"A Massive 1,109-Carat Rough Diamond Is Too Large to Sell"

What's the next step after "First World Problems"?
From Town&Country:

The "Lesedi La Rona" stone didn't find a buyer at auction last summer.

A massive, tennis ball-sized rough diamond, the second largest ever unearthed, has been deemed too large to sell. Found by the Lucara Diamond Corporation in Botswana, the stone has since been named Lesedi la Rona, which means "our light" in Tswana, the language spoken in the area.

The owners originally sought a buyer for the rough cut, placing the stone up for auction last summer, but after the 1,109-carat rock failed to meet the $70 million minimum reserve price set by Sotheby's, industry insiders say the gem will be cut. 

"It's only the second stone recovered in the history of humanity over 1,000 carats. Why would you want to polish it?" Lucara's chief executive told Fortune. "The stone in the rough form contains untold potential... As soon as you polish it into one solution, everything else is gone."

However, the stone is so large that it cannot be accurately assessed. 

"When is a diamond too big? I think we have found that when you go above 1,000 carats, it is too big - certainly from the aspect of analyzing the stones with the technology available," Panmure Gordon mining analyst Kieron Hodgson told Fortune....MORE

The rock had been even bigger but a  373-carat hunk broke off before the sorting process got to them.

Graff's newest acquisition

Flying taxis to transport passengers in Moscow in 2018

As noted back in 2016:

As the only analysts covering the nascent as-yet-theoretical autonomous electric flying taxi market we intend to be the the go-to source for all things autonomous electric flying taxi and/or theoretical....

There have been some developments.
From TASS:

MOSCOW, July 20. /TASS/. First self-flying taxis will appear in Moscow as soon as the year 2018 after relevant legislation is approved, the head of the Russian company ATM Freight Drones told TASS on Wednesday.

The company tests unmanned aerial vehicles in a Moscow technology park.

"The theme is rather expansive since it features technical aspects, which we have managed to overcome, and legal aspects as well," Alexander Atamanov said. "We have put forward an initiative to amend the current legislation so that personal drones can be used for transportation of cargoes and passengers. Moscow government’s position is positive but much depends on the federal authorities. So, if we manage to do it, Moscow will become one of the most innovative capital cities in the world. I think that the most positive scenario is one year."

There should be "a narrow echelon of 10-15 meters above the ground, flyovers, underpasses, rivers, and railways where transport goes," he said.

Flying taxis are "tested in fenced areas", in the Moscow and Skolkovo technology parks, he said. No traffic jams

At first, flying taxis will be available for short distance trips. A special app should be downloaded on the mobile phone to call a flying taxi. Fares are not expected to be higher than the current taxi rates.

High speeds and no traffic jams are main advantages of flying taxis, Atamanov said....MORE

Meanwhile, it appears the much heralded Dubai taxi service, which was due to begin service in July, has been delayed a bit.
From The National (UAE):

World's first self-flying taxi coming to Dubai 'within months'

Velocopter can carry two passengers in complete safety and will have new laws to guide operations, the RTA says.

The world’s first autonomous flying taxi is expected to be in the air by the end of the year, Dubai transport officials have revealed.

The German-designed Volocopter will begin testing in the final quarter of 2017, followed by a five-year evaluation period.

The RTA also announced that it is working with the Dubai Civil Aviation Authority to develop the world’s first autonomous aviation laws and operational guidelines. Because the Volocopter carries only passengers, its occupants do not need a pilot license.

A new video released by the Roads and Transport Authority (RTA) shows what it might be like to travel in the pilotless aircraft, which can carry up to two passengers and is powered by 18 electric rotors....MORE

If interested see also:
Airbus Reveals Ambitious Plan for Autonomous Flying Taxis
The Effect Of Airbus' Cash Squeeze On Their Autonomous Flying Taxi Project Is Probably Nil
Uber to Challenge Airbus in the Autonomous Electric Flying Taxi Business

Bugsy Siegel: A Love Story

A good story well told.
From Los Angeles Magazine, September 29, 2014:

On June 20, 1947, gangster Benjamin “Bugsy” Siegel was slain in Beverly Hills, his body riddled with bullets. One family claims to know who did it. Is one of the nation’s most famous cold cases heating up?

This is not your Ozzie and Harriet family, needless to say,” Robbie Sedway tells me one afternoon in May. We are sitting together in the dining room of his Pacific Palisades condo. In front of him is a cardboard box, and he is riffling through its contents: photos of made men, murderers convicted and otherwise, even a bona fide movie star. For Robbie, this is what passes for family memorabilia. Adjusting his glasses, he pulls out a posed portrait of his mother, Bee. Once she was a gangster’s wife. She married Jewish mobster Moe Sedway when she was 17 and he was 41, and soon she became the confidant of Sedway’s old friend and business partner, Benjamin “Bugsy” Siegel.

Robbie, a 71-year-old realtor, hands me a sheaf of yellowed newspaper clippings about his dad, Moe (“Czar of Vegas,” reads one headline). A treasured business card is embossed with Moe’s name and a glossy red bird. “The Flamingo,” it says. “Vice-president.” In the 1930s and ’40s, Bee and Moe lived a glamorous L.A. life. They had a huge Beverly Hills mansion with maids upstairs and down, a Cadillac custom painted to match Bee’s copper hair, a 5-carat diamond that hung on a chain around Bee’s neck. Now Robbie’s parents and their fortune are long gone, and he is the keeper of the artifacts they left behind. His second wife, Renee, joins us at the table as he pulls out a taped two-hour interview that his mother granted to documentary filmmakers in 1993. Most of the interview ended up on the cutting room floor, but there’s good stuff there, Robbie says. Next he offers me a ragged Xerox copy of a 79-page typewritten book proposal, which his mother called Bugsy’s Little Lunatic. The book was not written; the proposal never went to market.

In 2007, Robert Glen Sedway was diagnosed with throat cancer, which he beat. It’s been dormant, but suddenly it’s back. His build is still solid, and he has most of his thick silver hair, but he has begun moving more slowly and wipes his eyes often with a tissue. The time is right, he’s decided, to tell me the story he’s heard again and again but that has never been repeated outside his family. There is no one left to tell him no. Not his father, whose heart failed in 1952 while on a cross-country flight to Miami when he was just 57. Not his mother, who died in a Corona rest home in 1999 at the age of 81. Not Robbie’s only sibling, Dick, a sometime heroin user with multiple sclerosis who died in 2002, when he was 65.

“I’m at a point in my life where my health is not good,” says Robbie, shrugging when I ask him, Why break your silence now? “Everyone’s been wondering for 67 years. I mean, why not?”
That’s about the moment when the front door of the condo pops open, swinging wide. Robbie’s wife is startled and gets up from the table. After 20 seconds, the door shuts again, seemingly of its own accord, and Renee goes to see if there’s anyone outside. There’s not. Renee turns to her husband. “Your mother was here,” she whispers to him. “Bee just entered the house.”

Everyone knows that the longer a case remains unsolved, the harder it is to crack. That’s why most of us raise an eyebrow whenever someone steps up decades after the fact and announces that they can identify the Zodiac Killer, say, or take you to the exact spot in the Bermuda Triangle where Amelia Earhart’s plane is rusting away. Today Robbie is that someone. He says he knows who killed Bugsy Siegel. He says he can close the Beverly Hills Police Department’s most famous open case—a murder that, except for perhaps the disappearance of Jimmy Hoffa, is America’s greatest unsolved Mob mystery. Contrary to speculation, he says, Siegel wasn’t killed in a dispute over money. He was killed for love. “It’s a love story,” Robbie says. And his mother, Bee, was at the center of it all.

More than 50 years ago, Robbie says Bee told him the identity of Siegel’s killer. Several weeks ago he promised to tell me. Since then, I’ve been striving to temper my excitement with skepticism. So when Robbie’s wife insists that 15 years after Bee died, she remains a ghostly presence in their house, I try not to roll my eyes. Renee and Robbie may believe that Bee is as domineering in death as she was in life, but I’m not so sure. Still, I have to admit: I feel as if I’ve been chasing phantoms.

Returning to Renee and Robbie’s condo a few weeks later, I tell them that I’ve stumbled across a photo of Bee, taken backstage at the Paradise Cabaret in New York in the mid 1930s. I found it during that most mundane of reportorial exercises (a Google search) after I set out to envision the world that the teenage Bee inhabited when she was a vaudeville dancer. I didn’t think I’d find Bee herself—just images of the Paradise, where she performed two shows a night. But then in an uncaptioned photo there she was, bright-eyed and bare shouldered, a grinning sprite of a 17-year-old girl.....MUCH MORE 

Automation: "Professionals and Managers: You’re Next"

Last Saturday Mr. Musk said* to the National Governors Association:

“There certainly will be job disruption. Because what’s going to happen is robots will be able to do everything better than us, I mean, all of us.”

which many in the audience took to mean their kissing babies and cutting ribbons gig might be at risk.
This focused the attention of the politicians.

And the latest, from City Journal:

Automation may replace skilled workers sooner than you expect.

Here’s the dirty little secret about automation: it’s easier to build a robot to replace a junior attorney than to replace a journeyman electrician. And that fact helps explain why economists and politicians are feeling misgivings about “creative destruction,” which, up to now, they have usually embraced as a net good for society. Technology and automation, they’ve argued—correctly—boost productivity and create more jobs overall (even as some kinds of work get eradicated).

In the age of the algorithm, though, they’re not so sure any more, and no wonder: instead of creative destruction coming to factories and farms, it’s sweeping through city centers and taking white-collar jobs. The chattering classes have talked and written for years about the “end of work.” Doubtless many fear that the end of their work is in the offing, this time around.

Understandably, most of the media focus has been on the replacement of manual labor—real robots doing real tasks provide better visuals than an invisible service “bot” in the cloud. But focusing on hamburger-flipping androids is a distraction from where the real revolution is taking place. In any case, automation doesn’t really explain the decline in factory employment: manufacturing-sector investment in information technology has been flat or declining for more than a decade; and productivity, a critical indicator of (and the purpose of) automation has also been flat. Factories are actually underinvested in technology.

But Silicon Valley has been busy building software that will transform businesses, particularly those associated with shopping malls, Hollywood, hotels, taxis, newspapers, broadcast TV, finance, and even education. Some algorithms can teach basic math better than most humans with a B.Ed. Next up are the many paperwork tasks currently administered by bureaucrats and regulators....MORE 

*At the conference Mr. Musk also said:

"The thing that is the most dangerous — and it is the hardest to ... get your arms around because it is not a physical thing — is a deep intelligence in the network.

"You say, 'What harm can a deep intelligence in the network do?' "Well, it can start a war by doing fake news and spoofing email accounts and doing fake press releases and by manipulating information"

but I imagine the Governors were still thinking "Not my job, the people need me!"

Here's the C-SPAN video and transcript segments.

"'Miscalculated' Qatar blockade has backfired, says former UK Middle East chief"

From al-Araby:

The Saudi-led Qatar blockade was a miscalculated move that lacked strategy and backfired, the former the head of Britain's Foreign Office Middle East desk said.

The decision to impose an all-out blockade and sanctions on the tiny Gulf emirate backfired, Sir William Patey said, noting instead of the intended regime change, the blockade had in fact boosted the emir's support across the country.

“This has all the hallmarks of a policy that has not been thought through. It does not smack of a considered strategy,” Patey said at roundtable discussion in London organised by the Conservative Middle East Council on Saturday.

“It is not a smart move even if you are sympathetic to their vision. It is a short cut to achieve something quickly and I think they miscalculated and I think they did think that with Trump behind them, Qatar would back down.

"They raised these stakes because they thought Qatar would back down in the end, so I think they were a bit surprised," he said, noting "the Qataris are rallying round their leadership"....MORE

Also at al-Araby:
UAE rejects dialogue with Qatar 'until it revises policies'
Bin Salman 'exploited rival's painkiller addiction' to become Saudi heir

"Norway Takes Lead in Race to Build Autonomous Cargo Ships"

We'll reprise our headline from mid-May:
He May Not Have Received His Nobel Prizes But The World's First Fully Electric Autonomous Container Ship Will Be Called the Birkeland

Last month Norway and Yara celebrated the 150th anniversary of the birth of the company's co-founder: "The Birkeland Anniversary 2017".

And here's the latest from the Wall Street Journal:

OSLO—Two Norwegian companies are taking the lead in the race to build the world’s first crewless, autonomously operated ship, an advance that could mark a turning point in seaborne trade.

Dubbed by shipping executives the “Tesla of the Seas,” the Yara Birkeland now under development is scheduled in late 2018 to start sailing fertilizer 37 miles down a fiord from a production facility to the port of Larvik. Using the Global Positioning System, radar, cameras and sensors, the electric ship is designed to navigate itself around other boat traffic and to dock on its own.

The vessel will cost $25 million, about three times as much as a conventional container ship of its size, but its backers say without need for fuel or crew it promises to cut annual operating costs by up to 90%. The 100-container ship is scheduled to be in the water toward the end of next year, though initially it will be tested with a human at the controls.

The Birkeland is being jointly developed by agriculture firm Yara International ASA and Kongsberg Gruppen AS A, which builds guidance systems for civilian and military uses.

Petter Ostbo, Yara’s head of production who leads the project, said the company would look to invest in bigger ships and use them for longer routes once international regulations are in place for crewless vessels. “Maybe even move our fertilizer from Holland all the way to Brazil,” he said.

The International Maritime Organization, which regulates maritime travel, doesn’t expect legislation governing crewless ships to be in place before 2020.

Shipping executives say autonomous vessels will be popular for short sea routes, but doubt they will replace oceangoing ships that move thousands of containers across continents with an average crew size of around 25.

“It’s not a matter of technology, which is already there, but a business case,” said Lars Jensen, chief executive of SeaIntelligence Consulting in Copenhagen. “Autonomous ships are expensive to begin with, and have to be built very robust, because if they break down, the cost of getting a team to fix them it in the middle of the ocean will be very high.”...MUCH MORE

Just as long as the big blue boat doesn't become pirate-bait.
I'd watch for raiding parties out of Denmark.

Questions America Wants Answered: "Are Macro Gods in Big Trouble?"

The thing I don't understand in stories like this on macro or in "funds fleeing commodities" stories is:
In two-sided markets the ability to choose long or short is a big source of alpha generation (the rare 'true' arb opportunity is another) so someone who fails to make money is—almost by definition—exposing themselves as a bit of a scam, leveraged beta gussied up as 2-and-20 alpha.

From Bloomberg Pension Pulse via:

Saijel Kishan of Bloomberg reports, Markets No Longer Make Sense to Macro Managers:

Financial markets no longer make sense to macro managers like Mark Spindel.

After spending three decades focusing on things like economic trends, currency moves, politics and policy, Spindel has been confounded by markets shaped by low volatility, algorithms and more. He finally gave up and closed his nine-year-old hedge fund.

“I felt the intensity of following markets at a time of increasing political and economic confusion very hard,” said Spindel, founder of Potomac River Capital in Washington. “My entire career had centered on an understanding of monetary politics and I had trouble getting my head around it all. It was exhausting.”

These are troubled -- and troubling -- times for macro managers, those figurative heirs of famed investor George Soros who were once dubbed the masters of the universe. They’ve barely made money this year and once again, their returns pale next to those of cheaper index funds. Many investors are looking elsewhere.

Andrew Law at Caxton Associates has posted record losses. Alan Howard had the worst first-half in his hedge fund’s history. Even the old hands in the business such as Louis Bacon haven’t been spared from losing money. And Soros’s son, Robert, conceded last month that his family firm has made fewer macro bets amid “lackluster” opportunities.

It’s enough to make a macro man wonder: in an age of untested central bank measures and algorithms, can this classic hedge fund style pay off like it used to?

Opaque Markets

The old guard made their fortunes when markets were more opaque, less efficient and when they had access to market information privy only to a few. Price trends were easier to latch onto, leverage heavily used and competitors fewer. Today, funds face an onslaught of technology that’s disseminating information more quickly and widely, while some algorithms are able to spot -- and capture -- price anomalies almost instantly. And computer models can more cheaply follow market trends.

Macro managers posted their worst first-half since 2013, losing on average of 0.8 percent after a 1 percent decline in June, according to Hedge Fund Research Inc. data. The managers returned less than 1 percent annually over the past five years. The broader hedge fund industry returned 3.7 percent in the first half after barely making any money last month, and returned about 4.9 percent annualized over the past five years, the research firm said.

After winning a brief reprieve at the end of 2016 in the wake of President Donald Trump’s election win, macro managers’ fortunes reversed this year as the dollar and oil declined, stocks rallied and a political crisis erupted in Brazil. Volatility in equity and currency markets also fell to their lowest in years. In recent weeks, though, the dollar and Treasury yields have risen amid a hawkish tone from developed-nation central banks.

Investors have lost patience with the strategy. They pulled about $3.8 billion from discretionary macro managers in the first quarter, the fifth straight quarterly outflow, while adding $4.9 billion into computer-driven macro funds, HFR data show.

For years, managers have blamed central bank policies for their failure to deliver stand-out profits. Low interest rates globally made it harder to make money from differences among nations, they say. And as computers probabilistically forecast economic and market data, some managers say it’s a challenge to compete with algorithms that can be a driver of short-term price action, and create shorter and sharper investment cycles.

Disconnected Markets

Spindel, a former investment chief at a World Bank unit, is searching for answers to why macro didn’t work for him. Things started going awry for the 51-year-old just after Greece skirted Grexit two years ago. Spindel was wrong footed by China’s currency devaluations and Brexit -- at times trading from his couch at home during the night to keep abreast of political developments overseas.

Over a salad lunch during a visit to New York last month, Spindel recounted times when he got his economic forecasts right but market predictions wrong. He referred to charts that show a declining relationship between economic-data surprises and bond yields, and discussed how he was perplexed by new central bank measures.

“The dispassion felt harder in the Grexit-Brexit window,” Spindel said, whose fund generated an annualized 11 percent return from 2007 to July 2015. “Markets had become increasingly disconnected with economics and politics.”

In addition, increased regulation and fee pressure made it more expensive to run his $760 million firm, he said. After losing 12 percent through September last year, he returned money to clients.

Elephant in Room

“The elephant in the room is that macro should have done well in the past seven or so years because of all the political and economic events,” said Adam Duncan, a managing director at Cambridge Associates, a Boston-based firm that advises clients on investing. “Yet no one has made any money. The idea that the opportunity set hasn’t been there is just not true. Markets have been moving all over the place.”...MUCH MORE

Gig Economy, 18th Century Style

Interestingly (or not, your call) the two-wheeled one-horse open carriage was introduced around the time this article focuses on:

Gig and miniature horse

From The Conversation:

The Uber pool of the 18th century. James Pollard - The London-Faringdon Coach passing 

Buckland House, Berkshire

The Taylor Report, the UK government’s recent major review of modern work, paid particular attention to the “gig economy”. This is the idea that the traditional model of work – where people often have a clear career progression and a job for life – has been upended. It encompasses “self-employed” Uber drivers to the web developer freelancers and it allows workers more freedom – but also denies them benefits and protective regulation.

While it might seem that long-established ways of working are being disrupted, history shows us that the one person, one career model is a relatively recent phenomenon. Prior to industrialisation in the 19th century, most people worked multiple jobs to piece together a living. Looking to the past uncovers some of the challenges, benefits and consequences of a gig economy.

The diaries of three men in 18th-century Britain that I have found give a fascinating insight into how middle class people – the supposed beneficiaries of today’s gig economy – made multiple employments work. Edmund Harrold, a resident of Manchester in the early 18th century was a barber by training and title. He rented a small shop, shaved customers’ heads, bought and sold hair, and crafted wigs. In the hours unfilled by this he worked as a book dealer, and eventually as an auctioneer, selling various items in alehouses within Manchester and in outlying towns. He lent out money when he had it, earning 10% interest on his holdings.

Another enthusiastic embracer of the gig economy was Thomas Parsons, working as a stone carver in the city of Bath in 1769, as well as an amateur scientist – work that we might normally classify as leisure. In the West Country, John Cannon took jobs as an agricultural labourer, excise man, failed maltster, and teacher.

Like people earning money through the gig economy today, the three men were thrown into a world of precariousness. They had independence but fretted frequently about having enough money to pay bills, and feared the potential for failure. Parsons agonised about his ability to pay his debts, noting in one entry....MUCH MORE

Making the World a Better Place, One Pizza At a Time

From Yahoo Finance:

The pizza-making robots that want to change the world

HBO’s comedy “Silicon Valley” makes fun of the way even boring startup tech companies adopt the same mission statement: “To make the world a better place.”

But serial entrepreneur and former Microsoft executive Alex Garden isn’t shy about stating his new company’s path to making the world a better place—through pizza. It’s not just any pizza, though. Zume pizzas are made by robots, and they’re cooked in pizza ovens inside delivery trucks.

“One of the founding principles of this company is that every American has a right to a healthy meal they can afford,” he told me. “If you look at pizza, what is it? It’s high-quality bread, and high-quality organic vegetables, and meats and cheeses. All of these things are things that are good for you in moderation. And the number of calories really is a function of how much sugar is in the food. Zume Pizza is half the calories per slice, roughly half the cholesterol and half the fat, of any of the national leading chains.”

How? “The main reason is sugar,” says Garden, whose pizzas range in price from $10 for a cheese to $20 for a pineapple express.

“We don’t put any extra sugar in the sauce. We don’t put any extra sugar in the dough. And we let our dough age for 24 hours; during that process, the fermentation of the dough further reduces the sugar in it.”

He also has much to say about where he gets his ingredients—directly from the providers, without the warehouses and distribution channels that, say, Pizza Hut (YUM) or Domino’s (DPZ) employ. He uses software—predictive algorithms—to know what he’ll need when. He makes his sausage and tomato sauce in-house.

But that’s not the most headline-grabbing feature of Zume pizza, which was founded in 2015 and currently delivers in Mountain View, California, and surrounding areas. The biggest feature is the robots.

The robots

Inside the Zume kitchen, robots are displacing more human workers every passing month. These days, one robot presses out the dough into the familiar flattened circle; a second and third (Pepe and Giorgio) squirt tomato sauce or white sauce onto each pie; a fourth (Marta) spreads the sauce around (“perfectly, but not too perfectly,” Garden says). Humans apply the toppings, but then a fourth machine (Bruno) scoops up the pizza from the conveyor belt and delicately lays it into the baking oven; a fifth (Leonardo) chops it neatly into eight slices with a single, 200-pounds-of-force stroke....MORE

Coincidentally an earlier post was:
CDC Report: 100 Million Americans Either Diabetic or On Their Way

Supercomputers "The 49th TOP500 List was published June 20, 2017 in Frankfurt, Germany."

We're usually more timely posting the list but reality keeps intruding on the blog stuff.

A couple things to point out, we've made a few mentions of the Swiss supercomputer Piz Daint, here's one of them from last November:
NVIDIA Builds Its Very Own Supercomputer, Enters The Top500 List At #28 (NVDA)

...To be clear, this isn't someone using NVDA's graphics processors to speed up their supercomputer as the Swiss did with the one they let CERN use and which is currently the eighth fastest in the world or the computer that's being built right now at Oak Ridge National Laboratory and is planned to be the fastest in the world (but may not make it, China's Sunway TaihuLight is very, very fast)....

You can see the results of the upgrade in the current list, Piz Daint went from 8th fastest to 3rd fastest in the world. 

Possibly also of interest, NVIDIA's 'puter has been bumped down to #32, behind Facebook's AI/machine-learning supercomputer which is based on NVIDIA's DGX-1 and uses NVDA chips as their graphics accelerator.
From Top 500.org:

June 2017
In the latest rankings, the Sunway TaihuLight, a system developed by China’s National Research Center of Parallel Computer Engineering & Technology (NRCPC) and installed at the National Supercomputing Center in Wuxi, maintains its top position. With a Linpack performance of 93 petaflops, TaihuLight is far and away the most powerful number-cruncher on the planet.

Tianhe-2, (Milky Way-2), a system developed by China’s National University of Defense Technology (NUDT) and deployed at the National Supercomputer Center in Guangzho, China, occupies the number two position with a Linpack mark of 33.9 petaflops.  Tianhe-2 was the number one system in the TOP500 list for three consecutive years, until TaihuLight eclipsed it in June 2016.

The new number three supercomputer is the upgraded Piz Daint, a Cray XC50 system installed at the Swiss National Supercomputing Centre (CSCS). The upgrade was accomplished with additional NVIDIA Tesla P100 GPUs, doubling the Linpack performance of the system’s previous mark of 9.8 petaflops in November 2016, which itself was the result of a significant upgrade. Piz Daint’s current Linpack result of 19.6 petaflops enabled the system to climb five positions in the rankings.

As a result of the Piz Daint upgrade, Titan, a Cray XK7 system installed at the Department of Energy’s (DOE) Oak Ridge National Laboratory, drops to number four in the rankings. Its Linpack mark of 17.6 petaflops has remained constant since it was installed in 2012.

Rounding out the top 10 are:

• Sequoia (17.2 petaflops), an IBM BlueGene/Q system installed at the DOE’s Lawrence Livermore National Laboratory, at number five;
• Cori (14.0 petaflops), a Cray XC40 system housed at the National Energy Research Scientific Computing Center (NERSC), at number six;
• Oakforest-PACS (13.6 petaflops), a Fujitsu PRIMERGY system running at Japan’s Joint Center for Advanced High Performance Computing, at number seven;
• Fujitsu’s K computer (10.5 petaflops), installed at the RIKEN Advanced Institute for Computational Science (AICS), at number eight;
• Mira (8,6 petaflops), an IBM BlueGene/Q system installed at DOE’s Argonne National Laboratory, at number nine; and
• Trinity (8.1 petaflops), a Cray XC40 system running at Los Alamos National Laboratory, at number ten.

With the two Chinese supercomputers and one Swiss system occupying the top of the rankings, this is the second time in the 24-year history of the TOP500 list that the United States has failed to secure any of the top three positions. The only other time this occurred was in November 1996, when three Japanese systems captured the top three spots....MORE

TOP 10 Sites for June 2017
For more information about the sites and systems in the list, click on the links or view the complete list.

• 1-100
• 101-200
• 201-300
• 301-400
• 401-500

Rank	System	Cores	Rmax (TFlop/s)	Rpeak (TFlop/s)	Power (kW)
1	Sunway TaihuLight - Sunway MPP, Sunway SW26010 260C 1.45GHz, Sunway , NRCPC National Supercomputing Center in Wuxi China	10,649,600	93,014.6	125,435.9	15,371
2	Tianhe-2 (MilkyWay-2) - TH-IVB-FEP Cluster, Intel Xeon E5-2692 12C 2.200GHz, TH Express-2, Intel Xeon Phi 31S1P , NUDT National Super Computer Center in Guangzhou China	3,120,000	33,862.7	54,902.4	17,808
3	Piz Daint - Cray XC50, Xeon E5-2690v3 12C 2.6GHz, Aries interconnect , NVIDIA Tesla P100 , Cray Inc. Swiss National Supercomputing Centre (CSCS) Switzerland	361,760	19,590.0	25,326.3	2,272
4	Titan - Cray XK7, Opteron 6274 16C 2.200GHz, Cray Gemini interconnect, NVIDIA K20x , Cray Inc. DOE/SC/Oak Ridge National Laboratory United States	560,640	17,590.0	27,112.5	8,209
5	Sequoia - BlueGene/Q, Power BQC 16C 1.60 GHz, Custom , IBM DOE/NNSA/LLNL United States	1,572,864	17,173.2	20,132.7	7,890
6	Cori - Cray XC40, Intel Xeon Phi 7250 68C 1.4GHz, Aries interconnect , Cray Inc. DOE/SC/LBNL/NERSC United States	622,336	14,014.7	27,880.7	3,939
7	Oakforest-PACS - PRIMERGY CX1640 M1, Intel Xeon Phi 7250 68C 1.4GHz, Intel Omni-Path , Fujitsu Joint Center for Advanced High Performance Computing Japan	556,104	13,554.6	24,913.5	2,719
8	K computer, SPARC64 VIIIfx 2.0GHz, Tofu interconnect , Fujitsu RIKEN Advanced Institute for Computational Science (AICS) Japan	705,024	10,510.0	11,280.4	12,660
9	Mira - BlueGene/Q, Power BQC 16C 1.60GHz, Custom , IBM DOE/SC/Argonne National Laboratory United States	786,432	8,586.6	10,066.3	3,945
10	Trinity - Cray XC40, Xeon E5-2698v3 16C 2.3GHz, Aries interconnect , Cray Inc. DOE/NNSA/LANL/SNL United States	301,056	8,100.9	11,078.9	4,233

"Relative Finger Lengths and The Voices of Bankers [research study]"

From Improbable Research:

Relative Finger Lengths and The Voices of Bankers [research study]

Comes yet another discovery about relative finger lengths. The new study is:

“Prenatal exposure to testosterone (2D:4D) and social hierarchy together predict voice behavior in bankers,” Erik Bijleveld, Joost Baalbergen, PLoS ONE, vol. 12, no. 6, June 28, 2017, e0180008. The authors, at Radboud University and Utrecht University, The Netherlands, explain:

“Prohibitive voice behaviors are employees’ expressions of concern about practices, incidents, or behaviors that may potentially harm the organization…. In a sample of bankers, we used 2D:4D (i.e., the ratio of the length of the index finger to the length of the ring finger)  [and we] used a self-report scale to measure prohibitive voice. For low-ranked employees, lower 2D:4D was related to using less voice. No such relation was found for high-ranked employees. [Our] findings are consistent with the ideas that (a) people low in 2D:4D tend to strive to attain and maintain social status and that (b) remaining silent about perceived problems in the organization is—at least for low-ranked employees—a means to achieve this goal….

“In any case, by bridging management science and neuroendocrinology, this research suggests a new, biological way of thinking about people’s decisions to (not) use voice.”...MORE

A quick heads-up, Improbable's Ig Nobels are just around the corner:

Tickets for the 27th First Annual Ig Nobel Prize Ceremony go on sale THURSDAY, JULY 20, 2017, at noon (US eastern time). We expect (based on experience) the tickets will get snapped up quickly.
The Harvard Box Office handles all ticket sales. The physical ticket office [now in a temporary location in Farkas Hall, 10 Holyoke Street, Cambridge] is open some (but not all!) days from noon to 6 pm.Telephone (+1) 617-496-2222.
The web site is open 24 hours, every day.
Tickets: $75 / $65 / $55 / $35
Student tickets: $70 / $60 / $50 / $30
Ig Glorious tickets....

...MORE 

CDC Report: 100 Million Americans Either Diabetic or On Their Way

There's an opportunity in here, somewhere. The direct costs of healthcare for diabetics has to be five grand a year per. That gives us a half-trillion dollar market to address. Plus, who really wants a countryside full of blind amputees on dialysis?

From Sputnik:

The US Centers for Disease Control and Prevention (CDC) has announced the alarming results of research that shows more than 100 million US adults are living with diabetes or are somewhere in the "prediabetes" spectrum.

According to the report, as of 2015, a whopping 30.3 million Americans are diabetic and another 84.1 million have prediabetes, a condition that typically leads to type 2 diabetes within five years.

Deemed the seventh leading cause of death in the US, the disease incites a wide range of complications, including blindness, heart disease, stroke, kidney failure and the amputation of fingers, toes and whole limbs.

Released every two years, the report doesn’t exactly paint a happy picture of America’s health.
In 2015 alone, an estimated 1.5 million new diabetes cases were diagnosed in people aged 18 and older. Even more shocking, many were completely unaware of their condition.

"Nearly one in four adults living with diabetes – 7.2 million Americans – didn’t know they had the condition," the report noted.

The only good news that came out of the study was that despite the scary statistics, cases weren’t turning up as often as prior research suggested....MORE

How Do We Know James Chanos Got Under Elon Musk's Skin? (TSLA SCTY)

Chanos has been living rent-free in Elon's head for over a year.

The departure this week of the second of Mr. Musk's two cousins, the Rive boys who had been running SolarCity reminded me I had promised another example of the toll the stress of keeping all the plates spinning may be taking on Elon.
In Monday's "Being Told Tesla Exists Because of Tax Breaks and Subsidies Drives Elon Musk Crazy (TSLA)" I said:

Regarding Mr. Musk, it is starting to appear he's a bit thin-skinned, we'll have another example later today or tomorrow....

went into a meeting and forgot until today.

Here's the set-up for this example. Back in the fall of 2015 Chanos was pretty vocal about SolarCity being the quintessential short-it-to-zero-stock. The company was burning enormous amounts of cash, had no path to profitability, and couldn't get anyone but SpaceX to buy their debt.
On October 21 SCTY shared their financials and we posted "Pray For Elon Musk: SolarCity Drops 21% (SCTY)".

The public relations people earned their keep with "SolarCity pivots to slower growth mode" and I recounted how earlier, in August, Lyndon Rive, SolarCity's CEO was told Chanos was shorting his stock and  "SolarCity's CEO When Told Jim Chanos Is Shorting His Stock: "First I've ever heard of the guy" (SCTY)".

Oh dear.
Oh dear, oh dear, oh dear.
SolarCity's CEO is an ahistorical idot.

I mean we're all idots from time to time but most of us at least try to conceal our idot-hood from the freakin' media!

Well, Mr. Chanos apparently took note of this and the next day, while being interviewed on CNBC started out with "One of our big short positions in the renewable space is SolarCity".

The interviewer says "Elon Musk's company" and Chanos replied "Who?"

Here's the video if you care to see it, it's pretty funny: "SolarCity: Jim Chanos On Elon Who? (SCTY)".

Fast-forward to the week before last and, via Sujeet Indap, the FT's Lex US editor:

The Journal does a story on Tesla's need for cash,
One of the fanbois tells Elon not to sweat it,
Mr. Musk uses a variant of the 2015 trash talk:

When @CGrantWSJ wrote a straightforward critique of Tesla, @elonmusk maturely engaged him on the merits.  https://t.co/r73lHJrZkE pic.twitter.com/ay9HhZA6to

— Sujeet Indap (@sindap) July 8, 2017

The upshot? Elon got to use the line, the Rive boys got to say "thanks cuz" for turning their going-to-be-worthless SCTY stock into TSLA, I get to do this post and Chanos gets screwed by the self-dealing bail-out but hey, 3 out of 4 ain't bad.
Plus, the TSLA the cousins received may or may not be worth the current price after the model 3 roll-out.
We shall see.

"7 Signs that You’re NOT a Thought Leader"

A repost from 2016 because I heard the term three times today, once from a guy who actually said

"As a thought leader I...".

Allow me to complete that thought:  

"...ain't".

Somewhere between pretentious and insufferable: thought leadership.
From Marketing Craftsmanship:

Thought Leadership is perhaps the most widely used and consistently abused strategy in professional services marketing. There’s diverse opinion regarding what it is, and fuzzy expectations with respect to its benefits.

Our simple definition is that Thought Leadership is a content marketing strategy designed to leverage intellectual capital as a means to engage target audiences. The practical benefits of Thought Leadership are delivered through the power of “intrinsic selling.”

Without getting overly theoretical, here’s what we mean by that:

“Extrinsic selling” occurs when a seller’s credibility relies heavily on work they’ve performed for other customers. This requires the prospective customer to make a leap of faith; to believe the service provider can match or exceed what’s been done for others. It’s a “trust me” sales approach.

Conversely, intrinsic selling does not require a prospective client to base their selection on work done for others. Instead, it engages the prospective client based on ideas, opinions and advice that enables them to make their own objective decision regarding the seller’s potential to add value. Because no leap of faith is required, it’s a more powerful sales methodology.

The intellectual capital embodied within Thought Leadership is what provides you with credibility, and gives potential buyers the confidence to do business with you. It also serves as a sophisticated sales hook designed to grab their attention.

It’s easier to understand what Thought Leadership is by examining the behaviors that are contrary to its fundamental principles.

So here are 7 signs that you’re not cut out to be a Thought Leader:

1. You call yourself a Thought Leader. Worse yet, you call yourself a “visionary.” Thought Leadership is not a mantle that can be claimed. It’s a market perception that’s earned over time, and an unofficial stature that’s assigned to you by others.
2. Your editorial content is self-serving. If you’re unwilling to provide insights, information and recommendations without making yourself the hero, or without directly plugging your firm’s products / services, then you’re not really practicing Thought Leadership.
3. You lack original or interesting ideas. Repurposing “archived” content (a/k/a other people’s thinking), or providing summaries or news reports of information that’s available elsewhere, will likely position you as an industry parrot, rather than a Thought Leader....

....MORE

HT: The Big Picture

"Justin Bieber banned from China in order to 'purify' nation "

At The Telegraph but, really, what more needs to be said

Y Combinator Is Raising a $1 Billion Fund

That's a lot of starting-up.
From Axios:

Y Combinator raising $1 billion for new fund

Silicon Valley startup accelerator Y Combinator is raising up to $1 billion for a new venture capital fund, Axios has learned from multiple sources. No word yet on when it is expected to close. YC is also making changes to its investment organization.

Why it matters: Y Combinator is one of the most influential startup entities in Silicon Valley, having incubated such companies as Airbnb, Dropbox and Stripe. But, at it's core, it's an investor — so it's no surprise to see it evolve and expand its reach.

Keep reading 207 words

Details, per sources:

• Merger: This is technically for YC's second Continuity fund, the first of which was a $700 million vehicle designed to invest in later-stage rounds of companies incubated by YC. But YC has decided to merge its existing early-stage investment program with its later-stage fund, so the $1 billion would go toward both.
• Inside and out: YC has strayed a bit from its original Continuity mission, in that it's now willing to selectively back companies that didn't participate in its accelerator program (something it originally said it would not do). So far it's only done one such deal, which remains unannounced, but more could come. This puts YC more squarely in competition with traditional VC funds that usually invest in startups after they've completed the accelerator program....

MORE

Greylock’s Reid Hoffman and SoftBank are leading a $159 million round into a driverless-car tech startup

From recode:

Greylock’s Reid Hoffman and SoftBank’s Shu Nyatta will join Nauto’s board as part of the investment.

Greylock Partners and SoftBank are leading a $159 series B round into auto-tech startup Nauto. As part of the investment, Greylock partner and LinkedIn co-founder Reid Hoffman as well as SoftBank partner Shu Nyatta will be joining the board. 

While Nauto is currently primarily focused on making professional drivers safer with its aftermarket device that uses an inward-facing camera to detect things like distracted driving, the company has already started working with its automaker partners to begin developing the deep-learning algorithms that will enable the cars to drive autonomously. 

The company wouldn’t go into much detail about exactly what that development effort with the automakers entailed. 

However, some of the automaker partners include Nauto’s previous investors — that have also participated in this round — General Motors Ventures, BMW iVentures, Toyota AI Ventures and a few others, Nauto CEO Stefan Heck told Recode. Andy Rubin’s Playground Global also previously led a $12 million round into the company. 

In partnership with Nauto, these companies will use the driver behavior, accident, road and safety data that the devices — which have been deployed in “dozens of fleets” and some of the automakers’ development cars or car-sharing fleets — are collecting to eventually inform the autonomous system....MORE

Loot From World's Biggest Art Heist Probably In Ireland-Investigator (plus the 'catalogue' of the Hermann Göring collection)

That's "biggest" if you don't count the Nazis.
The value of the "Hermann Göring collection" alone was pegged by the NYT at $200 million in 1945.
To get to current valuations you should probably add a couple zeros.
And maybe multiply that by five. We've been meaning to post something on Fat Hermann for a while, the inventory that came out in 2015 is linked after the jump.

From CBS News:

Investigator "100 percent sure" stolen art from legendary heist is in Ireland

Twenty-seven years later, it's still a mystery.

The biggest art heist in history, thieves targeted some of the highest-value art from Boston's Isabella Stewart Gardner Museum, leaving behind empty frames, tied-up security guards and few clues.

The 13 stolen masterpieces valued at around half-a-billion dollars included a Rembrandt and a Vermeer, reports CBS News correspondent Seth Doane.

"I'm 100 percent sure that they are in Ireland. Hundred percent sure. No doubt in my mind," art investigator Arthur Brand said. He's described as the Indiana Jones of the art world.

It's an audacious claim to make after nearly three decades. But Brand alleges his leads point to the Irish Republican Army, or the IRA.

"We have had talks with… former members of the IRA – and after a few Guinnesses, after a few talks – you can see in their eyes that they know more," Brand said.
"How do we believe you?" Doane asked.

"Well, I have a track record. We have found some pieces back before. So let's give this a shot," Brand said.

Brand's highest-profile find to date came working with German police to recover bronze horse statues which stood in front of Adolf Hitler's Grand Chancellery building. He also helped recover Salvador Dali's "Adolescence."

"How is this stolen art used?" Doane asked.

"They use it as payment for drug deals, for arm deals," Brand said. "Sometimes they use it for, like, art-napping. They kidnap paintings and they use it as – to get a lesser sentence."...

...MUCH MORE

HT: Marginal Revolution

Inventory of Hermann Göring art collection at Unterstein, Germany, 1945

Renoirs, Rubens', Monets, Corot, Tintorettos, van Goghs, Botticellis, a bunch of Cranachs and on and on.

Previously on the Izabella Stewart Gardner Museum theft:
June 2017
"Cracking the Biggest Art Heist in History"

At the museum "Thirteen Works: Explore the Gardner's Stolen Works"

May 2016
Risk: Stolen Gardner Museum Masterpieces Probably Destroyed
The author, James Ratcliffe, is director of recoveries & general counsel at the Art Loss Register, London  
August 2015
New Video May Show $500 Million Gardner Heist Perps
June 2011
What does Whitey Bulger know about the 1990 Gardner Museum art heist?

Possibly also of interest:
Duveen, The Greatest Salesman in the World: Isabella Stewart Gardner, Bernard Berenson and the Boston Connection Pt. IV

The courtyard of Mrs. Gardner's home, now the museum and site of the $500 million art theft

"EU’s antitrust ‘war’ on Google and Facebook uses abandoned American playbook" (GOOG; FB)

From The Conversation:

The casual observer could be forgiven for thinking that European antitrust regulators have declared war on American tech giants.

On June 27, the European Union imposed a €2.4 billion (US$2.75 billion) fine on Google for giving favorable treatment in its search engine results to its own comparison shopping service. And Germany’s antitrust enforcer is investigating Facebook for asking users to sign away control over personal information.

In contrast, American antitrust enforcers have shown little interest in these companies. The Federal Trade Commission (FTC) did open an investigation into whether Google has a search bias, but closed it in 2013, despite recognizing that it “may have had the effect of harming individual competitors.”

Anti-Americanism, however, does not explain these starkly different approaches. Europe targets homegrown companies with the same ferocity. Last summer, for example, the EU fined a cartel of European truck-makers even more than it did Google.

Instead, the divergence is explained by America’s abandonment in the 1980s of the theory that competition promotes innovation, which is still embraced by Europe today. America now seems to operate under the theory that competition threatens innovation by denying companies that develop a superior product the rewards of monopoly.

My research suggests that embrace of this new theory has led to under-enforcement of America’s antitrust laws, which may in turn have actually held back innovation.

Betting on competition
The mission of antitrust law, first articulated by the framers of the Sherman Act in 1890, is to ensure that markets contain large numbers of equally matched competitors. That’s why Europe calls its own antitrust rules “competition law.”

The Sherman Act implemented this goal by prohibiting two things: “restraint of trade,” such as price fixing, and monopolization, the attempt of a powerful company to keep competitors out of its markets. European competition laws have a similar bipartite structure.

The EU case against Google falls under the second category, monopolization, or as Europeans dub it “abuse of dominance.”

One of the most important and difficult areas of the law of monopolization involves infrastructure, which can be anything from the roads that crisscross America to the engineering standards that mobile phones use to communicate. Great innovations, such as Google’s search engine, often become the infrastructure that the next generation of competitors need to access in order to create their own, innovative products. But the infrastructure owner will often shut those competitors out, to maximize profits.

The goal of antitrust law would seem to require that its enforcers – the Department of Justice and the FTC in the U.S. – sue to force owners to share their infrastructure on reasonable terms with competitors.

Skeptics emerge
But in the 1960s, skeptics – particularly antitrust economists and lawyers associated with the University of Chicago and led by Robert Bork – started to argue that forcing a business to share its infrastructure on an equal basis with competitors reduces the rewards a company can expect to generate from innovation, potentially discouraging technological progress....MUCH MORE

You Can Tell If Someone’s Rich or Poor by Looking at Their Face

From New York Magazine's Science of Us:

Throughout the late 1960s and 1970s, the English artist David Hockney painted a series of “double portraits,” two subjects depicted side by side — of the fashion designer Ossie Clark with the textile designer Celia Birtwell; of the author Christopher Isherwood with the artist Don Bachardy; and one of his own mother and father, among others. For nearly all of them, critics especially applauded Hockney’s ability to convincingly paint faces, capturing both emotion and a sense of mysterious intimacy.

The one exception to these sympathetic, evocative depictions, however, is a painting titled “American Collectors (Fred and Marcia Weisman),” in which the Weismans’ faces are slightly blurred and blunted to appear similar to the statues behind them. It’s not an obviously negative portrayal, exactly, but to most viewers, it seems clear that Hockney perceived his subjects as flat and dull, their faces signifying their well-bred background and high social class but also their utter lack of original artistic discernment.

The ability to convincingly and subtly depict social class through one’s face alone is a rare skill — not everyone can be David Hockney — but the artist was also tapping into something more universal: Research suggests that the face alone might provide clues to someone’s social class, especially for those who know how to look.

Generally speaking, we pick up hints on a person’s socioeconomic status by looking for more obvious markers, things that are buyable or learnable —clothes, watches, comportment, manner of speech. (Just think of the line in The Great Gatsby when Jay Gatsby turns to Nick to proclaim that Daisy’s “voice is full of money.”) There are subtler, academically proven cues, too, like the fact that someone from a higher class tends to be more disengaged and aloof when dealing with someone from a lower one.

But a study recently published in the Journal of Personality and Social Psychology posits that we really don’t need any of these clues to know someone’s social class: The face alone can be our guide.

“We know that people use facial information for a lot of other things,” says lead study author Nicholas O. Rule, a psychology professor at the University of Toronto. We look at the face to make judgments on “someone’s race, someone’s sex, someone’s age, and even more subtle things like sexual orientation, political affiliation, or religion. It seemed very logical to us, actually, that people would be able to get social class information from people by looking at their faces.”...MORE

The 'cues' paper is:
Signs of Socioeconomic Status A Thin-Slicing Approach

Risk:Today's 6.7-Magnitude Turkish Earthquake Was Not The 'Big One'

From Reuters:
Turkey quake to cause small tsunami: EMSC

A 6.7-magnitude earthquake off the southwestern coast of Turkey could cause a small tsunami in the area, European quake agency EMSC said, although Turkish officials said large waves were more likely than a tsunami.... 

From the U.S. Geological Service via the New Straits Times:

The epicenter is just offshore southwestern Turkey while  the 'big one' is expected in Istanbul's backyard.

As the Daily Sabah reminds us:

... Turkey is among one of the world's most seismically active countries as it is situated on a number of active fault lines, with the most potentially devastating one being the Northern Anatolia Fault (NAF), where the Anatolian and Eurasian plates meet.
The NAF, a strike-slip fault formed as the Anatolian plate was being pushed northwestwards by the Arabian plate, has produced devastating earthquakes throughout history, with the most recent ones being magnitude 7.4 and 7.2 earthquakes in northwestern Izmit and Düzce provinces in August and December 1999. The 1999 earthquakes killed thousands in Kocaeli, Adapazarı, Istanbul, Yalova and nearby towns in the northwest, which serve as Turkey's economic and industrial heartland....

...Scientists have warned that the epicenter of Turkey's next big earthquake is likely to occur under the Sea of Marmara, where the NAF passes.

For which see: May 20's "Risk: Massive Earthquake Could Hit Istanbul at any Moment with just SECONDS Warning, Say Scientists".

"Amazon Prime and other Subscription Businesses: How do you Value a Subscriber?"

This might be pertinent not just for Prime and others, but for Tesla, should it survive the model 3 ramp-up. More on that next week.
From 25iq, July 15:

Businesses increasingly don’t just sell products and services in a single transaction. Subscription and other businesses that focus on recurring sales have existed for a very long time. What is new is that many more businesses have adopted a subscription approach, which makes them look a lot more like a company in the the cable television business than an auto parts manufacturer.

Successfully implementing a subscription business model can be particularly hard since the customer acquisition cost (CAC) happens up front and the revenue appears over time. These subscription businesses have a revenue profile that is more like an annuity. This revenue profile is not like the manufacturer’s business that many people learned about from a college introduction to accounting class. Unlike an annuity, the revenue stream of a subscription business is subject to risk, uncertainty and ignorance. The good news is that it is precisely because there is risk, uncertainty and ignorance that an opportunity for profit exists. The bad news is that it can be hard to capture. The reality is that if you do not capture this profit your competitors may do so.

Someone may ask: Why should I worry about this? Will it be on the test? The answer is: Yes and yes. Charlie Munger says it best: “The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.” The text in bold in the Munger statement is critical with a subscription service like Amazon Prime- you can’t understand the value of the business by looking at just one month or even a few months since it is lifetime value that matters.

Why are these new subscription businesses being created more often? The economics of a subscription business can be very favorable if you get it right. A lot of financial leverage can be generated if the customer does not need to be acquired repeatedly. Customer acquisition cost is lower for a well-run subscription business even though it is more front loaded. Yes, subscription business models can have more predictable revenues, but that is not caused by the tooth fairy. More predictable revenues are a byproduct of lower overall CAC and some operational approaches and investments in customer retention. The trade-off is that a subscription business model can also be deadly if you get it wrong. Each of the key variables in a subscription business can be either: (1) many angels working together to build something wonderful, or (2) a pack of hungry wolves that can tear the business to shreds. Propelling more businesses to adopt a subscription business  model is a simple truth: if your competitors or competitors get this model right your business may be doomed.

The benefits of this new way of doing business was chronicled well in the book The Outsiders by Thorndike. One of the major innovators of this way of doing business model was John Malone in the cable television industry. Here is John Malone talking about the model he used to build many of his businesses:

“We decided… to go on a cash flow metric very much like real estate. Levered cash flow growth became the mantra out here. A number of our eastern competitors early on were still large industrial companies — Westinghouse, GE, — and they were on an earnings metric. It became obvious to us that if you were going to be measured on earnings, it would be real tough to stay in the cable industry and grow.” “I used to say in the cable industry that if your interest rate was lower than your growth rate, your present value is infinite. That’s why the cable industry created so many rich guys. It was the combination of tax-sheltered cash-flow growth that was, in effect, growing faster than the interest rate under which you could borrow money. If you do any arithmetic at all, the present value calculation tends toward infinity under that thesis.” “It’s not about earnings, it’s about wealth creation and levered cash-flow growth. Tell them you don’t care about earnings..” “The first thing you do is make sure you have enough juice to survive and you don’t have any credit issues that are going to bite you in the near term, and that you’ve thought about how you manage your way through those issues.” “I used to go to shareholder meetings and someone would ask about earnings, and I’d say, ‘I think you’re in the wrong meeting.’ That’s the wrong metric. In fact, in the cable industry, if you start generating earnings that means you’ve stopped growing and the government is now participating in what otherwise should be your growth metric.”

The more you understand about what John Malone has accomplished in his business the more you will understand what companies like Amazon are doing in their business....MUCH MORE

"Why on earth is India’s most famous yoga guru building an army of security men?"

I think the FT had the story first:

Indian guru Baba Ramdev expands into private security
Yoga-televangelist has shaken up consumer goods sector with ‘natural’ products

July 12, 2017 by: Amy Kazmin in New Delhi 
Baba Ramdev, the Indian yoga guru turned entrepreneur who has been challenging consumer goods giants Nestlé, Colgate and Unilever, is diversifying into another of his country’s fastest-growing business areas: private security services. Mr Ramdev, a popular yoga-televangelist and high-profile backer of Prime Minister Narendra Modi, has recruited former army and police officers to help train guards for his new venture, Parakram Suraksha (Valour Security) Private Ltd. The new security business will “help develop military instinct in each and every citizen of the country so as to awaken the spirit and determination for individual and national security,” the Hindu holy man said in a statement announcing the company’s formal launch....MUCH MORE 

But Quartz had the better picture (and the headline which we lifted):

India’s most famous yoga guru-turned-businessman is building an army of security guards.

On July 12, fifty-one-year-old Ramdev, whose Patanjali Ayurved has taken on India’s reigning consumer business giants, announced the launch of Parakram Suraksha (Valour Security) which will supply guards and provide security services. The company says it has recruited former Indian Army personnel and police officers to train youngsters....

... “Maybe the baba feels the need for protecting his own assets,” Kunwar Vikram Singh, chairman of Central Association of Private Security Industry (CAPSI), said. “There is a huge need for private security…particularly to protect infrastructure, women, homes, and airports. Of course, the opportunity is massive.”

Lucrative private security...

....MORE