"Kenyans rush to swap banknotes as cash ban looms"

Things get interesting when governments decide to swap money.
In the case of India, the FT's David Keohane (now Paris, then Mumbai) was reporting almost daily on the compounding indignities which eventually boiled over into an outright fustercluck.
In the case of Germany it led to the Soviets blockading what became known as West Berlin in an attempt to force a couple million people to submit.*

From Agence France-Presse via Kenya's The Nation:

Last week a man walked into a Nairobi car yard and paid for a luxury Mercedes with a mountain of Sh1,000 banknotes, desperate to offload cash that within days would be worthless.

With a deadline looming before the Central Bank of Kenya bans all old edition Sh1,000 notes, big fish with their fortunes stashed in cash are under pressure to find ways to jettison their money.

A new print of the Sh1,000 banknote, the largest denomination, was rolled out in June, with Kenyans given to September 30 to exchange their old bills at the bank or be stuck with bundles of useless cash.

DIRTY MONEY

The operation is aimed at flushing out dirty money being hoarded by tax evaders, crooked businessmen and criminal groups.

Large deposits of the old notes, embossed with the image of Kenya's founding father Jomo Kenyatta, raise alarm bells at banks and require paperwork to prove their origin....MORE

Here's a post from November 2016 that references both: "Whoa: India Messes With Currency Big-Time" 

Although not as dramatic* as the 1948 German currency reform when 10 Reichsmarks were swapped for 1 Deutsche Mark in the Western zones of occupation, this is still a stunning move.

From FT Alphaville:

Death of cash, India’s black money attack edition

You have 50 days (From 10 Nov to 30 Dec) to deposit notes of Rs 500 and Rs 1000 in any Bank or Post office,” PM Modi told the nation in a televised address to the nation....

That’s Indian prime minister Narendra Modi declaring that 500 and 1000 rupee notes will be void from December 30. You know… No big deal. 

Updating with a bit of context: The notes involved here, per the FT based on RBI data, constitute some 86 of the value of all cash in circulation in India atm. And, despite being the current largest notes out there, are used daily in ordinary transaction and to pay monthly salaries, bonuses… basically everything. 

It’s not really about the death of cash of course (even if you gotta say every nod to the reality of cash as the lubricant of corruption brings us further down that road) it’s about curbing the black money menace....MORE

*Four days later the Soviets blockaded the city of Berlin to starve and/or freeze the population into submission which led to one of my favorite examples of clear thinking, recounted in 2008's "Ag Stocks and The Berlin Airlift (AG; MOS; MON; POT)" 

If interested here is a Google search for the Keohane/Alphaville reportage:

site:https://ftalphaville.ft.com Keohane India currency

"Cyprus and Turkey: the battle for oil and gas in the Eastern Mediterranean"

I bet if one were to turn over some rocks on Cyprus one could find signs of American politicians mucking about.
From Offshore Technology, September 30:

The rush for oil and gas reserves in the Eastern Mediterranean is heating up, and nowhere more so than in Cyprus where the government and the UN have condemned as illegal and provocative Turkey’s decision to deploy vessels in Cypriot waters. Julian Turner reports on the ongoing controversy.

Perhaps more than any other body of water on Earth, the Mediterranean Sea has helped shape the evolution of human civilisation. For centuries, great empires and cultures have coveted and fought for control of this civilisational crossroads linking Western Asia, North Africa and Southern Europe.

Today, the Med remains a critical geopolitical chokepoint for trade, transport and natural resources, notably oil and gas. In December, Egypt and Cyprus announced the construction of a major pipeline connecting the Aphrodite gasfield in offshore Cyprus to Egypt’s liquefied natural gas (LNG) facilities.

This was followed in January by the formation of the Eastern Mediterranean Gas Forum, a platform comprising Cyprus, Egypt, Greece, Jordan, Israel, Italy and the Palestinian Authority, aimed at developing a regional natural gas market that again leverages existing LNG infrastructure in Egypt.

Then, in February, US multinational ExxonMobil announced a new gas discovery in offshore Cyprus. The Glaucus-1 well in Block 10 – in which ExxonMobil Exploration and Production Cyprus (Offshore) together hold a 60% interest – more than doubles Cyprus’s estimated offshore resources.

Elsewhere in the Eastern Mediterranean, however, international cooperation is in short supply, and the battle between Cyprus and Turkey for key resources is being fought along familiar political lines.

Partition in Cyprus: reunification and drilling rights
Almost exactly 45 years ago, on 20 July 1974, Turkey invaded Cyprus in order to crush a military coup backed by Greece. In defiance of international opinion, Ankara continues to lay claim to the Turkish Republic of Northern Cyprus, a de facto state situated in the north-eastern portion of the island....

....MUCH MORE

Shipping: "Moody's Downgrades CMA CGM's Rating"

From MarineLink, Sept. 26:

Global ratings agency Moody's has downgraded the corporate family rating of French shipping major CMA CGM due to its "materially weaker" liquidity. The rating was downgraded to B2 from B1.

Concurrently, the company's senior unsecured ratings were downgraded to Caa1 from B3. The outlook was changed to stable from negative.

"Today's rating action reflects that CMA CGM's liquidity profile has weakened materially in the last 12 months as a consequence of the acquisition of CEVA Logistics AG, although expected by Moody's to improve somewhat in 2020", says Daniel Harlid, Assistant Vice President -- Analyst and lead analyst for CMA CGM.

The downgrade of CMA CGM's rating follows the acquisition of CEVA Logistics AG (Ceva, B2 Stable), that together with the a large capex program and difficult, albeit stable, market environment has and will continue to put pressure on the company's liquidity profile.

Given Moody's base case, where the free cash flow generation of the company leaves very limited room for debt reduction, Moody's now expects adjusted debt/EBITDA to be sustained above 5x and adjusted FFO Interest coverage to be sustained below 3x during the next 12-18 months.

Moody's notes that CMA GCM has historically shown good access to capital and that there is some optionality when it comes to delay capex which would improve the current liquidity profile.

Also, Moody's understands the company is planning to sell a minority stake in Ceva and divest terminals; both these actions would improve liquidity....MORE

And from Moody's:

Rating Action: 

Moody's downgrades CMA CGM's corporate family rating to B2 from B1; outlook stable

25 Sep 2019

Stockholm, September 25, 2019 -- Moody's Investors Service ("Moody's") has today downgraded the corporate family rating of CMA CGM S.A. (CMA CGM) to B2 from B1 and its probability default rating to B2-PD from B1-PD. Concurrently, the company's senior unsecured ratings were downgraded to Caa1 from B3. The outlook was changed to stable from negative.

"Today's rating action reflects that CMA CGM's liquidity profile has weakened materially in the last 12 months as a consequence of the acquisition of CEVA Logistics AG, although expected by Moody's to improve somewhat in 2020", says Daniel Harlid, Assistant Vice President -- Analyst and lead analyst for CMA CGM.

RATINGS RATIONALE
The downgrade of CMA CGM's rating follows the acquisition of CEVA Logistics AG (Ceva, B2 Stable), that together with the a large capex programme and difficult, albeit stable, market environment has and will continue to put pressure on the company's liquidity profile. Given Moody's base case, where the free cash flow generation of the company leaves very limited room for debt reduction, Moody's now expects adjusted debt/EBITDA to be sustained above 5x and adjusted FFO Interest coverage to be sustained below 3x during the next 12-18 months.

Moody's notes that CMA GCM has historically shown good access to capital and that there is some optionality when it comes to delay capex which would improve the current liquidity profile. Also, Moody's understands the company is planning to sell a minority stake in Ceva and divest terminals; both these actions would improve liquidity. Nevertheless, today's rating action reflects that available liquidity has decreased substantially since June 2018, when the company had $1.6 billion of cash on balance sheet and $1.2 billion of undrawn RCFs. This is in stark contrast with the liquidity position in June 2019, consisting of $1.5 billion (of which $270 million is at a Ceva level) and only around $280 million in undrawn RCFs.

In terms of environmental, governance and social factors, CMA CGM's rating reflects the elevated environmental risk facing the shipping sector, such as carbon regulation and air pollution. More precisely, the IMO2020 regulation which comes into force 1 January 2020 will most likely increase bunker costs for shipping companies initially before they will be able to pass it through to shippers. Moody's notes as positive that CMA already has agreements in place with contracted customers to include a new Bunker Adjustment Factor based on the new low sulfur fuel. The rating also incorporates risks related to its ownership of Ceva, more precisely linked to related-party transactions and that the deputy chief financial officer ("CFO") of CMA CGM will be CFO for Ceva. That being said, CMA's board consists of two independent directors which helps mitigate corporate governance risks....MUCH MORE

Previously:
Sept. 6
Shipping: CMA CGM Reported a Second Straight Quarterly Loss 

And possibly related, September 3:
China Merchants in Talks to Invest in CMA CGM Port Assets 

"USDA Releases Market-Friendly Data For Corn and Soybeans"

Since this morning's heads-up post "Ahead of Today's USDA Grain Inventory Report" beans are higher, corn is much higher and whet has turned a small loss into a 3% gain.
From Ag.com:

Soybean ending stocks tighten.  

DES MOINES, Iowa — While still large, the U.S. corn and soybean supplies have been tightening, according to the USDA.

As a result, the soybean market jumped up 20¢ per bushel, corn up 10¢.
At midsession, the Dec. corn futures are 7 3/4¢ higher at $3.79 1/4. March corn futures are 7 1/2¢ higher at $3.91 1/2.

Nov. soybean futures are 16 3/4¢ higher at $8.99 1/4. Jan. soybean futures are 15 3/4¢ higher at $9.13 1/4.
Dec. wheat futures are 3/4¢ higher at $4.87 1/4.

December soymeal futures are $3.90 per short ton higher at $299.00. December soy oil futures are $0.30 higher at 29.14¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.68 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 158 points higher.

Sept. 1 Stocks
In its Quarterly Grain Stocks Report Monday, the USDA pegged the U.S. corn supply, as of Sept. 1, at 2.11 billion bushels. The trade expected the USDA to print stocks at 2.428 billion bushels....

....MORE

"Why supply is the secret to affordable housing"

From the Oxford University Press blog, September 26:

Housing has become unaffordable for all but the lucky few in many of the world’s great cities. Who can afford to live in New York or Paris? Yet, housing prices can be kept in check. Some cities have succeeded in doing so, as we shall see. The secret is simple: housing supply, which can be stimulated or thwarted by public policy. Basic economics teaches us that rising demand (say for bread) in the face of inadequate supply (of bread) will inevitably lead to higher bread prices. Housing is no exception. The answer, thus, if we wish to keep prices down is to provide more housing. That indeed is the right answer; but easier said than done. For bread, the normal workings of the market (bakers making more when demand increases) will keep prices in check.

Housing, on other hand, is rarely produced under normal market conditions. Housing as well as the makeup of the neighborhoods we live in are highly sensitive issues that directly affect our well-being. Almost all nations have laws and regulations that govern what can be built where; which is why zoning ordonnances exist. No one wants a waste dump next door or a high-rise blocking out the sun. How housing markets are regulated varies greatly across nations, reflecting national conditions and tastes. High housing prices in many rich-world cities, not least in the United States, are largely self-inflicted, the result of public policy.

The rationale behind many restrictions on housing supply are entirely understandable, heritage protection a common objective in Europe, Paris’ urban planning regulations prohibiting buildings above a certain height a typical example, but which in essence freeze supply, rising prices the inevitable outcome. The roots of America’s housing crisis, especially acute in West Coast cities, are more complex (geographical constraints aside) and also more difficult to remedy, the outcome of a tradition of urban governance and development that privileges local democracy and single family homes. Local democracy is certainly laudable; but has all too often resulted in local residents, via referendums or other means, blocking zoning changes that would have allowed denser residential construction. The parallel proliferation of single-family home low-density neighborhoods, which residents are loath to alter, is the outcome of over sixty years of car-oriented development, difficult to reverse. America’s path to affordable housing will not be easy, requiring changes in how American cities are governed.

However, affordable housing is not an unattainable goal. Vienna in Europe and Montreal in North America have systematically kept housing prices (both rental and owned) below those of comparable sized cities in their respective continents. The two cities have chosen different paths. Housing can be produced by the public sector or by private builders. Vienna chose to privilege the former. Following in the footsteps of 1920s Red Vienna, the City administration with federal support has consistently financed the construction of housing, often via non-profit builders associations, public housing accounting for some two thirds of the market, in turn keeping private sector prices in check.

Montreal, on the other hand, has chosen to facilitate market entry by private contractors, keeping charges and planning constraints to a minimum while at the same time enforcing mid and mixed-density zoning, resulting in a generally flexible (elastic) market in which triplexes, duplexes, and other mid-range housing is the rule.....

....MORE

Ahead of Today's USDA Grain Inventory Report

The question the entire nation is asking, via AgWeb: 

Can USDA Stocks Report Help Clarify Outlook?
Good Morning from Allendale, Inc. with the early morning commentary for September 30, 2019.

Grain markets continue to push higher despite fears U.S.–China trade relationships could be deteriorating again as the two sides seems to be distancing themselves from one another.  Traders will be keeping a close eye on today’s USDA quarterly stocks report for an update.

Last week, December corn futures were up 1.25 cents, November soybeans up 0.25 cents, December wheat up 2.75 cents, December soymeal was up $0.10 and December soyoil was down 63 points.

USDA weekly crop progress report will be released today at 3 p.m. CST.  Trade is looking for corn harvest rating at 14% complete (7% complete last week, 19% 5-year average).  Winter wheat plantings at 38% complete (22% complete last week, 43% 5-year average).

CFTC Commitments of Traders showed funds new net position short -159,890 corn contracts, short -41,688 soybean contracts, short -18,779 wheat contracts, short -5,817 live cattle contracts and long +21,455 lean hog contracts.

USDA's quarterly grain stocks report will be released today at 11 A.M. CDT.  Average analyst estimates are .982 billion bushels of soybeans, 2.318 billion bu. of wheat, and 2.428 billion bu. of corn.  If realized, the corn and soybean numbers would be some of the largest on record....

....MORE

And from DTN Progressive Farmer:

USDA Reports Preview

A Quarterly Checkup From USDA

I'll say it again, the 2019 U.S. crop season continues to be unlike any other in recent history. While we wait to see how harvest turns out, USDA has a couple of reports for us to consider on Monday, Sept. 30. 

The Sept. 1 Grain Stocks Report will establish final ending corn and soybean stocks for the 2018-19 season. For wheat, USDA's wheat stocks estimate will help us compare first-quarter demand with previous years. In the Small Grains Summary, USDA will provide estimates of 2019 wheat production by class at a time when the spring wheat harvest is encountering more difficulty than usual.

Both reports will be released at 11 a.m. CDT.

CORN

USDA's Sept. 12 World Agricultural Supply and Demand Estimate (WASDE) report estimated U.S. ending corn stocks at 2.445 billion bushels (bb) for 2018-19. The ending stocks-to-use ratio of 17% was the highest since 2005-06, inflated by six consecutive years of good weather and big crops. Dow Jones' survey of analysts expects USDA to find 2.436 bb of corn on hand as of Sept. 1, very close to the Sept. 12 estimate. If there is a surprise Monday, the odds lean bearish as corn demand has fallen off in recent months....MUCH MORE

Soybeans are up, wheat is down, corn is middling:

 

All charts via FinViz futures who are highlighting the drop in Brent.
(also in blogroll at right)

"Saudi Arabia to invest $100bn in India to strengthen ties & diversify own economy – envoy"

India has the second largest Muslim population in the world so we don't know how much of this is religiously motivated but a huge part of it has to be just a straight-up bet on India.
It might be time to start paying attention to the NIFTY indices (the 50 closed at 11,474.45) for portfolio investments and at Foreign Direct Investment for clues to industries and themes.

From the former Soviets at RT:

Saudi Arabia is eyeing long-term investment in India’s key sectors such as petrochemicals, infrastructure and mining, citing the country’s growth potential and the need to diversify the Arab nation’s own economy. 

“India is an attractive investment destination for Saudi Arabia and it is eyeing long-term partnerships with New Delhi in key sectors,” Saudi Ambassador Dr Saud bin Mohammed Al Sati said in an interview with India’s PTI news agency on Sunday.

Saudi Arabia, the world’s top oil exporter and a key energy supplier providing India with some 17 percent of its crude oil and 32 percent of its LPG, said it is looking at making investments in India “potentially worth $100 billion.” Saudi money will be poured into India’s energy, refining, petrochemicals, infrastructure, agriculture, minerals and mining sectors, Al Sati said.

According to the envoy, Saudi Arabia’s state-run oil giant Aramco will partner up with India’s Reliance Industries Ltd, a step he said reflected the strategic nature of the energy ties between the two states.

“Saudi Aramco’s proposed investments in India’s energy sector, such as the $44 billion West Coast refinery and petrochemical project in Maharashtra, and long-term partnership with Reliance, represent strategic milestones in our bilateral relationship,” the ambassador said....

....MORE 

Elon's SpaceX Starship Prototype Looks Quite Retro

From TechCrunch:

Story here (Sept. 28)

Equities: "Financials Are About To Do Something They Haven't Done In Nearly 18 Months" (XLF; KBE)

From StockCharts:

Financials (XLF) had been rather dormant for nearly 18 months - at least on a relative basis to the S&P 500 - but that is all about to change. While the group is certainly beginning to flex its collective muscle, the real confirming signal would likely be a 10-year treasury yield ($TNX) break above its earlier September high of 1.90%. The following is a relative chart vs. the benchmark S&P 500. In particular, check out the relative momentum (PPO):

A positive relative PPO is important because it tells us that momentum on a relative basis has begun to shift the financials' way. Over the past month, financials have moved into a leadership role. Another way to look at that here at StockCharts.com is to look at the sector summary. Here's the leaderboard over the past month:

*****

It's a little too early to say that this leadership role will continue, but the big clue will most likely be the direction of the TNX. When the TNX is on the move higher, the XLF:$SPX ratio usually is too. Check out the positive correlation here between the two:...

... MUCH MORE

The 10 - year is currently yielding 1.697 % +0.024, so looking for rates to back up to (and through) 1.90% is a bit of a contrary bet but if it happens bankers (and longs) will be happy.

With Cat 4 (now 3) Hurricane Lorenzo Approaching, Ireland Raises Jameson Deflector Shields...

....In an attempt to divert the monster to Iceland.

From the National Hurricane Center:

Previously:
September 28
Hurricane Lorenzo NOW A CAT 5, Still On Track To Make First Landfall In Ireland
Sept 27
Hurricane Lorenzo Now in "Beast Mode" As It Aims For Ireland, Scotland,Tromsø 
Sept 26
Hurricane Watch For Great Britain: Lorenzo Coming Off the African Coast Looks Serious

 *****

Just so you know, we were on top of the risk to the British Isles and northern Norway within a couple days of the storm "coming off the African coast":



http://www.tropicalstormrisk.com/ 

Ogilvy's Rory Sutherland: "The Next Revolution Will Be Psychological Not Technological"

I was thinking of a tweet from Mr. Sutherland when posting today's "YouTube is experimenting with ways to make its algorithm even more addictive" on the frightening power of recommendation engines:

There are times when Amazon has a kind of accidental comedic genius, but this is unsurpassable pic.twitter.com/JvSZ0bSR4N

— Rory Sutherland (@rorysutherland) May 8, 2016

Here is his Ogilvy mini-bio:

Rory is the Vice Chairman of Ogilvy in the UK, an attractively vague job title which has allowed him to co-found a behavioral science practice within the agency.

He works with a consulting practice of psychology graduates who look for ‘unseen opportunities’ in consumer behaviour - these are the very small contextual changes which can have enormous effects on the decisions people make - for instance tripling the sales rate of a call centre by adding just a few sentences to the script.

Put another way, lots of agencies will talk about "bought, owned and earned" media: we also look for "invented media" and "discovered media": seeking out those unexpected (and inexpensive) contextual tweaks that transform the way that people think and act.

Before founding Ogilvy’s behavioral science practice, Rory was a copywriter and creative director at Ogilvy for over 20 years, having joined as a graduate trainee in 1988. He has variously been President of the IPA, Chair of the Judges for the Direct Jury at Cannes, and has spoken at TED Global. He writes regular columns for the Spectator, Market Leader and Impact, and also occasional pieces for Wired. He is the author of two books: The Wiki Man, available on Amazon at prices between £1.96 and £2,345.54, depending on whether the algorithm is having a bad day, and Alchemy, The surprising Power of Ideas which don't make Sense, to be published in the UK and US in March 2019.

Rory is married to a vicar and has twin daughters of 17. He lives in the former home of Napoleon III - unfortunately in the attic. He is a trustee of the Benjamin Franklin House in London and of Rochester Cathedral.

I'm not sure if he is still vice-chair, I thought I saw somewhere that he had set up another independent group within Ogilvy.
He is definitely a behavioral science/behavioral finance wonk. This post has a video of him talking behavioural economics with Daniel Kahneman and holding up his end of the convo.

And here we have highlights of a 2015 talk Mr. Sutherland gave along with notes/annotations.
If the format is too jumbled, scroll ahead to the jump.

From How to Shape Human Behavior. (Exploring the line between persuasion and manipulation.):

32 important lessons from this talk:

00:00:59 While the internet is the 3rd industrial revolution, Tyler Cowen’s book The Great Stagnation and Robert J. Gordon’s white paper Is US economic growth over? Faltering innovation confronts the six headwinds argue that we shouldn’t put all our money on the technological revolution because you can’t create revolutionary inventions like that twice: home plumbing, sanitation, etc. aren’t likely going to undergo any revolutionary changes any time soon. The airplane took humans from walking speed to +700 miles per hour. To do this again, given the earth’s limitations, would be pointless unless it were for long-haul flights from NYC to Australia.

[EDITOR’S NOTE: In July 2015 Airbus patented a jet that could fly from London to NYC in 1 hour as opposed to the current 7-8 hour flight time.]

00:02:56 One thing all ‘the next big things’ have in common is that they come from a place you wouldn’t expect, and when people do try and predict the future they basically take the most visible form of progress they’ve seen in their own lifetime and extrapolate upon it.

[EDITOR’S NOTE: In the documentary Transcendent Man: When Humans Merge With Technology & Transcend Biology, Ray Kurzweil argues that people routinely underestimate what is achievable in long periods of time because they leave out the radical implications of exponential growth. People can see, even in their own lifetime, how much more quickly technology moves today than it did five years ago. The law of accelerating returns argues that the nature of technological progress is exponential. For example, if I count linearly (1, 2, 3, 4…), if I take 30 steps, I get to 30. If I count exponentially (2, 4, 8,16…),  30 steps later I’m at 1.07 billion.]

 Could it be that the next improvement in economic growth actually comes from improvements in marketing efficiency; particularly in our understanding of human behavioral economics?

00:04:05 Were the percentage of successful startups to increase by a mere 10% while the % of failed startups decrease significantly because we reached a point where we understand and predict humans well enough that we could just slightly increase the odds of success, the world’s Gross Domestic Product (GDP) could be increased by up to 2.6% .
00:05:01 There are two approaches to happiness:

• Materialistic – amass physical things which meet your needs, thus diminishing your wants
• Psychological – redefine your needs

This means you can solve this problem in two ways: create more materialistic ‘stuff,’ or you can make people more content with ‘stuff’ that they already have.

[EDITOR’S NOTE: Recall in Annie Leonard’s documentary The Story Of Stuff: How Our Modern Markets Economy Is Destroying Our Planet that the problem with this system is that humans are currently confined to living on Earth, which is a finite planet; and you cannot run a linear system on a finite planet indefinitely. In every step of this linear process, waste is created which diminishes the system’s efficiency, and subsequently, the Earth’s sustainability.]   

 00:06:57 If you give a problem to a bunch of engineers, you’ll get an engineer’s solution, such as spending 6 billion £ renovating the train track line and trains to reduce the journey time between London and Paris by roughly 40 minutes – a perfectly sensible and pragmatic engineering solution that a mere reduction in journey time is the key to happiness. 

If however, you applied a psychological solution to this problem, for roughly 0.01% of that renovation budget you could put wifi on the trains, and for 1 billion £ you could employ top supermodels to walk the length of the train handing out free glasses of Chateau Pétrus to all the passengers, and passengers would actually ask for the trains to be slowed down.
Why? Because the worst part of a train ride isn’t the ride itself, it’s:

• Hauling your suitcase(s) through public transportation, or
• Driving to the train station and finding a place to park, or
• Finding and paying a taxi
• Standing in line and buying/printing your ticket
• Going through customs & immigration
• Finding the right seat
• etc.

This is where the train company should be focusing its efforts: reducing pain, not duration.
This is the difference of philosophy in believing we can solve humanity’s problems by measuring them making it more efficient versus simply improving the subjective factors that increase the person’s pleasure derived from it.

Further, the train company competition is the airline and the bus industries. In terms of going from the center of town to the center of town, the railway already wins, so why not do all of the things that airlines cannot do on their airplanes – wifi, quality meals, and large tables – rather than trying to beat the airline industry in their one competitive advantage: being fast....

...MUCH MORE (or view the embedded video) 

We've visited Mr. Sutherland a few times, among the more interesting:
Ogilvy & Mather UK Vice-Chairman, Rory Sutherland, Talks Behavioral Economics
Ogilvy & Mather UK Vice-Chair Rory Sutherland on Driverless Showers

@realDonaldTrump "What's with this rap stuff with me and Ebenezer Scrooge?"

It's too early for the true spirit of Christmas rap battle: Mary Poppins v. Mrs. Claus, but with the countdown clock at just under 13 weeks I had to post something.
From President Trump's Twitter feed, 20 Dec 2013:

What's with this rap stuff with me and Ebenezer Scrooge? http://t.co/G4ZBtjUkgW

— Donald J. Trump (@realDonaldTrump) December 20, 2013

Yes, People Are Awful

First posted in October 2015.
From xkcd:

And from explain xkcd:

This strip plays on certain experiments involving human subjects. Ponytail is questioning the reliability of Megan's experimental results, given that her human subjects appear to be extremely unusual and highly sociopathic.

In the second panel, she mentions that several people in one study had been arrested for arson. Megan begins to suggest that the arson is a side effect of whatever is being tested before she learns that the arsonists are in the control group – that is, the group that is not subjected to whatever is being tested and is used as a comparison to see the differences in the people who are actually being tested. This result is "troubling", as the control group would not be expected to have such a high rate of incidence of arsonists. The implication is that her subjects are not representative of the general population, but appear to have been selected from some aberrant subpopulation, such as a prison or mental institution.

Or she could have recruited them through an announcement that catered in some way to arsonists. An alternate explanation comes from comic 790: Control, in which Randall notes his hobby of sneaking into experiments and giving LSD to the control groups. Yet another explanation could be that Ponytail went looking for some clusters of characteristics in the sample population, which had no connection to the study criteria, and happened upon the arson arrests - such clusters are expected if you look at enough different characteristics.

The third panel alludes to the prisoner's dilemma, in which two subjects must independently decide whether to "collaborate" with or "betray" the other subject based on different rewards for each choice (often framed as a different length of prison sentence, or a different amount of money). The rewards tier are selected so that the outcomes for each individual from best to worst are: betraying a collaborator, collaborating with a collaborator, betraying a betrayer, collaborating with a betrayer. The thought experiment is considered interesting as it's uncertain what the most logical course of action, as choosing betrayal always improves one's situation, yet being in identical situations with no knowledge of each other, it's also logical for both prisoners to make the same choice and both collaborating is better than both betraying. Of course, it would not be expected that normal people would simply betray each other for no reason, without benefiting from it in any way.

The last panel references the Milgram experiment, in which subjects were instructed by experimenters to administer electric shocks to an unseen third party. The unseen third party was part of the experiment and pretended to be in agony....MORE

explain xkcd is so matter of fact.

"Alien Research Group Started by Blink-182 Singer Says It's Found 'Exotic UFO Material'"

From ScienceAlert:

Former Blink-182 singer Tom DeLonge has pulled off an astonishing career change. In 2017, after quitting the band, he co-founded a group called To the Stars Academy of Arts & Sciences, an organization committed to researching aliens.

And he apparently now has something to show for it. In a recent Q&A with The New York Times, a reporter asked whether the group had obtained "exotic material samples from UFOs."
The spokesperson's response: "certainly."

It's still unclear what precise materials the Academy has gotten its hands on, and whether they relate in any way to the three videos it obtained of "unidentified aerial phenomena" that a spokesperson for the Navy recently revealed to be legitimate....MORE

Possibly related, from Gizmodo:
Half the DNA on the NYC Subway Matches No Known Organism

"Greta Thunberg sings Swedish Death Metal"

Since Sweden is second only to Finland, worldwide, in the number of metal bands per capita (the Finns are nuts) see:  Today In Umlauts: Metal Bands Per Capita--UPDATED

And since this vid has 2.7 million views, onward to 3 mil.

Via the mind of crusty old John Mollusk:
All music written and performed by John Mollusk. Inspired by, and all lyrics by Greta Thunberg. If you like the music, check out my NYC-based Indonesian thrash band, Suaka.
https://www.youtube.com/watch?v=njLOm... https://suakatribe.bandcamp.com/ 
We are bringing Indonesian legends, Burgerkill on their first U.S. tour, Midwest October 16-31. Come see us! https://www.facebook.com/tours/616867...

If interested, here are the Encyclopaedia Metallum entries for Suaka.
And for Burgerkill:

Genre: Death Metal/Metalcore

Lyrical themes: Life struggles

Current label: Revolt! Records

re: the Finns:

PURL JAM – Knitters from around the world thrash around at the first-ever #HeavyMetalKnitting World Championship in eastern Finland. pic.twitter.com/LSFhjROO1r

— AP Entertainment (@APEntertainment) July 12, 2019

Using Jakub Marian's Metal bands per capita map:

it's easy to see the thrasher part of the equation but I tend to associate the yarn gig with Norway's Slow TV.
"National Knitting Night":

Related:
Climateer Line of the Day: Great Name For A Korean Metal Band Edition

A repost from the happy time back before Kim Jong Un got all friendly and stuff.

Beginning in ca. 2007 the music industry came face to face with a threat that appeared to mark the end of what had been an extremely profitable business.

The threat was not piracy or internet disruption. Rather the issue that had all involved, from creatives to A&R guys to execs prophesying the end times was: "All the good band names are taken."

Everyone, from Recording Studio Forum:"are all the good band names taken?" to the Wall Street Journal: "From ABBA to ZZ Top, All the Good Band Names Are Taken"; from the Guardian "Are all the best band names already taken?" to Gawker "All the Band Names Are Taken" carried the news of the crisis in creativity as it ricocheted around the world, with one of the earliest observers to weigh in being America's Finest News Source:

Report: Only 7 Band Names Remaining
NEW YORK—According to data released Monday by the International Registry of Rock Band Names, only seven of the estimated 518 million potential names for musical acts remain available. "Following the selection of 'The Stripped Amygdaloids,' 'A Purple Spray Of Cloth Violets,' and 'Guestowel' this past weekend, it is essential that new bands pick a name as soon as possible," read a statement on the organization's website....

Well to yours truly this meant only one thing: Opportunity, with a capital O.

It wasn't just me though. In a 2007 story about aluminum production in Iceland the WSJ's markets editor wrote "Alcoa is currently operating the Fjardaal smelter at Reydarfjordur (great band name: Fjardaal Smelter — ed.)" and I knew we had competition to get registering and copyrighting.

Having missed the dotcom domain name gold rush of a few years earlier - ya snooze, ya lose - time was of the essence. You could almost "smell the money" (taken by a hip-hop group in San Diego)

And then the computer script kiddies started writing short little programs for online Band Name Generators and it turned out there were more than 518 million potential names and the price of a name plummeted. And there went the dream of being the band name king.

From time to time I think back to those days and what might have been, maybe write a post and add some gratuitous umlauts here and there: "Automation Steals Jobs: Röböts Playing Motörhead" or "Tap's David St. Hubbins: 'Ït's lïke ä päir öf ëyes. Yöu're löoking ät thë umläut, änd ït's löoking ät yoü.'"

So when I saw the North Korean Foreign Minister responding to President Trump's Rocket Man taunt, via UN.org:

...“Due to his lacking basic common knowledge and proper sentiment, he tried to insult the supreme dignity of my country by referring it to a rocket. By doing so, however, he committed an irreversible mistake of making our rockets' visit to the entire US mainland inevitable all the more,” he said.

Mr. Ri said the very reason the DPRK has to possess nuclear weapons is because US hostility and nuclear threats have continued for over 70 years. “The possession of nuclear deterrence by the DPRK is a righteous self-defensive measure taken as an ultimate option,” he added.

“Unless true international justice is realized, the only valid philosophical principle is that force must be dealt with force and nuclear weapons of tyranny must be dealt with the nuclear hammer of justice.”...

My ears perked up, like an old dog hearing the car keys, "Saaay, 'Nuclear Hammer of Justice'!" and I checked a couple sources,* aaand crap.
Here's Finland's NUCLEAR OMNICIDE - Hammer of Justice:

And. like the old dog realizing those weren't car keys but keys to the room where they keep the $400 cat furniture climbing thing, I just lay down and think of chasing the cat.

The chance will never come again. In fact, as if governed by Hubble's Law, the opportunity seems to be receding faster and faster,
Now Lewis and Quark are bragging "The neural network will name your next band".

But hang on a second! South Korea's Yonhap News Agency is reporting "N. Korean FM threatens 'merciless preventive action' against U.S."

"Merciless Preventive Action"? - that could work...

*Encyclopedia Metallum tells us about the NYC band "Hammer of Justice":

Genre:

Melodic Death Metal

 

Lyrical themes:

Darkness, Vampires, Death

 

Last label:

Unsigned/independent

Back to Iceland there's Thorshamrar http://www.myspace.com/thorshamrariceland. Not to be confused with Iceland’s answer to the Fab Four; Thorshammers.
Probably would have gone further as Fjardaal…

It really is a Nordic thing.

"YouTube is experimenting with ways to make its algorithm even more addictive"

From MIT's Technology Review, September 27:

Publicly, the platform says it’s trying to do what it can to minimize the amplification of extreme content. But it’s still looking for ways to keep users on the site.

Recommendation algorithms are some of the most powerful machine-learning systems today because of their ability to shape the information we consume. YouTube’s algorithm, especially, has an outsize influence. The platform is estimated to be second only to Google in web traffic, and 70% of what users watch is fed to them through recommendations.

In recent years, this influence has come under heavy scrutiny. Because the algorithm is optimized for getting people to engage with videos, it tends to offer choices that reinforce what someone already likes or believes, which can create an addictive experience that shuts out other views. This also often rewards the most extreme and controversial videos, which studies have shown can quickly push people into deep rabbit holes of content and lead to political radicalization.

While YouTube has publicly said that it’s working on addressing these problems, a new paper from Google, which owns YouTube, seems to tell a different story. It proposes an update to the platform’s algorithm that is meant to recommend even more targeted content to users in the interest of increasing engagement.

Here’s how YouTube’s recommendation system currently works. To populate the recommended-videos sidebar, it first compiles a shortlist of several hundred videos by finding ones that match the topic and other features of the one you are watching. Then it ranks the list according to the user’s preferences, which it learns by feeding all your clicks, likes, and other interactions into a machine-learning algorithm....

....MUCH MORE  

"Do you know a good prison consultant? Larry Levine teaches the super-rich how to survive supermax"

After the unpleasantness of 2007 - 2008 this should have been a growth industry but the politicians and the prosecutors chose not to go after the miscreants.
So no headlines like this from 2017:
Meanwhile, In Vietnam: 51 Bankers Found Guilty, Sentences From Life In Prison to Death

From The Economist's 1843 Magazine:

Larry Levine teaches the super-rich how to survive supermax

Meet Larry Levine, prison consultant. The man who teaches the super-rich how to survive supermax.

Why should I trust him? Because Larry has previous. And plenty of it. Former “efficiency expert” for the Mob. Former guest of 11 federal correctional institutions. Still a man you wouldn’t want to cross.

What did he do? You going to ask this many questions inside? Listen to Larry. Larry says: “Running your mouth in prison gets you a knife.”

Was he innocent? Larry puts it like this: “The prosecutor said I was killing people for the Mafia. Dropping them in the ocean. Killed one guy in Mexico and attended his funeral. All this crazy shit.”
So did he? 1843 put this question to Larry. Larry replied: “If you ask me ‘You really kill these people?’ I’d say: whaddayou think?” At which point 1843 thought it wise to move on.

Why would I need him? Naturally you say you didn’t do it, says Larry. In his experience white-collar criminals “are all innocent. They say: I didn’t do this.” To which Larry says: “OK, sure.” Then he tells them how not to get stabbed in the shower.

What are his top tips? Don’t cut in line. Don’t reach across someone’s food tray. Don’t switch channels on the telly without asking. Larry watched someone do this and another inmate promptly “stabbed him to death and killed him”. We all feel like that occasionally when “Love Island” is on.

Anything else? Above all, don’t borrow anything. Ever. Not shower shoes. Not shampoo. Nothing. “You don’t want to owe anyone in prison,” says Larry. “Because there is more than one way to pay your bill.”...MORE

Previously: 
Missouri Dept. of Corrections Censors Issue of The Economist, The Economist Responds
Absolute Return: Helping Hedge Funders Cope With Prison
"El Chapo" Guzman Being Sexually Harrased In Prison-Report
The ‘Oracle of San Quentin’: Stock Tips From the C-block
The Wall Streeter’s Guide to Going to Prison
In Prison, Bernie Madoff is Cornering the Market on Swiss Miss Hot Chocolate
"How to Run Your Hedge Fund From a Prison Cell"
Avenatti Charged In 36 Count Indictment, Facing 331 Years In Prison, Channels The Black Knight
FT Alphaville: Now With More Pamela Anderson
Hayek and the Mexican Mafia
Barry Minkow heads back to prison (ZZZZ)
And here I thought he was rehabilitated.
Not.
Financial fraudsters have a recidivism rate similar to that of pedophiles. 

Here Comes Another Bubble: "French company plans to introduce ‘flying’ water taxis"

Via The Hustle:

seabubbles.fr
And they are in(Seine).

No, literally. SeaBubbles, the creators of the battery-powered watercraft, hopes to provide a sustainable, aquatic alternative to traffic-congested roadway travel with their four-person “flying taxi.”

The vehicles (or “bubbles) will offer shared rides up and down the Seine River, silently doing the electric glide a couple of feet above the water — so you can leave your motion sickness patches at home. 

The on-demand travel market is getting increasingly congested 
Companies are racing to provide sustainable traffic solutions. In recent years, tech improvements have empowered established rideshare giants and new startups alike to scan the skies, bike paths, and tunnels in search of innovative mobility solutions. But so far no one’s really been able to crack the code....MORE

Which of course is a dandy excuse to visit The Richter Scales —last seen in January's:
"Apple and Tesla shares on the blockchain could be the next big thing in crypto"

"Friendship bracelets + news is a game changer" 

The Richter Scales:

 

"Subscription Capitalism: The Story of a Power Shift"

From American Affairs Journal, volume III, number 3, Fall 2019:

The emergence of the internet changed the business landscape in fundamental ways. Computer-based services could be offered to anyone irrespective of geographic restrictions. This meant that internet companies could become globally significant with relatively little initial investment, as demonstrated by Facebook, Google, and several others. Their ability to rapidly concentrate wealth with relatively little overhead caught the attention of many entrepreneurs and investors and continues to evolve today.

Basic internet services began in the 1960s with time-sharing on computers. This gradually evolved into sharing entire applications online. It was a simple step from there for companies to offer complete online software services, some of the most prominent being full-service email such as Hotmail and Gmail in the 1990s.

Monetizing the internet, however, was not a straightforward proposition. When the internet first emerged, people saw it as a great democracy where anyone with a good idea could set up a business with little cost. This lowered barriers to entry and thus offered the promise of moving the economy closer to a pure “free market,” a system that better rewarded good ideas and merit over money or position.

Many free services appeared, not the least of which were search engines. When Google was first born, it was simply one of many search engines. In the process of becoming dominant, Google either bought out or made irrelevant all other search engines. Today, there are some people who think Google’s search engine is the internet instead of part of the internet.

Despite Google’s near monopoly, Google’s search engine remains free to use. At first glance, it seems puzzling that a large corporation would spend considerable resources to dominate a market and not use its place and power to force revenue from its users. This is because licensing software is not Google’s main money-making strategy. Google’s strategy requires large numbers of people to use its software, and the best way to generate traffic is to build high quality, free-to-use software packages that help everyone. On the surface, this aligns well with the widely held belief that the internet should remain free.

Although free products propagated across the internet, businesses never lost their desire to monetize the internet. At first, it looked impossible—how do you monetize free goods? To monetize such an environment, either everyone would have to agree to sell their software or no one could, with the exception of large, highly specialized programs such as Adobe Photoshop or (at the time) AutoCAD.

There were efforts to create paywalls throughout the internet, but this largely failed, just as newspapers are rediscovering today. This forced companies to think of different ways to monetize their products. The process branched into two distinct paths depending on whether the customers were enterprises or consumers. Both these methods altered the basic business relationship from one of sellers offering property in exchange for money to one of sellers renting their property to customers. In other words, sellers are increasingly retaining the power and rights of property ownership while retaining its customer-derived income. This is changing the power dynamics between customer and seller.

The Growth of Cloud Computing

As soon as internet technology became sufficient to reliably handle high bandwidths, business-to-enterprise activity exhibited a marked increase. Successful marketing of online services to businesses largely succeeded because of demonstrated savings on the cost of doing business. These new enterprises have been classified into various categories, including Software as a Service (SaaS), Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Everything as a Service (XaaS), Enterprise Resource Planning (ERP), and Functions as a Service (FaaS). All these activities can be described as cloud computing, where a service (be it storage, software, or other service) is supplied via the internet.

Before cloud computing, every business had to set up their own independent onsite IT operations, often duplicating the IT functions of other companies. For example, large firms need software processes to manage, track, and report their sales activity. After the proliferation of fast internet connections and large shared servers, however, entrepreneurs saw that if they set up a secure online sales service package, they could offer the same or similar online solution to several companies.

Development costs of IT functions are similar whether services are offered to one or many companies, so it is obviously more profitable to sell the service to many business customers.
The result, on the surface at least, is win-win—the seller makes greater profits while the businesses save money by not having to build their own IT functions. The customers receive leading edge IT services offered at a fraction of the cost. Further, should business IT needs suddenly increase, the cloud service is responsible for scaling the software project, not the business customer. The enterprise customer benefits from a lower cost of business and minimizes the responsibilities of managing IT resources as the business grows.

Another advantage of using existing services is certainty. For a business manager, purchasing a proven IT service removes considerable risk. An online journal, ZDNet, recently asked: “Would you rather host your data on an inflexible, costly and potentially unstable in-house resource, or would you rather work with a trusted external partner who is an expert in secure hosting?”¹ It is easy to understand how an experienced manager would be much more likely to reach for the proven software of a cloud service rather than ask his IT department to create something from scratch. This is borne out by the fact that the vast majority of cloud service contracts are initiated by business managers, not IT departments.

Ownership and Control

It is important to note, however, that once the IT department work has moved off premises, the business no longer owns that service or the infrastructure that delivers it. Instead, the company is investing in an intangible service from a centralized source. There are several consequences of this trend....

....MUCH MORE

Silicon Valley of the 14th Century: What the U.S. Can Learn From 1386 Germany

Venice was pretty hoppin' as well.*
First posted April 2012.
From the Atlantic: 

This is a story about how innovation happens. It begins with the Papal Schism of 1386 (seriously), demonstrates the ability of universities to foster capitalism, and concludes with a surprising hero of the modern world: lawyers.

Reuters

If you want an illustration of just how crucial a role education plays in economic development, there are any number of modern case studies to choose from. You can look at India's flourishing IT industry, or China's inexhaustible supply of manufacturing engineers. You can look at the U.S. after World War II, where the G.I. bill brought college, and middle-class prosperity, to the masses.

But why stop with this century, or the last? For a dose of seriously retro economics, you can look back to the dawn of the Renaissance, where the introduction of higher education helped make possible the efflorescence of trade that built Europe's early modern economy, according to a new working paper from researchers at the University of California, Berkeley, and the University of Munich.

INNOVATION IN THE 14 CENTURY
Let's step back in time for a moment to the late Middle Ages and early Renaissance, a period from about 900 to 1500 AD when plate armor was in vogue, and Europe was transforming itself from an illiterate backwater into the world's dominant economic and military power. As authors David Cantoni and Noam Yuchtman write, the time was defined by an economic revolution, as trade expanded, local markets flourished, and workers moved from farms into small cities, where they could specialize in new occupations.
This was also the era when the continent's first institutions of higher learning were founded, starting with the University of Bologna in 1088. But did schools create thriving economies, or did thriving economies create schools? To find an answer, Cantoni and Yuchtman looked at modern-day Germany.

14th CENTURY RHINE VALLEY VS. 21st CENTURY SILICON VALLEY
Though it would one day become the mecca of dour philosophers and the Ph.D. students who love them, Germany was actually a bit late to the game when it came to establishing universities. Before the 14th century, Germany youths had to travel abroad for an education, often to modern-day France. hat changed with the Papal Schism of 1386, when rival popes from Rome and France both lay claim to the leadership of the Catholic Church. German students loyal to the Roman faction were expelled from their French universities.

Suddenly, Germany had to build itself some colleges.

This bright line between Germany's pre- and post-college eras makes it an ideal test case. These schools weren't founded as the result of a hot economy. They were founded to educate students kicked out of their study abroad programs...MORE

*See Harvard Business Review:
HBR: "Why Innovators Should Study the Rise and Fall of the Venetian Empire" 

or the FT's Undercover Economist:
Another Post On Glass, This Time With "The Alchemist's Fallacy" (And Professor Nordhaus)

Rabobank on Feeding da Fishies

Bugs, krill, seaweed, algae, whatever. Get those fatty acids (not just the omega-3's)

From The Fish Site, September 18:

Rabobank: why the aquafeed sector needs a rethink

The aquafeed industry needs to “think out of the box to find growth,” according to a new report, How to Succeed in Aqua Feed, which has been published by Rabobank today.

As the report notes: “After years of growth, the aqua feed industry is experiencing a deceleration, with increasing overcapacity in nearly all key markets globally. The causes vary and are often region-specific, but what is clear is that the aqua feed industry will need to think out of the box to find growth.”

The most promising avenues for growth, according to the report, include “combining feed with a range of complementary inputs, such as genetics, animal health products, data analysis solutions, hardware, and farm management software, in order to extract previously unobtainable synergies.”

Context is provided by a sector-by-sector breakdown which details the trends in each of the salmon, shrimp and tilapia and pangasius industries. The report notes that opportunities in the salmon feed sector are being limited by the slow down in salmon production in Norway and Chile, and by an increasing trend for salmon producers to mill their own feeds.

Indeed, as the report points out, Mowi and Bakkafrost becoming self-sufficient in feeds in Norway, Scotland, Ireland and the Faroe Islands, essentially reduces the European aquafeed market by 20 percent. While, the authors add, “it cannot be ruled out that some of the larger players in Chile or in other regions will at some point vertically integrate into feed”.

Meanwhile, the shrimp feed sector, they note, is characterised by overcapacity, not least in India and Thailand, which "will take years of growth to fill, especially since expected growth of shrimp aquaculture has decreased to be more in line with demand growth”....

....MORE

Shipping/Logistics— Malcolm McLean, Unsung Innovator Who Changed the World

From American Business History:

In 1937, 24-year old Malcolm McLean (later changed to Malcom) delivered a load from the south to the New Jersey docks for export. He had been in the trucking business for two years.  The rural North Carolina native was running a gas station when he learned he could make $5 a load to truck the gas to his station.  He bought a truck, paid for on time, and began to build a trucking company with his brother Jim and sister Clara.  On this day in 1937, legend has it that, as he watched the stevedores gradually unload his truck bale by bale, and load the ship equally slowly, he dreamed of a day when the whole truck trailer could just be lifted onto the deck in one motion.  His dream would have to wait almost 20 years.

Young McLean proved himself an innovator in the trucking industry.  By 1945, he had 162 trucks, hauling primarily textiles and cigarettes from North Carolina to the northeast.  When soldiers returned from World War II, they were eligible for GI loans to finance vehicles, including trucks.  He offered them haulage contracts as independent operators, allowing him to indirectly benefit from the financing offers.  In this way, he added 600 more trucks to his fleet between 1947 and 1949.  In those days, before the Interstate Commerce Commission was eradicated, the ICC had full control over where truckers went, how much they charged, and what they carried, all in the name of “fair competition.”  Competitors could protest any move you made – in a committee room that took forever to make decisions rather than in the fast-moving marketplace dictated by customers.  His trucks carried RJ Reynolds tobacco to the northeast by roundabout routes, and usually came home empty since he did not have the ICC authority to bring other goods home.  McLean bought or leased other truck lines to gain better routes and freight rights.  Above all else, he was always seeking efficiencies: ways to lower his costs and thereby lower his rates, although the ICC sometimes rejected his applications to charge less (the other truckers and the railroads fought him all the way).  By 1954, McLean Trucking was the 8th largest US trucker in revenue, but 3rd in after-tax profits.

But McLean never stopped thinking about how to make ocean shipping more efficient, how to skip all that loading and unloading that took at least 8 days on each end of each ship’s journey.  This idea was not his invention – in 1929 ships took railcars to Cuba, and the military had experimented with small containers during World War II.  To all that studied the issue, the problems seemed intractable: tight government regulations that stifled creativity, powerful longshoremen’s unions who would fight to protect their jobs, ships that were not built for containers, docks that could not handle container ships and had no cranes to lift such heavy loads, no money to do any of this, and on and on.  Not only would changing the system take lots of money, it would take lots of persuasion.  Others could not see through the fog.  But to McLean, “It just made too much sense.”  His colleagues report that he could not see problems like others saw them – he took big issues and broke them down into components, which he attacked one at a time.

Realizing that oil tankers travelled with empty top decks, in 1955 McLean bought an oil tanker and added a steel deck.  On April 26, 1956, the ship Ideal X sailed from Newark toward Houston with a whopping 58 containers on board.  As he watched the ship sail, one top longshoremen’s official reportedly said, “I think they ought to sink the sonofabitch.”  Despite all the prior experiments, this was the birth of successful containerization.  It was driven by a man who thought in terms of systems, of how to integrate things and make them happen, rather than only in terms of the individual components.

In time, he acquired the Waterman Steamship Company of Mobile as a base of operations.  The ICC said he could not be in the trucking business and the shipping business at the same time, so he got out of trucking.  His friends thought him nuts.  A young banker at First National City Bank of New York (now Citibank/Citicorp) named Walter Wriston agreed to finance the purchase of Waterman with a $22 million loan, but his bosses rejected the deal as too risky.  McLean went to the bosses, made his case, and in reference to Wriston said, “He may just be a trainee, but he’s going to be the boss of both of you pretty soon.”  He got the loan.  Wriston, considered by many to be the most important commercial banker of the late 20th century, went on to preside over the giant bank from 1967 to 1984.  (My first job out of college was at First National City from 1973 to 1975, so I was fortunate to hear speeches by the visionary Wriston who gave us the Certificate of Deposit and early on promoted the ATM and credit card as well as global corporate banking.)

One of McLean’s key moves was to not patent the container.  Instead, he backed the people at the Fruehauf trailer company to develop the containers, and insisted that the technology be made available to the entire industry, including all his competitors.  But they all thought he would fail, that containers would never make it.  Over time, McLean made peace with the longshoremen and with the all important ports.  His later ships could carry over 200 containers.  By the mid-1960’s, The Port Authority of New York committed to spend $332 million to build a container port at Elizabeth, New Jersey.  In April, 1966, in his first transoceanic sailing, his Sea-Land Service sent a ship from Port Elizabeth to Rotterdam, arriving four weeks faster than any prior ship when loading time was included....

....MUCH MORE

Hurricane Lorenzo NOW A CAT 5, Still On Track To Make First Landfall In Ireland

From the National Hurricane Center:

...LARGE AND POWERFUL CATEGORY 5 LORENZO BECOMES THE STRONGEST HURRICANE THIS FAR NORTH AND EAST IN THE ATLANTIC BASIN... 

11:00 PM AST Sat Sep 28
 Location: 24.2°N 44.9°W
 Moving: N at 10 mph
 Min pressure: 925 mb
 Max sustained: 160 mph 

DISCUSSION AND OUTLOOK
----------------------
At 1100 PM AST (0300 UTC), the center of Hurricane Lorenzo was
located near latitude 24.2 North, longitude 44.9 West.  Lorenzo is
moving toward the north near 10 mph (17 km/h).  A turn to the
north-northeast is expected on Sunday, followed by a turn to the
northeast by Monday.  A faster northeast motion is expected by
Tuesday.

Maximum sustained winds are near 160 mph (260 km/h) with higher
gusts.  Lorenzo is now a category 5 hurricane on the Saffir-Simpson
Hurricane Wind Scale.  Some fluctuations in intensity are possible
through Sunday.  A weakening trend is forecast to begin Sunday
night. However, Lorenzo is expected to be a large and potent
hurricane as is approaches the Azores in a few days.

Hurricane-force winds extend outward up to 50 miles (85 km) from the
center and tropical-storm-force winds extend outward up to 275 miles
(445 km).

The estimated minimum central pressure is 925 mb (27.32 inches)....

 
Previously:
Sept 27
Hurricane Lorenzo Now in "Beast Mode" As It Aims For Ireland, Scotland,Tromsø 
Sept 26
Hurricane Watch For Great Britain: Lorenzo Coming Off the African Coast Looks Serious

She Should Have Been Awarded The Nobel Peace Prize

With the solemn observance of the September 27, 1939 surrender of Warsaw to the invading Nazis I've been thinking about World War II.
Some 200,000 Poles were killed during the invasion and the twenty-day terror bombing of Warsaw. before the surrender.
But the real horrors hadn't even started.

That's why we had yesterday's "Stuff Some Fourteen Year Old Girls Do" about the passing of Freddie Oversteegen who along with her older sister and and best friend, would sweet talk Nazis into "a stroll in the woods" and then assassinate them. The girls did other stuff as well, blowing up bridges and railroad tracks, smuggling Jewish kids out of The Netherlands, the usual.

stone killer

She wasn't the one in the running for the Nobel Peace Prize.

There was another gal, this one in Poland who fought the Nazis in a different manner,

This young woman saved 2500 children sometimes hauling one out of the Warsaw ghetto in a suitcase or a couple more under a caterers cart or a dozen in a truck. When the Nazi's caught and tortured her she went back to the saving-kids biz despite two broken legs, broken ankles and broken arms.

In 2007 she was nominated for the Peace Prize.
The betting markets had her as second choice behind Al Gore. There were also some Burmese Buddhist monks and a couple dozen other nominees.

Mr. Gore of course won. Well he and the UN's IPCC who had delivered the AR4 Climate Change 2007: Synthesis Report in February and who were looking forward to the 13th Conference of the Parties in Bali that December.

The woman in the picture is Irena Sendler and there was no way she was going to win in 2007, no matter how many kids she saved from certain death and no matter how many of her bones the Gestapo broke.
She might have won in 2008 but she died. And the Nobel folks don't award posthumous prizes.

We noted her passing in a May 2008 post: "Irena Sendler, Nobel Peace Prize Candidate, Has Died":
Some of the headlines.

From the Telegraph:
Irena Sendler
Social worker who saved 2,500 Jewish children in Warsaw and was tortured by the Gestapo

...The Nazis took Irena Sendler to the Pawiak prison, where she was tortured; although her legs and feet were broken, and her body left permanently scarred, she refused to betray her network of helpers or the children whom she had saved. Finally, she was sentenced to death....

From The Hindu: Saviour of 2,500 children
From the Kansas City Star: Polish woman championed by Kansas students dies
From the Associated Press: Polish Holocaust hero dies at age 98

From The Independent:
Pole who saved 2,500 children from the Nazis dies

From EuroNews:
Polish Holocaust heroine dies at 98
From News.AU:
Saviour of 2500 Jewish children dies

From Agence France-Presse:
Polish woman who saved 2,500 Jewish children dies

From The Herald (U.K.):
Saviour of thousands of children from Warsaw Ghetto dies at 98

From Reuters:

...Using her position as a social worker, Sendler regularly entered the ghetto, smuggling around 2,500 children out in boxes, suitcases or hidden in trolleys.

The children were then placed with Polish families outside the ghetto, created by Nazi Germany in 1940 for the city's half a million strong Jewish population, and given new identities.

But in 1943 Sendler, who led the children' section of the Zegota organisation which helped Jews during the war, was arrested and tortured by the Gestapo.

She only escaped execution when Zegota managed to bribe some Nazi officials, who left her unconscious but alive with broken legs and arms in the woods....

We had three posts on Irena. The first "Al Gore and the Nobel Peace Prize" had the betting odds on the 2007 Nobel Peace Prize:

From BETUS

Who will win the 2007 Nobel Peace Prize?

Irena Sendler

+450

Martti Ahtisaari

+500

Al Gore

+250...

Post number two talked about Irena and the kids in Kansas:

Al Gore vs.Irena Sendler: Smackdown!
A wonderful story from the Kansas City Star:

Eight years ago, in a tiny southeast Kansas town, four girls had a goal: Tell the story of a woman who saved 2,500 children during the Holocaust.

Our third post:
Life in a Jar congratulates the recipients (Al Gore and the United Nations Council on Climate Change)...
...of the Nobel Peace Prize and salute Irena Sendler for her continued impact on the world.

Classy.
From the IrenaSendler.org Website:

Protestant kids from rural Kansas, discover a Polish Catholic woman, who saved Jewish children. Irena Sendler and students from Uniontown, Kansas, they both have chosen to repair the world (Tikkun Olam)....