From Mr. Prine, 1971An update on John pic.twitter.com/fPQbv0tLyB— John Prine (@JohnPrineMusic) March 29, 2020
"Paradise"
And daddy won't you take me back to Muhlenberg County
Down by the Green River where Paradise lay
Well, I'm sorry my son, but you're too late in asking
Mister Peabody's coal train has hauled it away....
As the global economy craters, as the gap between the haves and have-nots is now one of life and death, the one percent is playing to type and doing what they do best: profiteering.....MORE
Just days after billionaire hedge funder Bill Ackman went on TV to tearfully declare “hell is coming” — thanks, but New York City already has one panic-stricken middle-aged excuse for a man in our feckless mayor Bill de Blasio — we learned that Ackman was, at that very moment, eyeballing his own bet against the markets, one that netted him $2.6 billion.
Net!
Now this may not technically, legally constitute market manipulation, but rational people can agree: It’s soulless and disgusting nonetheless.
The same thought occurs to me at least once a day now: The days and weeks and months after 9/11 brought out the best in people. This crisis is bringing out the worst, especially among people of means: smart, sophisticated, wealthy, connected. The ones perfectly positioned to do real acts of kindness, charity and philanthropy, to help those most afraid and in need.
The ones, in short, who should know better and do better.
Or at least, for propriety’s sake, fake it.
Instead, we have Treasury Secretary and human facsimile Steve Mnuchin (net worth $300 million) actually state that current unemployment numbers, a record 3.3 million and climbing, “are not relevant,” because three weeks from now, all those people will be getting $1,200 checks from the government.
Now we know the U.S. Treasury Secretary knows nothing, less than zero, of how most Americans live.
Then we have the four senators, including the legendary Dianne Feinstein, who in total offloaded hundreds of thousands in stocks after a Jan. 24 top-secret briefing on the coronavirus — three Republicans and one Democrat, proving nothing is as bipartisan as greed.
And as The Post exclusively reported, 84-year-old billionaire investor Carl Icahn bet $5 billion against U.S. malls — a bet made last summer, to be fair, but one that will pay off much more substantially solely due to this crisis.
But what is profiting off our nation’s pain if you can’t gloat about it? So Icahn, who lives on a private Miami island known as “the billionaire bunker,” went on CNBC to talk about his excitement over the grim fate of commercial real estate.
“You’re going to have this blow up, too, and nobody’s even looking at it,” Icahn said. He then predicted the coming collapse will be worse than the 2008 housing market crash — the kind of feeling that, for people like him, money just can’t buy....
On their peaceful island off France’s Atlantic Coast, some of the locals watched, with growing dread and rage, the images from Paris. As rumours began circulating about an imminent nationwide lockdown to stem the coronavirus outbreak, hordes of Parisians jammed into trains, an odd surfboard sometimes sticking out of the crowd.....MUCH MORE
There was no doubt about their destination.
“Irresponsible and selfish,” thought Dr. Cyrille Vartanian, one of the six physicians on Noirmoutier.
With some time to spare — Paris was roughly five hours away — a local mayor, Noël Faucher, moved to block the only bridge to the mainland. But national authorities said it would be illegal.
“We were powerless because people were not confined to their principal residences,” Faucher recalled, describing the influx as “an invasion.”
Overnight, the island’s population nearly doubled, to 20,000. Nearly two weeks after the nationwide lockdown went into effect March 17, there are about 70 suspected cases of the coronavirus on the island.
In France and across Europe, affluent city dwellers have been decamping epicentres of the crisis to their second homes, where proximity to the sea or the mountains lessens the discomfort of confinement and a decent internet link permits remote work. But they also bring fears that they will spread the virus to regions with few hospitals to handle a surge of the sick, putting at greater risk local residents who tend to be older and have limited incomes.
Perhaps more than anything else, the influx into second homes has ignited anger over what the global pandemic is laying bare every day: the ever-widening gap between the rich and the poor. Nowhere is that anger rawer than in France, which has 3.4 million second homes — far more than any of its neighbours — and whose domestic politics have been roiled in recent years by debates over inequality.
Unlike the second-home-owning class, many Europeans face the likelihood of spending weeks in quarantine in cramped spaces. Some have been laid off while others must continue to work, sometimes with limited protection, in low-paying jobs like supermarket cashier or deliveryperson that require contact with people.
At first, the French government urged citizens to work from home in order to slow the spread of the virus. But faced with the prospect of people refusing to work because of the health risks, Bruno Le Maire, the finance minister, urged all employees from “activities that are essential to the functioning of the country to go to their workplaces.”
According to both locals and Parisians on the island, some urbanites arrived in Noirmoutier and headed straight to the beach. They were seen picnicking, kite surfing, jogging and biking. In retribution, tires of about half a dozen cars with Paris plates were slashed....
Novartis Chief Executive Vas Narasimhan said his Sandoz generics unit’s malaria, lupus and arthritis drug hydroxychloroquine is the company’s biggest hope against the coronavirus, Swiss newspaper SonntagsZeitung reported on Sunday.....MORE
Novartis has pledged to donate 130 million doses and is supporting clinical trials needed before the medicine, which U.S. President Donald Trump also has been promoting, can be approved for use against the coronavirus.
Other companies including Bayer and Teva have also agreed to donate hydroxychloroquine or similar drugs, while Gilead Sciences is testing its experimental drug remdesivir against coronavirus....
Read: China cuts interest rate, injects $7 billion into banking systemIn its yet another move to fight the pandemic, China’s PBOC announced 20 basis points (bps) of a rate cut to its seven-day reverse repo. With this, the Chinese central bank’s benchmark interest rate currently stands at 2.2%....MORE
China’s central bank unexpectedly lowered the interest rate on reverse repurchase agreements by 20 basis points on Monday, as authorities stepped up easing measures to relieve pressure on the economy that has been hit hard by the coronavirus epidemic.
The People’s Bank of China (PBOC) said on its website that it was lowering the 7-day reverse repo rate to 2.20% from 2.40%....MORE
The drugs have been championed by President Donald Trump for treatment despite scant evidence.
The Food and Drug Administration on Sunday issued an emergency use authorization for hydroxychloroquine and chloroquine, decades-old malaria drugs championed by President Donald Trump for coronavirus treatment despite scant evidence.
The agency allowed for the drugs to be "donated to the Strategic National Stockpile to be distributed and prescribed by doctors to hospitalized teen and adult patients with COVID-19, as appropriate, when a clinical trial is not available or feasible," HHS said in a statement, announcing that Sandoz donated 30 million doses of hydroxychloroquine to the stockpile and Bayer donated 1 million doses of chloroquine.The move was supported by the White House, part of a larger Trump-backed effort to speed the use of anti-malaria drugs as a potential therapy for a virus that has no proven treatment or cure. FDA already has allowed New York state to test administering the medication to seriously ill patients, and some hospitals have added it to their treatment protocols..
"Let's see how it works," Trump said at a press briefing on Sunday, referencing New York state's efforts. "It may. It may not."..MORE
« Chapitre 7
« Dispositions relatives à la mise à disposition de médicaments
« Art. 12-2.-Par dérogation à l'article L. 5121-8 du code de la santé publique, l'hydroxychloroquine et l'association lopinavir/ ritonavir peuvent être prescrits, dispensés et administrés sous la responsabilité d'un médecin aux patients atteints par le covid-19, dans les établissements de santé qui les prennent en charge, ainsi que, pour la poursuite de leur traitement si leur état le permet et sur autorisation du prescripteur initial, à domicile.
« Les médicaments mentionnés au premier alinéa sont fournis, achetés, utilisés et pris en charge par les établissements de santé conformément à l'article L. 5123-2 du code de la santé publique.
« Ils sont vendus au public et au détail par les pharmacies à usage intérieur autorisées et pris en charge conformément aux dispositions du deuxième alinéa de l'article L. 162-17 du code de la sécurité sociale. Le cas échéant, ces dispensations donnent lieu à remboursement ou prise en charge dans ce cadre sans participation de l'assuré en application des dispositions de l'article R. 160-8 du même code. L'Agence nationale de sécurité du médicament et des produits de santé est chargée, pour ces médicaments, d'élaborer un protocole d'utilisation thérapeutique à l'attention des professionnels de santé et d'établir les modalités d'une information adaptée à l'attention des patients.
« Le recueil d'informations concernant les effets indésirables et leur transmission au centre régional de pharmacovigilance territorialement compétent sont assurés par le professionnel de santé prenant en charge le patient dans le cadre des dispositions réglementaires en vigueur pour les médicaments bénéficiant d'une autorisation de mise sur le marché.
« La spécialité pharmaceutique PLAQUENIL © et les préparations à base d'hydroxychloroquine ne peuvent être dispensées par les pharmacies d'officine que dans le cadre d'une prescription initiale émanant exclusivement de spécialistes en rhumatologie, médecine interne, dermatologie, néphrologie, neurologie ou pédiatrie ou dans le cadre d'un renouvellement de prescription émanant de tout médecin.
« Afin de garantir l'approvisionnement approprié et continu des patients sur le territoire national, en officines de ville comme dans les pharmacies à usage intérieur, l'exportation des spécialités contenant l'association lopinavir/ ritonavir ou de l'hydroxychloroquine est interdite. Ces dispositions ne s'appliquent pas à l'approvisionnement des collectivités relevant des articles 73 et 74 de la Constitution et de la Nouvelle-Calédonie.
« Pour l'application du présent article, sont considérés comme établissements de santé les hôpitaux des armées, l'Institution nationale des Invalides et les structures médicales opérationnelles relevant du ministre de la défense déployées dans le cadre de l'état d'urgence sanitaire. ».
https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000041755775&categorieLien=idThe bolded paragraph is particularly important as it allow prescriptions not just in hospital but continuation at home at the discretion of the physician.
EXCLUSIVE: Russell Hardy, CEO of Vitol Group, the world's largest independent oil trader, says global crude demand is down 15-20 million barrels a day (that's 20% of global) | #OOTT #OilPriceWar #Coronavirus Full interview with @annmarie: https://t.co/GNTY68hbPz pic.twitter.com/clLcXPAHRR— Javier Blas (@JavierBlas) March 25, 2020
▪A modified pathogen from a European bioresearch lab has caused a global pandemic.
▪It has not been firmly established whether the pathogen was released as a result of lax biosecurity or intentionally with terrorist intent.
▪The event raises broader questions about biosecurity, biosafety, and expanding global research involving modified pathogens.
The World Health Organization declared a Public Health Emergency of International Concern (PHEIC) on January 4, 2025 as infection rates of a SARS/MERS-like coronavirus reached 800 million globally, killing 25 million to date (about 3.125 percent of those infected).10That's from Appendix B: 2019 Global Security Forum Scenarios, page 20.
The United States, Europe, Northeast Asia, and the Middle East have been particularly hard hit by the illness. Few countries have been left unaffected by the outbreak, and the global economy has dipped into recession. Though against World Health Organization and World Trade Organization agreements, widespread travel bans have been enacted between multiple countries. The International Monetary Fund has dramatically increased non-concessional lending and has directed member countries to exercise monetary expansion and fiscal stimulus measures to offset slowing economies globally.
The virus has been identified as humanmade, linked to a research strain from a laboratory in Berlin, Germany. The modified pathogen was a coronavirus like the one responsible for sudden-acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS), and it was designed and replicated for research into treatment that might have application for future disease outbreaks. The incident further raises concerns of laboratory biosecurity and biosafety, which have been significantly underinvested in and understudied amid a revolution and dramatic global expansion in bioscience research related to microbe manipulation.11
The outbreak rapidly spread from its primary case at Berlin Tegel Airport to a range of connecting international destinations. It has not been established whether the release of the pathogen was purposeful or accidental. The release of the virus has been claimed by multiple terrorist groups as a deliberate act of violence, but following an inquiry by U.S. health agencies and the intelligence community, the surgeon general of the United States announced that none of these groups possess the skill and access to materials necessary to have created it or to have acquired the specific strain. A state-sponsored attack has also been ruled out.
Two leading theories on the origin of the virus are now under close examination, both centered on a laboratory employee who is believed to have been the index case (“patient zero”). The first theory is that the pathogen was intentionally smuggled out and then released by the laboratory-employed person of interest. The individual had access to the pathogen, had academic background in infectious disease transmission, and had espoused extreme views on climate change and human overpopulation online. The second theory is that the release of the virus may have been inadvertent and the result of poor biosecurity at the facility. The laboratory has been closed for the past three months, following its established connection to the pathogen. In this time, multiple safety and security issues have been identified that could have led to inadvertent infection of the person of interest.
The person of interest was infected with the strain either unintentionally or in an attempt to or in the course of infecting others at Tegel Airport. He boarded a flight from Tegel for what he claimed was a planned personal vacation to New York, where he transited through John F. Kennedy International Airport and the virus further spread. The patient was hospitalized a day after his arrival in New York City and quickly quarantined, but not before spreading the infection in five key locations in downtown Manhattan, from which it rapidly spread to New Jersey, Connecticut, and to other U.S. and global cities via contact during his transit through JFK Airport. The person of interest recovered from the illness and was released to German authorities and returned to Berlin. He committed suicide last week while under house arrest and after his identity was revealed in German media, which was quickly picked up as headline news globally. He maintained his innocence and blamed poor biosecurity practices at the laboratory for the release. He expressed great guilt at having been patient zero.In the three months since its release, the virus spread rapidly across Europe, North America, Northeast Asia, and the Middle East. The disease is transmissible during the prodromal period, during which carriers show only mild and, in some cases, unnoticeable symptoms. The novel nature of the pathogen means very low immunity across the population. There is no known existing treatment or prevention method (vaccine or medicine).
The virus is highly transmissible via direct, person-to-person contact, and the fatality rate is significant (around 3 percent). Global drug manufacturers working in collaboration with national biodefense researchers in countries around the globe are surging to develop a treatment and vaccine, but they are months away from a workable trial.
10. In comparison, the Spanish flu of 1918-1919 infected about 500 million people worldwide (about one-third of global population) and killed 20-50 million (4-10 percent of those infected).11. Rocco Casagrande, “Federal Funding for Biosafety Research is Critically Needed,” CSIS, CSIS Brief, August 6, 2019, https://www.csis.org/analysis/federal-funding-biosafety-research-critically-needed.
How farsighted was the leadership at the Federal Reserve as the world economy was heading toward a steep decline more than five years ago? Outside the Fed’s marble halls, the answers to that question are only now becoming known, and the verdict is perhaps surprisingly positive.HT: Economist's View
In December 2008, a few months after the Lehman Brothers collapse threw the world economy into crisis, participants in the Fed’s steering group, the Federal Open Market Committee (FOMC), met to discuss their policy options. It was widely agreed that the conventional policy instrument, the federal funds rate target, would have to be lowered to zero. The big question was “what should we do next?” A recently released transcript of the meeting shows that the FOMC was already considering most of the monetary policy options that are still being debated by economists and pundits today. The transcript frequently mentions a package of 21 memos on monetary policy at the zero bound that were prepared by Fed staff just before the meeting. The Peterson Institute for International Economics has obtained those memos through the Freedom of Information Act and is making them available to the public on its website [pdf] as of today. In the interest of full disclosure, I was a coauthor of three of those background memos.
Together, the transcript and background memos display that FOMC participants understood the severity of the economic outlook they faced and that they and their staff had a good grasp of the pros and cons of the options available. That is not to say that Fed policy over the past few years could not have been improved upon, but simply to recognize that the Fed was not flying blind and indeed was already cognizant of many of the issues that would come to dominate the public debate about monetary policy.
Is 0.25 Zero?
The primary tool the Fed had to achieve its federal funds rate target at that time was the interest rate on bank reserves at the Fed, which was 1 percent in early December 2008. Almost all participants wanted to lower this rate and a few argued for a rate of zero percent. But most wanted a rate slightly above zero and they settled on 0.25 percent, which has remained constant to this day. The primary reason for a rate slightly above zero was concern that banks and money market funds needed to earn a spread between deposit and lending rates in order to pay their operating costs and they would find it difficult to impose negative interest rates on their depositors. In addition, there was some concern about reduced liquidity and disruptions in the bond markets that were already evident at low interest rates. The possible harm from further disruptions in banking and securities markets was judged to outweigh any small macroeconomic benefit from an even lower interest rate.
The FOMC did not discuss the possibility of a negative interest rate on bank reserves, but it is widely agreed that a significantly negative interest is not feasible because banks would convert their reserve balances to paper currency. A lingering puzzle is why the Fed never lowered interest on reserves to zero in subsequent years, when financial strains had diminished and depositors and market participants had gotten used to the low rate environment, but standard macroeconomic models imply that the benefits of such a small decline would have been correspondingly small....MORE
Authorized for public release by the FOMC Secretariat on 03/07/2014
Breakthrough Energy Ventures, helmed by Bill Gates, is leading an investment round of $20 million for C16 Biosciences, a New York-based startup, which is working on making sustainable alternatives for palm oil.
The three-year-old startup uses microbes to convert food waste and industrial byproducts into synthetic palm oil, which it claims can replace the plant-derived version. The investment will be used to grow the team and scale up the technology. It’s one of a growing number of startups working on developing alternatives.Interest in alternatives to palm oil is growing as curbing its environmental impact becomes more critical. Most palm oil is produced in the tropics, where companies often destroy carbon-rich forests to make space for plantations. What’s even worse is that many producers light fires as a cheap way to clear forests and agricultural land, which adds to the greenhouse-gas emissions from the process and wrecks the region’s rich biodiversity.The palm oil market is expanding rapidly and could be worth almost $93 billion next year. Starting in the mid-1990s, following research showing vegetable oils are bad for health, big food brands switched over to using palm oil, which does not contain harmful trans fats. Now it’s found in more than 50% of consumer products, according to non-profit Palm Oil Investigations.Breakthrough Energy Ventures wants to invest in companies that have the potential to cut emissions by as much as 500 million metric tons each year. The fund's investors include Amazon.com Inc. founder Jeff Bezos, Virgin Group boss Richard Branson and Michael Bloomberg, the founder and majority owner of Bloomberg LP.Sustainable AlternativesSustainable palm oil is available in the market today, but its production is small and it isn’t cheap. That’s why startups, such as C16, are trying something different.C16 uses a proprietary yeast which it feeds with carbon-containing waste. This could include excess food from supermarkets and homes or glycerol from biofuels production. The startup can make about 10 kg of its synthetic palm oil each week, which it plans to ramp up to 1,000 kilograms using the money invested. This would allow it to supply large businesses, starting with cosmetics companies and then the food industry....MORE
And speaking of video, here's a post from last July:
- Structural engineers have built a new bridge using an unfolding, umbrella-like technique.
- The engineers say the process is ideal for unusual terrain and reduces time and cost.
- Hollow steel girders are lowered slowly and steadily into place by a hydraulic lift.
A new kind of bridge construction opens and unfolds like an umbrella, creators say. Structural engineers at the TU Wien, or Vienna University of Technology, have built a prototype bridge mechanism with a central umbrella handle and two opposite spokes controlled by a slider. The example bridge spans a river in Austria.The umbrella method is a completely new way to construct a static final bridge. This TU Wien team first worked on the idea in 2006, and it’s been experimenting and fine tuning since then. Instead of traditional kinds of bridge building—i.e. putting up long-term scaffolding as rebar is laid and concrete is filled into structures—this mechanism is built like a “closed” umbrella and then unfolded into its final position. From there, its hollow girders are filled with concrete and the rest of the structural elements are completed.“Erecting bridges using scaffolding usually takes months,” designer Johann Kollegger said in a statement. “The elements for the balanced lowering method, on the other hand, can be set up in two to three days, and the lowering process takes around three hours.” But this process, he says, is less invasive for bridges through protected or uneven terrain. The team's sample bridge over the Lafnitz River touches a nature preserve.The resulting bridge section has a span of 72 meters (about 236 feet)—enough to span many rivers and highways. Sections can also be daisy-chained and connected into longer bridges. Each girder weighs over 50 tons, and they’re lowered carefully and symmetrically over a pretty long time. Traditionally constructed bridges are also often built out symmetrically, because even small imbalances can break the foundations that have been constructed....MUCH MORE, including video
This seems like a pretty serious commitment to coal.Stunning aerial view of China's longest coal transport route, a heavy-loaded #railway scheduled to be completed later this year pic.twitter.com/KHd9DyUohw— China Xinhua News (@XHNews) July 20, 2019
The influenza pandemic of 1918-19 killed between 50 and 100 million people around the world, more than died in the battles of World War I. In the United States, the hardest-hit city was Philadelphia, where the spread of the disease was spurred by what was meant to be a joyous event: a parade.....MUCH MORE
Writing in Pennsylvania History: A Journal of Mid-Atlantic Studies, the historian Thomas Wirth explains what happened: “On September 28, despite the increased infiltration of the disease among the civilian population, a rally for the Fourth Liberty Loan Drive proceeded with minimal debate about the repercussions for public health.” The head of Philadelphia’s Naval Hospital told the Public Ledger in the days before the parade: “There is no cause for further alarm. We believe we have it well in hand.” So, the parade went forward. “In the streets of downtown Philadelphia 200,000 people gathered to celebrate an impending allied victory in World War I. Within a week of the rally an estimated 45,000 Philadelphians were afflicted with influenza.”
While frequently called Spanish flu, the disease did not originate in Spain. Rather, the country’s wartime neutrality contributed to higher reports of its escalation in its newspapers. Exactly where and when it started in 1918 is still under speculation. But by the fall of that year, it had arrived in Philadelphia.
“At first, Philadelphia’s epidemic did not differ from that in other major American cities,” the historian James Higgins writes in Pennsylvania Legacies. “Yet by the first week of October, roughly five weeks into the outbreak, Philadelphia’s mortality rate accelerated in a climb unmatched by any city in the nation—perhaps by any major city in the world.” And that spike is attributed to the patriotic event, one of several Liberty Loan rallies organized in Philadelphia to raise money for the war. This time it was joined by a baneful guest: “The virus, an invisible presence at the parade, had enjoyed an unprecedented opportunity to spread throughout the city and in the coming days announced its presence in a skyrocketing wave of sickness and death.”
Soon hospitals were at capacity, as were the morgues and cemeteries. In a study published in 2009 in the Proceedings of the National Academy of Sciences on the incidence curves of the 1918 epidemic in Philadelphia, researchers note that, 72 hours following the parade, all the beds in the city’s 31 hospitals were filled and by “the evening of October 3, the closure of schools, churches, and places of public amusement was adopted by the Philadelphia city council.”
In six weeks, 12,000 were dead. The smell of bodies left to rot in homes while they waited to be removed permeated the streets. The spread of the virus was exacerbated by existing conditions in the city: a booming population drawn by the wartime industries, a density of housing, and a lack of sanitation services and safe drinking water in these working-class neighborhoods....
"Just give us some money"We'll get to a couple of the headline takeaways but first here's the FT's Jemima Kelly to give us the lay of the land:
This year, it has felt like hardly a week has passed without some fintech declaring nonchalantly that it’s raised another few hundred million pounds.
On Monday, it was the turn of a little-known (to us anyway) start-up called Hastee, which gives employees access to their pay as they earn it. It announced that it had raised £208m in its latest funding round.
Challenger bank Revolut, meanwhile, is in the process of trying to raise $500m in equity and $1bn via a convertible loan from investors, in a fundraise that could value the company at as much as $10bn. This comes despite the fact that, like many fintechs, the company has never been profitable (apart from a brief period in early 2018 during peak crypto-mania, when Revolut launched crypto trading).
And we’ve lost track of the number of variations there are on the “[Insert City] Fintech Week” theme, but there seem to be very many indeed.
So we must be in the midst of peak fintech-mania, right?
Actually, possibly not. Take a look at this chart, from Ian Green, principal consultant for data and technology at The Disruption House, a firm that provides benchmarking and data analytics to the financial sector:
The chart shows that after a huge increase in the number of fintech start-ups founded between 2004 and 2015, there has since been a rapid decline: from 390 in 2015 to just 71 in 2018.......MUCH MORE
The fact the bubble was in the number of start-ups rather than price-in-the-public-markets means we may have extended the length of the overall bull market.Well, it didn't completely cut the "top off of extinction event cliff-edge waveforms"now did it. My bad.
Just as all the trade talk sturm und drang dramatically slowed the rate of ascent of the wider market over the last couple years:
in effect cutting the top off of extinction event cliff-edge waveforms:
A sawtooth wave represented by a successively larger sum of trigonometric terms and smoothing via Brilliant.org
and smoothing/extending the ride.
In hot new areas what you don't want to see is stuff like this:
March 10, 2010
Happy Anniversary Mr. Market: Ten Years Ago Today...
...Internet.com put out this press release:....
If ever there were doubts about how the superaffluent are faring amid a pandemic for the ages, media mogul David Geffen wants to make it abundantly clear that, for his part, he’s doing just fine — and he wishes us all the bestNot "from" his superyacht, overlooking his superyacht.
Geffen, whose net worth is estimated at $7.5 billion, according to Forbes, tweeted a number of images of his resplendent $400 million superyacht, Rising Sun, apparently adrift off the coast of the Grenadines, a chain of small Caribbean islands in the lesser Antilles, about 2,085 miles south of New York, which has emerged as the epicenter of the U.S. coronavirus outbreak....MORE
Economic failures cause us serious problems. We need to build simulations of the economy at a much more fine-grained level that take advantage of all the data that computer technologies and the Internet provide us with. We need new technologies of economic prediction that take advantage of the tools we have in the 21st century.
Places like the US Federal Reserve Bank make predictions using a system that has been developed over the last eighty years or so. This line of effort goes back to the middle of the 20th century, when people realized that we needed to keep track of the economy. They began to gather data and set up a procedure for having firms fill out surveys, for having the census take data, for collecting a lot of data on economic activity and processing that data. This system is called “national accounting,” and it produces numbers like GDP, unemployment, and so on. The numbers arrive at a very slow timescale. Some of the numbers come out once a quarter, some of the numbers come out once a year. The numbers are typically lagged because it takes a lot of time to process the data, and the numbers are often revised as much as a year or two later. That system has been built to work in tandem with the models that have been built, which also process very aggregated, high-level summaries of what the economy is doing. The data is old fashioned and the models are old fashioned.
It's a 20th-century technology that's been refined in the 21st century. It's very useful, and it represents a high level of achievement, but it is now outdated. The Internet and computers have changed things. With the Internet, we can gather rich, detailed data about what the economy is doing at the level of individuals. We don't have to rely on surveys; we can just grab the data. Furthermore, with modern computer technology we could simulate what 300 million agents are doing, simulate the economy at the level of the individuals. We can simulate what every company is doing and what every bank is doing in the United States. The model we could build could be much, much better than what we have now. This is an achievable goal.
But we're not doing that, nothing close to that. We could achieve what I just said with a technological system that’s simpler than Google search. But we’re not doing that. We need to do it. We need to start creating a new technology for economic prediction that runs side-by-side with the old one, that makes its predictions in a very different way. This could give us a lot more guidance about where we're going and help keep the economic shit from hitting the fan as often as it does.
COLLECTIVE AWARENESS
I'm thinking about collective awareness, which I think of as the models we use to collectively process information about the world, to understand the world and ourselves. It's worth distinguishing our collective awareness at three levels. The first level is our models of the environment, the second level is our models of how we affect the environment, and the third level is our models of how we think about our collective effect on ourselves.
Understanding the environment is something we've been doing better and better for many centuries now. Celestial mechanics allows us to understand the solar system. It means that if we spot an asteroid, we can calculate its trajectory and determine whether it's going to hit the Earth, and if it is, send a rocket to it and deflect it.
Another example of collective awareness at level one is weather prediction. It's an amazing success story. Since 1980, weather prediction has steadily improved, so that every ten years the accuracy of weather prediction gets better by a day, meaning that if this continues, ten years from now the accuracy for a two-day weather forecast will be the same as that of a one-day weather forecast now. This means that the accuracy of weather prediction has gotten dramatically better. We spend $5 billon a year to make weather predictions and we get $30 billion a year back in terms of economic benefit.
The best example of collective consciousness at level two is climate change. Climate change is in the news, it's controversial, etc., but most scientists believe that the models of climate change are telling us something that we need to pay serious attention to. The mere fact that we're even thinking about it is remarkable, because climate change is something whose real effects are going to be felt fifty to 100 years from now. We're making a strong prediction about what we're doing to the Earth and what's going to happen. It's not surprising that there's some controversy about exactly what the outcome is, but we intelligent people know it's really serious. We are going to be increasingly redirecting our efforts to deal with it through time.
The hardest problem is collective awareness at level three—understanding our own effects on ourselves. This is because we're complicated animals. The social sciences try to solve this problem, but they have not been successful in the dramatic way that the physical and natural sciences have. This doesn’t mean the job is impossible, however.
Climate prediction had the big advantage that it could piggyback on weather prediction. As weather predictions got more accurate, climate models automatically got more accurate, too. There is a way in which climate prediction is actually easier than weather prediction. You don't try to say what's going to happen three days in the future, you try to say what's going to happen, on average, if things change. If we pump 100 parts per million more CO2 into the atmosphere, how much is that going to warm things up? A climate model is just a simulation of the weather for a long time, but under conditions that are different from those now. You inject some greenhouse gases into the atmosphere, you simulate the world, and you measure the average temperature and the variability of the weather in your simulation.
Climate predictions get a huge benefit from all the effort that's gone into weather prediction. I've been trying to get a good number on how much we've invested in weather prediction, but it is certainly $100 billion dollars or more. Probably more. It's probably closer to $1 trillion that we've invested since 1950, when we did the first numerical weather predictions. It sounds like a lot of money, but the benefits are enormous.
I've been thinking about how we can make better economic models, because a lot of the problems we're having in the world right now are at least in part caused by economics and the interaction of economics with mass sociology. Our cultural institutions are lagging technological change, and having a difficult time keeping pace with them. The economy plays a central role. Since the '70s, the median wage in the US has been close to flat. At the same time, the rich have been getting richer at a rate of two or three percent per year. A lot of the factors that are driving the problems we're having involve the interaction of the economy with everything else. We need to pursue some radically different approaches to making economic models.
It's interesting to reflect on the way we do economic modeling now. How do those models work? What are the basic ideas they're built on? We got an unfortunate taste of the ways in which they don't work in 2006, when some prescient economists at the New York Fed asked FRB/US, the leading econometric model, "What happens if housing prices drop by twenty percent?" This was 2006—their intuition was right on target—over the next two years, housing prices dropped by almost thirty percent. FRB/US said there'd be a little bit of discomfort in the economy, but not much. The answer FRB/US gave them was off by a factor of twenty. It made such bad forecasts because the model didn’t have the key elements that caused the crisis to happen.
Since then, economists have focused a lot of effort on adding these key elements, for example, by coupling financial markets to the macroeconomy. FRB/US didn’t model the banking system, and couldn’t even think about the possibility that banks might default. Issues like that are now in those models. The models have gotten better. But there is still a good chance that when we have the next crisis, we'll get similarly bad answers. The question is, how can we do better?
The first thing one has to say is that it's a hard problem. Economics is a lot harder than physics because people can think. If you make a prediction about the future of the economy, people may respond to your prediction, automatically invalidating it by behaving in a way that creates a different future. Making predictions about economics is a lot harder than using physics to predict the behavior of the natural world.
Fortunately, the most interesting things we want to do aren't to predict what GDP is going to do next month, but to make predictions about what happens if we tinker with the system. If we change the rules so that, say, people can't use as much leverage, or if we put interest rates at level X instead of level Y, what happens to the world? These are conditional forecasts, in contrast to predicting tomorrow's weather, which is an unconditional forecast. It's more like climate prediction. It’s an easier problem in some ways and harder in others because it is necessary to simulate a hypothetical world and take into account how people will behave in that hypothetical world. If you have a system like the economy that depends on thinking people, you have to have a good model for how they think and how they're going to respond to the changes you're making.
When I was a graduate student, Norman Packard and I decided to take on the problem of beating roulette. We ended up building what turned out to be the first wearable digital computer. We were the first people to take a computer into a casino and successfully predict the outcome of roulette and make a profit. We were preceded by Claude Shannon and Ed Thorpe who built an analog computer that allowed them to predict roulette in Shannon’s basement, but they never successfully took it into the casino. My roulette experience changed the rest of my life because it set me on a career path in which I became an expert on prediction. This never would have occurred to me before that.Wayback Machine link
If a system is chaotic it means that prediction is harder than it is for a system that isn’t chaotic....
Following up on yesterday's "What Do You Get When You Cross Jeffrey Epstein With MIT's Media Lab? Apparently Something Like Theranos"
Students of international relations tend to focus on nations as separate entities with sovereignty, borders, economies. They examine the formal and informal institutions through which they cooperate, compete and coerce. The power of states to regulate in areas such as commerce and immigration is a key subject of interest.Globalization wrought an irrevocable shift. Markets were liberated and made more efficient. Mutual advantages were mined from deep interconnectedness. The stakes of sovereignty and the effectiveness of coercive force seemingly were diminished. And yet, researchers largely continued to interpret these explosive effects within inherited conceptual architectures.
Scholars Henry Farrell and Abraham Newman now argue that globalization has created a much different world than its proponents and detractors have trumpeted. The new pathways of connection forged in recent decades are lopsided, extending vast powers of surveillance and coercion over markets and security to a few countries that control key strategic positions within these networks.
Last summer Farrell and Newman published “Weaponized Interdependence: How Global Economic Networks Shape State Coercion” in the journal International Security. It was the starter’s pistol for a fundamental reassessment of globalization’s impact on state power."The debate we see at the moment is never going to be about trade and open markets in the same kind of way anymore."The newly-developed asymmetric information and financial networks yield what the authors call “panopticon” and “chokepoint” effects. The “weaponization” of these networks promises – at minimum – to transform traditional notions of statecraft, the role of corporations in national security, and the global projection of hard and soft power.Farrell and Newman’s paper closely examined the immense power wielded by the United States in areas such as global payment systems and web traffic. But among the piece’s most thought-provoking conclusions was that this power would not go unchallenged."The United States and its allies find themselves in a new and uncertain world,” write Farrell and Newman, “where rival powers and adversaries are seeking to insulate themselves from global networks, or perhaps over the long run to displace these networks."Farrell – a professor of Political Science and International Affairs at George Washington University (and a former Wilson Center Fellow) – and Newman – a professor with appointments in Georgetown University’s Edmund A. Walsh School of Foreign Service and its Department of Government – launched a website to track manifestations of “weaponized interdependence.” They are also co-authors of a book, Of Privacy and Power: The Transatlantic Struggle over Freedom and Security (2019, Princeton University Press).“There’s a lot that’s been happening in the world economy,” says Farrell in an interview with the WQ. “So that people have been able to figure out that there's a ‘there there,’ but not be able to put a name on it. So I think that we – for better or worse – turned out to be some of the very early people to try to put a name on it – and try and identify it.”Farrell and Newman have extended their arguments in broader venues such as Foreign Affairs and Harvard Business Review. In mid-March, as the coronavirus pandemic swept from outbreaks in China and Italy and into the United States and many other nations throughout the world, they examined the sweeping implications of the pandemic for supply chain networks in Foreign Affairs:
....MUCH MOREAs policymakers around the world struggle to deal with the new coronavirus and its aftermath, they will have to confront the fact that the global economy doesn’t work as they thought it did. Globalization calls for an ever-increasing specialization of labor across countries, a model that creates extraordinary efficiencies but also extraordinary vulnerabilities. Shocks such as the COVID-19 pandemic reveal these vulnerabilities.“We are starting to think about fragility in the supply chain system,” says Newman to the WQ. “You do see that in the pharmaceutical industry with India, but they’re not weaponizing that to a strategic end. You just notice that these supply chains that everybody thought were redundant are not redundant.”Bigger Isn’t StrongerFarrell and Newman’s work also has implications for how we evaluate the efficacy of state regulation. Even if they take a roundabout to get there.“We’re proceeding from a direction I think is orthogonal to most of the regulation literature,” says Farrell, “because that literature has been primarily a literature about markets and the best ways to achieve various kinds of policy outcomes…. Rather than thinking about regulation and how it might lead to a different way of thinking about interdependence, we instead started with network structure and start thinking about interdependence from that perspective – which has all of these interesting consequences for regulation.“When you start thinking about the world through this perspective, you really begin to think that a lot of the standard arguments about regulation and the benefits or lack of benefits are basically kind of misconceived -- or miss the point of how regulations will emerge or work – for better or for worse – in the future.”A key element in their research is a rejection of the notion that globalization diffuses or democratizes power evenly – or, in many cases, at all. “A country's ability to leverage these new tools is very much dependent on the institutions that oversee markets,” says Newman. “It’s not just about having a big market. China has a big market. Japan has a big market. But in many areas, they do not have the leverage over the global economic networks that the U.S. does. A lot relies on what we would call regulatory capacity – the ability to monitor, defend, define, and sanction a set of political objectives that you have.”The International Security paper fastened tightly on the advantages that the U.S. and other industrialized economies possess in a world of asymmetric networks. Edward Snowden’s revelations in 2013 revealed that the U.S. has a window into global web communications that makes the authors’ choice of the panopticon apt. The paper also explored how the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system has become another key chokepoint in global networks that is controlled by the U.S. and key European allies.“There aren't that many countries aside from the United States and Europe that really have access to those key chokepoints in the networks,” says Newman. “China is doing it in the 5G debate. That's what the 5G debate is all about. They are encroaching. Can they establish the next hub? I don't think either Russia or India play that role.”....
