Monday, March 25, 2019

"China to Use First Atomic Icebreaker as Test for Future Nuclear Aircraft Carriers"

But loyal and long-suffering reader already knew that.*
That bank-shot humblebrag aside, this is a first rate look at what China is up to and condenses into one cogent little package what Climateer took three meandering posts to get to.

From High North News:

The country’s first atomic icebreaker will rival Russia’s largest nuclear icebreakers in size. China will become only the second country to operate such a vessel and it will pave the way for the country’s first nuclear aircraft carriers.
A nuclear icebreaker will further enhance China’s ability to navigate the Arctic Ocean even during winter. With a displacement of more than 30,000 tons the proposed vessel will be just slightly smaller than Russia’s newest and largest icebreakers of the Arktika class.

China’s plans to build a nuclear icebreaker are just the latest step in its efforts to pursue a more active role in the Arctic. The country released its first-ever Arctic policy in early 2018 followed by the launch of its second conventional icebreaker in September. About two dozen Chinese vessels transited Russia’s Northern Sea Route in the last five years, more than any other country except Russia. It is also a large investor in Novatek’s Yamal LNG, a major natural gas project.

“This will now give the Chinese the ability to go anywhere at any time. The size of the icebreaker, if indeed reports are accurate, means China will have a capability that will rival Russia’s icebreakers,” explains Rob Huebert, associate professor at the University of Calgary and a senior research fellow with the Centre for Military and Strategic Studies.

Icebreaker paves way for aircraft carrier
But there is another, more long-term and strategic aspect to building this icebreaker. China will be able to draw valuable lessons from designing, constructing, and operating a nuclear icebreaker. “The use of a nuclear icebreaker can be understood as laying the foundation for the future acquisition of nuclear-powered aircraft carriers,” states Aki Tonami, Arctic researcher and Professor at the University of Tsukuba in Japan.

In original project documents the vessel is described as an “experimental ship platform,” hinting at its role as a test vehicle for nuclear propulsion. Currently, China operates two conventional aircraft carriers but in its great-power competition with the United States nuclear-powered carriers will be indispensable.

A powerful nuclear icebreaker
Earlier this week China General Nuclear Power Group (CGN) invited bids to construct the new vessel. China National Nuclear Corporation (CNNC) also published a tender notice for the project in June 2018 related to the small reactor technology, which will be used to power the vessel.
“China has rapidly increased its ability to build ice-class vessels thanks to advances in steel manufacturing. Building a nuclear icebreaker, for which bids were restricted only to companies from mainland China, would be a way to put that expertise to work while further refining it,” explains Mia Bennett assistant professor of geography at the University of Hong Kong and editor of Cryopolitics.

The proposed icebreaker will be powered by two 25 MW pressurized water reactors. The vessel will be capable of traveling into the Arctic during winter and open up polar waterways. Its top speed is designated at 11.5 knots, about 22 km/h. The specific purpose and operational role of the vessel remain unknown but it is described as a “comprehensive support ship.”

The vessel will be 152 meters long by 30 meters wide, with a maximum draft of 18 meters and displace 30,069 tons. These specifications place it among the largest icebreakers ever constructed....MUCH MORE
*Previously:
China Launches Its First Domestically Built Icebreaker
...Again, this is just a little guy, 1.5 meters capability is nothing in the world of icebreakers.
The Venta Maersk that just became the first container ship to transit Russia's Northern Sea Route can get through 2-3 feet of ice and Teekay's new LNG carrier, the Eduard Toll, was breaking through 1.8 meters of ice on its inaugural  run from Yamal in January.

The thing that is impressive about the Xue Long 2 is that the Chinese built it themselves.
As noted in the outro from the nuclear-powered ship, the strategy is similar to the one they used to pursue their aircraft carrier dreams.


Here's the short version of the time the Chinese bought their first aircraft carrier from Ukraine....
The Ukrainians wouldn't sell if the big boat were going to be used for military purposes.
So the Chinese said "Ahhh...casino"
"That's it, we're only going to use it as a floating casino, Chinese people like to gamble, come on lucky 8, that's the ticket!"
I can't wait to see what's cookin' in the icebreaker laboratories.
After reverse engineering everything on the casino, Xinhua announced in December 2015: "China building second aircraft carrier".based on the Varyag plans.

They will use the experience gained building that ship to build their second Chinese-made carrier (third total) which will be built to an entirely new plan.
Same thing with the icebreakers.  The new one refines construction expertise for the next homemade ship and away they go,
 
"China’s Polar Strategy: An Emerging Gray Zone?"
"China opens bids for first nuclear-powered icebreaker"
Back in March we intro'd "U.S. Navy Releases Proposal Request for Coast Guard’s New Heavy Polar Icebreaker" with:
If the U.S. were serious the request-for-proposal would be for six ships and they would have been started five to ten years ago.
China, a non-polar nation already has a small fleet of light and medium icebreakers and is rumored to have plans for a new medium with a 3-3.5 meter-thick-ice capability as a stepping-stone to a couple heavy icebreakers by the mid-to-late 2020's. They are serious about their Polar Silk Road.*
It appears the rumors were true....... On the other hand, if you read Xinhua's translation of January's "Full text: China's Arctic Policy" you'll note they call themselves a ‘Near-Arctic state’.
This is to counter people like me using the 'non-polar' or 'non-Arctic' phrasing.

Additionally China is couching their interest in terms of research:
States from outside the Arctic region do not have territorial sovereignty in the Arctic, but they do have rights in respect of scientific research, navigation, overflight, fishing, laying of submarine cables and pipelines in the high seas and other relevant sea areas in the Arctic Ocean, and rights to resource exploration and exploitation in the Area, pursuant to treaties such as UNCLOS and general international law. In addition, Contracting Parties to the Spitsbergen Treaty enjoy the liberty of access and entry to certain areas of the Arctic, the right under conditions of equality and, in accordance with law, to the exercise and practice of scientific research, production and commercial activities such as hunting, fishing, and mining in these areas....
and is dedicating 1100 square feet of space on the latest planned icebreaker to laboratories.

...Even "near-equatorial" Singapore wants to get into the act, albeit by way of the Russian icebreakers.
I suppose it's only a matter of time before right-on-the-equator Brazil or Gabon declare themselves "next-to-near arctic states"

It's a small world after all.
 

"Seagram heiress gave prosecutors the death stare during Nxivm trial"

2019 stories.

In addition to representing the lady in the sex-slave cult/child pornography case, attorney Geragos is the unindicted co-conspirator, “CC-1”, in Michael Avenatti's attempted shakedown of Nike.

From the New York Post:
Seagram liquor heiress Clare Bronfman stared daggers at prosecutors when she appeared in Brooklyn federal court over her role in sex-slave cult Nxivm Tuesday — seething so much that her own lawyer had to tell her to chill out.

“Stop looking,” attorney Mark Geragos instructed Bronfman as two female prosecutors strolled in....
 ...MORE

Earlier:
"Nike shares zig-zag after Avenatti tweet is followed by criminal indictment of Avenatti "
2019 headlines.

At MarketWatch

"Trade In Counterfeit Goods Hits Half A Trillion Dollars"

Following up on a post on a related subject that was getting so much reader praise I was compelled to ask "Just How Big Is Izabella Kaminska's Family?" here's SafeHaven:
Black-market traders have increasingly been tapping into an invisible network to funnel  a wide range of goods into global markets right under the noses of customs and border protection agents—to the tune of over $500 billion.

All of the merchandise —including luxury designer wares such as Chloé ankle boots, Chanel Le Boy bags, Saint Laurent wallets or chic Ray-Ban shades — are not authentic brand-name products but inexpensive replicas that are undeniably, shamelessly fake.
And they now command a half-trillion-dollar market that’s expanding at astronomical rates.
The market for counterfeit goods has reached alarming proportions, powered by tech-savvy traders lurking in dark corners of the internet.

According to a report by the European Union’s intellectual property office (EUIPO) and the Organization for Economic Co-operation and Development (OECD), the market for illicit goods has grown by over 100 percent over the past decade, with counterfeits accounting for 3.3 percent ($590 billion) of international trade in 2016 compared to $250 billion in 2008. Interestingly, the surge came against a backdrop of falling global trade volumes.

China leads the way
The report was compiled by analyzing thousands of customs seizures, with footwear, clothing, leather goods and IT equipment topping the list of the most frequently seized imported fakes.
(Click to enlarge)
Source: The Guardian
The report also reiterated another well-known trend: China, by far, remains the biggest source of fake goods. China was the main source of counterfeit products in 9 out of 10 categories tracked by the trade watchdogs with as many as 27 percent of seized goods being traced back to the country. Other leading offenders include India, Malaysia, Pakistan, Turkey, Thailand and Vietnam....MUCH MORE

"Nike shares zig-zag after Avenatti tweet is followed by criminal indictment of Avenatti "

2019 headlines.

At MarketWatch

"Tesla Hits 5-Month Low as RBC Trims Delivery Targets; Musk Notes Price Increases" (TSLA)

The stock is down  $3.53 (-1.33%) at $261.00 after trading as low as $254.46.
During the stock's March-April 2018 mini-crash TSLA traded as low as $244.59 on April 2.
Our warning on March 27, 2018 was "Tesla's Stock Is In A Very Dangerous Spot (TSLA)" at $301.10.

That $240 - 245 area would be the next support level and should that break the February 2016 lows around $140 - 145 would come into play
From TheStreet:

Tesla shares traded at a five-month low Monday after analysts at RBC trimmed their target for the stock and founder and CEO Elon Musk noted that prices for the group's clean energy cars would increase in the coming months.
Tesla Inc. shares traded at a five-month low Monday after analysts at RBC Capital Markets trimmed their target for the stock and founder and CEO Elon Musk noted that prices for the group's clean energy cars would increase in the coming months.

RBC's Joseph Spak cut his price target on Tesla shares by $35 to $210 each, and trimmed his first quarter delivery forecasts for the flagship Model 3 by 4,500 units to 52,500, in a note published Monday that cited "meagre demand". JMP Securities also lowered its price target by around 3% to $394 per share, and reduced current year and 2020 earnings forecasts, citing U.S. market weakness and the group's u-turn on closing its dealership network.

"As we have moved through the first part of 2019, it is becoming apparent that Tesla's efforts to pull demand into 4Q before the federal tax credit expired worked well, perhaps better
than the company had planned." JMP analyst Joseph Osha said. "Indeed, based on our analysis we are not sure that U.S. demand will return to 4Q18 levels at any point this year."

"It is worth reiterating that our investment stance on Tesla has always been based on the potential the company has to make competitive gains over time," he added. "The undeniably challenging environment that Tesla faces at the moment is not enough to impact our fundamental stance on the company and its prospects."...MORE

Pure Evil: The Chemical So Awful It Can Burn Rust or Sand

A repost from 2017:

Rust.
How the hell do you burn something that is already oxidized?

Meet Chlorine Trifluoride: The Chemical That Sets Fire to Asbestos on Contact
From Gizmodo, July 2015:
First discovered back in the 1930s, chlorine trifluoride is a rather curious chemical that easily reacts, sometimes explosively, with just about every known substance on Earth.

Just to get the ball rolling, here’s a few of the more unusual things chlorine trifluoride is known to set fire to on contact: glass, sand, asbestos, rust, concrete, people, pyrex, cloth, and the dreams of children…

Obviously the first question to answer here is how chlorine trifluoride is somehow able to cause asbestos, a substance that is known for being almost completely fire retardant, to catch on fire. Well, that’s because chlorine trifluoride is a more powerful oxidizing agent by mass than oxygen itself. Meaning it’s capable of rapidly oxidizing things that would normally be considered practically “impossible” to set aflame, like asbestos. Chlorine trifluoride is such an effective oxidizer that it can even potentially set fire to things that have seemingly already been burned up, like ash or spent charcoal.

The substance is so highly reactive that famously unreactive elements like platinum, osmium and iridium will begin to corrode when they come into contact with it. Notably tough elements like titanium and tungsten are also regarded as being wholly unsuitable to storing the chemical because they set on fire as soon as they come into contact with it.

The only known way to store chlorine trifluoride “safely”, which we use in the loosest possible sense, is to put it inside of a sealed containers made of steel, iron, nickel or copper which are able to contain the chemical safely if they’re first treated with flourine gas. This is because doing so will coat the metal in a thin fluoride layer, with which the chemical won’t react. However, if this layer is compromised in anyway, or the metal isn’t completely dry, chlorine trifluoride will begin to react violently and cause the vessel to explode.

A few of the other things known to not react with chlorine trifluoride include nitrogen, the inert gases and polychlorotrifluoroethylene. Rather fortunately, chlorine trifluoride doesn’t react with air unless it happens to contain a larger than average amount of water vapor.

Speaking of which, when chlorine trifluoride comes into contact with water, it will react explosively with it and as a fun byproduct creates large amounts of dangerous gasses such as hydrofluoric acid and hydrochloric acid. Hydrofluric acid in particular is incredibly dangerous and along with being able to melt things like glass and concrete, can permanently damage your lungs and eyes. As if that wasn’t worrying enough, if you’re ever unlucky enough to get hydrofluric acid on your skin, it doesn’t actually hurt until a few hours later. After it has absorbed a bit, it starts destroying your nerves and bones and can ultimately cause cardiac arrest when it gets into your blood stream. In fact, in 1994 a lab technician in Australia accidentally spilled hydrofluric acid on his lap and despite immediately executing safety procedures including hosing off, immersing himself in a swimming pool, and later extensive medical care (including needing to have one of his legs amputated), within two weeks of the accident, he was dead.

Unsurprisingly, the Nazis were really interested in the military applications of chlorine trifluoride. After all, it’s a substance that reacts explosively with water (humans are largely bags of water), and for those that don’t come in contact with it directly, there’s the byproduct of the deadly gasses. Further, there is really little one can do to put out the fires it causes directly other than to let them burn off. If you throw water on the source of the problem, it will get worse. The reaction here also doesn’t require atmospheric oxygen to burn, so trying to use that method of fire suppression won’t work either....MORE

"Subscriptions ‘Bundles always dilute the brand’: Publishers grapple with Apple’s new subscription service"

From Digiday, Mar. 25:

Apple wants to create a Netflix for magazines, but not every publisher is ready to hop on board.
On Monday, Apple plans to unveil a paid subscription product that includes access to dozens of magazines and reportedly at least one national newspaper, The Wall Street Journal, for $10 per month. Apple will keep 50 percent of that revenue and divide the remaining half among publishers based on readers’ “dwell time,” or the amount of time they spent reading a given publisher’s content, according to several publishing sources.
Those terms, plus the fact that Apple will control the customer relationship and most of the data about who is reading what content, have been enough to turn off several publishers, including The New York Times and the Washington Post. Some publishing executives, notably The New York Times’ CEO Mark Thompson, have also argued that having their content lumped together with dozens of others, at a price far lower than a typical newspaper subscription, sets a dangerous precedent.

“It totally commoditizes news and undermines publisher pricing,” said an executive at one publisher that is not participating in the product. “Bundles always dilute the brand visibility and brand narrative of a publisher by dint of being thrown together with everyone else. It will not be a ‘sticky’ read for any one publisher.”

Publishers are not entirely opposed to bundling strategies, especially as they seek to grow consumer revenue. Yet with so many feeling like they haven’t captured all of their potential subscribers yet, some publishers are worried that Apple could stunt one of their biggest growth opportunities — and are willing to wait to sit out of Apple’s flashy new product, for now.
Apple did not respond to a request for comment by press time.

Many of the publishers involved in Apple’s forthcoming subscription service did not have much of a choice.
Last year, Apple purchased Texture, a service that offered unlimited digital access to nearly 200 magazines, plus a daily news digest from Reuters, for up to $15 per month. Many of the publishers that were part of that version of Texture — which included titles ranging from Cosmopolitan to Bloomberg Businessweek — were locked into long-term agreements with the service, said one source familiar with the matter. This spared Apple the trouble of having to start negotiations from scratch....MUCH MORE

Apple's Big Pivot To Services Starts Today and The New York Times Has A Warning

From Reuters:

New York Times CEO warns publishers ahead of Apple news launch
Apple Inc is expected to launch an ambitious new entertainment and paid digital news service on Monday, as the iPhone maker pushes back against streaming video leader Netflix Inc. But it likely will not feature the New York Times Co. 

Mark Thompson, chief executive of the biggest U.S. newspaper by subscribers, warned that relying on third-party distribution can be dangerous for publishers who risk losing control over their own product.
“We tend to be quite leery about the idea of almost habituating people to find our journalism somewhere else,” he told Reuters in an interview on Thursday. “We’re also generically worried about our journalism being scrambled in a kind of Magimix (blender) with everyone else’s journalism.”
Thompson, who took over as New York Times CEO in 2012 and has overseen a massive expansion in its online readership, warned publishers that they may suffer the same fate as television and film makers in the face of Netflix’s Hollywood insurgence.

“If I was an American broadcast network, I would have thought twice about giving all of my library to Netflix,” Thompson said in response to questions about any talks with Apple to participate in the iPhone maker’s new news service....
...MUCH MORE

Does Monsanto’s Roundup cause cancer? The law says yes, the science says maybe

From The Conversation:
A federal jury in California has unanimously decided that the weedkiller Roundup was a “substantial factor” in causing the lymphoma of 70-year-old Edwin Hardeman, who had used Roundup on his property for many years. This is the second such verdict in less than eight months. In August 2018 another jury concluded that groundskeeper DeWayne Johnson developed cancer due to his exposure to Roundup, and ordered Monsanto, the manufacturer, to pay Johnson nearly US$300 million in damages.

In product liability cases like these, plaintiffs must prove that the product was the “specific cause” of the harm done. The law sets a very high bar, which may be unrealistic for harms such as a diagnosis of cancer. Nonetheless, two juries have now ruled against Roundup.

Monsanto’s lawyers insist that Roundup is safe and that the plaintiffs’ arguments in both cases were scientifically flawed. But jurors believed that they were shown enough evidence to meet the legal criteria for finding Roundup was the “specific cause” of cancer in both men.

As a result of these high-profile trials, Los Angeles County has halted use of Roundup by all of its departments until clearer evidence is available about its potential health and environmental effects.
Although “proof” has a similar primary meaning in science and law – a consensus of experts – how it is achieved is often quite different. Most importantly, in science there is no deadline for a discovery, whereas in law, timeliness is paramount. The conundrum is that a legal decision may be required for a potentially dangerous product on the market before the science has been settled.

What is ‘proof’?
Proof is an elusive concept. Do we need proof that our glimpse of stripes in the jungle is a tiger before we run? Do we need proof that the jet engines are reliable before clearing a plane to take off for London with 300 passengers on board?

Can proof ever be absolute, or is it inherently a statement of probabilities?
Scientists use proof to advance our understanding of nature. Science assumes that there is an objective reality underlying all of nature, which we can eventually understand. Nature has no moral compass: It is neither good nor bad – it simply is. Scientists are human, so they experience joy or disappointment depending on the outcome of an experiment, but those emotions do not alter the truths of nature.

In contrast, lawyers use proof to find justice for people. Law is built on the premise that there are widely accepted codes of human behavior, which should be rectified when they are violated. Ideally, justice under the law is a highly moral endeavor with fairness at its core....MUCH MORE
If interested see also:
Bayer Battered After Suffering "Major Blow" From Second RoundUp Cancer-Trial Loss
Safe Or Not, Monsanto's Roundup Is Toxic for Bayer—Spiegel

Chips: The Accelerator Wall—A New Problem for a Post-Moore’s Law World (GPU; ASIC; FPGA)

As grandmother used to say, if it's not one tham ding it's another.
From the brainiacs at IEEE Spectrum:

Specialized chips and circuits may not save the computer industry after all
Accelerators are already everywhere: The world’s Bitcoin is mined by chips designed to speed the cryptocurrency’s key algorithm, nearly every digital something that makes a sound uses hardwired audio decoders, and dozens of startups are chasing speedy silicon that could make deep learning AI omnipresent. This kind of specialization, where common algorithms once run as software on CPUs are made faster by recreating them in hardware, has been thought of as a way to keep computing from stagnating after Moore’s Law peters out in one or two more chip generations.

But it won’t work. At least, it won’t work for very long. That’s the conclusion that Princeton University associate professor of electrical engineering David Wentzlaff and his doctoral student Adi Fuchs come to in research to be presented at the IEEE International Symposium on High-Performance Computer Architecture this month. Chip specialization, they calculate, can’t produce the kinds of gains that Moore’s Law could. Progress on accelerators, in other words, will hit a wall just like shrinking transistors will, and it will happen sooner than expected.

To prove their point, Fuchs and Wentzlaff had to figure out how much of recent performance gains comes from chip specialization and how much comes from Moore’s Law. That meant examining more than 1,000 chip data sheets and teasing out what part of their improvement from generation to generation was due to better algorithms and their clever implementation as circuits. In other words, they were looking to quantify human ingenuity.

So they did what engineers do: They made it into a dimensionless quantity. Chip specialization return, as they called it, answers the question: “How much did a chip’s compute capabilities improve under a fixed physical budget” of transistors?

Using this metric, they evaluated video decoding on an application specific integrated circuit (ASIC), gaming frame rate on a GPU, convolutional neural networks on an FPGA, and Bitcoin mining on an ASIC. The results were not heartening: Gains in specialized chips are greatly dependent on there continuing to be more and better transistors available per square millimeter of silicon. In other words, without Moore’s Law, chip specialization’s powers are limited....MORE
Previously on specialized chips:
Watch Out NVIDIA: "Amazon, Huawei efforts show move to AI-centric chips continues"
Jan. 24
Watch Out Nvidia, Xilinx Is Performing (reports, beats, pops) XLNX; NVDA
Xilinx with their field-programmable gate array approach versus Nvidia's more generalist chips is an example of the type of competition experts were predicting NVDA would be facing, some over two years ago, links after the jump...
Dec 2018
A Dip Into Chips: "AI Chip Architectures Race To The Edge"
Sept. 2018
"Why Alibaba is betting big on AI chips and quantum computing"
Sept 2018 
Hot Chips 2018 Symposium on High Performance Chips
Sept 2018 
Chips: "A Rogues Gallery of Post-Moore’s Law Options"
Aug 18
Ahead of NVIDIA Earnings: The Last of the "Easy" Comparisons (NVDA)
Beating that Q3 2017 EPS, 90 cents, by double i.e. $1.80 or more, is doable but AI and data centers will have to pick up the slack from the Q1 and Q2 cryptocurrency bump that started declining with Bitmain and other miners use of ASICs rather than GPU's.

Going forward the trend toward specialist proprietary chips, see Tesla's development of their own chips etc, etc will leave NVIDIA with a couple holes in the potential addressable markets they will want to fill.

Additionally, the smaller pups, some still in stealth, are nipping at the big dog's heels, making it more expensive for NVIDIA to maintain their edge in architecture....
Aug 2018
Artificial Intelligence Chips: Past, Present and Future
May 2018
Chipmakers Battle To Power Artificial Intelligence In Cloud Data Centers" (AMD; NVDA; XLNX; INTC)
May 2018 
"Xilinx Analyst Day Plays Heavy on AI" (XLNX)
May 2018
"Intel vs. Nvidia: Future of AI Chips Still Evolving" (INTC; NVDA)
Dec. 2017
“'The Ultimate Trading Machine' from Penguin Computing sets Record for Low Latency"
Oct. 2017
"The Natural Evolution of Artificial Intelligence" 

"Nvidia CEO is 'more than happy to help' if Tesla's A.I. chip doesn't pan out" (NVDA; TSLA)

And April 2017
We've said NVIDIA probably has a couple year head start but this bears watching, so to speak....
***
The only reason for Tesla to do this is that NVIDIA's chips are general purpose whereas specialized chips are making inroads in stuff like crypto mining (ASICs), Google's Tensor Processing Units (TPUs) for machine learning and Facebook's hardware efforts.

In May, 2018 we met a person who knows about this stuff:

 AI VC: "We Are Here To Create" 
Sometimes the competition is just plain intimidating/scary/resistance-is-futile, smart.

June 2016 
Machine Learning: JP Morgan Compares Google's New Chip With NVIDIA's (GOOG; NVDA)

And many more, use the "search blog" box, upper left if interested.

Cows and Pigs and Insights from Alltech’s Global Feed Survey

The survey was released a couple months ago so we're tardy getting to it but what with tariffs and floods and all the things that happen in the world I have a feeling we're going to be referring back to the baseline numbers.
Via Farm Journal: Pork, January 25:

https://www.porkbusiness.com/sites/default/files/styles/featured_banner/public/Agriculture-Collage.jpg?itok=hWFP34pv
Eight countries, China, U.S., Brazil, Russia, India, Mexico, Spain and Turkey, produce 55% of the world’s feed and have 59% of the world’s feed mills. ( Lori Hays )
Global feed production is at an all-time high. In the 2019 Global Feed Survey, Alltech estimates a strong 3% growth to 1.068 billion metric tons of feed produced. This is the third consecutive year the survey exceeded the billion-ton production mark.

The feed industry has seen 14.6% growth over the past five years, says Dr. Mark Lyons, during the media webinar Tuesday. As the population grows, so does the middle class, which is well reflected in an increase in overall protein consumption.

Eight countries, China, U.S., Brazil, Russia, India, Mexico, Spain and Turkey, produce 55% of the world’s feed and have 59% of the world’s feed mills.
Here’s a brief look at the top trends from the survey:
China Remains Top Feed Producer and User
The world’s largest producer and consumer of feed has faced clear challenges in its pig herd with African swine fever (ASF) and foot-and-mouth disease in cattle. But overall, this year the country saw only a small decline of 0.4% in animal feed production.
China maintained status as the top feed-producing country in the world with 187.89 million metric tons, 10 million metric tons more than the U.S. More than 42% of the country’s feed production goes to pigs. ASF has only further accelerated China’s move toward larger, more professional farms and improved cost-efficient pork production. While feed production growth might not be as high this year as one might expect, the feed-cost ratio has improved dramatically.
The survey only showed a small portion of the ASF’s effect on feed use and demand. Lyons said some industry estimates are predicting a loss of up to 30% of China’s hog production in 2019 and 2020.
“That’s something for us to think about. Even if as that pork is removed from the market, we recognize that exports can only represent a certain percentage of the picture. The Chinese market is so dominant and so large, there’s few countries can export enough pork to make up that gap,” he said.

China’s dairy and beef feed production also both declined by 17%. China’s dairy industry is struggling as dairy farmers try to balance high priced inputs with poor returns from milk processors. The beef industry’s decline indicates the displacement of local production with both cheaper imports and higher quality imported meats. China’s layer and broiler industries also saw small declines of 11% and 5% in feed production, respectively.

Regional changes:

  • North America, 2% growth
  • Latin America, 1% Growth
  • Europe, 4% Growth
  • Africa, 5% Growth
  • Middle East, 2% Growth
  • Asia Pacific, 3% Growth
...MUCH MORE

Sunday, March 24, 2019

Lo and Behold: Andrew Lo's Adaptive Markets

Professor Lo appears to be a better theoretician than practitioner.
So be it.
As noted in a 2010 post on pricing long-term options with William Bernstein reviewing Boston University's retirement maven:
William Bernstein (No slouch either, M.D. Neurologist, PhD. Chemistry, dabbler in Modern Portfolio Theory, Bestselling Author, etc.) in one of his Efficient Frontier pieces, "Zvi Bodie and the Keynes’ Paradox of Thrift" described the professor as "Academician, raconteur, and all-around good guy Zvi Bodie...".
Then he rips his lungs out. Very typical in the academy:...
You see a bit of that refined lung ripping in the piece below.
The reviewer is Professor Emeritus of Banking and Finance at the London School of Economics.

From Inference Review:

Adaptive Markets: Financial Evolution at the Speed of Thought
by Andrew Lo
Princeton University Press, 504 pp., USD$37.50.
Andrew Lo is a professor of finance at MIT’s Sloan School of Management. After taking his PhD at Harvard in 1984, he went off briefly to the Wharton School of Business, and, four years later, went back to Cambridge and then to MIT. A prolific author, he is known to the public for A Non-Random Walk Down Wall Street, and he is known to the professionals for his numerous articles in leading journals on finance and economics. He is rich in awards.

In Adaptive Markets he proposes to challenge the scientific basis for many theories in mainstream finance and economics. That mainstream, he argues, has been based on a static approach derived from theoretical physics. It is evolutionary biology that he champions in its place. Facile à dire, difficile à faire. The social sciences are always more complicated than the natural sciences. Controlled experiments are rarely possible. Human beings learn and they adapt. An experiment having been conducted, there is no guarantee that subsequent experiments will yield the same outcome. The wider environment of habits, rules, laws, and customs within which men live is always changing. Any initial economic state, to reprise the language of physics, is compatible with a huge number of evolutionary developments. Most of them are currently unknowable. They correspond to situations of uncertainty and not risk.

What to do?
The obvious answer is to simplify things by reducing the real world to a relevant model, one tractable enough to be calculable, and realistic enough to be useful. Within the close confines of an economic model, the environment is held constant, its markets, laws, and customs fixed from the first. The system that results is not completely determined because its parameters admit of stochastic variation, but these variations are derived from a known and constant probability distribution. There is risk, but no uncertainty.

If the real world were really so simple, consumers would share the same rational, model-consistent expectations, and these expectations would be efficiently reflected in asset prices. To within the margin of risk, borrowers and lenders know what is coming: borrowers have no reason to default, and lenders, no reason to despair. In some general equilibrium models, the agent never defaults. But if an agent never defaults on a contract, his note must always be acceptable in payment. If borrowers and lenders undertake their transactions at the riskless interest rate, there is no place in the model for a great financial crisis.

Whatever the model, in life this is too good to be true.
Some progress has been made in incorporating defaults into macroeconomic models, but none of the models yet encompasses bank failures. Mainstream macroeconomics has detached itself from such issues as illiquidity, insolvency, and bankruptcy; but they are crucial in finance. As a result, macroeconomics and finance, which used to overlap a few decades ago, have drifted further and further apart. They now have largely separate languages serving largely separate masters.

Live and Learn
Lo observes the current scene from his position as a finance economist; but where other finance economists see a stable and constant macroeconomic system, he sees one that is evolving, adaptive, and fluid. “Individuals and species adapt to their environment,” he writes. “If the environment changes, the heuristics of the old environment might not be suited to the new one.”1 Live and learn. In the time between living and learning, revisions in supposed rationality are bound to occur. Judged by the standards of an older environment, agents may seem to act irrationally, and vice versa. “[I]f the environment is constantly shifting, it’s entirely possible that, like a cat chasing its tail endlessly, individuals in those circumstances will never reach an optimal heuristic.”2 This, too, will look irrational. From this new perspective, it becomes plain that “[a]n efficient market is simply the steady-state limit of a market in an unchanging financial environment.” Such a market is unlikely ever to exist beyond the textbooks, but it is still a useful abstraction, one whose performance can be approximated under certain conditions.3

Most of us macroeconomists might well be tempted to remark that we knew it all along, and if not all along then at least since the publication of Judgment under Uncertainty by Daniel Kahneman, Paul Slovic, and Amos Tversky.4 Published in 1982, their work has been reinforced by the development of behavioral economics. Lo takes up most of the early chapters of his book with a review of this research and it is, of course, no surprise that the economic agent who emerges from this summary is only distantly related to homo economicus—the man of rational economic expectations. Lo writes well and these chapters are a good read.

However much Lo’s economic agent may be adapting himself, he is still acting alone. As a solitary actor, he is not always interested in optimal solutions. Lo offers himself as an example. In choosing his wardrobe on any given day, he faces a choice of 2,016,000 unique outfits. Contemplation is required. The simple business of optimally matching his silk undershorts to his tie and pocket handkerchief would require almost twenty-four days. “The choice of clothes I settle on each day,” he adds sensibly, “may not be optimal, but it’s good enough.”5

Me? I ask my wife. That usually settles the matter.

We respond to events, Lo is right to observe, by constructing plausible narratives; and intelligence, he is right to add, is nothing less than, “the ability to construct good narratives [emphasis added].”6 The good narratives are those that make for “accurate cause-and-effect descriptions of reality.” But no one acting alone has the time or the energy to construct narratives about most phenomena, and only specialists are able to derive their narratives from first principles. We learn and accept such narratives from others. In the social sciences, opinions matter; there are fashions in economics as in clothing.

Evasive Abstractions
Mainstream economic models ignore the poorly understood process of learning. Such models may still be useful. Carefully hedged mainstream predictions are better than no predictions at all. The assumption that, given perfect information, economic agents are apt to converge rapidly onto rational expectations is most nearly justified when models assess the impact of current events on short-run, high-frequency developments in asset prices. So long as the time is short, the overall structure of the system stays constant. But even this commonsensical conclusion fails when a crisis occurs: a terrorist attack, the unexpected fall of a great financial house, the outbreak of war. In economic life, the structure of the economy changes, and the relationship between temporal volatility and asset return turns negative. Asset prices tend to vary much more than is consistent with their dividend path because economic agents are uncertain about the structural changes taking place all around them....
...MUCH MORE

Michael Crichton On Speculation By (and in) the Media

Mr. Crichton had an M.D. from Harvard but never practiced, preferring writing as his vocation.
Like Isaac Asimov he had a talent for science fiction and like Asimov he was pretty good at it.
Here is a speech Crichton gave in 2002, referenced in a column by In-Q-Tel's Chief Information Security Officer for the Advanced Computing Systems Association.
This version is the copy archived by the Wayback Machine from Mr. Crichton's website. The redesigned Crichton website seems not to have the speech.
It is also archived at DocDroid with an added quote from Mark Twain.

Given in La Jolla, California, at the International Leadership Forum on April 26, 2002  

WHY SPECULATE?
A talk by Michael Crichton
In recent years, media has increasingly turned away from reporting what has happened to focus on speculation about what may happen in the future. Paying attention to modern media is thus a waste of time.
_____________________________________________________________________
My topic for today is the prevalence of speculation in media. What does it mean? Why has it become so ubiquitous? Should we do something about it? If so, what should we do? And why? Should we care at all? Isn't speculation valuable? Isn't it natural?

I will join this speculative bandwagon and speculate about why there is so much speculation. In keeping with the trend, I will try express my views without any factual support, simply providing you with a series of bald assertions.

This is not my natural style, and it's going to be a challenge for me, but I will do my best. I have written out my talk which is already a contradiction of principle. To keep within the spirit of our time, it should really be off the top of my head.

Before we begin, I'd like to clarify a definition. By media I mean movies television internet books newspapers and magazines. That's a broad definition but in keeping with the general trend of speculation, let's not make too many fine distinctions.

First we might begin by asking, to what degree has the media turned to pure speculation? Someone could do a study of this and present facts, but nobody has. I certainly won't. There's no reason to bother.

Today, everybody knows that "Hardball," "The O'Relly Factor," and similar shows are nothing but a steady stream of guesses about the future. The Sunday morning talk shows are pure speculation. They have to be. Everybody knows there's no news on Sunday.

But speculation is every bit as rampant in the so-called serious media, such as newspapers. For example, consider the New York Times for March 6, 2002, the day I was asked to give this talk. The column one story that day concerns George Bush's tariffs on imported steel. We read:

Mr. Bush's action "is likely to send the price of steel up sharply, perhaps as much as ten percent.." American consumers "will ultimately bear" higher prices. America's allies "would almost certainly challenge" the decision. Their legal case "could take years to litigate in Geneva, is likely to hinge" on thus and such.

In addition, there is a further vague and overarching speculation. The Allies' challenge would be "setting the stage for a major trade fight with many of the same countries Mr. Bush is trying to hold together in the fractious coalition against terrorism." In other words, the story speculates that tariffs may rebound against the fight against terrorism.

You may read this story and think, what's the big deal? Isn't it reasonable to talk about effects of current events in this way? I answer, absolutely not. Such speculation is a complete waste of time. It's useless. It's bullshit on the front page of the Times.

The reason why it is useless, of course, is that nobody knows what the future holds.

Do we all agree that nobody knows what the future holds? Or do I have to prove it to you? I ask this because there are some well-studied media effects which suggest that a simple appearance in media provides credibility. There was a well-known series of excellent studies by Stanford researchers that have shown, for example, that children take media literally. If you show them a bag of popcorn on a television set and ask them what will happen if you turn the TV upside down, the children say the popcorn will fall out of the bag. This effect would be amusing if it were confined to children. The studies show that no one is exempt. All human beings are subject to this media effect, including those of us who think we are self-aware and hip and knowledgeable.

Media carries with it a credibility that is totally undeserved. You have all experienced this, in what I call the Murray Gell-Mann Amnesia effect. (I call it by this name because I once discussed it with Murray Gell-Mann, and by dropping a famous name I imply greater importance to myself, and to the effect, than it would otherwise have.)

Briefly stated, the Gell-Mann Amnesia effect works as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward-reversing cause and effect. I call these the "wet streets cause rain" stories. Paper's full of them.

In any case, you read with exasperation or amusement the multiple errors in a story-and then turn the page to national or international affairs, and read with renewed interest as if the rest of the newspaper was somehow more accurate about far-off Palestine than it was about the story you just read. You turn the page, and forget what you know.

That is the Gell-Mann Amnesia effect. I'd point out it does not operate in other arenas of life. In ordinary life, if somebody consistently exaggerates or lies to you, you soon discount everything they say. In court, there is the legal doctrine of falsus in uno, falsus in omnibus, which means untruthful in one part, untruthful in all.

But when it comes to the media, we believe against evidence that it is probably worth our time to read other parts of the paper. When, in fact, it almost certainly isn't. The only possible explanation for our behavior is amnesia.

So one problem with speculation is that it piggybacks on the Gell-Mann effect of unwarranted credibility, making speculation look more useful than it is.

Another issue springs from the sheer volume of speculation. Ubiquity may come to imply a value to the activity being so assiduously carried out. But in fact, no matter how many people are speculating, no matter how familiar their faces, how good their makeup and how well they are lit, no matter how many weeks they appear before us in person or in columns, it still remains true that none of them knows what the future holds.

Some people still believe that the future can be known. They imagine two groups of people that may know the future, and therefore should be listened to. The first is pundits. Since they expound on the future all the time, they must know what they are talking about. Do they? The now-defunct magazine Brill's Content used to track the pundit's guesses, and while one or another had the occasional winning streak, over the long haul they did no better than chance. This is what you would expect. Because nobody knows the future.

The second group that some people imagine may know the future are specialists of various kinds. They don't either. As a limiting case, I remind you there is a new kind of specialist occupation-I refuse to call it a discipline, or a field of study-called futurism. The notion here is that there is a way to study trends and know what the future holds. That would indeed be valuable, if it were possible. But it isn't possible. Futurists don't know any more about the future than you or I. Read their magazines from a couple of years ago and you'll see an endless parade of error.

Expertise is no shield against failure to see ahead. Paul Erlich, a brilliant academic who has devoted his entire life to ecological issues, has been wrong in nearly all his major predictions. He was wrong about diminishing resources, he was wrong about the population explosion, and he was wrong that we would lose 50% of all species by the year 2000. His lifelong study of these issues did not prevent him from being wrong.

All right, you may say, you'll accept that the future can't be known, in the way I are talking. But what about more immediate predictions, such as the effects of pending legislation? Surely it is important to talk about what will happen if certain legislation passes. Well, no, it isn't. Nobody knows what is going to happen when the legislation passes. I give you two examples from the left and right.

The first is the Clinton welfare reform, harshly criticized by his own left wing for caving in to the Republican agenda. The left's predictions were for vast human suffering, shivering cold, child abuse, terrible outcomes. What happened? None of these things. Child abuse declined. In fact, as government reforms go, it's been a success; Mother Jones predicts dire effects just ahead.

This failure to predict accurately was mirrored by the hysterical cries from the Republican right over raising the minimum wage. Chaos and dark days would surely follow as businesses closed their doors and the country was plunged into needless recession. What was the actual effect? Basically, nothing. Who discusses it now? Nobody. What will happen if there is an attempt to raise the minimum wage again? The same predictions all over again. Have we learned anything? No.

But my point is, for legislation as with everything else, nobody knows the future.

The same thing is true concerning the effect of elections and appointments. What will be the effect of electing a certain president, or a supreme court justice? Nobody knows. Some in this audience are old enough to remember Art Buchwald's famous column from the days of the Johnson Administration. Buchwald wrote a "Thank God we don't have Barry Goldwater" essay, recalling how everyone feared Goldwater would get us into a major war. So the country elected Johnson, who promptly committed 200,000 troops to Vietnam. That's what happens when you choose the dove-ish candidate. You get a war. Or you elect Richard Nixon because he can pull the plug on Vietnam, and he continues to fight for years. And then opens China.

Similarly, the history of the Supreme Court appointments is a litany of error in predicting how justices will vote on the court. They don't all surprise us, but a lot of them do.

So, in terms of imminent events, can we predict anything at all? No. You need only look at what was said days before the Berlin Wall came down, to understand that nobody can predict even a few hours ahead. People said all sorts of silly things about the Communist empire. I can't quote them, because that would mean I had looked them up and had facts at hand, and I have promised you not to do that. But take my word for it, you can find silly statements 24 hours in advance of the fall of the Russian empire.

So I say again: NOBODY KNOWS THE FUTURE.

Now, this is not new information. It was Mark Twain who said, 'I've seen a heap of trouble in my life, and most of it never came to pass."

If speculation is really worthless, why is there so much of it? Is it because people want it? I don't think so. I speculate that media has turned to speculation for media's own reasons. So now let's consider the advantages of speculation from a media standpoint.

1. It's incredibly cheap. Talk is cheap. And speculative talk shows are the cheapest thing you can put on television, They're almost as cheap as running a test pattern. Just get the talking host, book the talking heads-of which there is no shortage-and you're done! Instant show. No reporters in different cities around the world, no film crews on location. No research staff, no deadlines, no footage to edit, no editors...nothing! Just talk. Bullshit. Cheap.

2. You can't lose. Even though speculation is correct only by chance, which means it is wrong at least 50% of the time, nobody remembers and therefore nobody cares. People do not remember yesterday, let alone last week, or last month. Media exists in the eternal now, this minute, this crisis, this talking head, this column, this speculation.

One of the clearest proofs of this is the "Currents of Death" controversy. This fear of cancer from power lines originated with the New Yorker, which has been a gushing fountainhead of erroneous scientific speculation for fifty years. But the point is this: all the people who ten years ago were frantic to measure dangerous electromagnetic radiation in their houses now spend thousands of dollars buying magnets to attach to their wrists and ankles, because of the putative healthful effects of magnetic fields. They don't remember these are the same fields they formerly wanted to avoid. And since they don't remember, you can't lose with any future speculation.

Let me expand on this idea that you can't lose. It's not confined to the media. Most areas of intellectual life have discovered the virtues of speculation, and have embraced it wildly. In academia, speculation is usually dignified as theory. It's fascinating that even though the intellectual stance of the pomo deconstructionist era is against theory, particularly overarching theory, in reality what every academic wants to express is theory. This is in part aping science, but it's also an escape hatch. Your close textual reading of Jane Austen could well be wrong, and could be shown to be wrong by a more knowledgeable critic. But your theory of radical feminization and authoritarian revolt in the work of Jane Austen-with reference to your own childhood feelings-is untouchable. Similarly, your analysis of the origins of the First World War could be debated by other authorities. But your New Historicist essay, which includes your own fantasy about what it would be like if you were fighting in the first war...well, that's unarguable. And even better, how about a theory of the origin of warfare beginning with Paleolithic cave men? That's really unarguable.

A wonderful area for speculative academic work is the unknowable. Religious subjects are in disfavor these days, but there are still plenty of good topics. The nature of consciousness, the workings of the brain, the origin of aggression, the origin of language, the origin of life on earth, SETI and life on other worlds...this is all great stuff. You can argue it interminably. And it can't be contradicted, because nobody knows the answer to any of these topics-and probably, nobody ever will.

Then there is the speculative work of anthropologists like Helen Fisher, who claim to tell us about the origins of love or of infidelity or cooperation by reference to other societies, animal behavior, and the fossil record. How can she be wrong? These are untestable, unprovable, just so stories.

And lest anyone imagine things are different in the hard sciences, consider string theory, for nearly 20 years now the dominant physical theory. More than one generation of physicists has labored over string theory. But-if I understand it correctly, and I may not-string theory cannot be tested or proven or disproven. Although some physicists are distressed by the argument that an untestable theory is nevertheless scientific, who is going to object, really? Face it, a untestable theory is ideal! Your career is secure!

In short, there is now widespread understanding that so long as you speculate, you can't lose.

Now, nowhere is it written that the media need be accurate, or useful. They haven't been for most of recorded history. So now they're speculating....so what? What is wrong with it? ...MUCH MORE
I can't imagine being a serious journalist and having to put up with this crap from colleagues, confrères and competitors. It has to drive them nuts to watch the never-ending speculations.

Is Elon Musk Following In The Footsteps of John DeLorean

Nah.
The similarities are superficial. Two guys with revolutionary cars, possible mental illness, early business success, etc.
From The Outline:
DEC—11—2018
John DeLorean and the Demon Underneath
Long before Elon Musk, a visionary automaker showed how ugly the American Dream could be.

The Crash at Lime Rock
In Zachary DeLorean’s little house on Detroit’s Near East side they speak Rumanian. Zachary is from Bucharest. Zachary has a way with machines but his poor English holds him back. He starts and ends his career on the factory floor at Ford. He’s a thwarted man and a payday drunk. He fights in bars and knocks his wife around. Her name is Kathryn Pribak DeLorean. Their oldest son is John DeLorean, born January 6, 1925.

She divorces Zachary in the ‘40s and John never sees him again. When Zachary dies of throat cancer in 1968, the Ford plant calls and asks John to come pick up his father’s toolbox. John lives with his mother until he marries Elizabeth Higgins in 1954. She’s a phone-company receptionist. They never have children.

In 1956, John DeLorean leaves a research and development job at Packard and goes to work for General Motors. At the time it’s the biggest car company on Earth. DeLorean works in engineering at Pontiac. It’s a struggling division with no real brand identity, but John’s new boss, Bunkie Knudsen, is beginning to turn things around. He’s started supplying Pontiac product to stock-car drivers. NASCAR is a decade old and Cotton Owens has just won a title at the Daytona Beach & Road Course in a Pontiac.

Bunkie’s betting that an association with speed and excitement will help move Pontiacs. Implicitly he’s betting on youth. You can’t sell an old man’s car to a young man, Bunkie likes to say, but you can always sell a young man’s car to an old man.

The rest of the industry doesn’t think this way. Bunkie’s superiors aren’t thinking about speed or youth or action. Each day the auto-industry princes of General Motors leave their homes in Birmingham and Bloomfield Hills and drive to work — down Woodward Avenue, which runs shotgun-straight from the Detroit suburbs to GM headquarters — in big General Motors cars built to ride as smoothly as sailboats on glassy water. From where they sit, it’s hard to imagine anyone wanting something different from a car. Former Car & Driver editor Brock Yates will later call this strain of confirmation bias the “Detroit Mind.”

In 1961 Knudsen is appointed general manager of Chevrolet. His chief engineer Elliott “Pete” Estes succeeds him at Pontiac, and John DeLorean takes over for Estes. He’s 36.
After work the Pontiac engineers test-drive prototypes that will never see the floor of a dealership. When the streetlights come on Woodward Avenue becomes one of America’s hottest drag strips. Sometimes kids pull up at stoplights next to shirt-sleeved GM engineers driving cars with code names. Sometimes the GM guys blow the kids off the road.

In 1963, John and his team start to wonder what would happen if you threw a 389-cubic-inch V8 engine fit to power a full-size Bonneville into a smaller car, like the midsize Pontiac Tempest. What happens is you create a maneuverable but brawny car with a race-friendly surplus of power and torque.

There’s a companywide rule capping engine displacement in midsize cars at 330 cubic inches. It exists in part to prevent GM engineers from making a hopped-up car like this one available over the counter. With Estes’ approval, the team smuggles the 389 past GM’s Engineering Policy Committee by hiding it in a $296 option package on the ’64 Tempest. John, a sports-car aficionado, borrows an acronym from a line of limited-edition Ferraris — Gran Turismo Omologato — and christens the option the “GTO package.”

Dealer orders start pouring in and they’ve sold 5,000 before GM figures out what’s happening. John and his team have just put General Motors in the muscle-car business....MUCH MORE
I don't know if Musk even has an interest in DeLorean.
James Bond is a different story.

Musk bought the Lotus Esprit featured in The Spy Who Loved Me for $866,000. From June 2016:

"Tesla’s Model S can turn into a boat (kinda), Musk claims" (TSLA)
Tesla-obsessives may recall last year's "As The Good Ship Tesla Sells Some Equity, A Reminder That Elon Musk Has Exit Options Not Available To The Rest Of Us (TSLA)":
Should Tesla experience what Titanic enthusiasts were calling a "crash floe" problem everyone knows Elon has already prepared one alternative future for himself via Space-X:...
But what many may not remember is that a couple years ago he secured a second, more prosaic, if that's the word, escape vehicle:
James Bond’s Lotus Esprit Submarine Purchased by Elon Musk 


http://i.kinja-img.com/gawker-media/image/upload/s--NYDT67tG--/c_fit,fl_progressive,q_80,w_636/193hg3hnzai8ojpg.jpg

The sub is electrically powered,
of course.

"A World Built on Sand and Oil"

We too have experienced the allure of sand.
Usually at the beach but on the blog as well.

From Lapham's Quarterly:

When natural resources become essential commodities.
Oil and sand are not often commodities conjoined in discussions of global trade. The first is the motive engine of industry and transportation, fuel for heating and illumination, the spirit that animates much global politics. Even when priced cheaply—as I write, the price of oil hovers around fifty dollars per barrel (or just under four hundred dollars per ton)—it is considered precious. Humble, ordinary, oft-overlooked sand is, by contrast, the second most consumed good in the world by volume after water. It makes concrete and glass and electronics possible. According to the UN Environment Programme, at least fifty billion tons of sand (often measured in aggregate with gravel) are used annually, in contrast with four billion tons of oil. But sand is not often thought of as valuable: its trade is more domestic than global, and its market price per ton is under nine dollars in the United States and far less than that in the rest of the world.

But there are similarities, too. While China is the biggest consumer of both products, the United States follows close behind as the world’s second-largest consumer of oil and the third-largest user of sand. Depending on its market price, crude oil is often the first or second most exported good in the world by value. Today’s relatively low prices put crude oil exports in second place, after automobiles. At the end of 2015, the U.S. government rescinded a forty-year ban on the export of crude oil from the States, and since then the country has aggressively reentered the global oil market, becoming the world’s third-largest exporter of petroleum and its refined products, behind Saudi Arabia and Russia. (Despite being the largest oil producer, the U.S. is not the world’s largest exporter, because it consumes most of what it produces.) The vast majority of the trade in sand is domestic, and the U.S. and China extract the sand they need for construction and industry from their own territories. The world’s biggest importer of sand, however, is Singapore, which uses a great volume of the stuff in its frenetic projects of land reclamation.

The two commodities converge in one other regard. Their commodification and trade hold mirrors to global inequalities and ecological plunder. Both are produced over eons, the one a product of fossilization of prehistoric flora and fauna, the other the debris of rocks’ encounter with wind and water. Both tar and dirt symbolize inferior material. And yet the moment at which they became pivotal to industrialization and urbanization, rocks are blasted, wells are drilled to sepulchral depths, rivers are dredged, beaches are bulldozed away to enable the transformation of these natural resources into commodities. The inexorable proliferation of oil and sand on the global circuits of trade tells us about the shape-shifting ways of production, colonial forms of exploitation, and our reckless wrecking of the global environmental commons. It is about how the commodification of prosaic everyday things affects lives here, now, and half a world away.

If you look around you, you will inevitably see objects, places, things containing sand. Sand is dredged out of a riverbed or a seafloor in one place and poured into the shallows in another place to conjure land out of the sea. Sand and gravel are used in the making of concrete, today the most widely used building material in the world. Mixed with tar, sand and gravel constitute asphalt. The silica in sand is extracted to manufacture all grades of glass, as well as semiconductors and integrated circuits used in electronics. Even hydraulic fracturing, or fracking, requires sand. The urbanization of the world, the meteoric growth in the production of electronics, and the expansion of the use of glass in everything from windows and fiberglass to screens for automobiles and electronics all have increased the demand for sand. But the largest consumer remains the construction industry.
Throughout human history sand and gravel have been used to raise buildings, pave roads, and make glassware. Monumental structures of ancient times—the Great Wall of China, Roman aqueducts and amphitheaters, and ziggurats and pyramids in Mesopotamia and the Americas—used either early versions of concrete (blending some adhesive with sand and gravel) or fired mud bricks made from a mixture of sand and clay. The massive blocks of stone for the pyramids in Egypt were dragged into place on beds of sand. Glass-cutting techniques were employed in the Sassanian Empire, and glass windowpanes made from sand quartz and ash were known in Roman Alexandria nearly two thousand years ago, though they were opaque, small, and thick. (Until the early modern period, glass panes were—like many other technologies—reserved for elite sacred and profane institutions: cathedrals, jami’ mosques, and grand administrative buildings.) The glorious Hagia Sophia, built in the sixth century, was illuminated by large glass panes in its dome. Urbanization in the early modern era fueled the usage of sand and gravel needed for the expansion of cities and the arteries that facilitated circulation within and between them. But until recently, the sand and gravel used for these purposes were almost always mined and transported locally. (The exceptions were prized construction materials such as specially colored marbles and hardwood timber.) Transporting such heavy cargo using either human or animal motive force was costly and slow.

Oceanic transport of building materials took off only from the fifteenth century onward, with the colossal expansion of maritime trade across the globe that came with colonialism. Sand and gravel were not immediately considered commodities to be traded across the seas; their large-scale maritime transportation was a side effect of seaborne trade itself. Ships are “in ballast” when not carrying cargo: when not laden, they float too close to the surface of the sea and can list. Ships not in cargo have to carry ballast to sail true. Before steamships fueled by coal (which acted as ballast), sand, gravel, and shingle were used. Landscapes were harvested for ballast, which was then dumped on quaysides halfway around the world. The discarded gravel and shingle from the ballast hills were employed in roads, buildings, and railroads, all of which underwent continent-wide expansion in the Americas, Europe, and their colonies in the nineteenth century.

The trade in sand and gravel as commodities in their own right began in earnest in the twentieth century. The efflorescence of modernist concrete architecture with large windows and the later fashion for glass cladding in ever-expanding cities demanded concerted and organized trade in sand, rather than the accidental use of ballast. And with the invention and upward spiral in the usage of electronics at the end of the twentieth century, the search for industrial-quality sand became more urgent.

Not all sand is created equal. The fine sand of the desert, stretching for miles across the arid climates, has been eroded by wind, becoming too uniform in size and too even in shape to make good concrete. Concrete is manufactured by mixing cement with a larger proportion of sand; unevenly sized and shaped grains of sand better facilitate the adhesive effect desired of cement. The grains of water-eroded sand are irregular in shape and dissimilar in size and thus ideal for making concrete. As the demand for concrete has skyrocketed and technologies for making it have improved in the past fifty years, the world has grown famished for sand. Residential and commercial buildings, agglomerations of skyscrapers, and sprawling exurbs all devour concrete. Land reclamation requires pouring dredging by-products, sand, and concrete blocks into the sea, creating property ex nihilo. Islands such as Bahrain and Singapore have pushed their landmass further into the sea through this process. A 2014 Financial Times investigative report showed that a secretive investment vehicle owned by Bahraini royals was granted deeds to undersea plots of land; after reclamation these became coveted and expensive ground for the development of luxury hotels and commercial buildings. By some accounts China has used more cement between 2011 and 2013 than the U.S. did in all of the twentieth century. If concrete requires at least twice as much sand as cement, then the volume of sand involved in producing billions of tons of concrete today boggles the mind.

Over the millennia oil, naturally seeping out of the earth, has been used as fuel for lamps and heaters and as an emollient for skin ailments. The industrial exploitation of petroleum via hand-dug wells had begun in Russia’s Azerbaijan region a decade or so before oil gushers were drilled in mid-nineteenth-century Pennsylvania....MUCH MORE
Possibly also of interest (I know it's a longshot):

The World Is Running Out of Sand (Elon Musk to the rescue!)

Commodities: The Next Big Thing Is Sand

Sand Wars - China and developing countries need tens of billions tons of sand for urbanization and economic growth
The link that starts this piece goes to Sand Wars: Beijing’s Hidden Ambition in the South China Sea a 22 page PDF, hosted at the College of William & Mary.

What the Frac: "The Past Year’s Hottest IPO Is… " (EMES; SLCA)
From MoneyBeat:
The hottest initial public offering from 2013 isn’t a cloud technology stock, or a biotech company with a promising cancer drug.

The company behind the top-performing IPO in the past 18 months digs sand.

Through Friday, sand-mining company Emerge Energy Services LP has rallied 462% since its debut on May 8, 2013, for the biggest share-price gain since its IPO among companies that went public last year, according to Dealogic....
Having concluded that oil and gas were just a passing fad, this is what we were posting the month Emerge came public:
The Internet of Things: Huggies App Sends You a Tweet Whenever Your Kid Pees...
The Ethics of Torturing Robots
British Psychologists Bashing British Psychiatrists
Shaman               Witch Doctor
Psychologist            Psychiatrist
I so wish I were kidding.
Like that point in a "Behind the Music" where everyone goes to rehab, we knew it was ending:
What the Frack: "Good Times Run Out for Sand Producers"
with, maybe a bit of forced jollity in March:
Basic Materials: What's New In the Sand Business? (SLCA; EMES)
But there was nothing new, it's sand.


EMES Emerge Energy Services LP weekly Stock Chart

Saturday, March 23, 2019

"Viking Cruises engine failure off Norway coast prompts rescue operation for 1,300 people on board"

The good news is the ship is close to shore. The bad news is the ship is close to shore.
Fortunately, the ship is not captained by Schettino.*

From ABC (U.S.) News:

 A cruise ship went adrift off the waters of Norway on March 23, 2019, and passengers were being evacuated.
 (Eva Frisnes)  A cruise ship went adrift off the waters of Norway on March 23, 2019, and passengers were being evacuated.
Rescue helicopters were battling severe winds on Saturday to airlift more than 1,300 people off a Viking Cruises' ship that issued a distressed call after an engine failure off the coast of Norway.
Of the 1,300 stranded, 915 were passengers on the Viking Cruises' ship called The Viking Sky, Norway's Rescue Coordination Centre told ABC News. The ship can house 930 guests and was built in 2017, according to the company's website.

The initial mayday was received by the agency at 2 p.m. local time, a Viking spokesman said. Currently, the cruise ship is close to shore and has one engine working and one anchor holding. Rescuers hope to get two other engines working....
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Schettino below but before I forget, Moss Hills, hero of the sinking MTS Oceanos, via the PBS program NOVA:

Why Ships Sink

PBS Airdate: April 18, 2012

NARRATOR: Moss raced to the bridge.

MOSS HILLS: I went up to the bridge area and it was completely abandoned. And it looked in a bit of disarray. There were binoculars lying around and sliding around, and charts had fallen to the floor. And it's just not a sight that you expect to see.

NARRATOR: The missing captain was later discovered, smoking a cigarette under the stairs. Many of the crew had fled in a lifeboat.

MOSS HILLS: Still no announcements, still no officers to be seen anywhere, and we started to realize we were in charge.

NARRATOR: Moss grabbed the ship's radio.

MOSS HILLS: And I'd said, "Mayday!" And he said, "Right," well, you know, "What is your mayday?" And I said, you know, "We're the cruise ship Oceanos. We're sinking."

And he said, "Well, what rank are you?" I said, "Well I'm, I'm not actually a rank, I'm a guitarist."

And he said, "Well, what are you doing on the bridge?"

I said, "Well, there's nobody else here." And he said, "Where's the captain and the officers?" I said, "I don't know. We don't know where they are."...MORE
Moss and the rest of the band assisted by the comedian Julian Butler, the magician and the choreographer were able to organize the shipboard part of the rescue of 571 people.

*When the "Costa Concordia" got too close to shore in 2012 it hit a rock, capsized and 32 people died. Captain Schettino fled and this transpired: Via The Guardian:
Translated transcript of the conversation between Captain Francesco Schettino of the Costa Concordia and Captain Gregorio de Falco of the Italian coastguard in Livorno  
...De Falco: "Schettino? Listen Schettino. There are people trapped on board. Now you go with your boat under the prow on the starboard side. There is a pilot ladder. You will climb that ladder and go on board. You go on board and then you will tell me how many people there are. Is that clear? I'm recording this conversation, Cmdr Schettino …"

Schettino: "Commander, let me tell you one thing …"

De Falco: "Speak up! Put your hand in front of the microphone and speak more loudly, is that clear?"

Schettino: "In this moment, the boat is tipping …"

De Falco: "I understand that, listen, there are people that are coming down the pilot ladder of the prow. You go up that pilot ladder, get on that ship and tell me how many people are still on board. And what they need. Is that clear? You need to tell me if there are children, women or people in need of assistance. And tell me the exact number of each of these categories. Is that clear? Listen Schettino, that you saved yourself from the sea, but I am going to … really do something bad to you … I am going to make you pay for this. Go on board, (expletive)!"

Schettino: "Commander, please …"

De Falco: "No, please. You now get up and go on board. They are telling me that on board there are still …"

Schettino: "I am here with the rescue boats, I am here, I am not going anywhere, I am here …"

De Falco: "What are you doing, commander?"

Schettino: "I am here to co-ordinate the rescue …"

De Falco: "What are you co-ordinating there? Go on board! Co-ordinate the rescue from aboard the ship. Are you refusing?"

Schettino: "No, I am not refusing."

De Falco: "Are you refusing to go aboard, commander? Can you tell me the reason why you are not going?"

Schettino: "I am not going because the other lifeboat is stopped."

De Falco: "You go aboard. It is an order. Don't make any more excuses. You have declared 'abandon ship'. Now I am in charge. You go on board! Is that clear? Do you hear me? Go, and call me when you are aboard. My air rescue crew is there."

Schettino: "Where are your rescuers?"

De Falco: "My air rescue is on the prow. Go. There are already bodies, Schettino."

Schettino: "How many bodies are there?"

De Falco: "I don't know. I have heard of one. You are the one who has to tell me how many there are. Christ!"

Schettino: "But do you realise it is dark and here we can't see anything …"

De Falco: "And so what? You want to go home, Schettino? It is dark and you want to go home? Get on that prow of the boat using the pilot ladder and tell me what can be done, how many people there are and what their needs are. Now!"...MORE