Thursday, March 23, 2017

Investing: Cliff Asness Blasts Rob Arnott

From Institutional Investor, March 16, 2017:

"The AQR founder takes issue with white papers published by Research Affiliates CEO Rob Arnott.
Cliff Asness, founder of AQR Capital Management, is back again arguing that factor timing is “deceptively difficult” despite what you may have heard from Research Affiliates chief executive officer Rob Arnott.

In a research report and March 15 blog post, Asness takes issue with a series of white papers published by Arnott and his colleagues, which presented evidence in favor of a contrarian approach to factor timing based on what Asness called a “plethora of mostly inapplicable, exaggerated, and poorly designed tests that also flout research norms.”

For several years now, a debate has raged over whether risk premia factors – such as value, momentum, growth, and volatility – have become overvalued as a result of the rising popularity of smart beta and factor investing strategies. While some, like Research Affiliates and founder Arnott, believe factors can become expensive and that investors should time their exposures to buy low and sell high, others, like Asness, argue that diversification, not timing, is the best way to achieve returns through factor exposures.

Together with three AQR co-authors – Swati Chandra, Antti Ilmanen, and Ronen Israel – Asness put Research Affiliates’ conclusions to the test this month, first by evaluating whether any factors are overvalued and then by applying a value-based timing strategy to a multi-factor portfolio. The first question was dismissed fairly quickly.

“While, not surprisingly, some of these factors are cheaper and some are richer compared to historical norms, none are near bubble-level extremes and collectively they do not paint a picture of very stretched valuations in either direction,” the authors wrote in the research report....MORE

Professors Anne Case and Angus Deaton's Follow-up Paper, “Mortality and morbidity in the 21st Century”, Is Out in Draft

From Brookings:
In “Mortality and morbidity in the 21st Century,” Princeton Professors Anne Case and Angus Deaton follow up on their groundbreaking 2015 paper that revealed a shocking increase in midlife mortality among white non-Hispanic Americans, exploring patterns and contributing factors to the troubling trend.

Case and Deaton find that while midlife mortality rates continue to fall among all education classes in most of the rich world, middle-aged non-Hispanic whites in the U.S. with a high school diploma or less have experienced increasing midlife mortality since the late 1990s. This is due to both rises in the number of “deaths of despair”—death by drugs, alcohol and suicide—and to a slowdown in progress against mortality from heart disease and cancer, the two largest killers in middle age.

The combined effect means that mortality rates of whites with no more than a high school degree, which were around 30 percent lower than mortality rates of blacks in 1999, grew to be 30 percent higher than blacks by 2015.

Case and Deaton find that deaths of despair are rising in parallel for both men and women without a high school degree, and they[sic] deaths of despair have increased in all parts of the country and at every level of urbanization....
...MORE, including download,  (60 page PDF)

Today In Fedspeak: Three Speeches

Continuing to draw on the list Amey Stone at Barron's posted last week:
  • 03/23 08:00 Fed’s Yellen Speaks at Community Development Conference
  • 03/23 12:30 Fed’s Kashkari Speaks on U.S. Education Outcomes in D.C.
  • 03/23 19:00 Dallas Fed’s Kaplan Speaks on Economy in Chicago
Despite the Chair's being one of today's talks it's actually tomorrow's lineup that could throw a match into the fireworks factory:
  • 03/24 08:00 Fed’s Evans Speaks at Community Development Event
  • 03/24 09:05 Fed’s Bullard to Speak to Economic Club of Memphis
  • 03/24 10:00 Fed’s Dudley Speaks in New York at York College

March 19 "Risk: 'Fed Talk Could Get a Lot More Hawkish Next Week'"
March 20 ditto.

Foreign Exchange: Marc Chandler Has "Some Thoughts about the Recent Price Action" (DXY)

The charts are not helpful at this juncture, here's the last two weeks of the hourly:

While it appears the dollar may have seen a short term low at ~99.35 yesterday, pulling back to the daily view over the last year shows there's no "reason" for the decline to stop right here:

That early February low is not especially strong support, the November and March 2016 resistance just above 98.00 make more sense.
Both charts via FinViz, 99.60 up 0.13 last.

From Marc to Market:
(greetings from Tokyo.  Speaking at the CFA Society of Japan tonight)

The gains the US dollar scored last month have been largely unwound against the major currencies.  The dollar's losses against the yen are a bit greater, and it returned to levels not seen late last November. 

The down draft in the dollar appears part of a larger development in the capital markets that has also seen the US 10-year yield slide 25 bp in less than two weeks.   The two-year yield is off 17 bp.  The yield of 1.25% is 25 bp on top of the upper end of the Fed funds target range.  

A few forces are at work.  First, is the reaction to the less aggressive stance at recent FOMC meeting.  Second, the Dutch election outcome and poll still pointing to a defeat of Le Pen in the second round of the French presidential election has seen some unwind of safe haven demand.  Third, oil prices have fallen.  Consider that as recently as March 7, light sweet crude was near $54 a barrel. On March 22, it reached almost $47, the lowest level since the end of November.  Fourth, President's Trump draft budget for the remainder of the fiscal year and the drawn out process over his temporary travel ban and the replacement of the Affordable Care Act (Obamacare) warn that tax reform and infrastructure efforts will also be delayed.  

There is much focus on the scheduled Thursday vote in the House of Representatives on the replacement for the Affordable Care Act.  We suspect that if it does not appear to have the votes, the vote will be delayed.  In some ways, there is much riding on it.  A defeat would be seen as jeopardizing President Trump's agenda.   It would be a defeat for Speaker Ryan by the same forces that brought down his predecessor (the Freedom Caucus).  

In other ways, there is less riding on the particulars of the bill at this juncture.   The Senate has opposed views, and it will likely pass its own version.  Then the two differences are hammered out in the reconciliation process.   It is there that the bill ultimately is shaped into law.   Trump and Ryan can compromise on much to get any bill passed, which can be heralded as a success.  We suspect this will be the case before the weekend, and this could help support the dollar and stocks, while interest rates may also rise in response. ...MORE

Wednesday, March 22, 2017

"Why US Growth of 2 Percent Is Plausible—And Unlikely to Get Much Higher"

We owe someone a hat tip on this but don't know where it came from, we don't have the PIIE in any of the feedreaders.
From the Peterson Institute for International Economics, March 21:

The US economy will likely grow at a rate of around 2 percent a year over the next decade. While this estimate seems low relative to the average annual growth rate of 3.5 percent from 1950 to 2000, it is not reflective of some newly found pessimism. Instead, it is largely based on two demographic facts: aging baby boomers entering retirement and the end of the influx of women into the workforce. In fact, without the cyclical boost in recent years from the falling unemployment rate, achieving even 2 percent annual growth will require substantially faster productivity growth than the United States has seen in recent years, along with a stabilized labor force participation rate on an age-adjusted basis.

A piece I wrote on Vox (link is external) explores plausible variations around this central expectation, either due to luck or to policy. A possible range of this uncertainty—that is, how different assumptions about productivity growth and labor force participation would affect this growth forecast—is shown in the table below. The Vox piece also documents how policy can make a small difference but cannot radically change the picture.

Alternative potential real GDP growth scenarios, 2016–26

  Labor force participation rate scenario
Productivity scenario Pessimistic        
(–0.3 p.p. per year)  
Base case        
(–0.2 p.p. per year)
  (–0.1 p.p. per year)
(1.4 percent per year, 10th percentile)
   1.4    1.5    1.7
Base Case
(1.7 percent per year, CBO projection)
   1.7    1.8    2.0
(2.8 percent per year, 90th percentile)
   2.8    3.0    3.2
CBO = Congressional Budget Office; p.p. = percentage point
Sources: Bureau of Labor Statistics; CBO; author’s calculations.

This blog post provides additional detail on how estimates for growth for the next decade are calculated. It focuses on the base case, which corresponds to the Congressional Budget Office’s (CBO) projection of annual growth from 2016 to 2026, but the same method applies to the other cases shown in the table as well. (The Blue Chip consensus of private forecasters is slightly more optimistic, with a 2.2 percent projection for long-run growth.)

The analysis derives real potential GDP growth from two main variables: the annual percentage-point change in the labor force participation rate and the annual rate of labor productivity growth. While these are the two most consequential and uncertain variables underlying potential economic growth, they are not the only ones. This note explains in more detail the other elements of the equation.
The simple version of the base case with 1.8-percent annual growth is as follows, wherever possible following or approximating the CBO’s assumptions:

Labor Inputs
The population (ages 16 and older) is expected to grow at 0.8 percent per year. The fact that the labor force participation rate is falling by 0.2 percentage point per year subtracts 0.4 percent from the annual growth rate of the labor force (approximately 0.2 divided by the CBO’s estimate of the 63.5 percent potential labor force participation rate for 2016). Together with the assumption of no change in the length of the average workweek, this yields annual growth of labor inputs of 0.5 percent (0.8 - 0.4 + 0.0, with some rounding error)....MORE

Oil: "WTI/RBOB Plunge After Inventory Hits Record High, Production Surges"

WTI is bouncing off the day's lows having hit $47.01. $47.63 last.
Have I mentioned there seems to be a lot of the stuff slloshing around?

From ZeroHedge:
After a sizable build in crude and draw in gasoline overnight from API, WTI and RBOB are lower (legged down on Libya production news). DOE data confirmed the API data with a sizable crude build and gasoline and distillates extending their draw streak. US crude production rose once again - the highest in 13 months
  • Crude +4.539mm (+3mm exp)
  • Cushing +1.968mm
  • Gasoline -4.934mm (-2.4mm exp)
  • Distillates -883k
  • Crude +4.945mm (+3mm exp)
  • Cushing +1.42mm (+1.1mm exp)
  • Gasoline -2.81mm (-2.4mm exp)
  • Distillates -1.91mm (-1.5mm exp)
Crude inventory expectations had risen into the print and DOE data confirmed a notable build. Gasoline drew down but less than API and Cushing saw another notable build...
Cushing inventories are at their second highest level in history...
A new record high for US crude inventories... (note that Crude storage in ARA rises 7.3%, Genscape weekly data show, so European inventories are also soaring)

Today in Umlauts: "Journey into the heart of Ikea"

This store is 10.46 acres (over 4 hectares) under roof.

From Curbed:

How 12 hours in the biggest Ikea in the U.S. destroyed my soul
The country’s largest Ikea opened in Burbank, California, last month. At 456,600 square feet, twice the size of, and one mile away from, the old Burbank Ikea, this new store offers a lot more of everything people have come to expect from the brand: More inspirational showrooms, more lingonberries, more Billy bookcases. But how much is too much Ikea?

To find out, I decided to stay at the Burbank Ikea from when the restaurant opened at 8:30 a.m. until they announced over the speakers that the store was closing at 8:30 p.m. and we should take our purchases to checkout. I chose a Saturday, the day the lord set aside for furniture shopping. For a full day, I let Ikea provide for me like the Allfather of Norse mythology, eating and drinking naught but what Ikea provided. I wanted to see all the couch-inspired fights, document every umlaut, and figure out how the parking attendants don't die from smoke inhalation.

My hometown of Bloomington, Indiana, does not have an Ikea; the closest is in another state. I've come to understand that Ikea represents matchstick furniture "for college kids and divorced men," as the Jonathan Coulton song goes, but for a long time, for me, Ikea represented the far-off luxury of Cincinnati, Ohio. I moved to Los Angeles three months ago and discovered that Ikea was the perfect mix of affordable, well-designed, and bedbug-free that I craved. 

Since then, I have begun to fill my apartment with everything Sweden has to offer—as I write this I can see two Lack tables, a Falkhöjden desk repurposed as a dining room table, some shiny red Lixhult lockers, and a Doftranka rug. I like that I can buy a bright red coffee table, and that the founder renounced his fascist ties way back in the 1990s, before they were a renewed concern in global politics.

The pared-down Scandinavian designs of Ikea mean something to all people. For American post-grads, it’s crappy starter furniture you eventually discard. For people in China, it’s a place to nap and get dates. For Kanye West, it represents his entree into the world of home goods design.

But whoever you are, Ikea is known for three things: meatballs, umlauts, and breakups. I tracked all three during my all-day stay.

Ikea is so synonymous with relationship strife there’s an entire episode of 30 Rock dedicated to the concept. Clinical psychologist Ramani Durvasula even uses Ikea furniture in her practice—in an interview with the Wall Street Journal, she explained that different sections of Ikea bring up different problems in a relationship: “In the kitchen area one person will pick up a pan and the other will say 'You never cook anything anyway so why would we need that?’” I’ll see if this theory holds up to my rigorous, scientific study.

My suspicion is that Ikea causes fights through its sheer enormity. You yell at your partner just to assert your existence in the face of so much flat-packed furniture. There’s a scene in Sartre’s Nausea where the protagonist realizes that every leaf on a chestnut tree is as real as him. His mind buckles as he comprehends his insignificance compared to all those leaves. Will looking at approximately 200,000 scented votive candles similarly tear my mind asunder?

9:33 a.m. umlauts: 0 fights: 0
Ikea before opening is like the Sochi Olympic Village today: Giant, empty concrete structures built for a single purpose—bringing efficient Scandinavian design to the masses and trying to convince people to care about curling, respectively. When that purpose is not being fulfilled, the empty building becomes like a dead language, a sign without a signifier or signified. Ikeas are unitaskers—you wouldn’t be able to repurpose the country’s largest Ikea as mixed-income housing any more than you could turn a soccer field in the Amazon into a hospital. “Big box store” doesn’t even begin to cover it. It’s the biggest and boxiest box that you or your children, or your children’s children, will ever see. 

The only scale comparison I have for it is video games, specifically the endless maze of the Corvega Assembly Plant in Fallout 4, where you emerge from a 200-year cryogenic sleep to find the world an irradiated wasteland. The Corvega Assembly Plant is one of the first locations you encounter, and it’s full of zombies, gang members, and giant mole-rats trying to kill you.

The Burbank Ikea’s 600-seat restaurant opens half an hour before the store proper. The Swedish American Breakfast costs $2 and there’s free coffee. “Glamorous” by Fergie plays as I enter. Three minutes after opening and there are almost 100 people already here. This is easily the fewest people I will see in the Ikea restaurant all day. 

I get my $2 breakfast and sit in front of giant windows overlooking the hills of suburban Burbank—a place I’d only heard about in Animaniacs songs and on podcasts when comedians talk about buying their first reasonably priced home. Antsy shoppers pace in front of the showroom floor, waiting for 10 a.m. The sausage in my Swedish American breakfast is oddly bland. I suspect it’s the same meat as their meatballs, in a cylinder form. I hope it is not horse meat.

10:08 a.m. umlauts: 11 fights: 0
Ikeas are laid out "the long natural way": One is supposed to wind semi-aimlessly through the aisles. In every store, the first section of this labyrinth consists of model rooms from model homes, where unseen model people live model lives. Little boxes made of ticky-tacky, etc. Each room is planned at Ikea HQ by a designer, complete with biographies of the people who inhabit them. Cabinets are filled with Ikea-brand pens and pencils, magazine organizers are labeled, and closets are hung with discontinued clothes from Target....MORE

It's World Water Day! Hedge Funds and Investing In H2O

Some of our previous water posts:

September 2014
A Look at the World's First Water-focused Hedge Fund
Since the first Earth Day in April 1970 and more importantly since the establishment of the EPA in December of that year, folks have been trying to make money out of water in the U.S..
Put simply, the returns have not been market-beating.

Because so much of the opportunity was my-little-crony stuff, at the whim of politicians, there was no consistency of growth at a time when other portfolio investments offered very competitive comparisons.
The alternative was to own the cash flow, private equity style, but unless one felt a passion for grit chambers and sludge pans it was pretty pedestrian, utility type ROI.

In fact the most reliable water investment in the U.S. has probably been York Water Company of York PA.
They've been paying dividends for 199 consecutive years and just announced their 575th divi.
The announcement carries the boilerplate "This release contains forward-looking statements".

Anyhoo, here's a piece we've been sitting on since January, from Mother Jones:

...The following was published by arrangement with The Penguin Press, a member of Penguin Group (USA) LLC, a Penguin Random House Company. Copyright McKenzie Funk, 2014.
Where water Runs when it runs out
The offices of the world's first water-focused hedge fund overlook a parking lot in a subdivided landscape developers call the Golden Triangle. The neighborhood gets its water from the Alvarado Water Treatment Plant, run by San Diego's Public Utilities Department, which gets its water from the San Diego County Water Authority, which gets its water from the larger Los Angeles–dominated Metropolitan Water District, which gets much of its water—in greater proportions during California's droughts—from the 242-mile Colorado River Aqueduct, which gets its water from a reservoir straddling the Arizona border, Lake Havasu, which gets its water from the 1,400-mile Colorado River, which gets its dwindling water from thousands of streams, snowfields, lakes, and springs in a drainage basin covering nearly 250,000 square miles across seven western states. Without imported water, the 2.7-million-person San Diego metropolis, like much of Southern California, would be no more capable of supporting people than the coastal desert it once was. During my visit, at the height of a hot summer in 2010, I got my water one morning from a secretary, who handed me a tiny plastic bottle—Poland Spring, was it?—from the fridge.
The man I'd come to meet was John Dickerson, the founder and CEO of Summit Global Management, a former CIA analyst, and the buyer of billions of gallons of water in two vital, desiccating river systems: the Colorado and Australia's Murray-Darling. Both systems had recently experienced severe droughts that scientists tied to climate change. Financial managers like Dickerson, meanwhile, had experienced the opposite: a flood of money. Summit had launched its first water fund in 1999, but "for a long time," he told me, "I was a voice in the wilderness. We couldn't get anybody to buy our fund. Then came Al Gore and his stuff, the whole global-warming thing, droughts. Water became the go-to idea."...MORE
Aug. 2012
It's So Hard to Find a Decent Bet on Water (investment vehicles)
Update below.
Original post:
Water has confounded smarter people than me.

Enron's adventure in H2O is a cautionary tale, they bought Wessex Water in England, bought water concessions in Argentina and had a long term contract in Cancun.
Enron partially spun out the water sub, Azurix at $19.00. Within 18 months it was trading at $3.50 where Enron tendered for the 34% of the company that the public owned.

Not a very sweet deal for anyone involved. Water is tough business.
And, of course, Enron being Enron, they bid 100% more than any one else in the business to get the Argentina deal to have some big pre-IPO news.
From FT Alphaville:
In search of liquid water (investment vehicles)
This guest post was submitted by Jason Abbruzzese of
A little more than a year ago, Citi chief economist Willem Buiter said water was on its way to becoming “the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals”.

While we’re not quite there yet...
May 2013
Swiss Private Bank Pictet Making Money in the Water Biz (XYL; DHR)
July 2013
"Can Powdered Water Cure Droughts?"
October 2010
Muni's: "Water Scarcity a Bond Risk, Study Warns"

April 2015 
A Look At A Second Water Focused Hedge Fund
From Barron's:
Water Asset Management: Hunting Liquid Assets
Water Asset Management managers Disque Deane Jr., Matt Diserio, and Marc Robert are betting that water prices will float higher still.

Water wasn’t an obvious investment theme when Matt Diserio and Disque Deane Jr. launched their hedge fund 10 years ago. Now, every day brings news of a water shortage or drought. So have the water stocks targeted by their Manhattan-based Water Asset Management enjoyed a panicky rerating?
Not yet. Drought-parched headlines still get upstaged by the latest dot-com initial public offering, so water remains mispriced by consumers and investors. That’s good for the half-billion dollars that Water Asset has in an equity hedge fund and a newer long-only fund focused on regulated water services, water resources, and the suppliers of pipes, meters, and treatment technologies. Upside remains.
“It is an old industry,” says Diserio, who manages the firm’s stock portfolio, “but it is just becoming a recognized asset class.”
Water investing’s upside is ensured by the urgency of our water needs and the fact that this resource remains very cheap in an absolute sense—compared with natural resources like timber or farmland, oil or gold. The average American family’s water bill is under $40 a month, notes Deane, giving the industry room to charge more to cover hundreds of billions of dollars in deferred maintenance and upgrading....MORE 
There are many more, use the search blog box if interested.

"Wal-Mart Unveils ‘Store No. 8’ Tech Incubator in Silicon Valley"

From Bloomberg:
Wal-Mart Stores Inc. is creating a technology-startup incubator in Silicon Valley to identify changes that will reshape the retail experience, including virtual reality, autonomous vehicle and drone delivery and personalized shopping.

The incubator will be called Store No. 8, a reference to a Wal-Mart location where the company experimented with new store layouts. Marc Lore, chief executive officer of Wal-Mart’s e-commerce operations, announced the incubator Monday at the ShopTalk conference in Las Vegas.

The world’s biggest retailer has been overhauling its online team to better challenge Inc. with greater selection and lower prices. Lore founded, which Wal-Mart purchased in September for about $3.3 billion in pursuit of Amazon in the e-commerce race. Lore said Wal-Mart has an advantage over "pure play" e-commerce companies because of its large network of stores that attract shoppers for such items as fresh food.

"Every day, I become more and more convinced about the omnichannel advantage," Lore said, referring to a sales strategy that combines online and in-store shopping....MORE
And in other retailing news at Bloomberg: 
Payless Is Said to Be Filing for Bankruptcy as Soon as Next Week 
Sears Warns of ‘Substantial Doubt’ About Company's Future

Tuesday, March 21, 2017

"Magnitsky Family Lawyer Thrown off Top Floor Apartment in Moscow, Now in Critical Condition"

From Land and Order in Russia:
21 March 2017 – Russian lawyer Nikolai Gorokhov, who represents Sergei Magnitsky’s family, has been thrown from the top floor of his apartment building earlier today and is currently hospitalized in the intensive care unit of Botkin hospital in Moscow with severe head injuries.

Nikolia Gorokhov is a key witness in the US Government’s case against Prevezon Holdings, a Cyprus company owned by Denis Katsyv, son of senior Russian Government official Petr Katsyv. The trial is scheduled to begin in the Federal court in New York on May 15th 2017. The trial is in relation to alleged money laundering by Prevezon of proceeds of US$230 million fraud that Sergei Magnitsky uncovered and was killed for exposing in 2009 at the
age of 37.

Tomorrow morning, at 10:50 am, Nikolai Gorokhov was scheduled to appear in front of the Moscow City Appeals Court to argue against the Tverskoi District Court’s refusal to consider a new criminal complaint filed by Sergei Magnitsky’s mother in relation to the discovery of “Pavlov Leaks” – a series of electronic communications between Russian lawyer Andrei Palvov and other members and associates in the Klyuev Organized Crime Group. The Pavlov Leaks show collusion of those responsible for the $230 million fraud uncovered by Sergei Magnitsky and police officers assigned to investigate the US$230 million fraud and Magnitsky’s death in custody....MORE

"Why American Farmers Are Hacking Their Tractors With Ukrainian Firmware" (DE)

John Deere says:
"When a customer buys John Deere equipment, he or she owns the equipment," ...
Their actions say they are full of manure.
As one critic puts it:
"They require buyers to accept an End User License Agreement that disallows all of the activities they say are allowed in their statement," she said. "Deere is a monopolist and has systematically taken over the role of equipment owner, despite having been paid fairly and fully for equipment. Their claims to control equipment post-purchase are inconsistent with all aspects of ownership including accounting, taxation, and transfer of products into the secondary market."
It's all about the intellectual property and unfortunately the Supreme Court has been wishy-washy on a couple decisions but there is hope. As we noted in the November '16 post below:
One of the heroes of this stuff was Thai native and U.S. student Supap Kirtsaeng who won his case, Kirtsaeng v. John Wiley & Sons, Inc., wherein he argued he should be able to re-sell textbooks he had lawfully purchased. The Supreme Court upheld the First Sale Doctrine that "you bought it, you own it".
From Motherboard, March 21:

A dive into the thriving black market of John Deere tractor hacking.
To avoid the draconian locks that John Deere puts on the tractors they buy, farmers throughout America's heartland have started hacking their equipment with firmware that's cracked in Eastern Europe and traded on invite-only, paid online forums.

Tractor hacking is growing increasingly popular because John Deere and other manufacturers have made it impossible to perform "unauthorized" repair on farm equipment, which farmers see as an attack on their sovereignty and quite possibly an existential threat to their livelihood if their tractor breaks at an inopportune time.

"When crunch time comes and we break down, chances are we don't have time to wait for a dealership employee to show up and fix it," Danny Kluthe, a hog farmer in Nebraska, told his state legislature earlier this month. "Most all the new equipment [requires] a download [to fix]."
The nightmare scenario, and a fear I heard expressed over and over again in talking with farmers, is that John Deere could remotely shut down a tractor and there wouldn't be anything a farmer could do about it.

A license agreement John Deere required farmers to sign in October forbids nearly all repair and modification to farming equipment, and prevents farmers from suing for "crop loss, lost profits, loss of goodwill, loss of use of equipment … arising from the performance or non-performance of any aspect of the software." The agreement applies to anyone who turns the key or otherwise uses a John Deere tractor with embedded software. It means that only John Deere dealerships and "authorized" repair shops can work on newer tractors.

"If a farmer bought the tractor, he should be able to do whatever he wants with it," Kevin Kenney, a farmer and right-to-repair advocate in Nebraska, told me. "You want to replace a transmission and you take it to an independent mechanic—he can put in the new transmission but the tractor can't drive out of the shop. Deere charges $230, plus $130 an hour for a technician to drive out and plug a connector into their USB port to authorize the part."

"What you've got is technicians running around here with cracked Ukrainian John Deere software that they bought off the black market," he added.

Kenney and Kluthe have been pushing for right-to-repair legislation in Nebraska that would invalidate John Deere's license agreement (seven other states are considering similar bills). In the meantime, farmers have started hacking their machines because even simple repairs are made impossible by the embedded software within the tractor. John Deere is one of the staunchest opponents of this legislation....MUCH MORE
April 2015
John Deere Tells Patent Office That Purchasers Don't Actually Own the Machine They Paid For (DE)
 May 2015 
"John Deere Clarifies: It's Trying To Abuse Copyright Law To Stop You From Owning Your Own Tractor... Because It Cares About You" (DE)
November 2016 
For the Next Two Years Auto Manufacturers Can't Have You Arrested...
...for trying to repair or modify the software on your own car.

And in a tangential development:
Big Data Down On the Farm: "DuPont Joins Deere on Software in Challenge to Monsanto" (DE; DD; MON)

"Why Bank Stocks are Getting Crushed"

The Keefe, Bruyette bank index (BKX) is down 3.41% (-3.22 ) at 90.98.

From Barron's Stocks to Watch:
Down go the bank stocks! And it’s hard not to see why stocks like Bank of America (BAC), Morgan Stanley (MS), and Goldman Sachs (GS) are getting crushed.

It starts with bond yields. The 10-year yield has been in free fall ever since the Federal Reserve took a less hawkish stance than many had predicted heading into the meeting. The 10-year U.S. Treasury note now yields just 2.43%, down from 2.6% on March 13. Higher bond yields mean banks can make more money on the money they lend to the consumers. And banks fell hard after the Fed hiked rates last week.

Then there were financial results released by Jefferies, a unit of Leucadia National (LUK). Its results are often seen as a harbinger for the big U.S. banks, and the results “appear mixed,” according to JMP analyst Devin Ryan. He explains:
Our takeaways from trading results for the larger cap banks and investment banks are mixed. Given the incredibly difficult start to last year, the bar is not particularly meaningful, in our view....

For our younger readers here's the reference in the first line of Barron's post:

"George Foreman knocks out heavyweight champion Joe Frazier and Howard Cosell and Angelo Dundee announce one of the best broadcasts in sports history." January 22, 1973

"Uber's top lobbyist jumps to boutique tech firm"

Uh oh, now the defections are hitting at Uber's core competency.

The story is at The Hill, I just wanted a chance to snark a bit.

And mention that, in an effort to bypass the Austin city council which has not backed down in their confrontation with Uber (and Lyft) the Ubester is now spending serious money at the Texas legislature.
From the Austin Chronicle:

Lege for Sale?
Uber and Lyft splurge on lobby to deregulate themselves
If you don’t like the laws, buy some new ones. That’s not an option for most of us, but mega-corps Uber and Lyft have deep pockets and few scruples. If Austin officials and voters are not for sale, maybe state legislators will prove more agreeable.

That’s the message of the latest “Lobby Watch” from Texans for Public Justice, which reports that the two major “rideshare” companies (motto: "You share, we collect") have spent up to $5.5 million lobbying since 2014. That’s on top of the more than $10 million (mostly Uber’s) they spent last spring to impose and then lose an Austin deregulation referendum. In the wake of that humiliating defeat, they decamped the city and lay siege to the Capitol...MORE

As was said in the intro to January's "Uber tripled its lobbying efforts in 2016":
Just a reminder, there is more than one way to lobby.
The numbers cited here are just the declarable dollars spent at the federal level.

In addition there is the money spent at state capitals and for lobbyists at the local level.
Then there's the big money. The best example was probably Austin, Texas where Uber and Lyft spent millions on local political advertising.

Finally there are the political campaign donations which are not as large as the political advertising but do get the attention of the recipients....
I'm thinking it may be worth revisiting Welcome to Uberville, Uber wants to take over public transit, one small town at a time.

Hedge Funds: "S&P downgrades Och-Ziff further into junk territory " (OZM)

Couldn't happen to a nicer bunch of guys.
Here's the recent action via FinViz:

OZM Och-Ziff Capital Management Group LLC daily Stock Chart
$2.16 down 0.14 (-6.09%)

From MarketWatch, Mar 20, 2017 4:56 p.m. ET:
S&P Global Ratings on Monday lowered Och-Ziff Capital Management LLC's OZM, -5.20% credit rating to BB from BB+, pushing it deeper into junk territory. "We now believe that the company's fixed costs are a bigger proportion of its expense base than we initially projected, which results in lower EBITDA at a time when the company's revenues are under stress due to lower assets under management and a lower management fee rate,"...MORE
March 16
Hedge Funds: "Executives Abandon Och-Ziff Following $13 Billion In Withdrawals And An 80% Share Price Decline" (OZM)
Feb 2017
Och Ziff In Trouble: AUM Plunges After A Record $4.8 Billion In January Redemptions (OZM)

"We don't much care for these folks, some prior posts after the jump."

Barring a meltdown in the wider market the stock is probably getting close to a price where the bottom-feeders will gather.

Today's (possibly) Market Moving Federal Reserve Speeches

From yesterday's "Risk: "Fed Talk Could Get a Lot More Hawkish Next Week"":

...Russ Certo of Brean Capital provides a list of all the speeches coming. Note: Fed Chair Janet Yellen is Thursday:
03/21 06:00 Fed’s Dudley Speaks at BoE Event on Bank Ethics in London
03/21 12:00 Fed’s George Speaks in Washington on U.S. Economy and the Fed

03/21 18:00 Fed’s Mester Speaks at University of Richmond
Three more Thursday.

Here's Monday's action and a headline from ZH:,13874A&p=m5&rev=636256838350593514

Stocks Slump Into Red After Fed's Evans Warns Of Rising Uncertainty

FX: "Euro Recovery Continues, Posts New Six Week High; Other Currencies Mixed"

Here's the one year picture of the euro:

Note the December and early February resistance.

From Marc to Market:
(greetings from Tokyo)

Growing confidence that Le Pen will not be the next president of France following the televised debate for which two polls showed Macron doing best has lifted the euro and reduced the French interest rate premium over Germany. The euro pushed through $1.0800 after initially dipping below yesterday's lows.

The outside day (engulfing pattern) would be strengthened with a close above yesterday's high, a little above $1.0775. The next target is the February 2 high near $1.0830. It reached almost $1.0875 following the ECB's decision in December to extend QE longer than had been anticipated but at a reduced pace of 60 bln a month (down from 80 bln).

The US two-year premium over Germany peaked nearly two weeks ago near 223 basis points. Today it is near 205 basis points, the lower end of where it has been over the past month. The US 10-year premium peak shortly after last Christmas near 235 basis points. Today it is just around 202 basis points. Over the past four months, it has only closed below 200 basis points once.

While the euro is outpacing the other major currencies, it is dragging up other currencies against the dollar, including sterling, the Swiss franc, and the Scandi currencies. Core bond yields are 2-3 basis points firm, but peripheral yields are a bit softer. European stocks are heavy, and the Dow Jones Stoxx 600 is threatening to snap a three-day advance.

The MSCI Asia Pacific Index and the MSCI Emerging Market Index continued to rally. Each is posting their eighth consecutive advance. The former is up 10.2% year-to-date, while the latter has risen 13.2%. In contrast, the S&P 500 has fallen for three consecutive sessions coming into today and four of the last five.

For the fifth day, the dollar taken out the previous day's low against the yen. It is also the fifth day of lower highs as well. The dollar recovered to approach yesterday's highs but stalled. Intraday technical indicators warn that more work may be necessary at lower levels before a base can be from which to launch an assault on JPY113.00

Sterling has recovered over the past week or so. Assuming it holds on to some gains today, it will be the sixth advancing session in the past eight....

And the US Dollar Index:

Monday, March 20, 2017

So, What Does A Sleeper Train Look Like When Fashioned By A Ferrari Designer?

From Curbed:

Sleeper train by Ferrari designer is downright decadent
Japan’s new Train Suite Shikishima sleeps a maximum of just 34
Last week, Japanese industrial designer Ken Okuyama—perhaps best known for designing the Ferrari Enzo (and this weird office chair)—unveiled the latest in luxury train travel: the Train Suite Shikishima from JR East. 

The 5 billion Yen—nearly $44.4 million—sleeper train is made of 10 custom-designed cars including two glass-walled observatory cars, a shared lounge car, a dining car, and six private suite cars. Train Suite Shikishima hosts pre-arranged multi-day tourism trips across Japan, and can sleep a maximum of just 34 passengers. A three-night, four-day excursion costs roughly $8,000 per person. The train is already all booked up for its first six months, according to Spoon & Tomago.
But feast your eyes on the interiors: The white-and-wood lounge car features sculptural walls meant to resemble trees in a forest. The dining car feels slightly retro with geometric paneling and crisp white table linens....MORE

Carbon Markets: The 59.60 Carat Pink Star Diamond Is Going Back To Auction

Nothing is forever.
Except maybe Neil Diamond.

We have a fancy for some of the colored fancies and this is one of the top rocks in the world.

From Art Market Monitor:

Sotheby’s Brings ‘Pink Star’ Diamond to Hong Kong
Sotheby’s announced today that it is bringing back the Pink Star diamond to the marketplace. The nearly 60ct Flawless Fancy Vivid Pink diamond was originally sold in Geneva three and a half years ago for a record price of $83m. Then the buyer reneged on his bid and Sotheby’s—which had guaranteed the stone for a reported $60m—took the diamond into inventory....MORE

Sept. 2013
You Thought the Rio Tinto Red Diamonds Were Baubles, You Dismissed the 118 Carat 'Perfect' Being Auctioned Tomorrow as Crass, Perhaps Monsieur et Madame Would be Interested In...

...The Pink Star 
From Bloomberg:
Sotheby’s to Auction $60 Million Pink Diamond in Geneva
A 59.60-carat pink diamond is estimated to raise more than $60 million, a record for any gemstone at auction, when it is sold in Switzerland in November.

The oval-cut stone, the largest internally flawless fancy vivid pink diamond ever graded by the Gemological Institute of America (GIA), will be sold by Sotheby’s (BID) in Geneva on Nov. 13, the New York-based auction house said today in a statement.

The sale of the ``Pink Star” will follow a Sotheby’s auction in Hong Kong in October containing a white and a blue diamond valued at more than $28 million and $19 million each.

“This is a good time to sell important stones at auction,” the Karlsruhe-based jewelry dealer Otto Jakob said in an interview. “Wealthy people with a lot of cash fear their money is endangered. They’re putting it into goods."...MORE
November 2013
'Pink Star' Diamond Sells for World Record $83 million at Sotheby's Geneva

Here's the catalogue entry for lot 372 at the 2013 Geneva auction.

Possibly also of interest:
May 2013
Rio Tinto's Extremely Rare Red Diamonds (RIO)

June 2014
122.52 Carat Blue Diamond Found In South Africa (PDL.L)

The 122.5 carat diamond discovered by Petra

And the first time I used the Neil Diamond line: 

"Have You Ever Tried to Sell a Diamond?" 

"Map for High Performance Computing (far more interesting than it sounds)"

From What's Next: Top Trends, February 22:
So here’s a new roadmap showing how HPC (High Performance Computing or Super Computing as it’s sometimes known) is currently being used and what HPC might be capable of in the distant future (unspecified).
There are five key categories of applications: Modelling & Simulation, Healthcare & Medicine, Security, Fintech and Materials, Manufacturing & Engineering. We had Data in there too in the beginning, but removed it because most applications seemed to be subsets of the other categories.
In an ideal graphic the various entries would connect. For example, design of nano-water filters is materials & engineering, but it’s also modelling and it’s healthcare.

There are a couple of jokes on the map to keep people on their toes (or maybe not!) and the point of the map is dead simple. It’s intended to stimulate discussion about what HPC is capable of and where HPC might be heading (my personal favourite entry is aesthetics prediction btw).

The entries are all largely tech-push of course. In the real world you’d need to overlay things like energy, security, privacy, regulation and human psychology to get a clearer picture of what’s next, but it’s a start. As far as we can tell it’s also far better than anything currently out there in terms of info-graphics about HPC.

The main audience is obviously the global HPC community, but hopefully it will appeal to anyone interested in computing, Big Data, predictive analytics and perhaps machine learning and AI. (BTW, why HPC isn’t called Big Computing is beyond some of us!)

Below are a few pictures showing the development of the map, which originally started off in the shape of a question mark with the really big question being either where is this all going or what is this all really for?

The really interesting category to our collective mind at Tech Foresight is simulation and modelling. It brings up ethical and even philosophical questions about how simulations impact reality. For example, if you have data that suggests something will happen, what level of certainty would you require to then act and where is free will and human agency in all this?...MUCH MORE

"Russian ATMs Spit Out Cash After Malware Attack"

From ZeroHedge:
Russian daily Kommersant reports that the Bank of Russia detected malware that hides inside ATM’s operating memory which "forces" them to dispense cash to anyone who enters certain code on its keyboard. The paper cites the deputy head of information security Artem Sychev, and adds that cash machines made by NCR were among the ATMs mostly attacked.

Kommersant also writes that according to sources who received the Bank of Russia FinCert newsletter with a description of the virus, the virus in question is the so-called "Disembodied" or Bespalova virus that “lives” in ATM RAM. According to FinCert, the ATM virus was first noticed in Russia for the first time. Since the virus does not have a file body, it can not be removed by anti-virus programs and can live in infected ATM indefinitely, according to sources.

“The virus is aimed at stealing funds directly from the bank teller machine, and is activated after a specific code is punched in, at which point it gives all the cash from the first cassette dispenser....MORE

And via GeekCulture, although not exactly comparable attacks (ransomware being just one type of malware), the lighter side of dystopia:

One of the Greatest Editor's Notes of All Time: The Secret To His Success Edition

From Vinepair, Feb. 2, 2016:

Meet The VC Who Actually Makes Money Investing In Wine Brands
Ed. Note: This article was written and published prior to Charles Banks’ indictment for wire fraud, unsealed in Federal court on 9/9/16. This article, which discusses many of his business ventures, is in no way an endorsement of any of his financial practices or alleged crimes....
Here's the original story.

In Which FT Alphaville Stirs the Pot (SBUX)

Coffee pot that is.

Ms. Kaminska seems to have hit a nerve with this post and the comments are indicative of the explosive nature of combining the type-A/finance crowd with the dark caffeinated nectar of the Gods.
"Let's talk about something important. Put. That coffee. Down. Coffee's for closers only. You think I'm fucking with you? I am not fucking with you. I'm here from downtown. I'm here from Mitch and Murray. And I'm here on a mission of mercy. Your name's Levine? You call yourself a salesman you son of a bitch?"
-Glengarry Glen Ross
From FT Alphaville:.

How pre-ordering coffee has turned into a nightmare
Pre-ordering coffee with a mobile app at Starbucks was supposed to make life easier for both the customer and the retailer.

But, as Business Insider reports, the growing popularity of the option is causing untold chaos at branches all across Manhattan.
From BI:
Mobile ordering, which allows customers to order and pay on a smartphone before entering the store, has caused bottlenecks during busy hours at some of Starbucks’ most popular locations. The crowds of customers waiting for their lattes and Frappucinos has even started to discourage walk-in customers from entering stores.
This, sadly, was predictable. Pre-ordering coffee at scale is and always was a bad idea.
What’s strange is that at some point someone with a PowerPoint thought otherwise, and that he/she successfully convinced senior Starbucks executives of the case too.

The pitch no doubt argued that providing customers with pre-ordering functionality would help differentiate the coffee chain in the market by making it more efficient and customer focused while also allowing it to be more responsive to market fluctuations. With technology, they probably argued, every customer could benefit from the special treatment and favouritism shown to habitual or repeat customers in small town coffee shops. But this time at scale....MORE
Do read the comments if time permits.

Risk: "Fed Talk Could Get a Lot More Hawkish Next Week"

We originally had this set to post on Sunday morning but it's possibly pretty important, if for no other reason than giving markets an excuse to do what they were already leaning toward, so here's a repeat performance:
From Barron's Income Investing:

The market’s dovish interpretation of the latest Federal Open Market Committee meeting was likely as much a surprise to Fed officials as it was to investors.

Goldman Sachs economist Jan Hatzius wrote this week:
We feel quite confident that they were not aiming for a large easing in financial conditions. After all, the primary point of hiking rates is to tighten financial conditions, perhaps not suddenly but at least gradually over time.
Hatzius expects the Fed to start walking back some of that dovishness....MORE

"....Fake Science Conferences Abound for Fraud and Profit"

Who knew?
From Canoe (Canada):
Here’s the latest way to cheat your way to success in the academic world: Give a speech at a science conference that’s so awful, it will let you present research about flying pigs.

All you have to do is pay cash.

Companies that host thousands of these conferences per year are now offering them in Canada, and one operator is using former Canadian companies as a front.

Fake — but expensive — conferences help people to become professors, doctors and other professionals without proper training by providing credentials they haven’t really earned. They are marketed heavily in the Third World.

And far from being a victimless fraud, this cheats the taxpayer and spreads misinformation and incompetence in important professions.

This form of research fraud is simple. It goes like this:

When a scientist discovers something big, he or she publishes the findings in a science journal.

But organizations known as “predatory” journals will publish fake studies and make them look like real science. They help unqualified people to get university jobs or promotions, by making it appear they published legitimate discoveries. The journal collects a steep fee.

Last fall, Postmedia exposed an Indian company called OMICS International for publishing fabricated papers and making them look legitimate. OMICS expanded into Canada last year, taking over two Canadian publishing houses.

But it turns out there’s more.

OMICS and others also run conferences that accept outrageously fraudulent work, Postmedia has now found. People who pay to participate in them can establish professional credentials without doing any real research work. They tell their own universities how they have been invited to present their important findings to a high-level symposium....MORE 
HT: Fark

Phi Scamma Jamma, baby!

Sunday, March 19, 2017

"Sweet Dreams Are Made Of Cheese"

Who am I to dis a brie?

From the British Cheese Board via the Wayback Machine:
Sunday, 25 September 2005
Sweet Dreams Are Made Of Cheese
The age old myth that cheese gives you nightmares has finally been laid to rest this week following the release of a new study carried out by the British Cheese Board.

The in-depth Cheese & Dreams study, a first of its kind, reveals that eating cheese before bed will not only aid a good night’s sleep but different cheeses will in fact cause different types of dreams.
Of the 200 volunteers who participated in the week-long study, 72% slept well every night, 67% remembered their dreams and none recorded experiencing nightmares after eating a 20g piece of cheese half an hour before going to sleep.

A lot of people still believe the old wives tale that cheese gives you nightmares but this study endorses the scientific facts.

“ One of the amino acids in cheese – tryptophan – has been shown to reduce stress and induce sleep so cheese may actually help you have a good night’s sleep,” says Dr Judith Bryans, Nutrition Scientist at The Dairy Council.

85% of females who ate Stilton had some of the most unusual dreams of the whole study. 65% of people eating Cheddar dreamt about celebrities, over 65% of participants eating Red Leicester revisited their schooldays, all female participants who ate British Brie had nice relaxing dreams whereas male participants had cryptic dreams, two thirds of all those who ate Lancashire had a dream about work and over half of Cheshire eaters had a dreamless sleep.

Commenting on the study, Neil Stanley, PhD Director of Sleep Research HPRU Medical Research Centre at the University of Surrey says: "The Cheese and Dreams study conducted by the British Cheese Board is the first study of its kind and suggests that eating cheese before you go to bed may actually aid a good night’s sleep....MORE
...British Brie caused all participants to sleep very well, but dreams varied between males and females; women tended to experience very nice dreams, such as Jamie Oliver cooking dinner in their kitchens, or relaxing on a sunny beach. By contrast, the men who ate Brie experienced rather odd, obscure dreams, such as driving against a battleship, or having a drunken conversation with a dog....  
HT: Freakonomics

Just so we're clear, the intro line is not mine, it goes back, at minimum, to the late '80's/early '90's. Maybe as early as the day after the song dropped.

The correct attribution would be "-anon."

Here are some continuation lyrics and again, I can't stress this enough, not by me:

Sweet dreams are made of cheese
Who am I to dis a Brie
I cheddar the world and a Feta cheese
Everybody's looking for Stilton
Some cheese wants to be Bleu, too
Some cheese wants to be Buchette d'Anjou
Some cheese wants to be cubed
Some cheese will be braided by you

Sweet dreams are made of cheese
Colby or Chevre, if you please
I ferment the milk and then I squeeze
Everybody needs penicillium

Mold is better, on the rind
Mold is better, leaves taste behind
Mold is better, cheese is confined
Mold is better, use my enzymes...

...MORE at amIright's parody page

New York Fed: "Crisis Chronicles: The Long Depression and the Panic of 1873"

From the Federal Reserve Bank of New York's Liberty Street Economics blog, February 5, 2016:
It always seemed to come down to railroads in the 1800s. Railroads fueled much of the economic growth in the United States at that time, but they required that a great deal of upfront capital be devoted to risky projects. The panics of 1837 and 1857 can both be pinned on railroad investments that went awry, creating enough doubt about the banking system to cause pervasive bank runs. The fatal spark for the Panic of 1873 was also tied to railroad investments—a major bank financing a railroad venture announced that it would suspend withdrawals. As other banks started failing, consumers and businesses pulled back and America entered what is recorded as the country’s longest depression.

Westward Ho!
Formed in 1861, Jay Cooke & Co. was a bank that achieved fame and fortune by aggressively marketing government bonds during the Civil War. By 1869, it had expanded into financing railroads, specifically the Northern Pacific Railway that would link Duluth to Seattle. The line would be part of a transcontinental system that would carry goods from the Pacific Coast to the Great Lakes and then to Europe. Unfortunately, the project was plagued by mismanagement and construction challenges, and a growing funding gap made more challenging by the Credit Mobilier scandal.

In that case, the Union Pacific Railroad got caught using a shell company, Credit Mobilier, to inflate costs to maximize government subsidies for building the line. The revelation of this deception in 1872 damaged investor confidence in railroads and made Congress much less willing to support new railroad construction, including by the Northern Pacific.

Jay Cooke & Co. knew it was sinking at least a year before it suspended payments. “In the fall of 1872, the London partner Fahnestock observed that it was cruel to the depositors to use their money to support Northern Pacific bonds, and that the railroad should go to the market to borrow at any prices. The near panic in September 1872 made this impossible.” (Kindleburger in Crashes and Panics, p. 80)

The firm kept bleeding money and on September 18, 1873, suspended deposit withdrawals from its New York and Philadelphia offices (houses) with the following announcement: “The immediate cause of suspension of Jay Cooke & Co. was the large drawing upon them by the Philadelphia house and their own depositors during the last fortnight. Both houses had suffered a large draw upon their deposits in consequence of the uneasy feeling which has recently prevailed, and which has affected, more or less, all houses closely identified with new railroad enterprises.”

The announcement caused pandemonium on Wall Street:

The first intimation which came into the Stock Exchange of any change in the programme was contained in a brief notice, which said authoritatively that Jay Cooke & Co. had suspended payment. To say that the street became excited would only give a feeble view of the expressions of feeling. The brokers stood perfectly thunderstruck for a moment, and then there was a general run to notify the different houses in Wall street of the failure. . . . The members of the firms who were surprised by this announcement had no time to deliberate. The bear clique was already selling the market down in the Exchange, and prices were declining frightfully. . . . Some of the men who were ruined swore, some of them wept, some went out of the street without saying a word; others talked of the trouble in a jovial way and went about trying to borrow money from friends. . . (New York Times, September 19, 1873)
The Fallout
The panic led to bank runs and bank failures, followed by commercial bankruptcies and unemployment so severe that the downturn was called the Great Depression at the time. It lasted so long, more than five years, that it is now known as the Long Depression. Those were miserable years for many, including veterans....MORE

"Gen Z Tells Us What They Really Think of Millennials"

"They're kinda like Nazis. [They] completely destroyed our reputation. They're just dicks because of how annoying and hipster they are." 
Yeah, but other than that...

More at Vice

Chuck Berry Reviews Punk Acts (Ramones, Sex Pistols et al) 1980--UPDATED

Update: Flashbak has the entire original interview.

From Open Culture:

Chuck Berry (RIP) Reviews Punk Songs by The Ramones, Sex Pistols, The Clash, Talking Heads & More (1980)
When the punk wave broke in the UK and the States in the mid-1970s, it threatened to leave behind the established rock bands that once seemed so rebellious. Pete Townshend, the guitar-smashing songwriter of The Who, said: “I kind of welcomed [the arrival of punk], challenged it, and wanted it to happen, and then I realized that the person they wanted to shoot was me.” And indeed Sid Vicious, of the Sex Pistols, would say, “I don’t have any heroes. They’re all useless to me.”...MORE
The Sex Pistols’ “God Save the Queen”:
“What’s this guy so angry about anyway? Guitar work and progression is like mine. Good backbeat. Can’t understand most of the vocals. If you’re going to be mad at least let the people know what you’re mad about.”

The Clash’s “Complete Control”:
“Sounds like the first one. The rhythm and chording work well together. Did this guy have a sore throat when he sang the vocals?”

The Ramones’ “Sheena is a Punk Rocker”:
“A good little jump number. These guys remind me of myself when I first started, I only knew three chords too.”

The Romantics’ “What I Like About You”: 
“Finally something you can dance to. Sounds a lot like the sixties with some of my riffs thrown in for good measure. You say this is new? I’ve heard this stuff plenty of times. I can’t understand the big fuss.”...

"BBC Mum"

Via the Express Tribune (Karachi):

Which prompted a search for what else is out there. Here's One of the better ones:

"The True True Size of Africa"

Hoisted from the link-vault.

From The Economist's Graphic Detail, Nov. 10, 2010:
LAST month Kai Krause, a computer-graphics guru, caused a stir with a map entitled "The True Size of Africa", which showed the outlines of other countries crammed into the outline of the African continent. His aim was to make "a small contribution in the fight against rampant Immappancy"—in particular, the fact that most people do not realise how much the ubiquitous Mercator projection distorts the relative sizes of countries.
[the link used by The Economist has died, here's a fresh version]
The True Size of Africa
A sphere cannot be represented on a flat plane without distortion, which means all map projections distort in one way or another. Some projections show areas accurately but distort distances or scales, for example; others preserve the shapes of countries but misrepresent their areas. You can read all the gory details on Wikipedia.

Gerardus Mercator's projection, published in 1569, was immediately useful because it depicts a line of constant bearing as a straight line, which is handy for marine navigation. The drawback is that it distorts the shapes and areas of large land masses, and the distortion gets progressively worse as you get closer to the poles. (Africa looks about the same size as Greenland under the Mercator projection, for example, even though it is in fact 14 times bigger.) This was not a big problem for 16th-century sailors, of course, and the Mercator projection remains popular to this day.

In Mr Krause's map (above) he seems to have used the shapes of the countries from a Mercator projection, but has scaled up the outline of Africa, without changing its shape, to show the appropriate area. An alternative and arguably more rigorous approach would be to repeat the exercise using an "equal area" projection that shows the countries' areas correctly while minimising shape distortion. These two properties are the hardest to balance when showing the whole world on one map. I decided to rework Mr Krause's map using Gall's Stereographic Cylindrical Projection (1855) with two standard parallels at 45°N and 45°S. Distortions are still evident at the poles, but for most countries shape is maintained, and their areas are shown correctly. As you can see (below), the results are distinct from Mr Krause's map. But however you look at it, his point is a good one: Africa is much bigger than it looks on most maps.

"Fed Talk Could Get a Lot More Hawkish Next Week"

From Barron's Income Investing:
The market’s dovish interpretation of the latest Federal Open Market Committee meeting was likely as much a surprise to Fed officials as it was to investors.

Goldman Sachs economist Jan Hatzius wrote this week:
We feel quite confident that they were not aiming for a large easing in financial conditions. After all, the primary point of hiking rates is to tighten financial conditions, perhaps not suddenly but at least gradually over time.
Hatzius expects the Fed to start walking back some of that dovishness....MORE

Saturday, March 18, 2017

"Send More Chuck Berry"

With the passing of Chuck Berry earlier today here's a bit of trivia that will probably make it into the obituaries albeit in an abridged version.

From the Financial Times, Letters:  

Message from space was ‘Send more Chuck Berry’
March 4, 2016
In David Cheal’s story on Blind Willie Johnson’s song “Dark Was the Night, Cold Was the Ground” and its inclusion in the disc attached to Voyager 1 space probe in 1977, he quotes Steve Martin as joking that a message was soon received from another world that read “Send more Blind Willie Johnson”. (The Life of a Song, Life & Arts, February 26.) This is not correct. The joke was made in a skit on Saturday Night Live on April 22 1978, in which Martin’s character Cocuwa, a psychic, reported that the message received was “Send more Chuck Berry”....
Correct and correct. Typical FT reader.

After a rather rocky stretch in the markets and business in the second half of 2008 we reprised a 2007 post for New Year's Eve:

Happy New Year! Earth's Greatest Hits 

For this last post of 2008 I'll link to one of the more optimistic stories I know:

The Mix Tape of the Gods

Published: September 5, 2007
THIRTY years ago today, the Voyager 1 space probe — a one-ton robotic craft whose long antennas make it look rather like a spider the size of a school bus — was launched from Cape Canaveral, Fla., on a mission to reconnoiter Jupiter and Saturn. To succeed, Voyager would have to survive five years in the vacuum of space, where it would encounter cosmic rays, solar flares, the hurtling rocks and sand of the asteroid belt, and Jupiter’s intense radiation bands.
The probe did all that, transmitting back reams of scientific data and memorable color photos: of the sputtering red and yellow volcanoes of Jupiter’s moon Io; of the shimmering blue ice that shrouds Io’s fellow satellite Europa, beneath which a liquid ocean is suspected to dwell; of Saturn’s myriad rings and the murky mysteries of its orange satellite, Titan, whose hazy atmosphere is thought to approximate that of the early Earth .
Having accomplished its mission, Voyager 1 might have quietly retired. Instead it remains active to this day, faithfully calling home from nearly 10 billion miles away — so great a distance that its radio signals, traveling at the speed of light, take more than 14 hours to reach Earth. From Voyager’s perch, the Sun is just another star, south of Rigel in the constellation Orion, and the Sun’s planets have faded to invisibility.

Like its twin, Voyager 2 — which dallied behind to examine the outer planets Uranus and Neptune and is departing the solar system on another trajectory — Voyager 1 is approaching the edge of the solar system. That limit is defined by a teardrop-shaped bubble called the heliosphere, where the solar wind (particles blown off the Sun’s outer atmosphere) comes to a halt.
If all continues to go well, Voyager should pierce the heliosphere’s outer skin by around 2015. It will then depart into the void of interstellar space, where it is destined to wander among the stars forever.
Mindful of this mind-boggling fact, the astronomers Carl Sagan and Frank Drake persuaded NASA to attach a gold-plated phonograph record to each of the Voyager spacecraft.
Containing photographs, natural sounds of Earth and 90 minutes of music from all over our world, the record was intended to preserve something of human culture beyond what an intelligent extraterrestrial, encountering the craft at some far-distant time and place, might infer from the spacecraft itself.
The information etched into the grooves of the Voyager record is expected to last at least one billion years. That’s a long time: A billion years ago, life on Earth was first venturing forth from the seas....MORE
Here's the cover of the disc (from NASA)-

Golden Record
Read more about the Golden Record Cover
(Click on the image for a larger view)

Here's a description of what the markings mean (you want your recipient to enjoy their extraterrestrial 'Howdy')....

....On April 22, 1978 during an SNL segment, "Next Week in Review" it was announced that after capturing the Voyager spacecraft, the first alien message received by earth would be:

"Send more Chuck Berry."

Episode 18/Season 3 is considered one of the greatest SNL episode ever.
Here's the transcript.
...Maxine Universe: Well, uh, Cocuwa -- you predicted every Time Magazine cover for the last two years. Um, what's going to be on the Time Magazine cover this week -- uh, next week -- the Pope's cloning, the nuclear dump disappearance, or the Boone-napping?

Cocuwa: NONE of the above, Maxine! You know that my adopted name -- Cocuwa -- means "To help without compensation" in Hawaiian. And I have NOTHING to gain in ANY way from the personal wealth of my great gift. I believe... next week's Time cover... will be about the recent communication from outer space.

Kreeg Antwoord: Uh -- uh -- uh, Cocuwa -- I agree with you that it would be the biggest story if the message was of any importance. But we all know how trivial it is.

Maxine Universe: Well, what -- you mean a foreign planet will actually send a message next week?

Cocuwa: No! A foreign planet actually SENT us a message last week. Next week, the government will reveal the message to the public.

Kreeg Antwoord: [ coughing ] You see, it all started on August 20th, 1977, when NASA put up a recording of the sounds of Earth on Voyager I. A two-hour long tape included, uh, natural sounds of animals, a French poem by Gaugliere, a passage from the Koran in Arabic, messages from President Carter, United Nations Secretary Kurt Waldheim, music -- everything from classical to Chuck Berry.

Maxine Universe: Uh -- and you're saying that the, uh -- another civilization has found the tape?

Cocuwa: Yes. They've sent us a message that actually proves it. It may be just four simple words, but it is the FIRST positive proof that other intelligent beings inhabit the universe.

Maxine Universe: Uh -- what are the four words, Cocuwa?

Cocuwa: The four words that came to us from outer space -- the FOUR words that will appear on the cover of Time Magazine next week -- are: [ he holds up the magazine" "Send More Chuck Berry".

[ the audience applauds enthusiastically ]
The episode is on Hulu.

Finally, here's the playlist from NASA. Blind Willie Johnson is on the disc.

He and Chuck Berry left our solar system and entered interstellar space in August 2012. Here's the real-time odometer.