts and images — has been snapped up and trademarked as the name of either a brewery or a beer." [Harvard Law Review]
  • Blue Bottle Coffee director of training Michael Phillips, who was the 2010 World Barista Champion, says that when a customer asks a Blue Bottle barista for a flat white (and it's only Aussies and Kiwis who ask for them, he says), the protocol is to not make a fuss, but to serve a modern American cappuccino, which he says it "incredibly similar" to the flat whites you'll get in, say, New Zealand. "We'll simply say, 'Absolutely!' but we'll make them a drink that's pretty much our cappuccino," he says. "And if they get the drink and say, 'No, no, no, that's not a flat white,' we'll work with them on it. But in general, they get it and say, 'This is the best flat white I've had in the States.'" [Bon Appetit]
  • "Obama never used the Oval, but Trump is different," the president would say, referring to himself in the third person as he often does [NY Mag]
  • This former warehouse was transformed with an eye for quiet privacy and grand entertaining, hosting the likes of John Lennon and Norman Mailer. The ultimate New York City secret -- "you never know what is behind the façade." [link]
  • I played around with a ton of different filler materials for the cinder blocks, but pure cement just broke so easily. I finally settled on a secret formula using cement and a few other materials that look and feels identical to real cement. [link]
  • Over the next few weeks, we showed up each day and tapped away on MacBook Airs to the sounds of Portuguese house music and old-school hip hop piped in through speakers. ("Rap is urban, and so is WeWork") [link]
  • "I know there are minimum costs required to be a public company, but don't really think a hot breakfast at the Fairmont for the shareholder meeting meets that criteria." [CoBF]
  • I simply couldn't find much evidence that distributed ledgers are useful for any real-world applications (other than speculative asset bubbles). Once you understand that blockchains are bad at solving real-world problems, then you will understand why Bitcoin will fail. The blockchain imposes limitations that makes Bitcoin a bad version of something that has been tried in the past: e-gold (description here and Wired profile here). A company's stance on blockchain can also serve as a test of a company's management. In my view, companies pushing blockchain technology (e.g. IBM, Microsoft, Intel, Oracle) are disconnected from customers' actual needs and have mediocre management. Companies that don't talk about blockchain (e.g. Facebook, Amazon, Google, Apple) are more likely to produce sensible technology that will work in the real world. [Glenn Chan]
  • "You've formed an opinion on the cap toe — a crude and inappropriate way to finish the toe of a boot. The ultimate crutch of for the impatient, unskilled bootmaker. The blended scotch of shoemaking — a real patch-up job." [link]
  • Apparently Wahlberg's regular morning rounds at Riviera are no less zany. He starts on the 10th tee after one of three caddies has greeted him in the parking lot and another looper handles the clubs and raking. A third is there to do sprints with Wahlberg in between shots. These extraordinary bagmen are well compensated for their brief time—two Benjamins at least—to keep Hollywood’s busiest man active. [link]
  • These were heady days for the victors. In 1947, a carton of American cigarettes, costing fifty cents in an American base, was worth 1,800 Reichsmarks on the black market, or $180 at the legal rate of exchange. For four cartons of cigarettes, at this rate, you could hire a German orchestra for the evening. Or for twenty-four cartons, you could acquire a 1939 Mercedes-Benz. Penicillin and 'Persilscheine' (whiter than white) certificates, which cleared the holder of any Nazi connections, commanded the highest prices. With this kind of economic whammy, working-class soldiers from Idaho could live like modern tsars. [link]
  • There's been so many things – so many things – but me tell you about the canary in the coal mine. Let me tell you how I know saving Barnes & Noble is not in the home office's plans. [link]
  • At the peak of the waterbed craze, in 1987, more than one out of five mattresses purchased in the U.S. were waterbeds. [link]
  • Starting with Carbonell's notebook, tickets from an old till and data from the gin and vermouth brands he worked with, de las Muelas calculated the total drinks already sold and created a counter which would tally whenever a dry martini was served. Dry Martini celebrated its millionth dry martini in May 2010: the recipient, a lawyer, is entitled to a dry martini every day for the rest of her life. [link]
  • "Ethiopia is at a pleasant altitude. The current capital, Addis Ababa, is at 7,700 feet elevation. It's average high temperature ranges from 69 degrees during the July rainy season to merely 77 in March." [Sailer]
  • And when she's feeling worn down from all the negativity in the world, she'll turn off her television and her phone, light some candles, and blast Duke Ellington so loud that it reaches every nook and cranny of her $12.6 million Massachusetts Avenue Heights home. [link]
  • During my formative years back in the Fifties, I was the kind of kid who was secure in the belief that God wore buttondown shirts and madras Bermuda shorts. The worst villain passed my inspection if he wore trousers with a vestigial little belt in the back or possessed the skill to tie a bow tie. Good and bad were simply a matter of tweedy and non-tweedy. [link]
  • Yoshimichi Nakajima was waiting for the train one day at his local station in Tokyo when he politely asked the station attendant to lower the volume on his microphone. He was told that would be "difficult," so Nakajima lent a hand by grabbing the mic and throwing it onto the track. He then recounted all of this to the station master, who was speechless. Nakajima, a rare breed of Japanese anti-noise crusader, has also taken a speaker from a liquor store and tossed it outside as well as seized a megaphone from a police officer. [link]
  • The back-up plane Spirit provided was only half-filled as most people who were scheduled to go to Fort Lauderdale were too freaked out to get in the sky and must have decided if there was ever a time when you should press your luck in Atlantic City, you probably couldn't top the day you emergency landed there. [Quora]
  • "We're getting requests for service that are just astounding," said Steve Wright, general manager of the Chelan County Public Utility District, which includes Wenatchee. "We do not intend to carry the risk of bitcoin prices on our system." [WSJ]
  • As it stands, public blockchain is very much a kludgy solution looking for non-existent problem, namely lack of trusted intermediaries in finance and accounting. Unfortunately for this central value proposition of blockchain, there is no lack of trusted enough intermediaries in the financial/accounting sector. [link]
  • In the three weeks leading up to Feb. 14, 30 cargo jets make the trip from Colombia to Miami each day, with each plane toting more than a million flowers. [WaPo]
  • Someone has to make sure that "Who is Harriet Tubman?" isn't the answer to more than one clue a game, or even more than one clue a week. [link]
  • When Orwell speaks about the cathedral of Barcelona, he is talking in fact about La Sagrada Família temple, designed by Antoni Gaudí: "I went to have a look at the cathedral—a modern cathedral, and one of the most hideous buildings in the world. It has four crenellated spires exactly the shape of hock bottles... I think the Anarchists showed bad taste in not blowing it up... though they did hang a red and black banner between its spires." [Wiki]
  • Former aides say Bush would have loved a big parade, but they recognized a problem: The wars in Iraq and Afghanistan never ended. Such subtleties — the United States is now dropping bombs in seven countries — don't seem to have factored into Trump's calculations. [WaPo]
  • As I've mentioned many times, a large fraction of America's intellectual history has been entirely "disappeared" over the last sixty or seventy years, and there are absolutely fascinating lacunae that I'm hoping to reveal when I've finally finished my current software work. [Unz]
  • South America is the victim of a bad start. It was never settled by whites in the way that they settled the United States. All the European blood from the Caribbean to Cape Horn probably does not exceed that to be found within the area inclosed by lines connecting Washington, Buffalo, Duluth, and St. Louis. The masterful whites simply climbed upon the backs of the natives and exploited them. Thus, pride, contempt for labor, caste, social parasitism, and authoritativeness in Church and State fastened upon South American society and characterize it still. It will be yet long ere it is transformed by such modern forces as Industry, Democracy, and Science. It would be unpardonable for us ever to be puffed up because we enjoy better social and civic health than is usual in South America. If our forefathers had found here precious metals and several millions of agricultural Indians, our social development would have resembled that of the peoples that grew up in New Spain. Not race accounts for the contrast in destiny between the two Americas, nor yet the personal virtues of the original settlers, but circumstances. [Sailer]
  • An Alaskan might forgo a latte to pay $5 for a single perfect Sumo mandarin orange, flown in by New Sagaya, the city's largest gourmet market. [NYT]
  • Keep your exclamation points ­under control. You are allowed no more than two or three per 100,000 words of prose. [link]
  • You realize you probably wouldn't be able to relate to most humans if you were the sort of person who bought Italian Kangaroo boots. [link]
  • Some of the outfits in the South Williamsburg, Brooklyn, location trade in worldly goods, like Conscious Step, a sock company that donates a share of its proceeds to charity; Carvana, an online used-car dealership; Motorino, a pizza micro-chain; and Visual Magnetics, which sells idea boards. Others are entirely ether-based, such as One Door, a company that offers cloud-centric "merchandising execution"; Mish Guru, a Snapchat-focused "management & analytics platform"; and DevTribe, a social-media consultancy seeking "influencers looking to increase revenue through personal branding." There's at least one self-employed "vlogger and design consultant," as well as Turnkey & Bespoke, which manages retail construction projects, be they pop-up shops, promotional booths, or, yes, offices inside WeWork buildings. There's also a company called NSFW, whose function might be described as "facilitating curated gratification." (It puts on swingers' parties.) [Esquire]
  • If we exclude the folks who bought Bitcoin in 2010, I used to think that the smartest Americans were those who maximized leisure and social time without the tedium of work, e.g., by bubbling to the top of the waiting list for public housing in San Francisco, Manhattan, Cambridge/Boston. There are, of course, some crazy rich people who have even better material lifestyles than folks on welfare in these parts of the U.S., but they may have (a) inherited money from a parent, (b) worked like a slave, or (c) taken a lot of risk such that they might easily have ended up middle class and exiled to the suburbs. [Greenspun]
  • By the late nineteen-sixties, ownership of the Miss Universe Organization had passed to a lingerie company called Kayser-Roth. Cindy Adams, who was an assistant at the company, and her husband, the comedian Joey Adams, were friends of Roy Cohn, the New York lawyer and fixer who had been a close aide to Senator Joseph McCarthy. "Roy used to invite us everywhere, and once we went to a party on Long Island, where I happened to be seated at a small table with this tall young guy with blond hair," Adams told me recently. "Roy told me at that dinner that one day Donald would own New York. I said, 'Yeah, pass the gravy.'" [New Yorker]
  • Then we had the response to the Section 220. To force two people to travel to Kentucky, to put them in a room with a card table and some chairs, give them binders of documents, and then say "copy them yourselves on the copier," is discourteous, disrespectful, and unnecessary. It is inconsistent with how anyone actually handles 220 demands and the production of records pursuant to 220. It's essentially a gratuitous power trip by the incumbents to attempt to show a party they believe to be their adversary who is really in control. [EDGAR]
  • The candidates were then knighted with a petrified grapevine root brought from Burgundy, France. They were kissed on both cheeks and signed their names into a large book, sang a song in French, and joined their ''elders'' in a procession past admiring guests. [NYT]

Wednesday, February 7, 2018

February 2018 Links

  • Most books are a BIG IDEA exploited during hundreds of pages so that in that way you have to pay 20 dollars for the idea. Sometimes this bloating is better, sometimes worse (i.e., inspirational anecdotes), but most books can have their "usefulness" reduced to 10-20 pages. To get these 10-20 pages, I read in EPUB files and highlight interesting passages and write notes through PocketBook. Then I export the highlights and notes in xhtml format and convert them to a Google Doc through an R script. Then, most important of all, I try to "rewrite" the book from this Google Doc during trips. This is the moment when I really learn from the book. Not only is much easier to retain concepts from 10 concentrated pages than from 300 bloated pages. Rewriting it forces me to link the concepts and really understand them. It works in a similar way to the advice of learning something by trying to teach it to someone. [MR]
  • Here is how I pack. One hand held bag with a shoulder strap. In it I pack five good quality black cotton t-shirts, five changes of socks and underwear, a pair of cotton chinos, a woolen jumper, a woolen beanie, a waterproof goretex jacket, a pair of sandals, one nice button up shirt, a baseball cap, a pair of jeans, and my toiletries bag. Any room left over I pack with books. These books will be swapped with other travelers as I meet them on my journey. If I need anything else I purchase it on the way. [Pushing Rubber]
  • Multiculturalism is a lie and a betrayal of Western culture. Not all cultures are equal. If you believe they are then go and live in Africa or Afghanistan and see how you like it. [Pushing Rubber]
  • You may believe that it does not matter how you dress, but it does. You may think that people should not judge by appearances, but they do. You might well consider yourself to be special and above the hierarchies of social status, but you are not. [Pushing Rubber]
  • You don't have to work hard to have a great relationship. A great relationship is easy, that's what makes it a great relationship. Any relationship which requires work isn't worth being in in the first place. [Pushing Rubber]
  • Quasi-religions such as environmentalism and new age nonsense don't seem to offer much spiritual comfort when the doc informs you that you have the big C. But the Boomers infected the Church much like they infected everything else; or rather they failed to protect the treasures that had been passed down to them by previous generations. [Pushing Rubber]
  • The modern man has spent time alone. Use this time well. Take up some hobbies, learn a language, become more interesting. Prove to yourself that you don't need anyone else in order to be happy. If you can do that then you'll be in the position of never being vulnerable. And when you do find someone then there is a greater possibility that she will enhance your life. Not only that but women are very attracted to a man that doesn't need them. That's why alone time is so important. It ends up making you even more attractive. So not only will you not die alone, you'll end up with someone far superior than you were able to attract before. [Pushing Rubber]
  • Common to all the great marriages and relationships that I personally know, (and there aren't many of them), both partners are genuinely happy people. They wouldn't think about taking their frustrations out on their partner or making them demean themselves for their own short-term contentment. They are marriages of equals. The husbands do not have to ask 'permission' to do something. The idea of asking my wife for permission is completely alien to our relationship. I simply let her know what I'm doing. She in turn is happy that I'm having a good time. [Pushing Rubber]
  • There's strong market demand for smaller homes with a patch of garden in tolerably walkable neighborhoods near a Main Street. The architects have already arrived with their Dwell Magazine aesthetic. I first began to understand this dynamic in Portland, Oregon some years ago. Halfway between the urban core and the fringe sprawl is a particular sweet spot for a lot of people. [Granola Shotgun]
  • We never see the world as our retina sees it. In fact, it would be a pretty horrible sight: a highly distorted set of light and dark pixels, blown up toward the center of the retina, masked by blood vessels, with a massive hole at the location of the "blind spot" where cables leave for the brain; the image would constantly blur and change as our gaze moved around. What we see, instead, is a three-dimensional scene, corrected for retinal defects, mended at the blind spot, stabilized for our eye and head movements, and massively reinterpreted based on our previous experience of similar visual scenes. All these operations unfold unconsciously—although many of them are so complicated that they resist computer modeling. For instance, our visual system detects the presence of shadows in the image and removes them. At a glance, our brain unconsciously infers the sources of lights and deduces the shape, opacity, reflectance, and luminance of the objects. [SSC]
  • No other farmer, not even Gallo, had cornered a market the way Resnick had cornered the growing, buying, processing, and selling of pistachios. He had his hands on 65 percent of the nation’s crop. [link]
  • Dozens of entrepreneurs, made newly wealthy by blockchain and cryptocurrencies, are heading en masse to Puerto Rico this winter. They are selling their homes and cars in California and establishing residency on the Caribbean island in hopes of avoiding what they see as onerous state and federal taxes on their growing fortunes. [NYT]
  • Older adult residents' socio-demographic factors were found to be associated with gait speed. Those with slow gait speed were not physically active and had less frequent contact with people through religious activities and this might place them at risk of being socially isolated, which can have consequences. Gait speed can be included as a routine assessment tool to identify at-risk groups for interventions which aim to keep the older adults socially engaged and healthy. [NLM]
  • By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo's revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of "Eureka!" I was shouting "Sell!" [Paul Graham]
  • There could be a period when stocks and bonds go down together. For example, instead of stock declines -> people wanting the security of bonds, people might decide that stock declines lead to bailouts which are really stealth currency devaluations, and decide they want no part of the long end of the yield curve. [CBS]
  • While sales of other "light lagers" like Molson Coors Brewing Co.'s Coors Light and Miller Lite also declined, the fall at Bud Light is the steepest. The brand suffered its biggest volume drop ever last year—down an estimated two million barrels, or 5.7%. [WSJ]
  • It's been more than a decade since South Florida Rep. Mark Foley was forced out of Congress for sending sexual text messages to teenage boys. But Foley tapped his congressional campaign fund to dine on the Palm Beach social circuit four times in early 2017, ending with a $450 luncheon at the Forum Club of the Palm Beaches. [link]
  • We knew the alt-right was a rapidly-growing far-right threat to society. So we did what we do best – got inside. For the past year, we sent Patrik Hermansson undercover in the alt-right. He infiltrated the heart of the movement, and he caught it all on hidden camera. [Kickstarter]
  • This pessimistic view of the universe, in which civilisations must exist in isolation for the sake of their own safety, illustrates a point that Cixin makes throughout the series: that virtuous behaviour is a luxury, conditional on the absence of threat. [LRB]
  • Sound cards happen to carry sound most of the time, but they are perfectly happy measuring any AC voltage from -2 to +2 volts at 48,000 times per second with 16 bits of accuracy. Put another way, your microphone jack measures the voltage on a wire (two wires for stereo) every 0.02 milliseconds, and records it as a value between 0 and 65,535. [link]
  • Aspirin and atenolol (beta blocker) enhance metformin activity against breast cancer - use of cheap, safe drugs against cancer is fascinating but I doubt it will catch on, no money to be made. [Mangan]
  • When people are subjected to artificial blue-rich white light at night, from screens and electronic devices as well as artificial illumination, the photosensitive ganglion cells in the retina signal the brain to stop producing melatonin. Such disturbances can have wide effects: on sleep and waking cycles, eating patterns, metabolism, reproduction, mental alertness, blood pressure and heart rate, hormone production, temperature, mood patterns and the immune system. [link]
  • Probably placebo effects rode on the coattails of a more important issue, regression to the mean. That is, most sick people get better eventually. This is true both for diseases like colds that naturally go away, and for diseases like depression that come in episodes which remit for a few months or years until the next relapse. People go to the doctor during times of extreme crisis, when they’re most sick. So no matter what happens, most of them will probably get better pretty quickly. [SSC]
  • I view the infamous "Dean Scream" as one of the last triumphs of the controlled Establishment Media. Dean was mildly outside of the mainstream consensus, but still he was effectively kneecapped by the media over some mild overexuberance. At the time, I found the whole episode ridiculous and I still feel that way. Say what you want about Dean, but at least he was against The Iraq War, unlike the eventual Democratic nominee, John Kerry. Contrast the media's ability to sideline Dean with the Donald Trump campaign. Internet comments and social media allowed the Trump campaign to leapfrog the Establishment Media framing that traditionally blocked non-conformist politicians. If Dean had access to Twitter and Facebook, his supporters could have transmogrified the "Dean Scream" into a humorous meme and simply moved on. [Sailer]
  • SENS Research Foundation, a leading Silicon Valley nonprofit focused on diseases of aging, announced today the receipt of a $2.4 million Ethereum donation from Vitalik Buterin, the co-founder of Ethereum and the co-founder of Bitcoin Magazine. [link]
  • Trump's Treasury forecasts borrowing over $1 trillion in 2019 and over $1.1 trillion in 2020. Before taking office, Trump described himself as the "king of debt," although he campaigned on reducing the national debt. [WaPo]
  • Brendan is thirty and the founder of a tech company. He is bright, cheerfully handsome, well-related, well-connected, an alumnus of Brown University and Goldman Sachs, where he did operational risk management, which he concedes was "not exactly a crushing-it kind of job." One day a couple years ago, Brendan looked at his bosses and saw his future self: "charting numbers under fluorescent light, two kids at home, counting vacation days, and at what cost?" He quit and tried writing comedy sketches but found it too solitary, plus he didn't want to move to L.A. Last year, Brendan scraped together his life savings and started a dating app called Hater. [Esquire]
  • The question, as always, is the following: what source of fixed investment will disappear as the result of the backup in interest rates? There is obviously a fair amount of malinvestment going on (cough, Bitcoin mining, cough), but it is unclear to me that this enough to derail the global business cycle. [link]
  • Former firefighter Thomas Futterer, an avid runner who lives in Long Beach, hurt a knee "misstepping off the fire truck," three weeks after entering DROP, according to city records. The injury kept him off the job for almost a full year. Less than two months after the knee injury, a Tom Futterer from Long Beach crossed the finish line of a half-marathon in Portland, Ore., in a brisk 2:05:23, according to race results posted online. Only one Tom Futterer lives in Long Beach, according to public records. [LA Times]
  • For years, when it arrived in a port, the Blue Ridge would be welcomed by a familiar sight on the pier: a beaming Leonard Francis, flanked by a black sport-utility vehicle or limousine and an entourage of comely young women. His company, Glenn Defense, held Navy contracts to provide everything the crew might need while in port, including fuel, food, fresh water, tugboats, security guards and ground transportation. But Francis, also known within Navy circles as "Leonard the Legend," was renowned for the perks that he provided off the books. Besides paying for meals at Asia's fanciest restaurants, he was famed within the Navy for the prostitutes and strippers he had on call from China, Indonesia, Malaysia, Mongolia, the Philippines, Russia, Thailand and Vietnam. [WaPo]
  • I wonder how many of the people making predictions about the future of truck drivers have ever ridden with one to see what they do? One of the big failings of high-level analyses of future trends is that in general they either ignore or seriously underestimate the complexity of the job at a detailed level. Lots of jobs look simple or rote from a think tank or government office, but turn out to be quite complex when you dive into the details. [MR]
  • Owls are intensely territorial, and when a male hears a rival male of the same species invade his territory, he attacks. By posing as an intruder, an observer equipped with speakers can quickly bring an aggrieved male into view. [NY Books]
  • At a total lifetime intake of 7,100 liters of 100 proof whiskey, you're guaranteed to get cirrhosis. However, 50% of the alcoholics had cirrhosis at an intake of about 2,000 liters. [Mangan]
  • Calls for rent-control legislation are growing across the U.S. as apartment tenants endure sharply rising rents and memories fade of the downsides of price caps. [WSJ]
  • U.S. officials have long maintained the federal government would make a profit on its $1.4 trillion student loan portfolio or at least break even, but two recent reports suggest just the opposite will be the case. [WSJ]
  • The relationship between patent law and antitrust law has challenged legal minds since the emergence of antitrust law in the late 19th century. In reductionist form, the two concepts pose a natural contradiction: One encourages monopoly while the other restricts it. The inherent tension can be framed in the following manner: Can a body of case law that grants monopoly opportunities be reconciled with a body of case law that curtails monopolization. To avoid uncomfortable dissonance, the trend across time has been to try to harmonize patent and antitrust law. Since the 1930s, for example, the Supreme Court has ruled that antitrust law operates only when patent holders reach beyond the boundaries inherent in the patent grant. It is an inspired attempt at reconciling the two bodies of case law. Unfortunately, no one has been able to determine what boundaries are inherent in the patent grant, a confusion that has spawned almost a century of consternation and conflict over what exercise of power lies within the patent grant and what lies outside. [pdf]
  • I'm looking at great industrial companies I own — like MMM, Honeywell and Boeing. Their P/Es are high. Should we see a 15% decline, I'll think about trimming. Or maybe adding more. For now, I'm thinking this is not 2001-2002 or 2008. The world's economies are firing on all cylinders. The big growth is in tech. And that’s where I will continue to be heavily invested, for now. [Technology Investor]
  • If Beverly Hills built a lot of high-income housing, it would have a salutary ripple effect moderating housing prices in surrounding areas all down the Great Chain of Housing. In contrast, Beverly Hills building a handful of low-income units is just a way to funnel pay-offs to the relatives of politically well-connected folks. [Sailer]
  • Our Bolshevik overlords are quite devoted students of Dystopia Engineering. We received a sinister blend of both Orwell and Huxley's worst nightmares. Amused to death in private, and ruthlessly silenced in public. Porn & Scorn. [Heartiste]
  • What Orwell feared were those who would ban books. What Huxley feared was that there would be no reason to ban a book, for there would be no one who wanted to read one. [link]
  • In the largest sense, jamming is a problem in a field called tribology—the study of friction, lubrication, and wear between interacting surfaces. In the nineteen-sixties, the British government asked an engineer named H. Peter Jost to investigate this subject; the 1966 "Jost Report" found that poorly lubricated surfaces—sticky ball bearings, rusty train rails, and the like—cost Britain 1.4 per cent of its G.D.P. (The term "tribology," coined by Jost, comes from the Greek verb "to rub.") [New Yorker]
  • All automakers "cheat" off each other. They buy their competitors' cars, disassemble them, and learn precisely how they work and how they're made. This reverse engineering is called "competitive benchmarking," and while sometimes it's done in-house, there are also entire companies devoted to the practice. One of them is Munro and Associates, a firm of manufacturing experts contracted by OEMs and suppliers to tear down cars and car parts to the very last nut and bolt. [link]

Wednesday, January 31, 2018

End of January 2018 Links

  • In a 2014 paper in the journal Ecosystems a team of researchers reported that the hydrography of residential neighborhoods in Miami and Phoenix is more similar to each other than to the hydrography of the Sonoran Desert and Everglades natural ecosystems that they replaced. "You sit there in Phoenix," says Peter Groffman, an ecologist at the City University of New York Advanced Science Research Center, "and a lot of people have moved there from the northeast because they're allergic to tree pollen. And then they planted all these trees. Pollen counts in Phoenix can be really high. Why have people moved across the world spreading a similar ecosystem type?" [link]
  • "Cornelius Vanderbilt was once the richest man in America. Yet none of his descendents just three generations below him could count themselves as millionaires! How did this happen? Fortune's Children: The Fall of the House of Vanderbilt tells the tale." [link]
  • The main textbook resource for this year is Robbins and Cotran's Pathological Basis of Disease. Upperclassmen recommended that we purchase a $95 subscription to Pathoma, an online organ-based video atlas covering high-yield pathologies. Many of us are watching the lectures at 1.5x speed, pausing to replay sections that are confusing or to check Wikipedia. Lanky Luke surmised, "This is the future of medical education. There are so many educational resources now. Most of our class would give up lectures if it saved $10,000 of tuition." [Greenspun]
  • Living in Zurich forced completely unanticipated personal growth. Weekends once filled with work and JIRA tickets were now occupied with impulsive SCUBA trips off the Italian coast, ibex-spotting excursions in southeast Switzerland, and under-the-bridge “nature raves” a quick train-ride away from Zurich proper. Being able to remove myself from the constant specter of work made me more creative and driven; in fact, this replenished focus led to developing the research that landed me and my co-publishers a spot at the European Conference of Computer Vision in 2016. [link]
  • Barrett-Jackson's 2018 Scottsdale auction just wrapped up and everyone's rich dad went home happy with a NUMBERSMATCHINGIKNOWWHATIHAVE 1970 Chevy Chevelle SS that'll sit untouched in a garage for the rest of eternity. Occasionally my dad and I will watch the auction live because I will always have a soft spot for '60s-'70s muscle cars and trucks, but can we all admit how silly prices are getting? [link]
  • Once in office, Trump appointed the most disproportionately enplaned administration in history: According to Forbes, Treasury Secretary Steven Mnuchin has a Dassault Falcon; Linda McMahon, the Small Business Administration administrator, has a Bombardier Global; Education Secretary Betsy DeVos and her family maintain a fleet of 12 private jets, including a Boeing and six Gulfstreams, as well as four helicopters; Gary Cohn, the chairman of the National Economic Council, and Commerce Secretary Wilbur Ross each retain private-jet shares in a fractional-ownership arrangement. [NYT]
  • We study the relation between mutual fund managers' family back grounds and their professional performance. Using hand-collected data from individual Census records on the wealth and income of managers' parents, we find that managers from poor families deliver higher alphas than managers from rich families. This result is robust to alternative measures of fund performance, such as benchmark-adjusted return and value extracted from capital markets. We argue that managers born poor face higher entry barriers into asset management, and only the most skilled succeed. Consistent with this view, managers born poor are promoted only if they outperform, while those born rich are more likely to be promoted for reasons unrelated to performance. Overall, we establish the first link between family descent of investment professionals and their ability to create value. [pdf]
  • We recall that the reading of the Daily Sentiment Index of S&P futures traders stood at just 3% bulls on the day of the March 2009 low. Looking at sentiment data today, there are probably 3% bears left. [link]
  • Nobody smokes marijuana anymore. Everyone's vaping it. Or eating, drinking, sipping, dabbing, sucking on lozenges, chewing on gum, applying unguents or administering a drop or two of a cannabis-infused tincture under one's tongue, where it is absorbed into the sublingual artery, within minutes producing an invisible, odorless, private high. [NYT]
  • We are in the "Internet Two" phase as Steven Johnson called in it his piece that I blogged about yesterday. Internet One was an open network, open protocols, open systems. Internet Two is closed platforms that increasingly dominate the market and own and control our content and us. We need to get to Internet Three where we take back control of ourselves. [AVC]
  • I mean, Faye Dunaway is driving a fuckin' Prius today. Now, there's nothing wrong with a Prius, but my point is, she had no financial power. [link]
  • A VC firm is a two sided marketplace that doesn't scale. On one side you have entrepreneurs looking for capital, support, introductions, know-how, and all sorts of "value add" that can help them win a market. On the other end you have return hungry (yet risk adverse) investors looking for unique investment opportunities with asymetrical upside. The VC firm is the platform where such value is exchanged. [link]
  • He gave a personal story about Canada's attempt to provide gold-plated service for all: "I used to teach in Canada. My daughter went to an ophthalmologist where she was told she may have brain cancer and needed an MRI to rule this out. She was given an urgent 3:00 am appointment... in 6 months. Instead of waiting, we went across the border to get a $500 MRI that was emailed to her Canadian doctor. It was quite the spectacle. There are these lots near the border where MRI and CT machines are set up in trailers. The whole parking lot was filled with cars with Canadian license plates." [Greenspun]
  • In order to attract global talent, Japan's government has followed the example of countries such as Canada, and introduced a points-based immigration system. Advanced degrees, language skills, work experience and other qualifications are tallied up and a high score can help foreign workers earn permanent residency -- the equivalent of a U.S. green card -- in as little as one year. The administration has thus taken to boasting that it has the quickest permanent residency system in the world. After that, it takes five years of residency and another year or so of paperwork to become a citizen of Japan. So for skilled workers, Japan is now among the easier rich countries to move to. There's just one problem -- skilled workers aren't coming. [Bloomberg]
  • The key to a good interrogation is that the suspect doesn't know what the interrogator knows so the suspect can be caught in a lie which unravels their story. Thus, the Florida Police Bill of Rights is stunning in what it allows police officers... [MR]
  • Wennmachers, 53, has worked with, advised, or broken bread with nearly everyone who has endeavored to build—or write about—a startup. "She's like the router at the center of the industry," Andreessen says. [Wired]
  • Real earnings growth per share for the S&P Composite Stock Price Index over the previous ten years was negatively correlated (-17% since 1881) with real earnings growth over the subsequent ten years. That's the opposite of momentum. It means that good news about earnings growth in the past decade is (slightly) bad news about earnings growth in the future. [link]
  • Luckily, running your own mail server is not as daunting as many would have you believe. After all, that is how email is designed to work. Email is perhaps the most successful federated, decentralized protocol to ever exist. It's a shame we've allowed a centralized, monolithic advertising company to obtain a near monopoly on such a great technology. Luckily, I've spent the last few years tweaking my mail server setup, and I'm willing to enable your laziness in the spirit of a more free and open internet. [link]
  • Warren Miller, a passionate skier and filmmaker whose movies introduced skiing and snowboarding to a wide audience, died on Wednesday at his home on Orcas Island in Puget Sound, near Seattle. He was 93. [NYT]
  • I'm firmly in the blog camp, but I'm hitting a wall. I want to find independent content written by passionate, slightly zany individuals on independent websites, but I don't know where to find it. I know it's out there, but I've been trained by Facebook, Twitter, and even aggregators like Techmeme and Hacker News, to expect content to just appear in my lap. Like, somehow the creme of the crop will find its way to me — I just need to show up. [link]
  • working long hours sketching designs and being cutting toward people who want his precious time or are making too much distracting noise buttering their toast [Sailer]
  • In the event of a major war with the North Atlantic Treaty Organization, even one that Russia starts, its plans call for "de-escalatory" nuclear strikes. That is, Vladimir Putin would order limited nuclear attacks early, so as to frighten the U.S. into ending the conflict on terms favorable to Moscow. [WSJ]
  • Keeping track of a one-name first-date phone number isn't easy. Mr. Krick said his phone contacts contained, at one point, more than 60 women with the last name "OkCupid" or "Tinder." He hardly ever enters real last names. "The one time I did it recently, it was because there was another Emily Tinder already, so I needed to find out her real last name," he said. "I couldn't have Emily Tinder Two." [WSJ]
  • It isn't the zoning restrictions, or the building code, or the fire marshal's stipulations, or minimum parking requirements, or storm water management, or handicap accessibility, or financing practices, or tax regimes, or home owners associations, or public school district jerrymandering, or NIMBYs, or the DOT... It's all of it. The entire constellation of parameters taken together means only very large, fairly expensive, and incredibly complex things can be built. Whenever anyone tries to reform the system instead of simplifying things, additional new layers are added on top of the existing ones. [Granola Shotgun]
  • The cardiologist commented that one of his classmates paid for medical school by working as a cab driver while another worked as a part-time cop. "Getting shot at was his stress relief from studying. He is now a trauma surgeon." Classmates noted that tuition has gone up so much faster than wages that even paying for undergraduate tuition would be impossible today. [Greenspun]
  • Most women in the Bay Area are soft and weak, cosseted and naive despite their claims of worldliness, and generally full of shit. They have their self-regarding entitlement feminism, and ceaselessly vaunt their independence, but the reality is, come the epidemic plague or foreign invasion, they'd become precisely the sort of useless baggage you’d trade for a box of shotgun shells or a jerry can of diesel. [Greenspun]
  • One afternoon, I had to interrupt a phone interview that I was conducting to chase two fighting men from my front yard. They were flinging decorative stones from the flower bed at each other while they argued over a soured sale of pain pills. After I shooed them away, one of the combatants slunk back and rang my doorbell to beg for a ride home. His buddy had peeled away after an old woman who lived at the house where the fracas began shot out the truck's windshield. [WSJ]
  • Despite the promises of the name, it can be a challenge to find actual olives at Olive Garden. The omission is intentional, though the irony is not. It's a simple matter of marketing: People don't like olives. [Eater]
  • His goal has been modest: to have as decent a life as medical knowledge and the limits of his body will allow. So he saved and did not retire early, and therefore is not in financial straits. He kept his social contacts, and avoided isolation. He monitored his bones and teeth and weight. And he has made sure to find a doctor who had the geriatric skills to help him hold on to an independent life. [New Yorker]
  • Startups represent "the field offices of a large distributed workforce assembled by venture capitalists and their associate institutions," doing low-overhead, low-risk R&D for five corporate giants. In such a system, the real disillusionment isn't the discovery that you're unlikely to become a billionaire; it's the realization that your feeling of autonomy is a fantasy, and that the vast majority of you have been set up to fail by design. [Wired]
  • Had a cool opportunity to walk up the cable to the top of the the first tower of the Bay Bridge today with folks from the Bay Lights project. You walk right up the cable/pipe to the top, it actually wasn't that hard. Once on top the vistas were amazing. I tried to grab some photos of the hardware behind the lights at the top of the cables. The top of the tower is 526 feet high, and 280,000 cars drive on the bridge every day, making it the second busiest bridge in the world. [Matt]
  • An Argentine ant society is separated socially and reproductively from all other Argentine ants by an intolerance of outsiders. Their patriotism is so absolute that males are almost always killed if they enter the territory of the next supercolony. [Amazon]
  • Dean is the one who pointed me to that John Smedley cardigan is going to last three times longer than anything from say a J.Crew. That conversation put me on track towards developing an excel spreadsheet where I compare the daily usage value of a garment — think clothing return on investment. [OM]
  • For decades, food engineers at the big coffee brands of the day—Folger's, Maxwell House, Hills Brothers—systematically reduced the cost of their product by adding ever-cheaper beans into their blends. They used a less expensive coffee varietal known as robusta that was easy to produce in bulk in Brazil—and even took the lowest grades of it that they could find. Over time, they replaced the actual smell and flavor of coffee with marketing and some engineering tricks. "Just before sealing the powdered coffee in the cans, manufacturers inject a simulated coffee aroma," wrote Taylor Clark in his book Starbucked, "so when consumers open the container, they get a whiff of fresh coffee, which, because it’s entirely fake, instantly vanishes." [Atlantic]
  • [T]he "errors" between actual market returns and those that one would have expected (on the basis of reliable valuation measures 12-years earlier) are tightly correlated with by cyclical fluctuations in consumer confidence (h/t Mark Louis for that insight). Put simply, extreme overvaluation emerges because investors feel exuberant over some portion of the market cycle, not because prices actually belong at those extremes. Likewise, extreme undervaluation emerges because investors feel risk-averse. [Hussman]
  • Taleb took that single insight and turned it into a lucrative publishing and public speaking career. The liberal media refuses to give the full story of who actually originated the black swan concept and continues to give Taleb free publicity. The media only promotes people who are useful idiots, not those who have actually insightful observations. [Grey Enlightenment]
  • I discovered a Twitter feed that puts faces to this hypothesis. It's called "Mugshot Baes", and before you all ask what the hell baes means, apparently it's one of those new fandangled words that the kids are using these days which translates roughly to babe but the kids nowadays are too exhausted to be bothered using entire words. [Pushing Rubbber]
  • Money, which had always flowed freely to Manafort and which he'd spent more freely still, soon became a problem. After the revolution, Manafort cadged some business from former minions of the ousted president, the ones who hadn’t needed to run for their lives. But he complained about unpaid bills and, at age 66, scoured the world (Hungary, Uganda, Kenya) for fresh clients, hustling without any apparent luck. Andrea noted her father's "tight cash flow state," texting Jessica, "He is suddenly extremely cheap." His change in spending habits was dampening her wedding plans. For her "wedding weekend kick off" party, he suggested scaling back the menu to hot dogs and eliminated a line item for ice. [Atlantic]
  • Bank of Utica is right back where it started. It is now the best bargain of any bank stock I own at 57% of book value and about 12x normalized earnings. If the Sinnotts were to sell (which they won’t) the stock would fetch North of $2,000 per share. If they would simply start buying shares back (which they should with 19% capital, but likely won’t) you could easily see it trade over $1,000. The problem is, the family controls the voting stock so outside shareholders have no voice and are held hostage by the stingy ways of the family. [Seeking Alpha]
  • Gwern's argument for why Bitcoin might be worth $10,000 doesn't match what actually happened. He thought it would only reach that level if it became the world currency; instead it's there for...unclear reasons. [Less Wrong]
  • A test patient who does not need treatment is sent to 180 dentists to receive treatment recommendations. In the experiment, we vary two factors: First, the information that the patient signals to the dentist. Second, we vary the perceived socioeconomic status (SES) of the test patient. Furthermore, we collected data to construct several measures of short- and long-term demand and competition as well as dentist and practice characteristics. We find that the patient receives an overtreatment recommendation in more than every fourth visit. [SSRN]
  • Drinking on top of a mountain in a refuge with hearty food to sustain your continued alcohol consumption is the epitome of the civilized world. There simply is nothing quite like it. The highlight of our trip, and the highlight of our alcohol intake, was lunch at the small private restaurant at the splendid Chalet Fiat in Madonna di Campiglio. [Pushing Rubber]
  • "Every time we'd go to lunch, he'd be 30, 60, 90 minutes late," says Stuart Feigin, Oracle's fifth employee, who calls his former boss "the late Larry Ellison." Ellison was 90 minutes late for this interview. He did not apologize, he only explained: He was in a meeting. He has a hard time getting out of meetings. He is "somewhat reassured" that two of the people he most admires, Winston Churchill and Bill Clinton, were and are habitually late. [WaPo]

Wednesday, January 24, 2018

Cobalt International Energy ($CIEIQ) Bankruptcy Update

As expected, the newly published plan of reorganization for Cobalt (one of the Distressed Watch companies) provides for no recovery for equity.

Class 10 – Interests in Cobalt
a.Classification: Class 10 consists of all Interests in the Cobalt.
b.Treatment: On the Effective Date, existing Interests in Cobalt shall be deemed canceled and extinguished, and shall be of no further force and effect, whether surrendered for cancelation or otherwise, and there shall be no distribution to holders of Interests in Cobalt on account of such Interests.
Regarding the timing of the case:
Pursuant to the Bid Procedures Motion, the Debtors currently expect that 5:00 p.m. (prevailing Central Time) on February 19, 2018 will be the final bid deadline for all Sale Transactions and an Auction, if needed, will be held at 10:00 a.m. (prevailing Central Time) on February 27, 2018.

Confirmation Hearing Date
March 30, 2018, at 9:30 a.m., prevailing Central Time
So the case may be moving pretty quickly.

The unsecured debt is trading for ~37 cents today. How's the stock doing? Up big, of course. Why wouldn't you want to own equity junior to the impaired debt?

Friday, January 19, 2018

Friday (January 19th) Links

  • Johns Hopkins study in which broccoli extract applied to the skin of nude mice prevented oxidative damage from UV light for a period of several days, even after it was washed off the skin. The absorbed sulforaphane could only act as an antioxidant for 30-60 minutes, at best a short-term effect. However, the induced upregulation of antioxidants in the skin protected the skin from UV for two days! To put it in chemistry terms: antioxidants are stoichiometric and used up quickly, whereas the endogenous antioxidant enzyme system is catalytic and long-lasting. [Getting Stronger]
  • Possibly one of the most frequent requests we get is a recommendation for the best pencil for the New York Times Sunday crossword puzzle. [link]
  • Recipes for chocolate require the addition of extra cocoa butter to cocoa liquor, leading to a cocoa solids surplus and thus a relatively cheap supply of cocoa powder. This contrasts with the earliest European usage of cocoa where, before milk and dark chocolate was popularized, cocoa powder was the primary product and cocoa butter was little more than a waste product. [Wiki]
  • With much fanfare, Starbucks introduced a light-roast espresso blend to its shops across the country on Tuesday, marking the first time in more than 40 years that the coffee behemoth has used anything other than a dark, robust blend for its espresso, whether as an individual shot or as part of lattes, cappuccinos and other drinks. [Wapo]
  • Weeds are elegant masters of adaptation and procreative success, and the Genghis Khan of weeds—the one most hellbent on total domination—is pigweed, aka Palmer amaranth. It can grow as high as 10 feet in the shape of a ponderosa pine, with a stalk the width of a corncob. A single plant can produce a million seeds, and a pigweed-infested field will spew hundreds of millions, raising the probability that a mutation of the plant will come along that can resist an herbicide. "To a farmer, pigweed"s like a staph infection resistant to every antibiotic," Heraud says. [BB]
  • Grouse moors cover at least 550,000 acres of England, with at least 300,000 of these acres owned by just 30 huge estates – a number of which are owned offshore, and most of whom rake in large public farm subsidies. This survey's far from complete, however, with many more grouse moor estates yet to be listed and mapped. [link]
  • Mother Nature embedded the Nrf2 signaling pathways in us intentionally, because she didn't want us to get cancer. She cleverly invented a molecule (sulforaphane) which could both activate Nrf2 then be incorporated into one of Nrf2's greatest weapons (glutathione). [link]
  • Mr. Hummer went out to meet Joe Buttram, 27, for drinks. As a mixed martial arts fighter, Mr. Buttram said he would fight for a couple hundred bucks, sometimes a few thousand, and worked security at a start-up, but his main hobbies were reading 4chan and buying vintage pornography, passions that exposed him to cryptocurrency. [NYT]
  • But seriously, it's way healthier than I thought. This has been in-and-out of the news a few times over the years, but I was always like, "duh," until I finally looked at the data. In some cases glucose & insulin excursions are down 20, 30, even 50%! (mostly depending on distance covered, but also speed) (but mostly distance). [Lagakos]
  • One of the great benefits of eating low-carbohydrate whole, unprocessed foods is that it reduces your hunger. In trials of low-carbohydrate diets, one thing that's been seen again and again is that people spontaneously reduce their caloric intake on this diet. That's one of the keys to the success of this diet right there. [Mangan]
  • In humans under normal conditions, I believe pro- and anti-oxidants are balanced by our own endogenous processes. If we ingest something that produces a bit too much ROS, they'll be neutralized. If we ingest something that induces antioxidant processes, they'll be used if necessary and degraded if not. In other words, as long as you're not mega-dosing beta-carotene or smoking 2 packs a day, etc., then none of this should matter. [Lagakos]
  • The city of Seattle is getting more apartments this decade than in the prior 50 years combined. For the Puget Sound region as a whole, the current construction frenzy rivals the record apartment boom from the late 1980s, which was centered in the suburbs. [link]
  • Immense vertical skyscrapers can autonomously lift these driverless rooms and their passengers hundreds of meters up, where they're slotted into position before the wall panels open to reveal other connected room modules. [link]
  • Every time miners figure out how to hash faster or cheaper, the difficulty increases. When difficulty increases, each hash becomes less valuable. Your hashrate may stay the same, but you get paid less and less. In this way, Proof of Work forces miners to constantly re-invest revenue. Miners only profit through constant spending, constant optimization, constant competition. Miners that can't compete fall off the treadmill. [link]
  • In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal-use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological progress could not be relied upon to reduce fuel consumption. [Wiki]
  • With tinkering, syrup scientists at Japan's Hayashibara chemistry company finally figured out a novel enzymatic method to make [trehalose] on the cheap from starch. The method brought costs down to just $3 per kilogram. By 2000—just before the rise of C. diff.—the company got approval from the US Food and Drug Administration to use it as an additive in food. Approval for use in Europe came the following year. Manufacturers started pouring trehalose into a variety of foods, from pasta to ground beef to ice creams. [link]
  • Kigali, Rwanda's gleaming capital, pulses with African charm. About 23 years after the horrific genocide in Rwanda, Kigali has reclaimed its narrative and emerged as a proud and progressive city, buzzing with tech hubs, creative start-ups and cafes serving some of the best coffee in East Africa. [NYT]
  • Ms. Felstein turned to the New York Foundation for Senior Citizens, a Manhattan-based nonprofit. The group has been operating a home-sharing service since 1981, matching people who have space in their homes with those in need of affordable housing. It is one of a number of similar programs that have emerged across the country as the population of older Americans grows, as a way to help people stay in their homes. [NYT]
  • Port-au-Prince, Haiti, is one of the largest cities in the world without a central sewage system. There are no sewers connecting sinks, showers and toilets to hulking wastewater treatment plants. Most of the more than 3 million people in the metro area use outhouses, and much of that waste ends up in canals, ditches and other unsanitary dumping grounds where it can contaminate drinking water and spread disease. [NPR]
  • His primary message is that you will not achieve financial security and personal happiness by working harder to get ahead of the pack; you will find these things by carefully studying what the pack is doing and then doing the opposite. [link]
  • One of the key Principles of Mustachianism is that any and all lineups, queues, and other sardine-like collections of humans must be viewed with the squinty eyes of skepticism. Because if so many people simultaneously decide to do something that they are forced to stand or drive in a queue to do it, there’s a good chance it is something that is not worth doing. [MMM]
  • Thoren's intravenous magnesium load test for diagnosing magnesium deficiency: Provide ~360–480 mg of magnesium intravenously over 1 hour. If under 70% of the magnesium load comes out in the urine over 16 hours, this is highly suggestive of magnesium deficiency. [BMJ]
  • Brits saying that the NHS was designed for a country of hard-working laborers who died young and now is dealing with "sedentary workers who eat too much and exercise too little" and then keep living more or less indefinitely. [Greenspun]
  • I was offered a job in Denver once and have visited many times. The attraction has always been lost on me. Someone once described it as Akron with a mural. [Granola Shotgun]
  • "I am convinced we are living through a mass hysteria of the sort one would read about in Popular Delusions and the Madness of Crowds." [Sailer]
  • I'm a vodka soda guy. I get a fair amount of grief over it from my friends who are cocktail enthusiasts. The most important part is to have a fresh, supercrisp 10-ounce club soda. I have a bunch of them in the fridge at home, and it drives my wife crazy because there are all these bottles in there with two-thirds gone. [NYT]
  • The current CAPE10 is 33.33, which is 136% above its historical average. By taking out the financial crisis, the CAPE7 falls to 28.44, which is 105% above its historical average. [link]
  • "As smaller, more efficient planes flood the market," he said in an email, "new city pairs are being created almost every day, killing the case for larger aircraft." [NYT]
  • I did not enjoy all three books equally. The first, Three Body Problem, is excellent. The second, The Dark Forest, is very good. The third, Death’s End, is too dismal for words. [Dan Wang]
  • The fewer the manufacturing workers and engineers, the more removed everyone is from the particulars of industrial processes, and the more remote that knowledge becomes in each successive generation. We become think tankers and app designers and restaurant hosts, while the details of the industrial world become further and loftier abstractions. How many of our grandparents were familiar with the details of ball bearings, wire production, concrete mixing, industrial chemicals, while we are not? [Dan Wang]
  • This year, I had the chance to visit every part of the Sinosphere (or places where people are majority Chinese): I live in Hong Kong, and I've visited mainland China, Macau, Taiwan, Vancouver, and Singapore. [Dan Wang]
  • The growth of "zero-sum" activities may, however, be even more important. Look around the economy, and it’s striking how much high-talent manpower is devoted to activities that cannot possibly increase human welfare, but entail competition for the available economic pie. Such activities have become ubiquitous: legal services, policing, and prisons; cybercrime and the army of experts defending organizations against it; financial regulators trying to stop mis-selling and the growing ranks of compliance officers employed in response; the huge resources devoted to US election campaigns; real-estate services that facilitate the exchange of already-existing assets; and much financial trading. [link]
  • In just a matter of months I'll depart old age to enter deep old age — easing ever deeper daily into the redoubtable Valley of the Shadow. Right now it is astonishing to find myself still here at the end of each day. Getting into bed at night I smile and think, "I lived another day." And then it's astonishing again to awaken eight hours later and to see that it is morning of the next day and that I continue to be here. "I survived another night," which thought causes me to smile once more. I go to sleep smiling and I wake up smiling. I'm very pleased that I'm still alive. Moreover, when this happens, as it has, week after week and month after month since I began drawing Social Security, it produces the illusion that this thing is just never going to end, though of course I know that it can stop on a dime. It's something like playing a game, day in and day out, a high-stakes game that for now, even against the odds, I just keep winning. We will see how long my luck holds out. [NYT]
  • The CreditSights analysts called the structure a "SuperHoldCo PIK note", while several investors have dubbed it more simply a "super PIK". "It's definitely a sign of where we are in the cycle right now," said a manager at a US credit hedge fund. "I've never seen a 'super PIK' before." [FT]
  • In 1940, for example, when the roaring '20s had been fully liquidated, the Fed's gold backed its liabilities by 88%. There was very little credit in the dollar system, which made it a good time to own stocks. By the top of the 1960s bubble, the Fed had monetized so many government bonds that, at the pegged and London market price of $35 per ounce, gold backed the Fed's liabilities by just 12%. That was a great time to own gold (had it been legal for Americans to do so). On January 21, 1980, the spot price of gold hit a peak of $875, which meant that the gold on the Fed's balance sheet backed its liabilities by 133%—in order words, its liabilities were overbacked by 33%. That was not a good time to own gold. Today, the Fed reports it holds 8133 tonnes of gold, worth $349.4 billion at $1330 per ounce, which equals 7.9% of the Fed's reported $4.4 trillion in liabilities. [link - pdf]
  • Modern universities are insane. For the vast majority of human history universities as we conceive of them did not exist. The modern university system did not produce the Mahabharata, The Aneaid, or The Tale of Genji. The modern university system did not produce Ibn Khaldun, Thomas Aquineas, or Alexis de Tocqueville. The universities John Adams, Alexander Hamilton, and James Madison attended looked or functioned very little like Harvard, Columbia, and Princeton do today. Men like Abraham Lincoln are evidence that a deep reading and appreciation for the liberal arts do not require formal education at all. Let's not kid ourselves: the humanities existed before the modern university department was conceived; they will exist long after the modern university department has been destroyed. [link]
  • "Liquor is everything," Healy says. "The best thing you can do for a restaurant is order a vodka soda." [link]

Thursday, January 18, 2018

Review of Good Strategy / Bad Strategy by Richard Rumelt

Found out about Good Strategy / Bad Strategy from another blogger who reviewed it last year. The author Richard Rumelt was an electrical engineer who worked at JPL and then became a strategy consultant and UCLA management professor later in life. Here he is giving a talk about the book at the LSE:


As Rumelt says, "bad strategy is not the absence of strategy, it's an active force of mistaken belief". And he is right - this shows up time and time again in business and in government and anywhere else one needs a strategy.

For example, Donald Trump ran into a problem articulating a strategy last August. Watch this speech he gave about the new strategy for the war in Afghanistan. [Previously on Afghanistan: 1,2,3,4.]



Or read it:

I arrived at three fundamental conclusions about America’s core interests in Afghanistan.

First, our nation must seek an honorable and enduring outcome worthy of the tremendous sacrifices that have been made, especially the sacrifices of lives.
Oh no! The tremendous sacrifices that have been made are a sunk cost now. What are relevant are the potential costs and benefits (if any) of continued involvement in Afghanistan, starting from now, which is what should be evaluated and discussed. Poor reasoning about sunk costs is a sure way to torpedo a strategic deliberation.

Trump also did not elucidate any interests in Afghanistan that would qualify as "core interests." As Steve Sailer says,
Afghanistan is the sort of quagmire that ideally, you'd lure your greatest enemies to attempt to occupy. “Oh no, stay out of Afghanistan! It’s the strategic center of Asia, controlling all of the mountain passes. It’s a veritable Gibralter or Constantinople of strategic world locations.”
A clear understanding of the core interests would have been important for understanding what benefits could be derived from the Afghanistan activities, which could then be compared to the costs. One of the interests that Trump did put forth was that involvement in Afghanistan could somehow prevent future terrorist attacks in America and Europe.

Of course, Afghanis had nothing to do with the 9/11 attack, and for the more minor attacks (like Barcelona which Trump mentions), the best strategy would be to make America and Europe Muslim-free zones. As a CBS correspondent summarized Trump's speech,
1) How long we will be in Afghanistan, how many of us, and what we will be doing there will remain a secret, so the bad guys can’t guess what to do. He can choose among any of the options the globalists give him, and we don't need to know about it.
2) We will win*, and that will stop Muslims in America from stabbing, shooting, blowing up and running over people, because they get their orders directly from goat herders in Afghanistan who shtup little boys.
*3) Winning is undefined. He won't decide when to leave or what to do based on anything specific, because he's a problem-solver and you have to decide on the fly as things change. This way, we can stay there forever.
The result of this muddled Trumpian mess of lies and confusion is a Bad Strategy. So what would a Good Strategy look like?

Rumelt describes the structure that underlies a good strategy as a "kernel", which contains three elements:
  1. A diagnosis that defines or explains the nature of the challenge, helping to simplify the complexity of reality by identifying the most critical, salient aspects of a situation.
  2. A guiding policy for dealing with the challenge; an overall approach chosen to cope with or overcome the obstacles identified in the diagnosis. 
  3. A set of coherent actions that are designed to carry out the guiding policy, which are coordinated with one another to work together in accomplishing the guiding policy.
Rumelt presents interesting cases where the decisionmakers seemed to follow this approach. However, see my comments from the reviews of Billion Dollar Lessons and Why Most Things Fail about possible limitations to strategic thinking.

4/5.

Tuesday, January 16, 2018

Distressed Debt Watch - January

Bankrupt

Not Yet Bankrupt
  • Iconix Brand Group (ICON, EDGAR) bond due March 2018 trading at 82 cents, YTM of 137%.
  • Bon Ton Stores (BONT, EDGAR) bond due June 2021 trading at 25 cents, YTM over 65%. Missed interest payment due December 15 and entered forbearance agreement today.
  • Egalet Corp (EGLT, EDGAR) bond due April 2020 trading at 46 cents, YTM over 47%.
  • GNC Holdings (GNC, EDGAR) bond due August 2020 trading at 49 cents, YTM of 32%.
  • Frontier Communications (FTR, EDGAR) bond due April 2022 trading at 73 cents, YTM of 17%.