Monday, July 16, 2018

July 16 Links

  • Do you ever get the feeling that, leaving aside minor details about what kind of economic system, the Soviet Union will eventually triumph over the United States due to the sophistic skills of ex-Soviets like Ilya Somin, Max Boot, Masha Gessen, and Julia Ioffe? They may not quite agree on what should replace the U.S., but they are united in being committed to propagandizing Americans into believing that America isn't for "ourselves and our posterity," no matter what it says in the Preamble to the Constitution. [Sailer]
  • I once gathered the people in my building around the kitchen table and asked them to consider adding insulation to the whole building envelope in a coordinated fashion. I paid an expert to assess the things that could be done quickly and inexpensively, the things that would be slightly more involved and a bit more pricey, and the super deluxe version of ultra insulation. The simple "low hanging fruit" package would have been $3,000 divided by four apartments ($750 each) or eight inhabitants ($375 each.) No one was interested in lower gas and electric bills for the next few decades by way of insulation. But shortly afterward one of the guys upstairs installed $13,000 worth of solar panels on the roof, attached an electric charging plug to the garage wall, and bought a Tesla. [Granola Shotgun]
  • One underreported phenomenon is the medical salaries of physicians. American doctors are no longer content with being members of the local upper middle class or gentry. A lot of them want to become 8 digit millionaires with huge mansions and extravagant vacations. You cannot do that on a 200K-300K salary. Hence all this over-treatment. Its like a business. You sell as many services as you can convince the patient (or his insurer) to buy. [Sailer]
  • The U.S. is a great place to live if you're rich. There is no wealth tax and income tax rates, though much higher than in the most efficient countries (e.g., Singapore, Estonia), are still lower than in many European nations. Prices are low and there is no VAT so you can consume like crazy. The U.S. is also a great place to live if you're poor. You're entitled to a lifetime of free housing, free health care, free food, and free smartphone. If you start at age 18 and navigate the policies and waiting lists you might find yourself in an apartment with a market rate of $60,000 to $100,000 per year in the heart of one of America’s most desirable cities, e.g., San Francisco, New York City, or Cambridge, Massachusetts. [Phil G]
  • When the ibises aren't eating or resting, the foster moms spend as much time as possible bonding with them. Cuddle time is key to ensuring such a strong connection that the birds will eventually follow the microlight aircraft carrying Schmalstieg and Esterer from Austria, over the Alps, and to overwintering grounds 800 miles away in Italy—a route their parents would typically teach them, and that they need travel only once in one direction to learn. [Audubon]
  • Bank of the Ozarks will meet this brave old world with a new name. Gleason is spending as much as $25 million to rebrand as Bank OZK (pronounced oh-zee-kay, not oz-kuh). The name will start appearing soon on checkbooks, outside branches, and in those thousands of pages of loan documents. Gleason came up with it himself: "It's a name that sounds young, tech-oriented, global," he says. A long way, in other words, from Ozark, Arkansas. [Bloomberg]
  • Hastings knows that if Netflix falls short of, say, 250MM subscribers, his business will buckle and break. His spend is predicated upon it. Accordingly, some say that company's strategy – which Sarandos claims is "more shows, more watching; more watching, more subs; more subs, more revenue; more revenue, more content" – more closely resembles that of a Ponzi scheme: Netflix takes on more debt to finance more content in hopes of getting more subscribers so that past content investments can be recouped, but then needs even more subscribers to pay for the new content spend, and so on. [link]
  • Duncan's narrative voice, describing a crucial episode in his presidency barely a month after the event, isn't his private, inner voice; it's a public, self-justifying voice, which is perhaps all we can expect from a novel written by a former US president and his collaborators, but anyone hoping for a flash of insight, however brief, into what it's like to be both an ordinary, fallible human being and the most powerful person on earth is going to be sorely disappointed. The story then moves away from the White House to Reagan National Airport, where a woman has just arrived and 'is enjoying the open-air space after the flight'. I found myself wondering whose point of view we're supposed to be seeing her from. So far, the president has been telling the story in the first person. In which case, who is the mysterious omniscient third-person narrator who has suddenly appeared at the arrivals gate along with the mysterious woman sucking on ginger candy and listening to Bach – 'the whimsical first movement of Violin Concerto No. 1' – through her headphones? [LRB]
  • Some of the top-ten predictors of whiteness were watching "Rudolph the Red-Nosed Reindeer," "American Pickers," "The Big Bang Theory" and the Kentucky Derby. If we're looking at specific brand names, the top 10 included Thomas' English muffins, Sweet Baby Ray's barbecue sauce and Stove Top stuffing. More generally, in consumer products, the best predictor of whiteness was whether someone owned a pet — followed closely by whether they owned a flashlight. [WaPo]
  • One of the reasons Frito-Lay is still so entrepreneurial is that it is a relatively young company in its industry. Both the ''Frito'' and the ''Lay'' portions of the company were founded in the early 1930's - the Frito corn-chip business by Elmer Doolin and the Lay potato chip operation by Herman W. Lay, each of whom borrowed $100 to found their businesses. The two companies, both based in the South, joined hands in 1961. When they merged with Pepsi four year later, their combined sales still totaled only about $200 million. [NY Times]
  • Frito-Lay is a very interesting company. They call on more than half a million accounts a week. There's a Frito-Lay rack in each store, and the chips are all there, and every store's got the identical rack and the big ones have multiples. For Frito-Lay, the biggest problem is stale product—bad chips, so to speak. For Frito-Lay's service, they've got, like, 10,000 guys who run around and take out the stale product and replace it with good product. They talk to the manager of that department and they make sure everything's fine. Because of that service and support, they now have more than an 80 percent share of every segment of chips that they're in. Nobody else can break into that. As long as they keep doing what they do well, nobody else can get 80 percent of the market share, because they can't get the sales and support staff. They can't get it because they can't afford it. They can't afford it because they don't have 80 percent of the market share. It's catch-22. Nobody will ever be able to break into their franchise. Frito-Lay doesn't have to innovate very much. They just watch all the little chip companies come out with something new, study it for a year, and a year or two years later they come out with their own, service and support it to death, and they've got 80 percent of the market share of the new product a year later. [link]
  • A straw buyer typically has the shelf life and career trajectory of a Trump appointee. Cash purchases are difficult, as they set off all the alarms for a dealer, but finance purchases present the problem of having multiple loans pending at once. It's tricky. I do not know what kind of noises U.S. Customs and Border Protection makes in verifying that a car is cleared for export, but it must tell someone your car is going swimming. Because when I went back to dealerships to buy more cars, most of the time I was politely told that I had been identified as an exporter. If you are clever, quick, or lucky, you might get three on the boats before you're blacklisted. [Car and Driver]
  • Jerome Powell's Federal Reserve will not alter course for any of these three reasons. The Federal Reserve will hike at least every other meeting until something breaks. Full stop. [Macro Tourist]
  • The journey from Belgrade to Podgorica and Bar in Montenegro over the celebrated Belgrade to Bar railway is one of Europe's most spectacular train rides, and one of my favourites. It's a marvel of engineering, with 254 tunnels and 435 bridges on the 296-mile journey from the Serbian capital to the Adriatic. Construction of the line started in the 1950s but only completed in 1976, opened by President Tito himself. Yet it costs only €21 - watch the video below and you can see it'll be amongst the best €21 you'll ever spend. [Seat 61]
  • And so the touring-car aces at Team Dynamics went back to the drawing board, fitting an HF 2622 mower with a pile of custom parts created using CAD design and 3D printing. They also added a lot of power by installing a 999-cc four-cylinder from a Honda CBR1000RR Fireblade SP motorcycle, which means Mean Mower V2, as it's known, makes 190 horsepower—60 hp more than before. With that much muscle, it's almost at the vaunted 1-hp to 1-kg power-to-weight ratio, which is Koenigsegg One:1 territory. [Car and Driver]

Monday, July 9, 2018

July 9th Links

  • We've had two break even months. The first was by accident in October 2013 because we had an unexpected revenue spike. For a moment we felt what it would be like to completely control our own destiny. The second time was in February 2014, because low growth in December scared the living shit out of us and it didn't look like our Series A was going to come together. My cofounders and I cut our salaries when we hit 3 months of remaining runway. There was no way in hell we would lose the incredible team we had meticulously built over the past six months. [link]
  • Cowen is just virtue-signaling. He actually understands how things work and occasionally lets some of the knowledge out. But he is also comfortable and addicted to his parasitic life, so he needs to balance every hint of heresy with messages of clueless progressivism. [West Hunter]
  • I knew guys in Taiwan about 15 years ago who started biotech companies whose labs were also shockingly small. They are shockingly cheap too, and that's the key point about bioengineering. Once you figure out how the underlying molecular biology works, developing the bioengineering to do something about it is quite cheap, compared to building a semiconductor fab or doing space launch. What makes medicine expensive is all of the regulation combined with the intense bureaucracy and parasitism of the healthcare industry itself. [Hsu]
  • The American energy industry has long suggested a simpler solution for Mexican energy incompetence: let American firms take over Mexico's oil business. It's not widely recognized in the U.S. media that the Bush dynasty's fundamental strategic vision over the last half century has been to knock down the barriers keeping American business out of Mexico in return for lowering the barriers keeping Mexican people out of America. (It's not a coincidence that two President Bushes' oil firms were named Zapata and Arbusto.) [Sailer]
  • Presently, we observe a combination of extreme valuations and divergent market internals. This combination suggests that investors have shifted toward risk-aversion at a point where risk premiums are unusually low, and it opens up a trap door that has historically permitted very steep market losses, as we observed in 2000-2002 and 2007-2009. While I'm inclined to view the January market high as the bull market peak for this cycle, which would suggest that stocks are already in a bear market, we also have to allow for the possibility that investors will again take the speculative bit in their teeth, which we would infer from the behavior of market internals. [Hussman]
  • Though the amateur videos showed pieces separating from the shuttle along the entire path over the United States, and though search parties backtracked all the way to the Pacific coast in the hope of finding evidence of the breakup's triggering mechanism, the westernmost piece found on the ground was a left-wing tile that landed near a town called Littlefield, in the Texas Panhandle. Not surprisingly, the bulk of the wreckage lay under the main breakup, from south of Dallas eastward across the rugged, snake-infested brushland of East Texas and into Louisiana; and that is where most of the search took place. The best work was done on foot, by tough and dedicated crews who walked in tight lines across several thousand square miles. Their effort became something of a close sampling of the American landscape, turning up all sorts of odds and ends, including a few apparent murder victims, plenty of junked cars, and the occasional clandestine meth lab. [Atlantic]
  • I am sure Philip is right that a low angle of approach is safest for the recreational pilot. There is no question that this is the easiest way to land a plane. As someone who learned to fly gliders first, this mode of landing does however take the fun out of it. Much more entertaining is to approach the numbers at 1000' AGL on final, then turn to exclaim to your passengers, "Oh my, it looks like it is time to drop this puppy." Then dial in full flaps and enter a steep dive with fully crossed controls approaching 100 knots if flying a 172. The angle and speed of the descent (2,000 fpm?) ensures that the ground will loom up in a way that results in paralyzing fear in most passengers, especially those experiencing a light plane ride for the first time. Many will never fly in a small plane again and thus measurably improve their life expectancy. [Greenspun]
  • In 2009, therefore, it was decided to make a drastic change. NJAS set up a non-profit foundation, The OEIS Foundation Inc., whose purpose is to own, maintain and raise funds to support The On-Line Encyclopedia of Integer Sequences® (OEIS®). On October 26, 2009, NJAS transferred the intellectual property of The On-Line Encyclopedia of Integer Sequences to the Foundation and work was begun on moving the database from NJAS's home page at AT&T to a commercial hosting service. [OEIS]
  • I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the General Government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit. A prevalent tendency to disregard the limited mission of this power and duty should, I think, be steadfastly resisted, to the end that the lesson should be constantly enforced that though the people support the Government the Government should not support the people. [Cleveland]
  • That insidious and crafty animal, vulgarly called a statesman or politician, applies police power to achieve his ends. And why not? All men strive and in different ways. Some are superior in production and exchange, some in intellect, some in military coercion, some in personality and rhetoric. The militarist extols the military, the politician extols government and socialism, the artist extols art, and the intellectual extols intellect. Each exploits his own talents as he may. [Alchian]
  • On the day that everybody knew would be the last of the Morsi Presidency, Atiyat arrived with her fingernails painted in the colors of the Egyptian flag. She took out some red, black, and yellow crayons, and she instructed the twins in the production of little flags. Should my three-year-olds be celebrating a military coup in advance? But I was too distracted to think about it; soon I would have to leave to cover the day's events. [New Yorker]
  • "The danger of grizzlies really turned my crank because I was an adrenaline junkie," he told me that night at the bar in Republic (where the evening's chief threat turned out to be a bartender who didn't have Wielgus's preferred whiskey). He got his doctorate studying grizzlies in western Canada and northern Idaho, then went to the Pyrenees for a year to help with bear recovery. [NY Times]
  • You can measure everything about a bubble except the most important part: When investors will stop believing in it. The end of the bubble is just the end of enthusiasm. And enthusiasm isn't a tamable statistic. It's a hormone that owes nothing to the logic of your data. [link]
  • Perhaps the most striking example of technological stagnation is to be found in general aviation, in which one needn't look further than the Cessna 172, the most popular airplane in the world, which first flew in 1955; the Piper PA-28, the second most popular airplane in the world, which first flew in 1960; the Cessna 150/152, the third most popular airplane in the world, which first flew in 1957; the Cessna 182, the fourth most popular airplane in the world, which first flew in 1956; and the Piper J-3, the fifth most popular airplane in the world, which first flew in 1938. Flight students across America are unironically training in the same airplanes as their great-grandfathers. [link]
  • As I've studied Tesla more closely, I've come to realize that Elon Musk appears to be running a Ponzi Scheme disguised as an auto-manufacturer; where he has to keep unveiling new products, many of which will never come to market, in order to raise new capital (equity/debt/customer deposits) to keep the scheme alive. The question has always been; when will Tesla collapse? [AiC]
  • I'm long-term bullish on Florida. It has great weather, endless coastline, and no state income tax. Florida has been drawing people from the rest of the country for nearly a century and the pace of migration will only accelerate due to the recently implemented Federal tax changes. I can think of no better way to play that structural view than St. Joe (JOE – USA), owner of 177,000 acres of undeveloped land on the Florida Panhandle. [AiC]
  • Next in June came an analysis by Gordon Johnson, an analyst at Vertical Group, estimating that the Model 3 cancellation rate is as high as 66%. No wonder Tesla—which never fails to report a favorable data point (even if it has to fabricate it)—refuses to update the current net Model 3 reservation number (and by net I mean net of requested refunds too, as numerous Twitter posts indicate that the cash-strapped company is delaying those requests for weeks or even months). [AiC]
  • San Francisco is the Schelling point for high-openness, smart, energetic, optimistic people. [link]
  • Grant reasons that the new immigrants were of different races and were creating separate societies within America including ethnic lobby groups, criminal syndicates, and political machines which were undermining the socio-political structure of the country. [Wiki]

Saturday, July 7, 2018

Tesla Back of the Envelope Math

I realized I have barely written about Tesla over the years, even though I have been thinking about it a lot recently.

First thing to know is that the stock at $310 is trading at about 12 times book value. Book value gives them full credit for their acquisition of Solar City (be sure to read the Delaware Chancery opinion) and for their groundbreaking automotive assembly facilities, such as the tent.

Market capitalization of Tesla is currently $53 billion. They are getting close to selling their 200,000th car (cumulative) - at which point their important $7,500 per car tax credit is going to start phasing out. Perhaps they can produce 200,000 cars annually with their current plant; probably not at an overall profit.

The Honda plant in Lincoln, Alabama can produce as many cars as Tesla on just one of its two lines. Honda has 12 plants in the U.S. Their market cap is about the same as Tesla. They sold about 2 million cars in the U.S. last year and 3.7 million worldwide, at an overall average annual profit margin of about 5 percent. Honda automotive plus their other businesses (like motorcycles) earn three to four billion dollars a year.

The market capitalization of Ford is $43 billion, which is only 6 times last year's earnings. They have a 5% automotive operating margin. They sold 2.6 million cars in the U.S. last year and 6.5 million worldwide.

Notice that Ford and Honda each earn about $1,000 net per car sold. For Tesla to justify a higher valuation than either company, it either needs to match that profit per car and sell more, or else have a smaller market but an order of magnitude higher profit per car. The people paying $53 billion for Tesla seem to believe in the higher profit per car scenario.

Ferarri earns about $500 million selling cars at a 15% net margin. They sell under 10,000 units annually at an average of about a quarter million dollars. But Musk's idea has been to move away from high price and margin, low volume, to compete head-to-head against mass market manufacturers like Toyota.

I think what the bulls fundamentally do not realize is what a legitimate premise of a $50 or $100 billion market cap electric vehicle manufacturer would be: a new battery chemistry. If you had invented that and obtained patent protection on it, and assuming it resulted in significantly better energy density and lower $/kwh than current batteries, you would be able to sell a lot of vehicles at an above industry average profit margin.

But... why would you want to? If you invented this better battery, you didn't disrupt automobiles. You disrupted oil. The share of oil used for ground transportation, which could be disrupted by a battery breakthrough, is a $2 trillion annual market. 

Inventing that battery and then building vehicles yourself would require you to raise vast amounts of outside capital to build automotive assembly plants. Honda and Toyota are fantastic at building vehicles and they do it at a 5 percent profit margin. What you would want to do is license your battery to these experienced manufacturers and collect royalty checks based on disrupting owners of oil reserves, not manufacturers of vehicles.

The Tesla battery is a modification of the 18650, which is a 20 year old laptop battery technology. Now you see why they aren't doing a licensing model - there is nothing to license. Instead, with Tesla you are seeing the result of the very arrogant Silicon Valley mentality best expressed by the tweets below,

My conclusion from this thought experiment is that Tesla is overpriced by an order of magnitude. They are a creature of the quantitative easing bull market that resulted in huge wealth inequality; a temporarily over-earning upper middle class.

Friday, July 6, 2018

Real Estate Market

I had a sense that the expensive spec houses that builders have built recently in the neighborhood were not selling, but I just checked on Zillow and confirmed it. I assume they thought these would find buyers before construction was complete, but they have been sitting finished for many months unsold. Did they overshoot the mark on pricing? Or maybe got caught by the interest rate increases? (Mortgage rates are up >100 bps since mid to late 2016.) So now the developers are doing price reductions, which is a change to the post-recovery tempo. I think it will be an interesting sign if they do not move this inventory by fall.

Thursday, July 5, 2018

Review of The Collected Works of Armen A. Alchian: Volume 2 by Armen A. Alchian

Since reading about Armen Alchian and writing about his Vertical Integration and Appropriable Rents paper, I have been wanting to read more of his work. To give you a sense of his style, his college textbook begins:

"Ever since the fiasco in the Garden of Eden, most of what we get is by sweat, strain, and anxiety. Two villains – nature and other people – prevent us from getting what we want. Nature is niggardly: it provides fewer resources than we could use, and much of what is available is made useful only by hard work. As for other people, the problem stems not from malevolence: their wants and ours simply exceed what is available."
I have had his textbook on my list to read, but when I was in a used bookstore I saw a collection of his work on property rights and economic behavior. It has a libertarian bent - one of his initial claims is that the "freedom to acquire and dispose of property rights plays a fundamental role in ensuring that assets reach and remain in their highest valued uses." Another funny question he asks is, "How do we make a voter bear the cost of bad judgment in his votes?" If only we could.

The most interesting paper is still Vertical Integration and Appropriable Rents. Much economics literature, including Alchian's work, is about why firms exist - beginning with Coase's transaction cost theory of the firm. (The "why firms exist" question is really asking why any particular firm is one firm and not two or N firms.)

Why does a newspaper company typically own an editorial content production business AND a printing business, when it could be two firms - the content firm outsourcing the printing of the newspaper to the printing firm? The usual transaction cost explanation does not work very well here. Also, book publishers and magazine publishers tend not to do their own printing. And that is the clue that leads to the Alchian "appropriable rents" explanation. The newspaper printing press is more specialized to the printing of the newspaper than other presses are to books and magazines, because newspapers are far more time sensitive than those other types of publishers. Also, the newspaper is more vulnerable to "opportunistic" behavior by the owner of the press than a book publisher would be. Even if the terms of the printing arrangement are contractually very well specified, an independent press owner would more easily be able to hijack the newspaper's profits through threats of production delays or by alleging higher production or maintenance costs

Thus, Alchian's theory is that if a substantial portion of the value of an asset is dependent on some other particular asset, both assets will tend to be owned by one party, forming a vertically integrated "firm". If you read Phil Greenspun's explanation of why airlines lease aircraft, it is a clear appropriable rent explanation, except in reverse:
A competent pilot union negotiator will present the airline with a plan to transfer essentially all expected future profits into the paychecks of pilots. It does not make sense to accept less because the pilots always have the power to strike and shut the airline down. The only real point of discussion would concern the best estimate of what the airline's profits are likely to be during the term of the contract.

During periods of economic growth, the negotiators peering in the future will tend to see a picture of increasing profits and therefore the airline will agree to substantial pay and benefits increases for the pilots. Should the economy turn down during the contract period, the pilots, having expected to collect 95 percent of the airline's profits, will in fact be entitled to 115 percent of the airline's profits. As the airlines tend to operate with fairly small reserves, paying out 115 percent of profits results in the airline seeking Chapter 11 bankruptcy protection and a federal judge adjusts the pilot union contract so that the pilots are back to collecting 95 percent of the new estimated profit figure.

This cycle of union contract negotiation and Chapter 11 bankruptcy is one reason that the airlines lease rather than own airplanes. By having the main assets in the hands of third parties, it turns out to be a reasonably efficient way of allocating airline profits. The stakeholders who suffer the most are public equity shareholders (the "widows and orphans"), who get wiped out with every bankruptcy filing. The leasing companies get paid, the airline executives get paid, the unionized workers get paid as much as possible, lawyers and Wall Street banks get fees from every bankruptcy, and the public shareholders get 5 cents back for each dollar that they invested.
Most entrepreneurs can sense when a specialized investment would be appropriable, and therefore unwise, but investors do make this mistake and then get held up now and again. An example that occurred to me was GT Advanced Technologies, which supplied sapphire screen material to Apple. Enticed by Apple's order sizes, they made very specialized investments in expanding furnace capacity but ended up going bankrupt after Apple kept squeezing them.

The Appropriable Rents paper is Alchian's second-most cited (by 8k papers). The most cited, which is in this compilation, was "Production, information costs, and economic organization" with Harold Demsetz. However, in a later talk called "Reminiscences of Errors" (in this compilation too), he explains why he thinks that 1972 paper is "partially obsolete".

So Alchian is known for the Appropriable Rents paper and it is the most interesting one (at least in this collection) for investors to think about. Unless you are interested in the history of the libertarianish law and economics movement or very interested in the theory of the firm, I would stick to that one paper.


Wednesday, July 4, 2018

July 4th Links

  • Like cobalt, which is produced as a by-product of nickel and copper production, helium is produced as a by-product of oil and gas production. "To get more cobalt you have to mine more nickel and copper, and to get more helium, you need more big, conventional oil and gas projects that happen to have a helium component, but frankly, most of those mega oil and gas projects aren't economic anymore because of the advent of shale gas," says Nicholas Snyder, founder of North American Helium. The shortage has been accelerated by the U.S. government's decision in the mid-1990s to sell off its helium stockpile. [Northern Miner]
  • I had the urge to buy an old four-wheel drive Toyota Pickup. The boxiness of the body, the square stance of the off-road suspension, the no-frills interior, and the perceived reliability of an old Toyota—it all came together to create an irresistible combination. [Jalopnik]
  • Young people look fundamentally different today from when I was younger. There are still good looking young people, but far fewer of them. It is almost like there has been some kind of genetic collapse. [Free Republic]
  • Taylor Sheridan was an actor who wanted to write. After small roles on Veronica Mars and CSI, he landed a recurring role as a policeman on Sons of Anarchy. But he spent most of his downtime hanging out with series creator Kurt Sutter in the writers room. "I got very fascinated with the craft of storytelling," he explains. After a couple of seasons of Anarchy, the 46-year-old quit the show and acting altogether. "My wife had just gotten pregnant, and I didn't want to look at my kid in seven years and say, 'You can be anything, son, but I can't go to your baseball game because I have to go to a Windex audition.' I sat down and wrote Sicario." [link]
  • As for the future, we may say, with equal certainty, that inhabitants of the Earth can not continue to enjoy the light and heat essential to their life for many million years longer unless sources now unknown to us are prepared in the great storehouse of creation. [Kelvin]
  • The buildup of heavier elements in the nuclear fusion processes in stars is limited to elements below iron, since the fusion of iron would subtract energy rather than provide it. Iron-56 is abundant in stellar processes, and with a binding energy per nucleon of 8.8 MeV, it is the third most tightly bound of the nuclides. Its average binding energy per nucleon is exceeded only by 58Fe and 62Ni, the nickel isotope being the most tightly bound of the nuclides. [link]
  • A physicist named Shawn Bishop has extracted atoms of iron-60 from fossils of ancient bacteria buried under the floor of the Pacific Ocean. This is significant for a couple of reasons. First, iron-60, a radioactive cousin of ordinary iron, is created only in stars that explode as supernovas. Second, iron-60 decays relatively rapidly into a different atom, nickel-60 (not radioactive, but much less common than garden-variety nickel-58). [New Yorker]
  • One realm that has seen substantial progress in my lifetime is not technological, but social. Tolerance for different races, ethnicities, sexual orientations, and other conditions/choices marking individuals as "different" has improved in most parts of the world. This is not without exception, and at times appears to lurch backwards a bit. But there is no doubt that the world I live in today is more tolerant than the one I grew up in. And only part of that involves moving from Tennessee to California. The one caution I cannot resist raising is that I view this tolerance as stemming from a sated world. In times of plenty, we can afford to be kind to those who are different. We are less threatened when we are comfortable. If our 21st Century standard of living peaks—coincident with a peak in surplus energy (i.e., fossil fuels)—then we may not have the luxury of viewing our social progress as an irreversible ratchet. Hard times revive old tribal instincts: different is not welcome. [Do The Math]
  • The estimated per capita consumption of soybean oil increased 1000-fold throughout the 20th century. As a consequence, the amount of LA increased 3-fold, and the amount of ALA doubled. Because the amount of ALA increased and amounts of n−3 EPA and DHA remained relatively stable, the total amount of n−3 fatty acids actually increased slightly. However, the net effect of increasing dietary LA, rather than these modest increases in dietary n−3 fatty acids, likely decreased the n−3 EPA and DHA status of human tissues over the 20th century. [NLM]
  • Since the beginning of the summer, we've moved toward satellite-based ABS-B tracking and ocean going surface robots with ADS-B receivers, but the core of our network remains our terrestrial receivers hosted by thousands of volunteers around the world. We are always looking for new receiver hosts to help expand our ADS-B network and we often get questions on where we're looking for hosts. [Flight Radar]
  • We are excited to announce for the first time that we have received and processed ADS-B signals collected by our autonomous boat. The unmanned surface vehicle, a Wave Glider manufactured by Liquid Robotics and managed by Maritime Robotics as part of their new partnership, is receiving ADS-B signals from aircraft over the North Atlantic Ocean and transmitting them to the Flightradar24 network via satellite relay. This is the first use of an autonomous surface ocean robot for ADS-B reception by any commercial flight tracking service. [Flight Radar]
  • The flight records on one of the jets from the last few months alone show that despite their $30-54k car allowances, management routinely takes 15-20 minute flights to and from airports within different parts of Houston. Given the time spent driving to and from the hangers, preparing/taxing/parking the plane, pre-flight check lists, etc, it can't possibly save a material amount of time versus driving the already paid for automobiles. The list also includes a mid-day on a Tuesday 70 min joy ride taking off and landing at the same airport (KAXH). [link]
  • Your boss is your age. He never got an exit either. He references his :start-up glory days" regularly. OK. Who are you kidding? You are bored. You are surfing the internet. You start with searches about real estate licenses. Maybe you should be a real estate agent. It feels like the purpose of tech companies and venture capitalists is to funnel money into property anyway. Maybe if you magically get between two gigantic piles of money, some will land in your lap somehow. [link]
  • It wasn't so long ago that a single exclamation point still felt extreme. One grammar guide from 2005 says the exclamation point "indicates extreme pain, fear, astonishment, anger, disgust, or yelling." At journalism school, I was told that you get one exclamation point to use in your entire career, so you should use it wisely. You could, perhaps, spend your one exclamation point on a headline like "WAR OVER!" but nothing less would merit one. (I'm sure I've already spent beyond my means, don't email me.) The writer Elmore Leonard had a similar rule for fiction: "You are allowed no more than two or three per 100,000 words of prose," he once wrote, though he apparently didn't abide by that. [Atlantic]
  • There are no simple interventions that can change average life expectancy by more than a few years or maximum life span at all. As a corollary, there is no single or small number of genetic or biochemical 'master switches' of aging, because if there, some of the thousands of interventions during the past 3 centuries of active scientific research would have flipped them directly or as a downstream effect, someone would have exceeded the Calment limit, or heritability estimates of longevity would be far higher. Research proceeding on the basis of 'identify a correlate of aging' is effectively doomed: the signature feature of aging is that it is an exponential acceleration (the Gompertz curve) of mortality due to all causes ie. all organs are simultaneously becoming nonfunctional and losing homeostasis and efficacy, and these problems interact as well. [Gwern]
  • If we sometimes cannot recognize a migration as an invasion and as warfare, it stands to reason that there will be certain kinds of warfare which we will not recognize as such when they appear. [link]
  • The size of the subject in the frame is a function of the square of the focal length. A subject that fills 25% (5X5) of the frame in an image created with a 500mm lens will fill 36% (6X6) of the frame if photographed with a 600mm lens from the same distance. The huge advantage here goes to the 600 II which will render the subject 44% larger in the frame than the 500 II. Along with this huge advantage comes less disturbance of birds and wildlife and less chance of flushing a desirable subject while approaching. It is difficult to quantify or overstate the importance of these closely related factors. [link]
  • If the Bavarian Motor Wizards boiled down their brand to the stuff that made it legendary, a 135is badge would be floating at the bottom of the cauldron. That essence, made real, would be a compact coupe with tubby rear-wheel-drive proportions, just like the small Sixties, Seventies, and Eighties sport sedans that made BMW a household name. [link]
  • I see a huge amount of construction everywhere, but fewer people occupying bigger spaces. For example, the graceful Victorian mansions built back in the 1800s were carved up into apartments decades ago. Now they're being repurposed into single family home again by prosperous families. Or homes that used to be occupied full time are now second homes that remain empty most of the time. [Granola Shotgun]

Monday, July 2, 2018

July 2nd Links

  • One of our neighbors is departing the Land of the Deplorables (TM) for Canada (folks protest Trump's election and the country's newfound hostility to non-whites by moving to our yet-whiter northern neighbor rather than to, e.g., Mexico?). She has been upset for more than a year by Donald Trump's collusion with Russia, his lack of respect for women who were paid to have sex, and his stated passion for enforcing U.S. immigration laws. The tipping point for her was an attractive job offer from a Canadian employer. She'll still be a U.S. citizen, but she doesn't want to be a Massachusetts citizen any longer. Write-in votes here won't help advance her passion for higher taxes and an expanded government. "I want to choose a state where my vote matters," she noted. I suggested Michigan or New Hampshire, the states that were closest in the 2016 Presidential Election. "No," she replied. "It has to be a state that is tax-free." [Phil G]
  • Once again, Powell cited financial risks as a potential trigger for monetary tightening. And once again, his phrasing (namely, the conjunction "or") suggested he could raise rates quickly even without an inflation threat. Whereas Yellen never once listed both inflation and financial instability as threats that could require aggressive tightening, Powell can't seem to describe it any other way. To state the obvious, his two tightening criteria are two times as many as the single tightening criterion (inflation) used by Yellen and her two predecessors - a neat math fact that explains why I called this the most hawkish turn in over thirty years. Later in the press conference, a questioner asked about the neutral interest rate but included an add-on question about the inflation rate. Powell concluded his answer like this: "It's worth noting that the last two business cycles didn't end with high inflation. They ended with financial instability, so that's something we need to also keep our eye on." [link]
  • Martin recalled a painting once referred to him, around 3.5 sq metres in size and dated to 1932. In a first round of study, he discovered nothing amiss. But the work's provenance – its documented history of ownership – was shaky, so he ran a second pass under a microscope. For most of a day, he scanned the painting in dime-sized increments, until his eyes dried up. Was anything embedded in the paint: dust, or hair, or an insect wing? Did the dirt look as if it had been smeared on deliberately? Finally, embedded in a speckle of blue, he found a slim fibre; with a scalpel, he snipped it off and subjected it to infrared spectroscopy. The fibre turned out to be polypropylene. Perhaps someone had worn a polar fleece while painting the forgery? [link]
  • The house, aside from being a beautiful blend of traditional and modern elements, is hyper energy efficient even in Montana's brutal winters. The lot is clearly large enough to accommodate two generously proportioned high quality homes – and the historic pattern in the neighborhood supports this form of infill development. But the present set back requirements and codes only permit one house on the lot. So he pushed the building as far to one side as possible and installed a bocce ball court in the space where a future home might go if officials ever change the rules. [Granola Shotgun]
  • Although the TV show Silicon Valley has a lot of accurate-sounding dialog regarding various software tools, it depicts young childless workers living in a group house. This is a little different than Pakistanis working in Dubai, for example, where a middle-aged man would export himself to labor and leave the wife and kids behind. [Phil G]
  • For many years, anthropologists have doubted traditional accounts of human sacrifice, cannibalism, torture, and general irritability among MesoAmerican Indians – mainly the Aztecs and Maya. Progress in archaeology and the translation of the Mayan script have greatly weakened this trend. When you find towers of skulls, racks of skulls, skull masks, you start to think that something about the Aztec empire wasn't exactly kosher. [West Hunter]
  • The big booze companies were desperate for a piece of the wine cooler action. "[Ernest & Julio] Gallo was hovering their company helicopter over our plant," Bewley recalls. "They had guys in our parking lot with binoculars, photographing how many trucks were coming in and out, trying to figure out what the hell we were doing. We'd bring them coffee" [link]
  • In addition to its conventional navigational capabilities, it has autonomous systems that operate independently from any ground- or space-based transmitters. The primary one is an inertial unit that slowly drifts, as inertial units do, but can be recalibrated in flight by using a stellar navigation system that observes stars day and night, or alternatively by using the airplane’s synthetic-aperture radar to pick out ground features at thousands of locations worldwide, which are known to an airborne database. [Atlantic]
  • Whoever President Trump chooses to replace Justice Anthony Kennedy will undoubtedly be a ghoul of the most nightmarish quality. But nobody should shed any tears for the loss of Kennedy himself. He was a fierce partisan for the destruction of what's left of the New Deal who happened to have a soft spot in his heart for gay people. He has a long list of greatest hits — Kennedy gave us President George Bush, of course. But more recently, in his retirement year, Kennedy did not even once join the liberal side of the 5-4 decisions for which this court will be infamous. [Jacobin]
  • Even Detroit products from the era of planned obsolescence, if rigorously cared for, could hit six figures. But double that and head for a quarter-million miles, and suddenly even well-built cars are succumbing to attrition. [link]
  • Comedienne Ali Wong offers a useful distinction between what she calls Fancy Asians (Japanese, Korean, Chinese) with "Jungle Asians" like herself, who are from Vietnam, Philippines, Laos, etc. (I don't know where Bangladeshis would fit in for her, if at all. She probably doesn't consider them Asian.) [Sailer]
  • A former Goldman Sachs banker who hung out a shingle in 2014, Mr. Culas helped Twitter negotiate with its banks and ultimately sell a type of hybrid bond for a 1% fee, one of the cheapest offerings in recent memory. Mr. Culas is among a handful of upstart advisers who are challenging investment banks on turf once thought impenetrable: the $7 billion-a-year business of handling complex stock-related transactions. [WSJ]
  • The most probable outcome of this is the court eventually sides with Harvard, by fashioning some ludicrous exception to the laws that govern everyone else. After all, the current Supreme Court is made up of six Harvard grads and three Yale grads. Look down the roster of the Federal bench and you won’t see many guys name Wong who graduated from Cal State Fullerton. The whole point of seizing power is to use it to reward your friends and punish your enemies. The people in charge have always known this. [Zman]
  • Advice to substitute polyunsaturated fats for saturated fats is a key component of worldwide dietary guidelines for coronary heart disease risk reduction. However, clinical benefits of the most abundant polyunsaturated fatty acid, omega 6 linoleic acid, have not been established. In this cohort, substituting dietary linoleic acid in place of saturated fats increased the rates of death from all causes, coronary heart disease, and cardiovascular disease. [BMJ]
  • By some measures, delivering packages is one of the few "good" jobs left in America for people without college degrees. The Teamsters represent roughly 260,000 UPS workers, who make around $36 an hour. The American Postal Workers Union represents around 156,000 clerks and support workers, who make, on average, $75,500 annually, according to the union. The National Association of Letter Carriers, which did not respond to requests for comment, represents the actual Postal Service delivery workers. [Atlantic]
  • I try to avoid lobbing clich├ęs like "holy grail" and "ultimate barn find" around too often, but we've got a freaking 1983 Toyota four-wheel drive manual transmission single cab pickup truck with less than 8,000 miles on our hands here, people. It's time to freak out. A reader sent this auction listing to me the other day with a note "figured you would enjoy that." Yes. Yes I do. Any red-blooded individual who holds pickup trucks sacred would be liable to lose their shit at the sight of this thing. Which is probably why it's already commanding an asking price of over $10,000. [Jalopnik]