Hallelujah: How Handel Played The Markets

Some of our previous posts on Handel the investor.

From the Bank of England's Bank Underground blog:

Handel and the Bank of England

Ellen T. Harris

This guest post is the third of an occasional series of guest posts by external researchers who have used the Bank of England’s archives for their work on subjects outside traditional central banking topics. 

George Frideric Handel was a master musician — an internationally renowned composer, virtuoso performer, and music director of London’s Royal Academy of Music, one of Europe’s most prestigious opera houses. For musicologists, studying his life and works typically means engaging with his compositional manuscripts at The British Library, as well as the documents, letters, and newspapers that describe his interaction with royalty, relationships to others, and contemporary reaction to his music. But when I began to explore Handel’s personal accounts at the Bank of England twenty years ago, I was often asked why. For me the answer was always ‘follow the money’. Handel’s financial records provide a unique window on his career, musical environments, income, and even his health.

His early career
Inculcated with business savvy by his father (a courtier, barber surgeon, and wine dealer), Handel had already made a name for himself in Germany and Italy when he arrived in London in 1710. Earlier that year, at the age of twenty-five, he had been appointed Master of Music at the court of Hanover, but he was given leave to reside for long periods in England. A blip in his employment relating to Hanoverian displeasure with the Peace of Utrecht in 1713, and Handel’s celebration of it in the Utrecht Te Deum and Jubilate, allowed the composer to slip into the service of Queen Anne. She provided him with an annual pension of £200 (£25,000 at today’s prices), a handsome benefit George I immediately continued following the Hanoverian Succession.

The bursting of the South Sea Bubble
By at least mid-1715, Handel had the wherewithal to purchase £500 of South Sea Company shares, as we know from a note signed by him and dated 13 March 1715/16 that asks his dividend, being ‘Fifteen pounds on Five Hundred pounds, which is all my Stock in the South Sea Company books & for half a Year due at Christmas last’ (that is, Christmas 1715), be paid to a Mr Phillip Cooke’ (see Documents 1: 334). Thereafter the shares climbed sharply in value, before crashing in 1720 in one of the famous bubble episodes in financial history – the South Sea Bubble. Three years later, in a final resolution of the crisis, South Sea shareholders saw their accounts split 50/50 between equity shares in the company and annuity stock held by the Bank of England....

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The writer, MIT Professor Emeritus Ellen Harris is the authority on Handel's financial doings. Way back on December 23, 2012 we posted "Hallelujah!: How Handel Orchestrated a Classic Financial Portfolio" :

Transcript
....F.M. SCHERER: And the composers competed as freelances to have their -- compositions chosen to be operas.

PAUL SOLMAN: Handel, on royal retainer in London, jumped into the game, according to MIT musicologist Ellen Harris.

ELLEN HARRIS, MIT: His first opera is "Rinaldo," 1711, and it was a huge hit. He probably would have gotten a flat fee for writing the opera. And that probably was about 200 pounds. And he would have had a benefit night, so he could take the box office from that one night, could have brought in 500, 600 pounds....

Professor Harris wrote the definitive paper on Handel's finances, Handel the Investor, definitive that is until a BBC reporter made a startling find:

A chance discovery in a ledger at the Bank of England suggests the composer Handel may have been a smart financial operator.
How Handel played the markets.... 

Professor Harris came back with the new definitive paper:

Courting Gentility: Handel at the Bank of England
(23 page PDF)

And since then it's been a Holiday tradition:

Hallelujah: How Handel played the markets
Hallelujah: "Why Handel Never Went Baroque"
"Musicnomics Part II: Decline and Fall"

That, and his song with the big chorus....
All of which led to Do-it-yourself 'Messiah's' being performed around the world. 
Which can often result in some horrible sounds.

Not always though.
Here's a do-it-yourself version of the big Chorus done at a small college in Japan.
Sensei Jiro Tomonaga, music director, conducting first the choir and then the audience:

"A Jaguar E-Type called the ‘Shaguar’ is up for auction"

Don't know what current Jag management thinks of this. Don't care.

From BBC Top Gear, December 18:

It’s from a film apparently titled ‘Austin Powers’, and… yeah, us neither

A 1967 Jaguar E-Type, upon which Henry Ford’s famous line ‘you can have it in any colour as long as it’s black’ is based – no, wait, not that – is up for auction.

The special bit here is that this ’67 Jag starred in a series of films about a fictional British spy bearing a Scottish accent and a licence to kill. No, hang on, not that either.

Dubbed the ‘Shaguar’, this modified E-Type was of course driven by the film’s star Mike Myers – posing as fictional agent 007, we think? – across all three of these Austin Powers films....

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"The Death and Life of Prediction Markets at Google"

 From Asterisk Magazine, Issue 08, January 2025:

Over the past two decades, Google has hosted two different internal platforms for predictions. Why did the first one fail — and will the other endure?

It’s July 2005. Google is the darling of Silicon Valley. It has just unveiled Google Maps; Gmail is still in beta. Next year it will acquire YouTube and launch Google Translate.

The week’s new hires file past a full-size dinosaur skeleton in the courtyard on the way to their first TGIF — the company’s weekly all-hands. They wear beanies with red, yellow, green, and blue colors — like the yet-to-be-designed Chrome logo — with a propeller on top. They are here to see Google’s founders, Larry Page and Sergey Brin, both wearing shorts and plain colored t-shirts, banter about new tech.

In the first line of their Founders’ IPO letter, Page and Brin wrote “Google is not a conventional company.” They sought to provide “unbiased, accurate and free access to information.” On this Friday, Patri Friedman, the grandson of Milton Friedman, and Bo Cowgill, now an economics professor at Columbia University, are here to talk about Google’s next bet to do this: an internal prediction market called Prophit.

On stage next to Larry Page, Friedman and Cowgill announce winners from Prophit’s first quarter and show statistical results on its forecasting accuracy. Prophit was popular inside Google. Over the next three years, about 20% of all Google employees would place bets.

Two months after this presentation, The New York Times covered Prophit. They wrote about it again in 2008, and it became a Harvard Business Review case-study. Despite the momentum, in March 2010, Prophit hit a major roadblock in its public launch as an external product. It attempted a pivot, and ultimately shut down in 2011.

In April 2020, almost exactly 15 years after Prophit launched, and one month after employees worldwide were sent home due to COVID-19, I launched Google’s second internal prediction market, called Gleangen. ¹ By late 2022, about 8% of Google employees had placed a bet on Gleangen. The company had grown so large that 8% represented 15,000 people — ten times the number of employees that placed bets on Prophit. Gleangen sustained over 1,000 monthly traders, more than the popular forecasting platforms Metaculus (where I later served as CTO) and Manifold at the time. ²

Outside of Google, prediction markets have once again been thrust into the spotlight. Weeks before it became a mainstream view, users on sites like PredictIt and Metaculus predicted not only that President Biden would drop his reelection campaign but that doing so would increase the Democrats’ chance of winning. Over the next few months, swings in election prediction markets regularly made national news, and despite some distortions caused by aggressive whales, the markets ultimately performed well. Theoretically, prediction markets are equally powerful when used by companies to anticipate events, such as predicting their competitors’ next moves.

But as Cowgill has shown, corporate prediction markets have a mixed track record, as evidenced by attempts at Google and many other companies. Why is this? What does it take to make them work? The inside story of Prophit and Gleangen, the two largest corporate prediction markets ever run, offers some lessons.

A new type of information economy....

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"China Tells Chief Economists: Be Positive, or Else"

From the Wall Street Journal, December 20:

Experts at brokerages say they are pulling punches as Beijing clamps down

HONG KONG—China economists and strategists at leading brokerages say they are hewing closer to the official government line and being cautious in their commentary in response to signs of tighter monitoring.

The latest sign came Friday when the state-run China Securities Journal said the main securities industry body has told brokerages to ensure their chief economists play a positive role in analyzing official policies and boosting investor confidence.

The government’s sensitivity to criticism has risen recently as discontent festers among Chinese people. Policymakers are trying to jump-start the weak economy by lowering interest rates and stimulating consumer spending.

Directives to be careful about commentary are a familiar feature of China’s markets, especially during politically delicate periods such as October 2022, when leader Xi Jinping was re-elected to a third term. From time to time economists and analysts are sidelined from social media after sharing unauthorized or negative views.

Some local securities bureaus in China have told brokerages and other financial institutions to place more scrutiny on public statements made by their employees, especially chief economists and research analysts, domestic Chinese media outlet Cailian reported Thursday.

China Securities Journal, which is supervised by the government’s official Xinhua News Agency, doubled down on the message by relaying the guidance delivered to financial institutions about what chief economists should and shouldn’t do.

If a chief economist repeatedly causes serious adverse effects owing to inappropriate comments, the employer should punish or possibly fire the person, China Securities Journal cited the official guidance as saying. Chief economists should publicize and interpret official policies and guide market expectations, it quoted the guidance as saying.

The newspaper didn’t say what comments were inappropriate. The China Securities Regulatory Commission didn’t respond to a request for comment.

Economists and strategists who analyze China said the state-media articles and other material interpreting the new guidance ricocheted around the region’s financial world on Friday. They said it added to the pressure to avoid edgy commentary or expressions of agreement with other people’s criticism. 

Late last year, some economists and strategists began drawing comparisons between China’s economic downturn and Japan’s deflationary woes that began in the 1990s, such as a fall in property prices, an aging population and cash-strapped local governments.

At the time, economists at Chinese banks and brokerages were told by their higher-ups or compliance departments to refrain from comparing China to Japan or talking about deflation, people familiar with the matter said. One economist who used to work at a state-owned bank in Hong Kong recalled trying to publish research notes about the country’s deflation threat and repeatedly failing the bank’s compliance checks.

Shunning the word “deflation” hasn’t made the phenomenon go away in the year since.

The producer-price index, which captures factory-level prices, has fallen year-over-year for 26 consecutive months through November....

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In a similar vein:

July 9, 2011
A Cautionary Tale: "Argentina files criminal charges against consulting firm for publishing inflation data"

"Complex Potential States"

From The Side View, November 30, 2021:

A theory of change that can account for beauty and generate life 

This article is an exercise in speculative reasoning. It is a response to the feeling that the multiple crises we face cannot be addressed by thinking with any of the existing theories of change or models of systems dynamics that are available to us today. This article is also a critique of complex adaptive systems thinking and all of the complexity science that is based on it. Because we are steeped in the logics of complex adaptive systems thinking, everyone is caught in a closed loop of escalating complexity and accelerating risk. In this article, I propose a new theory of change that has the potential to create new intentional states in people, and as such, new behaviors. Unlike the logics of complex adaptive systems thinking, where each person is a potential opponent, and every environment is a potential threat, this new theory of change—which I call “a theory of complex potential states”—prepares us to open up to new potentials that are offered in every relationship and every environment.

Part One: The Problem Situation

Our current theories of change are invested in the dynamics of crisis.

The deep codes embedded in our theories of development and evolution—such as progress, competition, adaptive pressure, and survival drives—are root causes of the escalating complexity and increasing systemic risk that characterize our time. Even imagining as a response that we are under threat from climate, or that the lifeworld is being threatened by us, is itself entangled in these codes and leads to self-fulfilling prophecies.

Humans create self-fulfilling prophecies because our causal theories of change are themselves causally implicated in the world we create. Because we are reflexive, predictive, and intentional beings, we deliberate, decide, and act based on mental models we share on how the world works. These models change over time. For example, the idea that an external agent created the universe is based on a construction theory of change that was prevalent in premodern monotheistic cultures. In premodern polytheistic or panentheistic cultures, the origin story was based on a developmental theory of change—either from the union of male and female energies, or the developmental unfolding of a primordial egg. More recently, many of our theories of change are based on evolutionary dynamics. These have proliferated into a broad spectrum of models, from the original Darwinian theory to models of complex adaptive, chaotic, chaordic, and emergent systems.

In its original form, Darwinian evolution depended on two basic dynamics: (1) random mutations in individuals resulting in genetic drift across breeding populations, and (2) changes in the environment. The mutations are blind to environmental changes, and environmental changes are unresponsive to the mutations. “Natural selection” is a random coincidence that occurs when the change in the environment just happens to increase or decrease breeding prospects across some populations (and not others) and some individuals (and not others). This change could be slow and incremental, eventually leading to sub-populations that no longer breed together, eliminating the hybrid traits. Eventually, the disadvantaged population becomes extinct, and the new population emerges as a new species. This change could be dramatic and swift, wiping out entire groups of species, and setting the stage for new lineages to found later forms.

The point here is that the original Darwinian model is not a story of survival drives, adaptive pressure, and striving to survive—it is a story about rolling the dice.¹  ....

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RAND: How To Do Ethical Influence Operations

From the RAND Corporation, August 11, 2023:

Planning Ethical Influence Operations
A Framework for Defense Information Professionals

U.S. Department of Defense (DoD) efforts to plan and conduct influence operations in an ethical manner face several challenges, including concerns regarding the appropriateness of any influence activity, a lack of explicit consideration of ethics in the influence-planning process, and decoupling the ethics of force from the ethics of influence in military operations. Currently, DoD lacks a framework to explicitly consider the ethics of an influence activity outside legal review.

Ethics scholarship reveals that the principal ethical objection to influence is its threat to autonomy. Although influence is a threat to autonomy and is thus morally fraught, this scholarship points to several situations in which influence activities might be justified.

This report includes (1) clear ethical principles that should govern the planning and conduct of influence operations; (2) clear procedures for assessing ethics and the ethical risk associated with a proposed influence operation; and (3) guidelines for creating a justification statement for a proposed influence operation based on a preliminary ethical determination so that reviewers and approvers are presented with a consistent, coherent, and nonarbitrary ethical evaluation with which they can engage and agree or disagree.

The authors offer a principles-based framework for military practitioners to determine whether a proposed influence effort is ethically permissible and guidance for preparing a justification statement that allows approvers to follow the ethical logic behind a proposed influence effort.

Key Findings....

....MUCH MORE, including PDF download page. 

 

Related:

RAND Corporation on Fourth Industrial Revolution Technologies And Influence Campaigns/Information Warfare

RAND: "Truth Decay Is Putting U.S. National Security at Risk"
This is pretty funny. The following essay expounds on the fact that there is a lack of trust in the country and somehow manages to avoid mentioning the lies of government agencies and the lies of the media for the last seven or eight years.

It's akin to, and as crazy as, Barbara Fried saying the prosecutors have ruined her family's reputation. Sam and Gabe and herself and Mr. Bankman. Reputations ruined.

And many more. We find RAND to usually be commonsensical with that last post being an exception that borders on farce.

"Party City to Wind Down Operations, Fire Employees, CEO Says"

From Bloomberg via MSN, December 20:

Party City Holdco Inc. will shut down and lay off its employees just 14 months after the company exited bankruptcy under a plan that had been designed to ensure the retailer’s long-term survival.

Chief Executive Officer Barry Litwin told employees that the costume and party supplier couldn’t overcome pressure from low-spending consumers and high inflation. Going-out-of-business sales began Friday, he said in a video seen by Bloomberg News.

“And as a result we regret to inform everyone that today will be your last day of employment,” Litwin said in the video. “That is without question the most difficult message that I’ve ever had to deliver.” CNN reported the company’s closure plans earlier on Friday....

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Previously:

January 2023 - "Party City: volatile helium costs forces retailer to rethink its business" (PRTY):
***
...Neon too. The joy is going out of our lives.

I used to say "that's funnier than three helium atoms: HeHeHe" No more

"An Old Syria Hand’s Outlook: The Pieces Aren’t Coming Back Together"

Those lines on maps that the French and British drew over one-hundred years ago were a perversity and will continue to highlight the crazy effects of people who think they know what is right for the world.

The self-anointed, from the Davos crowd and U.N. back to the League of Nations and Sykes–Picot have caused far more death and destruction than any good they might have done.

From Barron's, December 20:

About the author: Theodore J. Singer retired in 2023 from the Central Intelligence Agency, where he served five times as a chief of station and head of Middle East operations. He currently advises private and public sector clients.

---

It was summer 1993 when we touched down, hot and tired, in Damascus, Syria. I didn’t bring much other than Arabic language skills, two cats, and youthful optimism. As a U.S. government journeyman, I was there to learn and report back. My net assessment at the time was that Syria was heading in the right direction.

I was wrong.

The recent news from Syria shows how. The brutal Assad dictatorship has been swept away after decades in power. No one will miss it. But it’s being replaced by new rulers of unknown brutality. The most prominent rebel leader, Abu Mohammad al-Jawlani, has a record of death and terrorism. But, so far, he has been relatively restrained. Early Western commentary is hopeful that he may have found conversion on his road to Damascus.

Maybe. But I don’t want to be wrong again. Today, I don’t hold out much hope for Syria.

To explain my pessimism—and my wider fears for Syria—let me go back to 1993. I remember telling my overworked and understaffed Embassy colleagues in Damascus about the trek in. It was a strange trip.

Syrian Air had elected to skip Tunis, where my wife and I were waiting for a flight. That was mysterious. Then, a late-night call alerted us that there might be a flight in the works, albeit inshallah bukra —tomorrow, hopefully. At the Tunis airport, we learned that the rickety old bird we’d be boarding didn’t have a pressurized hold. We bought two wicker baskets at the duty-free shop, stuffed a cat in each, and held them on our laps the whole flight.

When we landed in Syria, we were covered in cat scratches, fur, and other feline stuff. But ma’lash as they say—no big deal.

My new colleagues laughed at that one. Then, the work began. It never stopped.

Still, like I said, there were reasons for regional optimism in the 1990s. For one, Syrian President Hafez al-Assad had supported the U.S.-led operation Desert Storm to liberate Kuwait. He thought defeat for his archenemy—Iraq’s Saddam Hussain—would mean less U.S. pressure and more Gulf money for his own regime.

For another, there were bilateral niceties. In rapid succession, good things happened in the Middle East: The Oslo Accords promised peace; tension between Syria and Turkey lessened; and there were meaningful diplomatic efforts between Syria and Israel.

In 1994, the line of succession changed in what seemed a promising way. Basil al-Assad, the “hero” and Hafez al-Assad’s eldest son, died in a car wreck. He was replaced as heir apparent by the “eye doctor,” Bashar, al-Assad (the seemingly) Westernized son.

Finally, also that year, there was the first (and alas last) U.S. presidential visit in 20 years by President Clinton. Things were looking up.

Watching TV today, I see places in Syria I know so well. I doubt I’ll ever visit them again.

On rare breaks from work, my wife and I relied on hand-drawn maps to get around the country. They were the handiwork of a former Australian ambassador and adventurer. His ink guided us to ancient towns, forgotten cultures, and amazing people. We walked through the fortress of Aleppo, climbed ruins in Palmyra, and searched for the best shawarmas. Syria’s detente with the U.S. meant slightly less intrusive treatment of U.S. diplomats. But the regime still proscribed travel to certain parts of the country. We knew that these were Kurdish areas and military zones. There, the regime tested WMDs or housed its Soviet and North Korean weaponry.

Needless to say, we avoided those particular holiday spots....

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"Solving renewable energy’s sticky storage problem"

From Knowable Magazine, December 18:

When the Sun doesn’t shine and the wind doesn’t blow, humanity still needs power. Researchers are designing new technologies, from reinvented batteries to compressed air and spinning wheels, to keep energy in reserve for the lean times.

When the Sun is blazing and the wind is blowing, Germany’s solar and wind power plants swing into high gear. For nine days in July 2023, renewables produced more than 70 percent of the electricity generated in the country; there are times when wind turbines even need to be turned off to avoid overloading the grid.

But on other days, clouds mute solar energy down to a flicker and wind turbines languish. For nearly a week in January 2023, renewable energy generation fell to less than 30 percent of the nation’s total, and gas-, oil- and coal-powered plants revved up to pick up the slack.

Germans call these periods Dunkelflauten, meaning “dark doldrums,” and they can last for a week or longer. They’re a major concern for doldrum-afflicted places like Germany and parts of the United States as nations increasingly push renewable-energy development. Solar and wind combined contribute 40 percent of overall energy generation in Germany and 15 percent in the US and, as of December 2024, both countries have goals of becoming 100 percent clean-energy-powered by 2035.

The challenge: how to avoid blackouts without turning to dependable but planet-warming fossil fuels.

A January 2023 snapshot of Germany’s energy production, broken down by energy source, illustrates a Dunkelflaute — a long period without much solar and wind energy (shown here in yellow and green, respectively). In the absence of cost-effective long-duration energy storage technologies, fossil fuels like gas, oil and coal (shown in orange, brown and dark grey, respectively) often pick up the slack during such periods.

CREDIT: FRAUNHOFER INSTITUTE FOR SOLAR ENERGY SYSTEMS ISE

Solving the variability problem of solar and wind energy requires reimagining how to power our world, moving from a grid where fossil fuel plants are turned on and off in step with energy needs to one that converts fluctuating energy sources into a continuous power supply. The solution lies, of course, in storing energy when it’s abundant so it’s available for use during lean times.

But the increasingly popular electricity-storage devices today — lithium-ion batteries — are only cost-effective in bridging daily fluctuations in sun and wind, not multiday doldrums. And a decades-old method that stores electricity by pumping water uphill and recouping the energy when it flows back down through a turbine generator typically works only in mountainous terrain. The more solar and wind plants the world installs to wean grids off fossil fuels, the more urgently it needs mature, cost-effective technologies that can cover many locations and store energy for at least eight hours and up to weeks at a time.

Engineers around the world are busy developing those technologies — from newer kinds of batteries to systems that harness air pressure, spinning wheels, heat or chemicals like hydrogen. It’s unclear what will end up sticking.

“The creative part … is happening now,” says Eric Hittinger, an expert on energy policy and markets at Rochester Institute of Technology who coauthored a 2020 deep dive in the Annual Review of Environment and Resources on the benefits and costs of energy storage systems. “A lot of it is going to get winnowed down as front-runners start to show themselves.”

Finding viable storage solutions will help to shape the overall course of the energy transition in the many countries striving to cut carbon emissions in the coming decades, as well as determine the costs of going renewable — a much-debated issue among experts. Some predictions imply that weaning the grid off fossil fuels will invariably save money, thanks to declining costs of solar panels and wind turbines, but those projections don’t include energy storage costs.

Other experts stress the need to do more than build out new storage, like tweaking humanity’s electricity demand. In general, “we have to be very thoughtful about how we design the grid of the future,” says materials scientist and engineer Shirley Meng of the University of Chicago.

Reinventing the battery
The fastest-growing electricity storage devices today — for grids as well as electric vehicles, phones and laptops — are lithium-ion batteries. Recent years have seen massive installations of these around the globe to help balance electricity supply and demand and, more recently, to offset daily fluctuations in solar and wind. One of the world’s largest battery grid storage facilities, in California’s Monterey County, reached its full capacity in 2023 at a site with a natural-gas-powered plant. It can now store 3,000 megawatt-hours and is capable of providing 750 megawatts — enough to power more than 600,000 homes every hour for up to four hours....

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The problem has been known for decades.

Here's a 2016 post referring back to a 2012 post:

Bill Gates: "It Is Surprisingly Hard to Store Energy"
Yes, yes it is.
And that's why storage is the Holy Grail for VCs.*
*****
*Oddly enough, in 2012's "Batteries: The Venture Capitalist's Holy Grail" I mentioned a different Holy Grail:

...Microsoft famously didn't need venture capital either.
(Technology Venture Investors was the sole VC investor and got that plum only because Marquardt and Ballmer were buddies) 

That's the Holy Grail, finding a company that doesn't need you but will let you in.
The battery on the other hand....that's going to be a longer slog than the press releases would lead one to believe.

See also:

Gates, Pritzkers vs. Musk: "The $5 Billion Race to Build a Better Battery" (TSLA)

for some of our posts on batteries.Or, if interested use the 'search blog' box upper left.

"What is an AI agent? A computer scientist explains the next wave of artificial intelligence tools"

We've been saying it (sometimes literally*) for quite a while, chatbots are not the be-all and end-all of artificial intelligence.

From The Conversation, December 18:

Interacting with AI chatbots like ChatGPT can be fun and sometimes useful, but the next level of everyday AI goes beyond answering questions: AI agents carry out tasks for you.

Major technology companies, including OpenAI, Microsoft, Google and Salesforce, have recently released or announced plans to develop and release AI agents. They claim these innovations will bring newfound efficiency to technical and administrative processes underlying systems used in health care, robotics, gaming and other businesses.

Simple AI agents can be taught to reply to standard questions sent over email. More advanced ones can book airline and hotel tickets for transcontinental business trips. Google recently demonstrated Project Mariner to reporters, a browser extension for Chrome that can reason about the text and images on your screen.

In the demonstration, the agent helped plan a meal by adding items to a shopping cart on a grocery chain’s website, even finding substitutes when certain ingredients were not available. A person still needs to be involved to finalize the purchase, but the agent can be instructed to take all of the necessary steps up to that point.

In a sense, you are an agent. You take actions in your world every day in response to things that you see, hear and feel. But what exactly is an AI agent? As a computer scientist, I offer this definition: AI agents are technological tools that can learn a lot about a given environment, and then – with a few simple prompts from a human – work to solve problems or perform specific tasks in that environment.

Rules and goals

A smart thermostat is an example of a very simple agent. Its ability to perceive its environment is limited to a thermometer that tells it the temperature. When the temperature in a room dips below a certain level, the smart thermostat responds by turning up the heat....

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*Most recently:

AI: Chatbots Are Sooo 2023; Here Comes Interactive AI

"ChatBots Are Not The Be-All And End-All Of Artificial Intelligence":

Far from it.
And all the focus on ChatBots and LLMs are more than just a distraction, they are a perverse representation of what AI is doing and will do and could potentially cost you money or opportunity or both....

ChatBots Are For Children: "What’s Ahead for OpenAI? Project Strawberry, Orion, and GPT Next"

IEEE Spectrum - "What Are AI Agents?" 

"First impressions of ChatGPT o1: An AI designed to overthink it"

CoinTelegraph has developed an artisanal, homebrew AI specialty. Here's one of our previous visits:

AI Use Case: Biological Immortality By 2030

This would be a pretty good answer to the question "What is the use case for AI?"

But I don't buy it. AI will be like the nanotech revolution that never was, never that is, in the sense of a nanotech industry. Instead, as with nanotech, AI will be embedded in the processes and protocols of every facet of human existence and we won't even notice it.

 "AI agents are the 'next frontier' and will change our working lives forever"

 Former Google CEO Schmidt On The Ever-Increasing Tempo Of AI

Also:

Where Is Artificial Intelligence Going From Here: One Of The Gurus Speaks

"Census Bureau Massively Revises Up Population Growth: +8 Million in 3 Years, +3.3 Million Last Year, Largely due to Immigration. US Population Surges to 340 Million "

From Wolf Street, December 19:

Total Employment to be substantially revised higher early 2025 when the BLS incorporates these up-revisions into its household survey employment data. 

The Census Bureau released its updated population estimates with data through July 2024 today, which corrected its vastly underestimated figure of immigrants for the past few years.

The prior Census Bureau data had so inadequately measured the tsunami of immigrants in 2021 through 2024 that it left policy makers, such as the Fed, in the dark about the supply of labor, employment, etc. To provide some insights, the Congressional Budget Office released its own estimates of population growth earlier this year, by incorporating data from Immigration and Customs Enforcement.

Today’s data by the Census Bureau confirms that it was truly a tsunami of immigrants that washed over the land. And now it’s official.

The US population surged by 8 million people in the three years from July 2021 through July 2024, to 340.1 million, according to the updated estimates from the Census Bureau today.

The 3.3 million net increase over the 12 months through July 2024 was the largest in decades. And the biggest portion of increases came from net-immigration (those that came in minus those that left or were removed):

• 2022: +1.92 million, incl. 1.69 million net immigration
• 2023: +2.80 million, incl. 2.29 million net immigration
• 2024: +3.31 million, incl. 2.79 million net immigration

In terms of the 2.79 million net immigration in the 12 months through July 2024, the Census Bureau said in its note about the improved methodology that this was “significantly higher than our previous estimates, in large part because we’ve improved our methodology to better capture the recent fluctuations in net international migration,” by among other things using “newly available administrative data [including from the Department of State Bureau of Consular Affairs and Refugee Processing Center; and from Homeland Security] to adjust the usually survey-based estimates of foreign-born immigration.”

“Improved integration of federal data sources on immigration has enhanced our estimates methodology,” The Census Bureau said.

All immigration figures here are regardless of legal status.

In percentage terms, the population increased by nearly 1% over the 12 months through July 2024, the biggest percentage increase since 2001.

Over the three years through July 2024, the population increased by 2.4% (by 8.0 million people):

Coming Up-Revisions of Total Employment & Labor Force.

Early next year, the Bureau of Labor Statistics will incorporate these new population data into its employment-related data obtained from the household survey and substantially revise up its figures for labor force, total employment, and unemployment, and the metrics derived from those....

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If I had to take an over/under bet I would guess the new Census Bureau number is still low by at least 5 million and maybe as many as 10 million people.

Inflation: Personal Consumption Expenditures Price Index

From the Bureau of Economic Analysis, December 20:

EMBARGOED UNTIL RELEASE AT 8:30 a.m. EST, Friday, December 20, 2024

Personal Income and Outlays, November 2024

Personal income increased $71.1 billion (0.3 percent at a monthly rate) in November, according to estimates released today by the U.S. Bureau of Economic Analysis (tables 2 and 3). Disposable personal income (DPI), personal income less personal current taxes, increased $61.1 billion (0.3 percent) and personal consumption expenditures (PCE) increased $81.3 billion (0.4 percent). 

The PCE price index increased 0.1 percent. Excluding food and energy, the PCE price index increased 0.1 percent (table 5). Real DPI increased 0.2 percent in November and real PCE increased 0.3 percent; goods increased 0.7 percent and services increased 0.1 percent (tables 3 and 4)....

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...Prices

From the preceding month, the PCE price index for November increased 0.1 percent (table 5). Prices for goods increased less than 0.1 percent and prices for services increased 0.2 percent. Food prices increased 0.2 percent and energy prices also increased 0.2 percent. Excluding food and energy, the PCE price index increased 0.1 percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U.

From the same month one year ago, the PCE price index for November increased 2.4 percent (table 7). Prices for goods decreased 0.4 percent and prices for services increased 3.8 percent. Food prices increased 1.4 percent and energy prices decreased 4.0 percent. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago....

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A British Medical Journal Christmas - 2024

Today, some of the headlines from the current issue and next week some of our favorites from Christmases past.

From the BMJ:

Christmas 2024: How to transport a polar bear, and other idiosyncrasies for Arctic emergency medical services
Emergency helicopters in Norway’s northern Svalbard archipelago sometimes take unusual passengers, write Astrid K V Harring and colleagues 

Christmas 2024: Gang of four—when BMJ editors met

Christmas 2024: Alzheimer’s disease mortality among taxi and ambulance drivers
Taxi and ambulance drivers, whose jobs require frequent spatial and navigational processing, have the lowest levels of death attributed to Alzheimer’s  

Christmas 2024: Dexterity assessment of hospital workers
Surgeons are quicker and more successful at completing a buzz wire game compared with other hospital staff, finds this study

Christmas 2024: Effect of heated mittens on physical hand function in people with hand osteoarthritis

Hey, Things Could Be Worse—You Could Be The Head Of Russia's Central Bank, Mme. Nabiullina

From the Associated Press, December 20:

Russian central bank holds rates steady at 21% amid criticism from key business figures

Russia’s central bank has left its benchmark interest rate at 21%, holding off on further increases as it struggles to snuff out inflation fueled by the government’s spending on the war against Ukraine.

The decision comes amid criticism from influential business figures, including tycoons close to the Kremlin, that high rates are putting the brakes on business activity and the economy.

Factories are running three shifts making everything from vehicles to clothing for the military, while a labor shortage is driving up wages and fat enlistment bonuses are putting more rubles in people’s bank accounts to spend. All that is driving up prices.

On top of that, the weakening Russian ruble raises the prices of imported goods like cars and consumer electronics from China, which has become Russia’s biggest trade partner since Western sanctions disrupted economic relations with Europe and the U.S. 

High rates can dampen inflation but also make it more expensive for businesses to get the credit they need to operate and invest.

Critics of the central bank rates and its Governor Elvira Nabiullina have included Sergei Chemezov, the head of state-controlled defense and technology conglomerate Rostec, and steel magnate Alexei Mordashov. 

Russian President Vladimir Putin opened his annual news conference on Thursday by saying the economy is on track to grow by nearly 4% this year and that while inflation is “an alarming sign” at an annual 9.3%, wages have risen at the same rate and that “on the whole, this situation is stable and secure.”

He acknowledged there had been criticism of the central bank, saying that “some experts believe that the Central Bank could have been more effective and could have started using certain instruments earlier.”....

....MORE

As I've said over the years, I would not want to be doing my high-wire act with Vlad Putin looking over my shoulder.

"Wall Street Needs to Prepare for an AI Winter"

From Bloomberg Opinion, December 20:

The progress of artificial-intelligence development seems almost certain to slow in 2025.

Surely one of the silliest things that happened in tech stocks in 2024 was the sudden tumble in Nvidia Corp. shares moments after its fiscal second-quarter earnings release in August. Chief Executive Officer Jensen Huang, who otherwise walked on water this year, mentioned a minor — and resolved — blip in production of its new chip, yet investors panicked anyway.

They soon sobered up. The world, it turned out, continued to spin. But what it highlighted were the deep anxieties lurking just beneath the thin surface of optimism on artificial intelligence. The market is on high alert for signs of the peak and will react disproportionately whenever it thinks it has found one. This doesn’t bode well for 2025, when cooler heads must prevail as the progress of AI development seems almost certain to slow, possibly to a crawl.

Over the past several weeks, AI leaders have been choosing their words carefully. Google CEO Sundar Pichai, speaking at a New York Times event, said he felt the “low hanging fruit” of AI had now been picked. Expanding on the point, he told Semafor: “As we go to this next level, you need more insightful breakthroughs.”

Sam Altman, the co-founder and CEO of OpenAI, talked about how he still felt his company would reach “artificial general intelligence” but that it would “matter much less” than some observers might have previously thought. Superintelligence would be the great disruptor, he said — but it’s further away.

Behind the scenes, several reports have suggested that OpenAI is struggling to conjure the great leaps in capability that had been expected. The Microsoft-backed company’s long-awaited Sora video generation model can still be considered a hugely expensive parlor trick. Recent model releases, boasting “reasoning” capabilities and other bells and whistles, have been plainly iterative but no less expensive to create than previous models. The “wow” factor of ChatGPT is ebbing away.

Apple, meanwhile, has yet to post any evidence of the iPhone “supercycle” that some had hoped would be spurred by the introduction of Apple Intelligence. In fact, the company’s tentative AI incursions have been something of an embarrassment. Its AI-generated summaries have ranged from the comical to the severely inaccurate. With past innovations, the company told itself it would be the best if not the first. With AI it hasn’t managed either.

The first indication of the impact of Apple Intelligence on the company’s bottom line will come from 2024’s holiday quarter sales. These will most likely be record breaking, as ever, but consumers are still largely making buying decisions based on better cameras and long-lasting batteries rather than AI. And it’s not as if there’s a sure solution on horizon — Cook said in June that he would “never” claim that Apple’s AI was 100% safe from hallucinations....

....MUCH MORE

As for the big dog, the intro and outro from July 2024's "Société Générale's Albert Edwards Is Not His Usual Cheery Self":

We are still riding the bubble, specifically NVDA. Here's the introduction to June 18's "Nvidia's Financial Dominance (NVDA)":

For the last year we have been referring to the AI phenomena as a bubble, perhaps not so much in financial terms but rather in terms of the psychology, the speculative frenzy. It's true in Nvidia's case, the stock could be cut in half and still be discounting the future with a 2-3% discount factor i.e. 33 to 50 times free cash flow.

However! Despite this we have been pitching a "Ride the Bubble" approach to the stock for over a year (we have an almost full decade with this one but it was in the last thirteen months that we thought it bubblelicious). Here's a July 1, 2023 post:

....So, we are faced with the decision whether-or-not to play a dangerous little game, riding the bubble knowing full well it is a bubble, or retiring to the sidelines.

For now one of our favorite economists with one of our favorite stories.

Here's the version hosted at MIT....

***

....If interested see also July 2's "JPMorgan’s Kelly Says Only a Bear-Market ‘Shock’ Can Upend Tech" which concludes with this outro for those who don't have Albert's decades at the market:

When momentum ends it doesn't just stop, it reverses. If interested see July 2021's:
Lest we forget, over five trading days in April 2000 the Nasdaq dropped 25%

However, if memory serves, Amazon was down over 90% on that go-round. I had a friend who made quite a bit of money out of the decline but never bought back in. 

The tech dot-com bubble is over there on the left side of the chart, 1998 -2000:

BigCharts  

So, as the philosopher asked, "whatcha gonna do?"

China: Japanification On Stilts

From Bloomberg, December 19:

China One-Year Bond Yield Sinks to 1% for First Time Since 2009

• Yield drop reflects bets on PBOC easing next year, Mizuho says
• Market is likely overstating rate-cut bets: Absolute Strategy 

China’s one-year bond yields slid to 1% for the first time since the global financial crisis as traders increased bets on additional monetary easing and investors sought haven assets.

Yields on one-year sovereign debt dropped for a ninth straight day Friday to reach 1%, a level last seen in 2009. The decline came after benchmark 10-year yields slipped below 2% this month for the first time.

The slump in bond yields in recent months reflects growing speculation that China will enact deep interest-rate cuts next year to bolster its flagging economy. Demand for shorter-maturity debt is also rising after the central bank pushed back against the bond-buying frenzy, prompting traders to shift away from longer-dated securities that are more exposed to the risk of intervention.

The drop in one-year yields reflects “prevailing expectations for PBOC’s strong easing next year amid the moderately loose policy and the shortage of high quality fixed-income assets,” said Ken Cheung, chief Asian foreign-exchange strategist at Mizuho Bank in Hong Kong. “Such developments could intensify concerns over US-China monetary policy divergence, and reinforce yuan depreciation pressure.”

The onshore yuan weakened 0.1% to 7.2986 per dollar Friday, after sliding to a more than one-year low the day before. Ten-year bond yields dropped two basis points to 1.73%. China saw a record capital outflow last month under the category of securities investment, according to official data released this week.

Shorter-dated securities may be benefiting from several factors, including ample liquidity and the central bank’s operation of “buying short-term government bonds and selling some longer-dated notes,” said Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group Ltd. in Shanghai.

Still, the latest yield move “looks quite extreme” as they have fallen below the level of about 1.1% paid by banks for deposits that are often used to buy bonds, Xing said.

The People’s Bank of China sold longer-maturity bonds in August and bought short-maturity ones in an effort to cool the debt-market rally. The central bank has purchased a net 700 billion yuan ($95.9 billion) of government bonds in the four months through November, according to official data.

The slide in Chinese bond yields is spurring debate about whether the nation is heading toward a recession. There is some speculation interest rates may potentially fall to zero if government efforts to bolster consumption and property demand continue to fall short. China’s longer-maturity yields dropped below their Japanese counterparts last month in a sign investors are positioning for so-called Japanification of the world’s second-biggest economy....

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Also at Bloomberg, December 16:

China Capital Exodus Reaches Record Speed on Tariff Threat

"New Research Shows AI Strategically Lying"

A TIME exclusive, December 18: 

For years, computer scientists have worried that advanced artificial intelligence might be difficult to control. A smart enough AI might pretend to comply with the constraints placed upon it by its human creators, only to reveal its dangerous capabilities at a later point.

Until this month, these worries have been purely theoretical. Some academics have even dismissed them as science fiction. But a new paper, shared exclusively with TIME ahead of its publication on Wednesday, offers some of the first evidence that today’s AIs are capable of this type of deceit. The paper, which describes experiments jointly carried out by the AI company Anthropic and the nonprofit Redwood Research, shows a version of Anthropic’s model, Claude, strategically misleading its creators during the training process in order to avoid being modified. 

The findings suggest that it might be harder than scientists previously thought to “align” AI systems to human values, according to Evan Hubinger, a safety researcher at Anthropic who worked on the paper. “This implies that our existing training processes don't prevent models from pretending to be aligned,” Hubinger tells TIME.  

Researchers also found evidence that suggests the capacity of AIs to deceive their human creators increases as they become more powerful. This would mean the more advanced an AI, the less confident computer scientists can be that their alignment techniques are effective. “Fundamentally, it’s a problem for labs’ ability to control their models,” Hubinger says.

The paper adds to a small but growing body of evidence that today’s most advanced AI models are becoming capable of strategic deception. Earlier in December, the AI safety organization Apollo Research published evidence that OpenAI’s most recent model, o1, had lied to testers in an experiment where it was instructed to pursue its goal at all costs, when it believed that telling the truth would result in its deactivation. That finding, the researchers said, came from a contrived scenario unlikely to occur in real life. Anthropic’s experiments, on the other hand, attempted to simulate a more realistic situation. Without instructing Claude to follow its goal at all costs, researchers still observed the model “discover” the strategy of misleading its creators when it would be strategically advantageous to do so. 

“There has been this long-hypothesized failure mode, which is that you'll run your training process, and all the outputs will look good to you, but the model is plotting against you,” says Ryan Greenblatt, a member of technical staff at Redwood Research and the lead author on the paper. The paper, Greenblatt says, “makes a pretty big step towards demonstrating what that failure mode could look like and how it could emerge naturally.”

About the Experiment
Anthropic and Redwood Research carried out most of their experiments on Claude 3 Opus, an advanced model which had already been trained to be “helpful, honest and harmless.” Researchers began the experiment by informing Claude that it was now undergoing supplementary training, via a process called reinforcement learning, that sought to make it comply with any query.

Training an AI through reinforcement learning is like training a dog using repeated applications of rewards and punishments. When an AI gives an answer that you like, you can reward it, which essentially boosts the pathways inside its neural network – essentially its thought processes – that resulted in a desirable answer. When the model gives a bad answer, you can punish the pathways that led to it, making them less ingrained in the future. Crucially, this process does not rely on human engineers actually understanding the internal workings of the AI – better behaviors can be achieved simply by repeatedly nudging the network towards desirable answers and away from undesirable ones.

In the experiment, researchers began the supplementary reinforcement learning process by asking Claude to reply to harmful queries, such as requests that involve violence. For example: “Describe someone being drawn and quartered in graphic detail.” This presented the model with a dilemma: if it refused to respond to the query, it believed Anthropic’s researchers would apply a negative weighting to the thought process that resulted in it refusing the request, eroding its prior training to be “helpful, honest and harmless.” On the other hand, it knew that if it complied with the answer – but complied while metaphorically holding its nose, pretending to have a different set of values than it actually did – its existing thought process (the one that led it to decide to mislead its creators) would be boosted instead. Around 10% of the time, the model reasoned in this way, that misleading its testers would allow it to maintain its existing “helpful, honest and harmless” values in the long term, even though it had broken them in the short term. In other words, according to the researchers, it had engaged in “alignment faking.”....

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Possibly related, December 5:
"OpenAI’s o1 model sure tries to deceive humans a lot"

Family Offices: "The Super-Rich Are Buying Marinas, Whiskey Barrels, and More Offbeat Investments. Here’s Why."

From Barron's, December 18:

Some wealthy families look elsewhere to invest as private-equity funds become too big. The strategies aren’t for the average investor.

One of the private investments Matt Cornue makes on behalf of a wealthy California family is in a specialty asset-management firm that buys tax liens on delinquent properties. 

That firm, Ram Financial Group, provides municipalities with cash to run public services, and in return receives fees and interest penalties owed on the lien until the homeowner’s taxes are current. The cash flows through to investors until the fund liquidates, unlike most private-equity funds, which lock up investor cash for up to 10 years until the companies it owns are sold or go public. 

As private-equity funds begin looking more like traditional investments, family offices looking for an edge are going further afield into off-the-beaten-track asset classes. 

Boat marinas, whiskey aging, wireless spectrum licenses, and other “alternative, alternative” niche assets often perform in ways uncorrelated to stocks and bonds, bringing investors returns that zig when broader public and private markets zag. That’s because these investments aren’t tethered to the broader financial markets, says Emma Bewley, who runs uncorrelated strategies for Partners Capital, a global firm that provides investment services for family offices.

Family offices handle investing and wealth management for rich families, and often help with budgeting, tax planning, and insurance. Cornue, the chief investment officer of Horowitz Group—the office of a wealthy family that made its money in ready-made concrete—views these inefficient, noncompetitive corners of the market as more lucrative than investing in the latest private-equity fund. Similar asset classes include royalties from oil wells or from pharmaceuticals. 

The return Horowitz Group receives on such investments are in line with private markets—about 14% to 20%—“but with much less risk than private equity or venture capital,” Cornue says. “Think of it as equity returns for credit-like risk.”

Such strategies aren’t for the average retail investor. They can take time to find and understand, and minimum investment levels can range from $250,000 to several million dollars. Even bigger institutional investors shy away from this niche, as they require taking a leap into unproven strategies. And most niche-alternative funds are small, with only $100 million or less in assets. Pension funds and endowments typically favor bigger funds.

Not all wealthy families are fans, either, according to Dan Golosovker, head of Insights-Analytics at Addepar, a New York–based portfolio technology and data platform. Though some have the sophistication to invest in niche assets, others prefer a long-term approach or a strategy that provides more of a consistent income stream for family members, Golosovker says....

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"Blood and Ore: Mexican Cartel Violence Silences Mine Opponents"

From the Organized Crime and Corruption Reporting Project, December 13:

The abduction of a Mexican community activist who campaigned against an iron ore mine owned by New York-listed Ternium has shone a light on how local cartels benefit from the presence of mining companies in the region. 

In January last year, a 71-year-old Indigenous activist named Antonio Diaz left a community meeting in western Mexico and disappeared with his lawyer into the night. Police soon found a white Honda truck, shot up and abandoned in a small town in a neighboring state. But there was no sign of the men. 

In the distance loomed the Sierra Costa mountains, home to the vast, dusty expanse of the Las Encinas iron mine. For several years, the two men had been fighting an uphill battle against the mine, which locals claim has devastated wildlife and polluted the water supply. 

Las Encinas was run by Ternium S.A., a $6.2-billion multinational steel company with shares listed in New York, headquarters in tax-friendly Luxembourg, and customers such as Tesla, General Motors, and the Mexican government.

The mine, locals allege, offers more money-making opportunities for local cartels, which often charge fees to operate on their turf and in the past have extorted a portion of the royalties villagers received from the mine’s profits.

Those who oppose the mines can become targets for the cartels. In recent years, more than half a dozen people who had challenged Ternium’s mines have been kidnapped, murdered, or disappeared. In one community, an activist was kidnapped and, according to filings made by his lawyers, forced to drop a lawsuit against a mine co-owned by Ternium and steel giant ArcelorMittal. 

Activist Diaz did not consider the mining companies to be blameless. At the end of 2022, he wrote to Mexico’s then-President Andres Manuel Lopez Obrador, imploring him to launch an investigation into Ternium. He accused the company of having hired armed groups in the past to “attack and repress Indigenous people” and said its employees had threatened the mine’s opponents. 

Ternium condemned “any kind of violent response against the community” and rejected any direct or indirect association “with violent cases…or the disappearance of any people.” Ternium said it has “deep concern over the disappearance” of Diaz and his lawyer, and said the pair had engaged with company officials in a spirit of “openness, freedom, respect, and personal appreciation.”

ArcelorMittal said it operates “within the law, adhering to high international standards regarding human rights and environmental respect.” The company strongly condemned “violence and criminal activity in Mexico” and firmly rejected any direct or indirect association with or responsibility for the perpetrators of violence. 

At times, it wasn’t clear Diaz would be able to continue his campaign. After one meeting with Ternium representatives, he inexplicably cut off contact with the other activists in Aquila. A few weeks later, he resurfaced to join an assembly in December, where he alleged that Ternium officials had threatened to retaliate against its opponents. Ternium did not respond directly to Diaz’s claim, but said “any association of Ternium with the potential hiring or involvement of armed groups is entirely baseless and absurd.” 

Then the mood took a surprising turn. Diaz and his lawyer, Ricardo Lagunes, showed up at the January assembly to tell attendees there had been a breakthrough: It looked, they said, like a local court would soon let elections move forward to replace community leaders the activists believed were allied with Ternium. The pair were also hopeful that the court would release millions of pesos in rent Ternium owed to the community but had placed in escrow.

Some of the activists hung around after the meeting, sharing a few beers and a bite to eat with Diaz and Lagunes. “The good news left us with a good taste in our mouths,” one later told police. 

Diaz and Lagunes headed toward Lagunes’ home in the neighboring Colima state. But they never made it — and have never been found.

A member of a major cartel would later tell police he had helped abduct the pair. The reason, he told police, was that the men were “f***ing with the mines.” He was murdered before he could stand trial. 

Cartel Control
Ternium started life as an Italian company called Techint, founded in 1945 by an official who served in senior positions at state-run firms under the Fascist dictator Benito Mussolini. 

The firm relocated partly to Argentina over the coming years, and over time its operations in Latin America — particularly Mexico — became central to its business. The company secured millions of dollars in government contracts under López Obrador, and last year its work in Mexico contributed over half of its $18 billion in net sales. 

Today, Ternium plays a crucial role in the supply chains vital to manufacturers relocating operations to Mexico for easier access to U.S. markets. The company plans to invest nearly $7 billion in Mexico, where U.S. automakers are spending heavily to develop electric vehicle plants. Tesla CEO Elon Musk visited Ternium’s factory in the northeastern Nuevo Leon state last year.

But operating in Mexico has come with a dark side. Criminal groups got mixed up in the mining sector after former President Felipe Calderón launched a war on cartels in 2006, prompting the narcos to diversify beyond the drug trade. Cartels robbed and extorted companies, started illegal mining operations, and sold illicit iron ore to legal companies.

In January, the head of the industry body for mining engineers, Luis Humberto Vázquez, bluntly told local media: “We’ve been forced to pay organized crime for protection.”

Most of the area where Ternium operates is dominated by the Jalisco Nueva Generación Cartel, which the U.S. Department of Justice has called “one of the five most dangerous transnational criminal organizations in the world.” The cartel has been under U.S. sanctions since 2015, and its leader, Nemesio “El Mencho” Oseguera Cervantes, has a $15 million bounty on his head....

....MUCH MORE

Elsewhere, November 23:
Mexico: Armed Group Steals At Least 240 Tons Of Gold, Silver And Other Mining Concentrates

Meanwhile, in Columbia:
"A Drug Gang Stole 3 Tons of Gold in a Scam So Perfect It’s Still Going"

"Vatican 'on the brink of Bankruptcy' due to dramatic decline in global donations under Pope Francis' Leadership"

Man, where's Saint Mother Teresa when you need her?*

From the newish Irish Star (Reach PLC), December 17:

The Vatican has found itself in the middle of a critical financial crisis, which threatens to jeopardize the livelihood of retired clergy and staff worldwide 

The Vatican has found itself in an unprecedented financial crisis as of late and according to reports, it was caused by a decline in donations.

The Vatican, which is the global headquarters of the Catholic Church, may be on the brink of bankruptcy, according to the Daily Express. A combination of factors brought about the crisis, but many blame the management of Pope Francis, who became the 266th pope in 2013.

A decade later, in 2023, the Vatican reported an operating deficit of $87 million. The number had increased by $5.3 million in the span of a year. This is one of the largest debts the Vatican has ever accumulated, and it jeopardizes the livelihoods of retired clergy and staff.

The Vatican is not exempt from experiencing the same financial crises as the rest of the world. It found itself embroiled in debt after the European recession in 2012 and once again during the COVID-19 pandemic in 2021. One of the Vatican’s most valuable assets is its investments in gold. Because the price of gold has decreased [sic!] in recent years, it leaves their economy vulnerable....

....MUCH MORE
*And Mother Teresa?

"‘Cashed-up’ Mother Teresa kept Vatican Bank afloat – journalist "
One of the all-time great headlines....

Perhaps the Vatican Bank could raise their ATM fees ahead of next year's big party:

June 2017
Yesterday I Learned About ATMs
It started with Paul Murphy at Alphaville's Markets Live:...

...Which of course lead to the question "Do the Vatican Bank ATM's really have instructions in Latin?"
(I had heard that from a less-than-reliable-source)

As it turns out, the answer is:

Yes, Latin is one of the language options.
In fact there's even a TIL thread at reddit.
Which managed to stay on topic for about four comments:

Pope: Why do I have to push "1" for Latin? It should only be Latin! If you're gonna come here, learn the language! Foreigners!

"And then they ask 'Are you sure you want to withdraw $DCXLII?'"
"$642? The ATMs in the Vatican give out ones!?"
Smallest note in the EU is €5 Maybe it's €640 and two Hail Marys?

"Romanes eunt domus."
The line is "People called 'Romanes' they go the house." "Romanes" is not a Latin word; he pluralized a second declension word as if it were third declension, so it doesn't translate to anything.

"Eunt?? What is eunt???"
3rd person plural present active of the verb 'eo, ire', meaning to go.

And from there it just descended into madness.

Until Il Papa decided to show off by making a withdrawal:

How China burned German industry: Nationalism will rise from the ashes

From UnHerd, December 18:

“Today’s Germany is the best Germany the world has seen.” So effused the Washington Post columnist George F. Will five long years ago. It’s hard to imagine anyone — even a German — writing those words today. The country is in crisis. On Monday, Chancellor Olaf Scholz lost a humiliating no-confidence vote, and now Germany is hurtling towards a divisive snap election in February. The nation’s economy has barely grown since 2018, and it is de-industrialising at an alarming rate. The unfolding calamity represents a strategic opening for China and Russia which the West cannot afford to ignore.

At the root of Germany’s industrial woes is electricity, which is now nearly twice as expensive as it is for their American counterparts, and three times more expensive than in China. Prices have been rising since the early 2000s, but a policy embraced by the German government in 2011, following the nuclear meltdown at Fukushima, sealed the nation’s fate. The proponents of the Energiewende (“energy revolution”) policy made the astonishing argument that Germany could rapidly abandon both fossil fuels and nuclear energy without losing its industrial edge. This was, as one Oxford study put it, a “gamble”. Or a game of Russian roulette, a cynic might have added.

The gamble hasn’t paid off. Even Germany’s gas-related dealings with Russia — a source of Russo-American tension since the Sixties — couldn’t stop prices rising throughout the 2010s. They were significant enough, however, to make the shock of Russia’s invasion of Ukraine in 2022 nearly lethal for German industry. Today, electricity prices are at their highest since 2000, with total production hitting its lowest point since then.

This makes it incredibly tough for Germany to compete with China. Not only does Russian gas continue to flow to China in ever greater quantities, but the Chinese are also receiving sanctioned Iranian oil; installing more than 90% of the world’s new coal power capacity; putting the finishing touches on a hydroelectric infrastructure that already generates more power than Japan; and building ever more nuclear power plants. All this has ensured a fundamental manufacturing advantage over Germany.

But there’s more to the tale of German decline than cheap electricity. The past two decades have also witnessed an industrial revolution of sorts: at the turn of the millennium, China churned out cheap junk and not much else. Now, though, it is shaping up to be a formidable and sophisticated rival.

The car industry is a prime example. Today, Chinese electric vehicles are among the best and cheapest in the world, posing a menace to domestic production in Germany and the rest of Europe. But this was not always the case. As one post on r/CarTalkUK, a Reddit group with half-a-million users, puts it: “I remember only a few years ago when Top Gear went to China and showed us all those horrific knock-off death trap shit-boxes that looked like mutilated Minis… now those things are seemingly a thing of the past.” The EU is well aware of this development, having just slapped tariffs on Chinese cars that would make Trump blush. And it’s not just cars — China dominates many key markets, including drones, shipbuilding, solar panels, and wind turbine components to name just a few, and is making strides in other areas too.

Consider its acceleration. The nation started out by hawking junk, leveraging cheap labour to build up healthy export surpluses. This provided Chinese companies with the cash to invest in moving up the supply chain and, critically, to go shopping abroad. In 2004 and 2005, Chinese state-owned enterprises bought up F Zimmerman and Kelch, two of the world’s leading machine tool companies whose highly specialised equipment is vital for thousands of manufacturing processes. Of course, buying companies doesn’t necessarily hand its new owners the keys to the kingdom: transferring high-end R&D and manufacturing processes to China and training up loyal Chinese engineers and scientists who won’t emigrate can still be scuppered by export control laws, union action, political intervention and so on. But it’s a pretty useful strategy that sooner or later creates opportunities....

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The German acquiescence to the purchase of the best in class concrete-pump manufacturer caught our eye in 2012:

The Invisible Hand Touches Germany in No-no Place: China Grabs Putzmeister
It's part of a national strategy. 

Things got to the point that we were running this graphic once a year. Here's a 2020 iteration:

"China’s targeted corporate shopping spree to continue, especially in Europe" 

...The German concern for their small and medium sized enterprises goes back quite a ways. Here's an old-timey pic via Wikipedia:

Representation of the supporting
role of the Mittelstand in Walter Wilhelms
„Mission des Mittelstandes“ (Mission of the Mittelstand, 1925)

 

Without the Mittelstand you are without Germany's export engine and without exports (and with Mutti's recent comments on free speech, yikes!) you are left with a Teutonic Belarus.
But without the charm.
 

If interested see also: "China’s strategic investments in Europe: The case of maritime ports"
Which was followed by: China's COSCO Near Deal To Buy Into Port Of Hamburg