March 18th Links

• The key feature of bubbles like 2000, 2007 and today is that, by the market peak, actual S&P 500 total returns over the most recent 12-year period outpace the return that one would have anticipated on the basis of valuations 12-years earlier. This is not an indication that valuations have failed, but rather an indication that prices are likely to do so. [Hussman]
• Eddie believed he knew more than anybody else. I had a conversation with him about putting the right merchandise in the store for the customer that lived within the radius of that store, and Eddie said, 'We have a Kmart in the Hamptons that does great.' The customers come in and they buy, I think he was saying, the $15 folding chairs. They'd buy them for their parties and then they'd throw them away. So why can't a store be anywhere and do business? That was a huge disconnect, because most people would buy that chair and hold on to it for 20 years. [WSJ]
• When egg prices rose in the spring of 1966 and Agriculture Secretary Orville Freeman told him that not much could be done, Johnson had the Surgeon General issue alerts as to the hazards of cholesterol in eggs. [The Great Inflation and Its Aftermath]
• There are 12 lines on the Mexico City metro, each of which has its own colour and number/letter. This makes the Mexico City metro lines really easy to navigate, because you can just look out for the colour-coded signs in the stations, instead of flailing about looking for names or numbers. You can also do the same for the individual stops, which all have their own logos, as well as names. (Fun fact: this was because a lot of the Mexico City population was illiterate when the first metro line was inaugurated.) [link]
• San Jose is a dump, with nothing of interest to tourists (you have to get out around the country), whereas CDMX is one of the world's great cities. No comparison. [Trip Advisor]
• Four open computers and frantic clicking couldn't snag Jillian Hiscock tickets to Michelle Obama's Wednesday book event in St. Paul when they went on sale in December. The moment they hit the web, the St. Paul resident found herself jostled in online queues as the seats she desired in the upper level of the Xcel Energy Center disappeared, with the event virtually selling out within minutes. "We were trying everything and couldn't get in," said Hiscock, 35. [Star Tribune]
• As time went on, the earplugs-plus-headphones protection rig became standard writing gear. That was because the use of gas-powered leaf blowers in my Washington, D.C., neighborhood evolved from a few hours a week during the leafiest stretch of autumn to most days of the week, most weeks of the year, thanks to the advent of the "groomed" look that modern lawn crews are expected to achieve. [The Atlantic]
• A while back I attended a talk at the Long Now Foundation based here in San Francisco. Jesse Ausubel suggested that we wouldn't even need to grow grain, soy, or sugar to feed the yeast in vats. Plain old hydrogen is an excellent chemical feedstock for hydrogenomonas. These micro organisms are capable of combining hydrogen with carbon dioxide and oxygen in the atmosphere to produce all the protein we need. Put a biodigester next to a power plant (nuclear, gas, coal, wind, solar, hydro...) that supplies the hydrogen and enough diversified formatted foods can be produced to feed an entire city. [Granola Shotgun]
• While I was waiting for the county paperwork to be processed I did a lot of research and decided I wanted a solar powered well pump. Since the fir tree was going away the pump house would receive full southern sun all day. Ranchers and off grid properties use solar pumps all the time. One huge advantage of a DC solar pump is there's no need for inverters or batteries which are not only the most expensive part of a solar power system, but they also need ongoing maintenance and periodic replacement. But with a basic DC solar pump the sun hits the solar panels, the pump kicks in, and water is brought to the surface. Super simple. [Granola Shotgun]
• To those who like the notion that the Indo-Europeans triumphed because they carried in bubonic plague (or some other pathogen) that blasted immunologically naive EEF farmers: find me a plague that only kills men – all of them. [West Hunter]
• Here's a conundrum: in a ratio of 500:28, Hillary Clinton was endorsed by our smartest citizens (journalists, editors, and publishers) as the best qualified person, out of more than 325 million, to lead the United States government. After November 2016, however, she didn't have any pressing job responsibilities and her family foundation was also winding down. Why wouldn't a country of 5 or 10 million have tried to persuade her to come over and be their leader? From a statistical point of view, assuming equal intelligence and education levels, it is unlikely that a country of 10 million would have a better person available than someone who was #1 out of 325 million. [Phil G]
• Lori Loughlin's daughter Olivia Jade Giannulli, who is attending the University of Southern California, would have probably been fine attending Arizona State University. (Arizona State is a thriving public research university that Ms. Giannulli's father is reported to have cited on F.B.I. wiretaps as the unthinkable destination he would pay bribes to avoid.) [NY Times]
• Even a 30% annual rate of return seems incredibly high, but it's not and here's why. While Western Lime was only earning 8.72% on it's equity an investor buying at a 67% discount to book was earning 26% on their investment. Over the ensuing nine years Western Lime continued to execute as they had in the past. The investor buying at such an extreme discount was able to realize a consistently high rate of return. You don't need to buy a great business that compounds at high rates, just a consistent business at a considerable discount. [Oddball Stocks]

Sears Holdings Expects to File a Chapter 11 Plan "in the coming weeks"

From an 8-K filing:

As previously reported, on October 15, 2018 (the “Petition Date”), Sears Holdings Corporation (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) seeking relief under chapter 11 of title 11 of the United States Code.

The Company does not believe that there will be sufficient funds or other assets in the Estate to allow holders of the Company’s common stock to receive any distribution of value in respect of their equity interests and expects to file a chapter 11 plan memorializing that belief in the coming weeks.

Our glorious efficient markets are working on pricing this in.

March 11th Links

• He found that his symptoms did not recur as long as he consumed no more than 1 L of Earl Grey daily. When last seen in November, 2001, neurological examination, nerve conduction studies, and electromyography were normal. He was still drinking 2 L of plain black tea daily (his entire fluid intake), and had no complaints. [Lancet]
• DIRECTOR: Cut, cut, cut, cut, cut! (Then in a very male form of Japanese, like a father speaking to a wayward child) Don't try to fool me. Don't pretend you don't understand. Do you even understand what we are trying to do? Suntory is very exclusive. The sound of the words is important. It's an expensive drink. This is No. 1. Now do it again, and you have to feel that this is exclusive. O.K.? This is not an everyday whiskey you know. [link]
• Boswell is the only tomato company in the USA that maintains complete control of the tomatoes from the seed to the field and through the processing factory to the customers' doors. This is made possible by the fact that Boswell is closer to the field than any other tomato processor. They are committed to having "a foot in the field every day" — all of Boswell's tomatoes can be traced back to the 5-foot section of the field they came from. [BWEL]
• Everyone seems to be Instagramming the katsu sandos and caneles at Konbi, a tiny Japanese sandwich shop in Los Angeles. But have you seen the croissant? Ever since Konbi opened last fall, I have double-tapped and saved almost every photo of the shatteringly-flaky, so-damn-chocolatey confection. I just had to know how they got it that way. Here chefs Akira Akuto and Nick Montgomery break down the pastry I can't stop thinking about. [Bon Appetit]
• For the first time since forecasters began recording data — at least 132 years — the mercury did not reach 70 degrees in downtown Los Angeles for the entire month of February. [LA Times]
• There's now a standard grab bag of minimally invasive techniques for making a lackluster neighborhood more appealing. Paint, street furniture, wayfinding signage, potted plants, and branding along with new programming help to define and activate designated areas. In this case the overly wide streets were narrowed, a public pedestrian plaza was cultivated, and a canopy of overhead plastic streamers created an iconic crown. These measures are sometimes dismissed as hipster stunts, but the cosmetic treatments are a reflection of a larger underlying dynamic. [Granola Shotgun]
• Second, contrary to the claims of modern monetary theorists, it is not true that governments can simply create new money to pay all liabilities coming due and avoid default. As the experience of any number of emerging markets demonstrates, past a certain point, this approach leads to hyperinflation. Indeed, in emerging markets that have practiced modern monetary theory, situations could arise where people could buy two drinks at bars at once to avoid the hourly price increases. As with any tax, there is a limit to the amount of revenue that can be raised via such an inflation tax. If this limit is exceeded, hyperinflation will result. Third, modern monetary theorists typically reason in terms of a closed economy. But a policy of relying on central bank finance of government deficits, as suggested by modern monetary theorists, would likely result in a collapsing exchange rate. This would in turn lead to increased inflation, increased long-term interest rates (because of inflation), risk premiums, capital fleeing the country, and lower real wages as the exchange rate collapsed and the price of imports soared. Again, this is not just theory. Numerous emerging markets have found, contrary to modern monetary theory, that they could not print money to cover even their domestic currency liabilities. [WaPo]
• We are now judging one another's fundamental decency based on whether we eat at Chipotle or Chick-fil-A. This may seem silly—harmless, even. But it is uncomfortably reminiscent of stories from conflict zones abroad. In Northern Ireland, for example, an outsider visiting during the Troubles had no way to tell unionists and nationalists apart. They were pretty much all white Christians, after all. But the locals themselves routinely guessed one another's identity based on their names, the spacing of their eyes, their sports jerseys, the color of their hair, their neighborhood, or even how much jewelry they wore­. This process came to be known as "telling." If a reliable cue didn't exist, people would make one up. It was a way to move about in the world in a time of profound tribalism, during which 3,600 people were killed. [The Atlantic]
• Let's be clear: the work of science has nothing whatever to do with consensus. Consensus is the business of politics. Science, on the contrary, requires only one investigator who happens to be right, which means that he or she has results that are verifiable by reference to the real world. In science consensus is irrelevant. What is relevant is reproducible results. The greatest scientists in history are great precisely because they broke with the consensus. There is no such thing as consensus science. If it's consensus, it isn't science. If it's science, it isn't consensus. Period. [link]
• what we see as a bloody mess that needs charity is natural to most Somalis. Not all—the Somalis actually used to have a rep as the best office workers in the Horn, believe it or not, under the colonial regimes. They're not stupid people. But they are nomads at heart, and nomads don't really have the idea of a central government protecting everybody. They want to protect themselves. Somalis actually live the way these survivalist wackos up in the Idaho panhandle think they live: all on their own, protecting their families. The way the Idaho nuts do it is all wrong, which any Somali or Bedu could tell them: you don't hole up in a log cabin with a bunch of motion sensors and polish your gun collection all day like a sitting duck. You move, you and your goats. You keep moving, keep watch, and don't trust anybody outside the clan. If you're really going to do it you can't do that single-family stuff. Too easy to besiege and wipe out. You need a clan. So the Somalis are organized in clans for mutual defense, hitting each other and running. Used to do it on livestock, then they met their dream car, the Toyota pickup, and never looked back. [War Nerd]
• On Friday alone, five men of Somali descent were shot in separate attacks, one fatally. Police and community members pinned the blame for the bloodshed on an ongoing feud between Cedar-Riverside neighborhood gangs like 1627 and Madhiban With Attitude (MWA) and their rivals, the Somali Outlaws, whose territory includes the area around Karmel Mall. Friday's shootings were a repeat of a familiar pattern: a shooting on one gang's turf is usually followed hours, if not minutes later by an "eye-for-an-eye" response so as not to appear weak, community members say. Two shootings last month are also blamed on the conflict. [Star Tribune]
• Americans have been falling in unrequited love with these glib visiting Brits since frontier days. Every time a 19th-c. British author overspent on child prostitutes or laudanum, he or she embarked on an American lecture tour to repair the family finances, following Dickens' path from one muddy American boomtown to the next. At every stop the author would let the yokels adore him for a few minutes, then retire to make careful notes on the locals' ignorance, foul table manners and general stupidity for the scathing book to be published once safe in London. And the Yanks fell for it every time. After wining and dining their distinguished visitor, the social elite of Podunk would order copies of the noble visitor's account, hoping to see their names in print-only to be stunned at the lecturer's sketch of Podunk as a stinking backwater, and brief description of its leading lights as an "execrable mob of beasts." [War Nerd]
• High-speed rail is presented as some kind of new technology race that America is in danger of losing if it doesn't start building right away. In fact, American railroads began experimenting with high-speed trains back in the 1930s. Japan's bullet trains date to 1964, 55 years ago. By that time, we had already surpassed them with jet airliners. Today, air travel is far less expensive than train travel, with airfares averaging under 14 cents a passenger mile, barely more than a third of Amtrak fares even though Amtrak receives much bigger subsidies, per passenger mile, than the airlines. Racing to build a faster train would be like subsidizing the manufacture of new IBM Selectric typewriters because China developed a faster electric typewriter – no matter how fast, typewriters have been rendered obsolete by word processors. [Cato]

March 4th Links

• The volcanic Hawaiian Islands are among Earth's most prominent mountains when measured from their bases on the ocean floor. The summit of Mauna Kea on the island of Hawai'i rises 10,000 meters, 1,100 meters taller than Mount Everest's height above sea level. Its sprawling neighbor, Mauna Loa, ranks as one of the most massive single mountains on Earth. Yet with 60 percent of their total height hidden beneath the Pacific, most people do not comprehend the size of Hawai'i's mountains. This paper discusses the Seafloor Map of Hawai'i, a new map that attempts to remedy this misperception. It depicts the Hawaiian Islands in their entirety from seafloor to summit with consistent detail throughout. [link]
• Think about it: peptic and duodenal ulcer were fairly common, and so were effective antibiotics, starting in the mid-40s. Every internist in the world – every surgeon – every GP was accidentally curing ulcers – not just one or twice, but again and again. For decades. Almost none of them noticed it, even though it was happening over and over, right in front of their eyes. Those who did notice were ignored until the mid-80s, when Robin Warren and Barry Marshall finally made the discovery stick. Even then, it took something like 10 years for antibiotic treatment of ulcers to become common, even though it was cheap and effective. Or perhaps because it was cheap and effective. This illustrates an important point: doctors are lousy scientists, lousy researchers. They're memorizers, not puzzle solvers. Considering that Western medicine was an ineffective pseudoscience – actually, closer to a malignant pseudoscience – for its first two thousand years, we shouldn't be surprised. Since we're looking for low-hanging fruit, this is good news. It means that the great discoveries in medicine are probably not mined out. From our point of view, past incompetence predicts future progress. The worse, the better! [West Hunter]
• This period of clinical and scientific revolution was followed by a massive expansion in research funding. But over recent decades, the rate of major clinical breakthroughs has probably declined, even as claims for the importance of medical research have grown more exaggerated. Perhaps the major deficiency of current therapy is the lack of significant progress in treating common solid cancers such as brain, lung, bowel, prostate, ovary and breast, which together make up the main cause of mortality in developed countries. Available therapies typically offer only modest or marginal benefit, detectable only in very large clinical trials, and usually at the cost of severe side-effects. In psychiatry, the major classes of useful drugs all date from before 1965, except for the selective serotonin re-uptake inhibitors (SSRIs) which (like the neuroleptics and the tricyclic anti-depressants) were synthesized in the early 1970s by chemically modifying a 1940s anti-histamine (chlorpheniramine/Piriton). In other words, the developmental strategy underpinning SSRIs was not new. The phenomenon of a declining frequency of breakthroughs seems common to many medical specialties. Furthermore, the output of effective new drugs for serious diseases, such as novel classes of antibiotics, seems to be drying up. [link]
• Black's in Lockhart. Pork ribs. Brisket (moist and smoky). Sausage jalapeño and cheese. A bit mushy (maybe because it was made fresh and we're used to supermarket sausage made months earlier?). Mac and cheese (bland, but John's new favorite) beef ribs (better than Kreuz). Cole slaw (wet). Green beans (bright green and not mushy). Sweet potato pudding. Pecan pie looks like Iron Works: pecans on top of sugar gel. Did not try. Manager, Anthony Hamilton, came out to chat, welcome, us and insist that we try beef ribs (he returned with a sample and they were awesome, much more tender than at Kreuz). Best decor. Johnny Cash and Willie Nelson. Overall rating: Superb. [Phil G]
• The Swiss cartographers were, and still are, unrivaled in their ability to give mountains and cliff faces the illusion of three dimensions with a technique known as hachuring, which involves drawing short, precise lines in the direction of the slope. According to Washburn, it would sometimes take them "more than a day of intense labor to produce a few square centimeters of cliffs." To date, cartographers have been unable to top the handiwork of the Swiss. [Outside]

February 25th Links

• We take no pleasure in Windstream's resulting financial predicament. Windstream could easily have averted it – first by not playing fast and loose with its noteholders in 2015, hoping nobody would hold the company to account, and second by settling. Instead, Windstream wasted an exorbitant amount – more than would have been needed to settle with us at the time – on an ineffective exchange offer and then on litigation. In our view, a management and a board with an extreme and unwarranted assessment of Windstream's legal case chose to bet the company. The company lost. [link]
• "This whole thing arose, credit market participants say, in part because there was not much better to do in distressed debt at the time, so bored former lawyers sitting at hedge funds trolled old bond documents looking for something to do." [Bloomberg]
• Earth's history is the history of failed civilizations. Most never industrialized. Nobody here cares about long-term survival or puts significant resources into mitigating existential risks. Isn't it obvious why there are no signs of advanced extraterrestrials? We've accumulated plenty of evidence that planets like ours are common. They probably develop life. They probably develop intelligent life. That intelligent life probably builds civilizations much like our own: lame ones with no hope of ever building a Dyson sphere. Note the role that AI plays in all far future fantasies now: some researcher or entrepreneur creates a 'seed AI', which becomes superintelligent, and then THAT does all the cool stuff (builds megastructures, takes over the galaxy) we now know we're too lame to do. [mr_scientism]
• If it hadn't been for the "60 Minutes" piece I don't know if I would have recognized her. She doesn't wear the turtleneck or the deep red lipstick anymore. But the voice was deep. Later she came over to the bench where I was sitting and thanked me again, and stuck out her hand and said "I'm Elizabeth." I said "Yes, I thought I recognized you. That deep voice." [Reddit]
• Everything you've been writing is bullshit, because everything you've been writing is based on the belief that political power comes from the ballot box, from being elected. Here was Robert Moses, a guy who was never elected to anything, and he came up to Albany for one day and changed the entire state government around, from the governor to the assembly. How did he have the power to do that? You have no idea and neither does anybody else. I said to myself, If you really want to explain political power, you're going to have to understand that. [Paris Review]
• David's not drinking anymore, and he's going to bed early, and he's talking about what's cool on Netflix. Then my staff was going to bed early and watching Netflix. My comptroller said staff drinking is down like crazy. We have the numbers. We used to give out 30 or 40 glasses of wine at the end of the shift, and it's down to 10, and half the staff is drinking kombucha. [Bon Appetit]
• "I have been to Thailand roughly 50 times in the past 27 years, for periods ranging from 3-12 weeks at a time. Your post does nothing to alter my thinking. But perhaps I am missing something. I concede that. Although I will at this point probably never again leave the small town where I currently live in Japan, from which I administer my internet empire, I would, if I had it to do all over, prefer to visit the west coast of South America from top to bottom, and all around the east coast (again)." [Marginal Revolution]
• Holmes is currently living in San Francisco in a luxury apartment. She's engaged to a younger hospitality heir, who also works in tech. She wears his M.I.T. signet ring on a necklace and the couple regularly post stories on Instagram professing their love for each other. She reliably looks "chirpy" and "chipper." She's also abandoned the black-turtleneck look and now dresses in athleisure, the regrettable attire of our age. [Vanity Fair]
• YC has more than 200 startups in their winter 2019 batch (!!) By comparison, the spring 2018 group was just 132 teams. (For the statistically inclined, that's at least a 51 percent increase batch-over-batch.) In order to accommodate this truly wild amount of elevator pitches, the accelerator is moving to a new venue in San Francisco for its Demo Day event March 18 and 19. [Tech Crunch]
• Once it landed on the shores of Latin America, the empanada shrank to its current handheld size and adapted to local climates, evolving with every incoming colonizer. As it spread, dough variations lost the yeast, some morphing into a more pastry-style crust, cut with beef fat or butter (especially in the cattle-raising regions of Argentina), while others lost the wheat flour entirely: empanadas in Venezuela and Colombia are made with corn flour, and in Caribbean countries, yuca or plantain serves as the starch. What's inside divides empanada geography even further, with specific states often staking their claim to a specific style of beef filling (with or without olives, raisins, eggs, or peppers), while others focus on cheese or even sweets such as dulce de leche or guava. Finally, there is the greatest divider of empanada lovers of all: fried or baked? [Serious Eats]
• I love just about every metric in this table; bank profitability is top-notch, capital ratios are great, and asset quality is strong. But in digging in to the loan book, one sees a ~16.5% allocation to Consumer Loans (on its face, this not a bad thing). Digging deeper, the bank has ~$57 million of purchased student loans on the books, and this little kicker of a note in the quarterly filings: "Initially, all student loans were fully insured by a surety bond, and the Company did not expect to experience a loss on these loans. Based on the loss of insurance after July 27, 2018 due to the insolvency of the insurer, management has evaluated these loans individually for impairment and included any potential loss in the allowance for loan losses; interest continues to accrue on these TDRs during any deferment and forbearance periods." So, after a review, this bank has an uninsured student loan allocation totaling ~80% of its Total Capital. It is not my intent to infer that this bank is overvalued, poorly-operated, risky, or anything of that sort. [link]
• Michael Eisner [owner, the Tornante Company]: Told that there was a meeting in Steven Cohen's office with a well-respected young writer, I happened to be in the hall as the meeting ended. In a one-minute hallway conversation, I was told three ideas. One of which being: "This one is about an animated show about a living 'person' who has a body of a man and a head of a horse." Thinking that sounded interesting, original, and theatrical in this century — yet harking back to my youth of Mister Ed, the talking horse from the early '60s — I simply said, "Yes, let's do that one." [Vulture]
• The transition from unicellular to multicellular life was one of a few major events in the history of life that created new opportunities for more complex biological systems to evolve. Predation is hypothesized as one selective pressure that may have driven the evolution of multicellularity. Here we show that de novo origins of simple multicellularity can evolve in response to predation. We subjected outcrossed populations of the unicellular green alga Chlamydomonas reinhardtii to selection by the filter-feeding predator Paramecium tetraurelia. Two of five experimental populations evolved multicellular structures not observed in unselected control populations within ~750 asexual generations. [Nature]

President's Day Links

• Molycorp provides a helpful framework for thinking through treatment of administrative claims in the range of Chapter 11 cases. It also serves as a warning to lender's counsel, as Oaktree's counsel appears to have believed that any fee objection to Paul Hastings' application would be upheld and Oaktree neglected to require a cap on the firm's fees in either the settlement agreement or in the plan itself. By neglecting to obtain Paul Hastings' express consent in the settlement or at plan confirmation, Oaktree's lawyers doomed its objection. [link]
• Linoleic acid (LA) is a bioactive fatty acid with diverse effects on human physiology and pathophysiology. LA is a major dietary fatty acid, and also one of the most abundant fatty acids in adipose tissue, where its concentration reflects dietary intake. Over the last half century in the United States, dietary LA intake has greatly increased as dietary fat sources have shifted toward polyunsaturated seed oils such as soybean oil. We have conducted a systematic literature review of studies reporting the concentration of LA in subcutaneous adipose tissue of US cohorts. Our results indicate that adipose tissue LA has increased by 136% over the last half century and that this increase is highly correlated with an increase in dietary LA intake over the same period of time. [link]
• [T]he patient began on some but not all of the system: (1) she eliminated all simple carbohydrates, leading to a weight loss of 20 pounds; (2) she eliminated gluten and processed food from her diet, and increased vegetables, fruits, and non-farmed fish; (3) in order to reduce stress, she began yoga, and ultimately became a yoga instructor; (4) as a second measure to reduce the stress of her job, she began to meditate for 20 minutes twice per day; (5) she took melatonin 0.5mg po qhs; (6) she increased her sleep from 4-5 hours per night to 7-8 hours per night; (7) she took methylcobalamin 1mg each day; (8) she took vitamin D3 2000IU each day; (9) she took fish oil 2000mg each day; (10) she took CoQ10 200mg each day; (11) she optimized her oral hygiene using an electric flosser and electric toothbrush; (12) following discussion with her primary care provider, she reinstated HRT (hormone replacement therapy) that had been discontinued following the WHI report in 2002; (13) she fasted for a minimum of 12 hours between dinner and breakfast, and for a minimum of three hours between dinner and bedtime; (14) she exercised for a minimum of 30 minutes, 4-6 days per week. [NLM]
• While it is acknowledged that the DSM-IV is not a nosology based on etiology, the implicit premise of the chemical imbalance perspective is that certain DSM-IV -defined " disorders" are lacking a given neurotransmitter in a particular part of the brain that is somehow related to the disorder. In the gray area are expansions of the basic illness with so-called spectrum disorders. Presumably, there is a genetic or biological link that explains the usefulness of certain medications across the entire spectrum of the related disorders. The weakness of this formulation is that medications such as the selective serotonin reuptake inhibitors (SSRIs) are proving efficacious in so many Axis I and Axis II disorders that to consider all of these forms of misery as part of the same biological spectrum is stretching credulity. Occam's razor demands a more parsimonious approach. I would argue that there are certain psychological effects of medications that make them useful in a variety of DSM-IV -defined disorders not because they are necessarily correcting a chemical imbalance, but because the psychological effect is useful. Rat pups that are isolated from their mother and littermates produce ultrasonic sounds that are indicative of stress. SSRIs reduce these sounds (Oliver, 1994). Is a chemical imbalance being corrected? I doubt it. [Psychiatric Times]
• The forge is designed to use raw wood as a fuel but it is actually the partially combusted wood--charcoal--that supplies the intense heat as it completes combustion. You can make the charcoal ahead, or do as we do and just use raw wood. [link]
• I also introduced an intermediate category between constant flux and permanent stasis: the symbiosis, a term I borrowed from the great evolutionary biologist Lynn Margulis. I hypothesized that pretty much any object will experience five or six symbioses during its lifespan: irreversible changes that moves the object to a new stage of existence before it eventually stabilizes, rises, declines, and dies. This has some interesting corollaries. One of the ways we can be sure that the Dutch East India Company is a real object is because it has many early failures: a failure, as long as it does not destroy us, means that we are something real that does not yet fit easily into our environment. Something that immediately succeeds, by contrast, is often just a spare part for something that already exists perfectly well. Notice that important intellectuals often had a very rough time as students, while the "teacher's pet" often has a thoroughly mediocre post-school career. I think the symbiosis model is a powerful tool, one that –among other things– allows us to determine that a great number of supposed objects aren't real objects at all. [Hong Kong Review of Books]
• At 8:22 a.m., the divers raised Sonar Technician 3rd Class Ngoc "Tan" Truong Huynh, 25, of Oakville, Connecticut. He was found beneath a television, though the divers assessed that he had not been trapped there. [link]
• The allegedly-firm aircraft order from Emirates was set to keep the A380 production line open until 2029. By then, Airbus hopes gate congestion may make planes like the A380 capable of carrying massive amounts of passengers more desirable. Airbus claims, 80 percent of today's 58 megacities with more than 50,000 long-haul travelers a day already have significant airport congestion. By 2036 there will be 95 such megacity hubs, presumably with congestion issues as well. Not surprisingly, the Airbus exec tasked with marketing the A380, Frank Vermiere, says the cure for such congestion is having the A380 fly to such gate-limited destinations. [Forbes]
• "They have his soul, who have his bonds," observed Jonathan Swift. This has been truth for thousands of years, and it still is truth today. How could any creditor hold anything of such value, if my bonds that I sold him are essentially worthless, and I can simply print more dollars to pay my debts when I have the need? This is something fundamental to money and debt, though I've come to increasingly understand that it's not broadly understood. Debt is purchased by someone with money, and that someone purchases that debt only if he believes that value will be derived by the purchase. [American Thinker]
• I've got a few hundred photos of vacant lots where homes and businesses used to be. The vestiges of steps, curb cuts, and garden retaining walls still linger as a reminder that people used to live here. How long do you think it takes for an oak tree to grow in the middle of a driveway? How long ago do you think the buildings remained empty and rotting before they disappeared entirely? How long before that do you think the buildings limped along in a halfway habitable condition? Notice the grass is cut. That's part of a city policy that fines property owners if the vegetation is more than six inches high. Glad they're on top of that. We wouldn't want things looking seedy now would we? We need to keep up appearances. Scattered throughout the neighborhood are remnants of what used to be here. Grand buildings once dominated the landscape. Poor people didn't build these homes and churches. Somehow a few have persisted against all odds. They're magnificent. [Granola Shotgun]
• You might think that the proposed State of Jefferson might solve problems for people like my neighbor – or myself – looking for lebensraum. But it's not that simple. I have friends in a distant county who own a 31 acre parcel in rolling hill country. Their neighbors are continually at war with them over every imaginable perceived slight and incursion. It appears that the people who self select in to a remote lifestyle far from the unwashed masses of city folk are hyper sensitive to just about everything anyone ever does anywhere near them. No amount of physical space can solve that dilemma. [Granola Shotgun]
• Suppose that a dystopian science fiction novel published in the 1950s had imagined a city in which fabulously rich people lived in new gleaming towers, getting marijuana delivered to them by runners on electric skateboards. The rich people who work stroll on sidewalks that are half covered in tents in which the "homeless" (but not "tentless") reside. When they get to work they're in a bullpen that is packed tighter than a commodities trading pit. If they need to make a phone call while at work they'll duck into a soundproof transparent pod. People who read a book like that circa 1950 would have said "This author has a great imagination, but none of this could ever happen. Even in the Great Depression people didn't simply pitch tents on downtown sidewalks. And an employer wouldn't have valuable workers distracted by noise and crowding." [Phil G]
• Los Angeles architect Tim Smith was sitting on a Hawaiian beach, reading through the latest building code, as one does, when he noticed that it classified wood treated with fire retardant as noncombustible. That made wood eligible, he realized, for a building category—originally known as "ordinary masonry construction" but long since amended to require only that outer walls be made entirely of noncombustible material—that allowed for five stories with sprinklers. [Bloomberg]
• The waterproof breathable concept is not new, and in the late 1970's GoreTex waterproof breathable clothing appeared on the market. Today there are many iterations of waterproof breathable clothing, the most popular are GoreTex and the more breathable eVent, not to mention dozens of proprietary twists on the subject. I have quite a bit of experience with these and the bottom line is: A waterproof breathable jacket will leak in prolonged rain and you will get soaked on the inside from perspiration. [link]
• There is this odd misnomer amongst generalists that a trade war is bad for shipping. Maybe it is bad for containerships (though rates have not seen much impact yet), but generally speaking, trade wars are good for shipping. How do US soybeans get to China? They get transported to Brazil, offloaded, reloaded and then transported to China as Brazilian beans. All of this means more ton-miles and more time tied up in port. Almost by definition, a trade war is going to be bullish. It disrupts existing trade routes that operate at maximum economic efficiency and instead inserts government mandated inefficiency. In the end, products will be shipped to where they’re needed—it will just involve more ton-miles and more idling in ports. As we enter the era of strongmen (as my friends at Capitalist Exploits have noted many times), I suspect that there will be more political grandstanding and less financial logic in terms of arbitrary trade restrictions and subsidies. This will almost always increase total ton-miles. An increase in ton-miles is bullish for shipping rates. Absolute quantities of GDP and global trade aren’t the metrics that are relevant. [AiC]
• The two courts spent less than two pages describing a result that was obvious to them, but it took us two years of uncertainty and cost to get there. Federal court litigation doesn't make anything easy. Even if Blackbird had won the case, it is not clear they would have been able to collect significant damages. Our allegedly infringing use was not a product or feature that we charged for or made money from – it was essentially posting interstitial messages for various errors. Even though we were able to win this case early in the legal process and keep our costs as low as possible, it's possible we spent more money resolving this matter than Blackbird would have been able to collect from us after trial. This is the dysfunction that makes patent trolling possible. It is why the option for a quick settlement, in the short term, is always so appealing to parties sued by patent trolls. [link]
• The basketball team quickly left to occupy an even larger more expensive $250 million publicly funded stadium down the road. There's a reason these projects get built. It's a big pie. Lots of important people get a slice: engineering firms, construction companies, concrete and steel suppliers, the banks that cobble together the financing packages and float the municipal bonds... And since the costs are widely distributed and stretched out over many years in a nebulous fashion well connected business leaders lobby hard for these silver bullet projects. They really do create jobs and generate economic activity in the short term. I never interpret these dynamics as corruption. It's human nature. Who doesn't want a big upfront bonus right now in exchange for some vague bill that will arrive years in the future – especially if you personally don't even live in the district that's responsible for the debt repayment schedule? [Granola Shotgun]
• Lennar (LEN): As the lumber market dropped from $650 to $330 per 1,000 board feet in the fall of 2018, we aggressively renegotiated lumber pricing for our fourth quarter starts. We'll begin to see the benefits of these lower prices with deliveries in – late in the first quarter and receive the full benefit of this lower pricing in the second half of the year. [Cinnamond]
• This study found that push-up capacity was inversely associated with 10-year risk of CVD events among men aged 21 to 66 years. Thus, push-up capacity, a simple, no-cost measure, may provide a surrogate estimate of functional status among middle-aged men. Participants able to perform 11 or more push-ups at baseline had significantly reduced risk of subsequent CVD events. To our knowledge, this is the first study to report the inverse relationship between push-up capacity at baseline and subsequent CVD-related outcomes in an occupationally active male cohort. Previous cross-sectional studies have incorporated push-ups in the assessment of muscular fitness and its correlation with cardiometabolic risk markers. In those studies, the authors found that a higher level of muscular strength was associated with lower cardiometabolic risk independent of cardiorespiratory fitness in the cohorts observed. Muscular strength has been shown to have an independent protective effect for all-cause mortality and hypertension in healthy males and is inversely associated with metabolic syndrome incidence and prevalence. [JAMA]

February 11th Links

• Birding is a life-long lesson in biology, distribution and geography, and keeping a list of all the birds I have seen in my life pushes me to find new places and habitats on the road. A birdwatcher learns to see in a very different way than non-birders; making anybody who pursues birds on the road much more likely to observe things about a place than those who don't. I talk about this in my notes from the Bahia Palace in Marrakech, Morocco. [Notes from the Road]
• A superior man, in regard to what he does not know, shows a cautious reserve. If names be not correct, language is not in accordance with the truth of things. If language be not in accordance with the truth of things, affairs cannot be carried on to success. When affairs cannot be carried on to success, proprieties and music do not flourish. When proprieties and music do not flourish, punishments will not be properly awarded. When punishments are not properly awarded, the people do not know how to move hand or foot. Therefore a superior man considers it necessary that the names he uses may be spoken appropriately, and also that what he speaks may be carried out appropriately. What the superior man requires is just that in his words there may be nothing incorrect. [Confucius]
• Let's say you have a family and you love performance cars, but you can't have two cars. You need one car that'll do it all. That'll take the kids to school, the family to dinner, get stuff from Home Depot, and something that's fun to drive. You have very few options that'll tick all those boxes. Sure, you could buy a fast SUV or crossover, but do you really want to do that? Everyone has crossovers these days, and they just aren't that much fun to drive no matter how quick they are. A fast sedan might work, but not if you want to haul a lot of people and things. No matter, Mercedes has the solution for you with this, the E63 S Wagon. [Road And Track]
• The difficulty people have with getting rid of items is so tough to overcome that she has to set a high bar for these clients to merit keeping them. Sparks joy might as well be top five. What is your top five of anything? Keep those. Junk the rest. It is junk. Kondo comes in and brings order to these homes filled with junk. The ritual matters. This is basic maintenance of a home, yet the rich and poor alike of California all fail to keep orderly homes. If you watch this, you will see pricey looking homes cluttered with kitsch and crap. There are entire rooms of shoes like Imelda Marcos. [American Sun]
• On ZH one finds a catechism of victimhood where it's "the Fed," "the Banksters," etc. who choreograph the entire macabre dance. Just this day one comment stated that low interest rates drove people to load up on debt. That is, of course, irrational. Interest rates are set by debt PRICES. Interest rates are thus simply a product of the meeting between people who want to buy debt and people willing to go into debt. It's simply another way to state a price. And what did low rates tell us? That the desire to buy other people's IOU's was nearly insatiable for a time. Is this not, like enthusiasm for foreigners, migrants, immivaders, and political promises hither and yon, simply an expression of giddy optimism and openness? It sure seems like it to me. [K]
• There's a sort of prisoner's dilemma now facing a federal judge in the ongoing Harvard race discrimination court battle. As you know, the prisoner's dilemma is a game theory that suggests self-interest will compel two confederates to betray each other when cooperation would benefit their mutual self-interests. For those unfamiliar with the court proceeding, in it plaintiffs allege that Harvard's diversity regime is racially discriminatory against Asians rather than merely the whites against whom it was intended to be racially discriminatory. As a result a race other than whites was denied legal protections, which runs counter to the country's principles. [K]
• The first indictment of a war criminal is losing the war. Some generals understand this innately and so endeavor to keep their morality pristine by plowing over as many corpses as their infantry can burn. By this measure William Tecumseh Sherman may have been the most ethical fighter of his age. One of his most famous assertions was that War is Hell. It was a quote he strived to uphold. [K]
• Ethereum sucks. Either the devs are too incompetent to make the code work or they are being bribed to forestall upgrades; either way is bad news for Ethereum. This bodes poorly for future upgrades such as Caspar and Sharding. Ethereum will continue to fall relative to Bitcoin and other coins as people lose faith in the project. A trade that is 'short' Ethereum and long a combination Bitcoin, Tron, Stellar, Monero, Ripple should be successful. [Grey Enlightenment]
• Remove TV, news and social media from your daily routine or limit them each to five minutes per day. Then when you feel the inevitable pull to check in, use this as a "keystone habit" to grab your paper to-do list and start working on something from the list – even if it's just ten push-ups, or picking up an old-fashioned paper book you are working through. [MMM]
• Before the bear market in 2000 began, Lancaster Colony was trading at 13x earnings and was priced as a value stock. Given its relatively low valuation, Lancaster Colony's stock provided investors with a healthy margin of safety heading into the bear market of 2000-2002. In fact, its stock was so attractively priced, it actually increased 58% while the Russell 2000 declined -44% from the 2000 peak to 2002 trough! During this period, owning Lancaster Colony and quality worked magnificently. Currently trading at 35x earnings, I no longer consider Lancaster Colony a value stock. And that of course is the big difference between high-quality this cycle and when quality worked in the past – valuation! In the case of Lancaster Colony, the difference between 13x and 35x earnings is considerable. From a risk management perspective, it's the difference between swimming with a life jacket and a bag of cement. [Cinnamond]
• Assuming the current market cycle's peak is behind us, it appears the 2-year yield that caused something in the financial markets to crack was approximately 2.75%. Not long after stocks began to fall, the 2-year yield peaked at 2.98% (November 8, 2018). It's not exactly a high yield for a cycle peak, but one needs to keep things in perspective. The fed funds rate was between 0-1% for nine years! A tremendous amount of debt accumulation, asset inflation, and capital allocation occurred while rates were pegged near 0%. As such, it didn't take many rate hikes (along with QT) to cause investors to revise their "lower for longer" valuation assumption. [Cinnamond]
• We were too tired to think much about it that evening, but the next day we – Brad and the two remaining members of the coding team – had a meeting. We talked about what we had. Blake gave it its name: Shiri's Scissor. In some dead language, scissor shares a root with schism. A scissor is a schism-er, a schism-creator. And that was what we had. We were going to pivot from online advertising to superweapons. We would call the Pentagon. Tell them we had a program that could make people hate each other. Was this ethical? We were in online ads; we would sell our grandmothers to Somali slavers if we thought it would get us clicks. That horse had left the barn a long time ago. It's hard to just call up the Pentagon and tell them you have a superweapon. Even in Silicon Valley, they don't believe you right away. But Brad called in favors from his friends, and about a week after David and Shiri got fired, we had a colonel from DARPA standing in the meeting room, asking what the hell we thought was so important. [SSC]
• The representativeness heuristic (RH) has been proposed to be at the root of several types of biases in judgment. In this project, we ask whether the RH is relevant in two kinds of choices in the context of gambling. Specifically, in a field experiment with naturalistic stimuli and a potentially extremely high monetary pay-out, we give each of our subjects a choice between a lottery ticket with a random-looking number sequence and a ticket with a patterned sequence; we subsequently offer them a small cash bonus if they switch to the other ticket. In the second task, we investigate the gambler's fallacy, asking subjects what they believe the outcome of a fourth coin toss after a sequence of three identical outcomes will be. We find that most subjects prefer "random" sequences, and that approximately half believe in dependence between subsequent coin tosses. There is no correlation, though, between the initial choice of the lottery ticket and the prediction of the coin toss. Nonetheless, subjects who have a strong preference for certain number combinations (i.e., subjects who are willing to forgo the cash bonus and remain with their initial choice) also tend to predict a specific outcome (in particular a reversal, corresponding to the gambler's fallacy) in the coin task. [link]
• I see Ferraris drive by and I think, "That's neat." I see a W8 AWD 6sp Passat wagon, snap my neck hard enough to induce whiplash, and think, "WHOA this guy is a glutton for punishment and/or knows his stuff. How can I be friends with him?" [Opposite Lock]
• In 2010 or so, VW had exactly no – zero, zilch, nada – new W8 engines in stock (at least in the US warehouses). When they were available, they listed out at $24,000 for a long-block. We replaced none of them out of warranty. [Jalopnik]
• Yes, that's the friggin' trunk hinge, not a piece of sculpture. Those hinges were made by Campagnolo, the bicycle company. They commissioned an Italian bike company as a vendor to make just the hinges! I had not seen anything like this before and have not seen anything like it since. [Jalopnik]