Saturday, July 4, 2020

"Cognitive Scarcity and Artificial Intelligence: How Assistive AI Could Alleviate Inequality"

First posted  April 15, 2018.

Original post: 
As with so many things, Kurt Vonnegut was onto this stuff years ago.

From Philosophical Disquisitions:
By Miles Brundage (FHI, Oxford University) and John Danaher (NUI Galway)
(Be sure to check out Miles's other work on his website and over at the Future of Humanity Institute, where he is currently a research fellow. You can also follow him on twitter @Miles_Brundage)

The rise of the robots and the end of work. The superintelligence control problem and the end of humanity. The headlines seem to write themselves. The growth of artificial intelligence undoubtedly brings with it many perils. But it also brings many promises. In this article, we focus on the promise of widely distributed assistive artificial intelligences (i.e. AI assistants). We argue that the wide availability of such AI assistants could help to address one aspect of our growing inequality problem. We make this argument by adopting Mullainathan and Shafir’s framework for thinking about the psychological effects of scarcity. We offer our argument as a counterbalance to the many claims made about the inequality-boosting powers of automation and AI.

1. The Double Effect of Income Scarcity
Achieving some degree of distributive justice is a central goal of contemporary societies. In very abstract terms, this requires a just distribution of the benefits and burdens of social life. If some people earn a lot of money, we might argue that they should be taxed at a higher rate to ensure that the less well off receive some compensating measure of well-being. Tax revenues could then be used to provide social benefits to those who lack them through no fault of their own. Admittedly, some societies pay little more than lip service to the ideals of distributive justice; but in many cases it is a genuine, if elusive, goal. When pressed, many would say that they are committed to the idea that there should be equal opportunities and a fair distribution of benefits and burdens for all. They simply differ in their understanding of equality and fairness.

Various forms of inequality impact on our ability to achieve distributive justice. Income inequality is one of them. Income inequality is a major concern right now. The gap between the rich and the poor seems to be growing (Atkinson 2015; Piketty 2014). And this is, in part, exacerbated by advances in automation. Whether automation is causing long-term structural unemployment is a matter of some controversy. Several authors have argued that it is or that it soon will (Brynjolfsson and McAfee 2014; Ford 2015; Chace 2016). Others are more sceptical. But they sometimes agree that it is having a polarising effect on the job market and the income associated with jobs that are still available to humans. For example, David Autor argues that advances in automation are having a disproportionate impact on routine work (typically middle-income middle-skill work): the routine nature of such work makes it amenable to computer programs (using traditional 'top down' methods or programming or bottom up machine learning methods) performing the associated tasks. This forces workers into two other categories of work: non-routine abstract work and and non-routine manual work. Abstract work is creative, problem-solving work which requires high levels of education and is usually well-rewarded. Manual work is skilled dexterous physical work. It usually does not require high levels of education and is typically poorly-paid and highly-precarious (i.e. short-term, contract-based work). The problem is that there are fewer jobs available at the abstract (and high-paid) end of the jobs-spectrum. The result is that workers displaced by advances in automation tend to be pushed into the manual (and lower-paid) end.

If these polarising trends continue, more and more people will suffer from income-related scarcity. They will find it harder to get work that pays well; and the work they do get will tend to be precarious and insecure. This should be troubling to anyone who cares about distributive justice. The critical question becomes: how can we address the problems caused by income-related scarcity in such a way that there is a just distribution of the benefits and burdens of social life?

What is often neglected in debates about this question is the double effect of income-related scarcity. Research suggests that the poor don’t just suffer from all the problems we might expect to ensue from a lack of income (inability to pay bills, shortage of material resources, reduced ability to plan for the future), they also suffer a dramatic cognitive impact. The work of Sendhil Mullainathan and Eldar Shafir is clear on this point (2014a; 2014b; 2012). To put it bluntly, they argue that having an insufficient income doesn’t just make you poor, it makes you stupid, too.

That’s a loaded way of putting it, of course. Their, more nuanced, view is that income-scarcity puts a tax on your cognitive bandwidth. ‘Bandwidth’ is general term they use to describe your ability to focus on tasks, solve problems, exercise control, pay attention, remember, plan and so forth. It comes in two main flavours:
Bandwidth1- Fluid intelligence, i.e. the ability to use working memory to engage in problem-solving behaviour. This is the kind of cognitive ability that is measured by standard psychological tests like Raven’s Progressive Matrices.
Bandwidth2 - Executive control, i.e. the ability to pay attention, manage cognitive resources, initiate and inhibit action. This is the kind of ability that is often tested by getting people to delay gratification (e.g. the infamous Marshmallow test).
Mullainathan and Shafir’s main contention, backed up by a series of experimental and field studies, is that being poor detrimentally narrows both kinds of cognitive bandwidth. If you have less money, you tend to be uniquely sensitive to stimuli relating to price. This leads to a cognitive tunnelling effect. This means that you are very good at paying attention to anything relating to money in your environment. But this tunnelling effect means that you have reduced sensitivity to everything else. This results in less fluid intelligence and less executive control. The effects can be quite dramatic. In one study, performed in a busy shopping mall in New Jersey, low-income and high-income subjects were primed with a vignette that made them think about raising different sums of money ($150 and $1500) and were then tested on fluid intelligence and executive control. While higher-income subjects performed equally well in both instances, those with lower incomes did not. They performed significantly worse when primed to think about raising $1500. Indeed, the impact on fluid intelligence was as high as 13-14 IQ points....

And here's Vonnegut's 1961 short story "HARRISON BERGERON" via the Internet Archive:
THE YEAR WAS 2081, and everybody was finally equal. They weren't only equal before God and the law. They were equal every which way. Nobody was smarter than anybody else. Nobody was better looking than anybody else. Nobody was stronger or quicker than anybody else. All this equality was due to the 211th, 212th, and 213th Amendments to the Constitution, and to the unceasing vigilance of agents of the United States Handicapper General.

Some things about living still weren't quite right, though. April for instance, still drove people crazy by not being springtime. And it was in that clammy month that the H-G men took George and Hazel Bergeron's fourteen-year-old son, Harrison, away.

It was tragic, all right, but George and Hazel couldn't think about it very hard. Hazel had a perfectly average intelligence, which meant she couldn't think about anything except in short bursts. And George, while his intelligence was way above normal, had a little mental handicap radio in his ear. He was required by law to wear it at all times. It was tuned to a government transmitter. Every twenty seconds or so, the transmitter would send out some sharp noise to keep people like George from taking unfair advantage of their brains.

George and Hazel were watching television. There were tears on Hazel's cheeks, but she'd forgotten for the moment what they were about.

On the television screen were ballerinas.
A buzzer sounded in George's head. His thoughts fled in panic, like bandits from a burglar alarm.
"That was a real pretty dance, that dance they just did," said Hazel.
"Huh" said George.
"That dance-it was nice," said Hazel.

"Yup," said George. He tried to think a little about the ballerinas. They weren't really very good-no better than anybody else would have been, anyway. They were burdened with sashweights and bags of birdshot, and their faces were masked, so that no one, seeing a free and graceful gesture or a pretty face, would feel like something the cat drug in. George was toying with the vague notion that maybe dancers shouldn't be handicapped. But he didn't get very far with it before another noise in his ear radio scattered his thoughts.

George winced. So did two out of the eight ballerinas.

Hazel saw him wince. Having no mental handicap herself, she had to ask George what the latest sound had been....MORE
Okay, maybe a slightly different approach, what with the Handicapper General and the weights and all but same goal.

"The Cotton Bond Bubble" or How the Confederacy Might Have Won the Civil War

I know, I know, from Virginia into the Old South the conflict is sometimes known as The War of Northern Aggression.
With two weeks to go before the sesquicentennial of the Battle of Gettysburg we'll probably have a few posts on the hostilities.

I've mentioned the 7% Cotton Loan of 1863, otherwise known as the Erlanger Loan, a couple times in connection with the Hoare's Bank archives, links below. It is one of the more important junk bonds in history.

From the New York Times' Opinionator blog, Jan 30, 2013:
It’s a story recognizable to anyone who dealt with toxic derivatives in the early 21st century: on Jan. 29, 1863, the Confederate Congress secretly authorized the Paris-based bankers at Erlanger et Cie. – which rivaled Rothschild for European royalty connections – to underwrite $15 million of Confederate bonds, denominated in British pounds or French francs.

But unlike ordinary bonds backed only by the faith and credit of the issuing country, at the option of the holder an Erlanger certificate could be converted into a receipt for a pre-specified quantity of cotton. Furthermore, the conversion rate was fixed at 12 cents a pound, regardless of the commodity’s market price, at the time about 48 cents. On top of that, the bonds paid a handsome 7 percent annual interest rate.
Put another way, a buyer of a £1,000 bond could convert it into 80 500-pound bales of cotton worth almost £4,000. If the price of cotton continued to rise, the underlying bond’s conversion-value would climb in lockstep. European investors flocked to the bonds, including the future British prime ministers William Gladstone and Lord Cecil.

But like any too-good-to-be-true investment, there was a catch: the cotton was located in the Confederacy. Upon conversion, Confederate authorities were obligated only to deliver the bales to a point within “ten miles of a navigable river or railhead,” where the new owner must arrange transport to the final destination.
This arrangement was an obvious boon to blockade runners, a fact that didn’t escape the men at Erlanger. It quickly founded the innocuously named European Trading Company, essentially a blockade-running line for its bondholders. For a fee, the company’s ships would pick up the cotton, slip past Union warships and deliver it to Cuba. Its chief vessel completed 73 round trips between Mobile and Havana before running aground in May 1865.

The service wasn’t cheap, though, and so while a few rich investors made use of it, the majority had to take another avenue: hoping the Confederacy would win the war. Consequently, the market price for the bonds fluctuated in response to the successes or failures of Confederate armies.

Initially, the conversion feature was so attractive that the $15 million offering was oversubscribed with orders for $80 million. But Erlanger’s terms were greedy: it was to earn a commission of 5 percent, in addition to being allowed to purchase the bonds at 77 percent of face value, while reselling the initial issue at 90 percent of face. In other words, nearly a fifth of each investor’s money would be siphoned off by the Erlanger syndicate as middlemen. Despite the immense demand for the bonds, Secretary of State Judah Benjamin accepted the deal only because, he figured, it would make European financiers financially invested in Confederate success.

Upon issuance, the bonds quickly rose from their 90 percent offering price to 95 percent in market trading, but then began to drop. Unfortunately for the Confederacy and its new financial allies, initial buyers were required to deposit only 15 percent of the purchase price, with the balance not due until the settlement date of April 24, 1863.

Meanwhile, Union diplomats in Europe scrambled for ways to discredit the loan. About a week before the settlement date, stories appeared in London newspapers describing how years earlier, Jefferson Davis had publicly defended Mississippi’s default on a bond issue mostly held by Europeans when he was a United States senator from that state.

Erlanger panicked and threatened to cancel the offering – while keeping its commission guarantee – unless the Confederacy agreed to stabilize the price by using some of the deposited funds to buy bonds on the open market. Ultimately about $6 million of the $15 million issue was used in this manner. As always with murky activities involving large sums of money, a full accounting is impossible, but Erlanger and the Confederacy are each estimated to have retained about $3 million of the issue.

While Erlanger is often credited with originating the “cotton bond,” it wasn’t the only one to develop the idea at the time, thereby forcing the company to compete for the business. But it had an advantage: Frédéric Emile d’Erlanger had fallen in love with Mathilde Slidell, a daughter of John Slidell, the Confederate envoy to the Court of Napoleon III. Mathilde was a stunning beauty who grew up on her father’s Louisiana plantation, where French was the lingua franca. (She and Baron d’Erlanger married in 1864.)

The Confederacy used its share of the bond proceeds to purchase munitions and to make deposits on oceangoing ironclads, ships that might have broken the blockade had they ever been delivered. After the war, Erlanger continued to prosper, financing American railroads and international telegraphic communications, among other ventures. In 1869 Mathilde sent the first telegraphic message from France to the United States over an Erlanger-financed facility. The family supported the arts and charitable causes, including the still-operational Erlanger hospital in Chattanooga, Tenn., and the first Paris performance of Richard Wagner’s “Tannhäuser.”

Shortly after the war, President Davis admitted that the Confederacy had misplayed King Cotton. It had encouraged an embargo, hoping to create a “cotton famine” and thus pressure British and French diplomatic recognition. But it should have adopted a March 1861 proposal made by Benjamin, the attorney general at the time: purchase as much cotton as possible and immediately send it to England, where the stockpile might be gradually sold as needed to raise funds. If the plan had been embraced Davis would promptly have become a richer president than Lincoln: more than three million bales rested unused in the Confederacy at the time of secession. If swiftly transported to England, Davis concluded, it could have been converted to enough hard currency to have “more than sufficed all the needs of the Confederacy during the War.”
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Sources: Frank Owsley, “King Cotton Diplomacy”; Tom Horton, “History’s Lost Moments”; Burton Hendrick, “Statesmen of the Lost Cause”; Gene Dattel, “Cotton and Race in the Making of America”; Jay Sexton, “Debtor Diplomacy”; Dean B. Mahin, “One War at a Time”; William C. Davis, “Look Away.”
The Amazing Archives of England's Oldest Private Bank: Junk Bonds from 1863
If Britain's Oldest Private Bank Could Survive the South Sea Bubble, You Can Get Through This: More of C. Hoare & Co's Amazing Archives

Here's one of the bonds that managed to get four coupons clipped, most are missing just one or two:

March 19, 2013
The Amazing Archives of England's Oldest Private Bank: Junk Bonds from 1863
Pardon me, I meant 'High-yield'.

I've mentioned the archives of C. Hoare & Co. a half dozen times, from the scholarly work of Temin & Voth to the bite-sized ephemera of their archivist's "Manuscript of the Month".
In August 2011 I pointed to one in particular:
Posted October 2010 Coupon Bond, 7% Cotton Loan, 1863
That last little story is almost a parable, it has so many instructive principles and lessons.
We'll link to more next week.
Thanks to C. Hoare & Co. for sharing
Since then the bank has published a compendium, "Through the Years: Tales from the Hoare's Bank Archive" (50 page PDF) that brings together 40 of these tiny treasures.
Despite the attraction of the rest of the manuscripts, I keep going back to that 1863 Cotton Loan:
Although now officially designated Meeting Room 9, the bank’s newest meeting room is still universally referred to as the Coupon Room. The framed examples of stock certificates and coupon (bearer) bonds that hang on its walls serve as reminders of a not so distant past, when the bank routinely administered shares and bonds on behalf of customers, clipping the interest coupons and remitting them for payment. Many more bonds, some beautifully illustrated, form part of the bank’s archive. One of the mostinteresting relates to the 7% Cotton Loan of 1863, otherwise known as the Erlanger Loan.

In 1863 the United States of America was in the grip of civil war. Two years earlier, eleven Southern States had seceded from the Union and formed what became known as the Confederate States of America. But the Confederacy’s economy, based on agriculture rather than industry, was ill- equipped to sustain a war that required large numbers of weapons, ships and other goods
Early hopes that Britain and France would join the fight against the Unionists were soon dashed, while a blockade of Southern ports prevented much needed supplies being able to enter the region.

Huge quantities of a new Confederate currency were printed, but this merely led to inflation, which in turn ate into the Confederacy’s dwindling revenue
By the end of 1862 it was clear that a new approach was required if the South was to generate enough money to continue the war.

The most obvious solution was a European loan based on the South’s most valuable commodity: cotton. But the political and military uncertainty that surrounded the

Civil War made European banks wary of committing themselves Both Rothchild’s and Barings’ refused to underwrite such a loan.

Eventually, in early 1863, the Confederacy managed to negotiate a contract with a Paris bank, Emile Erlanger & Co . Under the terms of the agreement, Erlanger & Co undertook to issue £3M or $15M (c. £129M today) of Confederate bonds, redeemable over twenty years.

The bonds would be made available to Erlanger and Co at $77 per $100, and sold on by them for $90, with the bank pocketing the difference as well as a 5% commission on each sale and 1% on each interest payment
Investors were to receive 7% interest, payable in twice-yearly instalments, and two annual payments representing 1/40th of the principal sum
Alternatively, the bonds could be redeemed for cotton at a rate of 6d per pound
As cotton was then trading at four times that figure, the bonds offered speculators an attractive return, if they could figure out a way to beat the blockade

During the spring of 1863, Confederate agents worked hard to publicise the bonds. Offices were opened in Paris, Amsterdam, Frankfurt, London and Liverpool, although ultimately it was British investors who were most attracted to the scheme.

The bonds themselves were issued in four denominations: £100 (Fr 2,500 or 4,000lbs cotton), £200 (Fr 5,000 or 8,000lbs cotton), £500 (Fr 12,500 or 20,000lbs cotton) and £1,000 (Fr 25,000 or 40,000lbs cotton).

The one shown here, illustrated with an image of Liberty clutching a Confederacy flag and leaning against bales of cotton, was fort he maximum £1,000.

Presumably it was purchased by a bank customer, although as coupon bonds are unregistered instruments the owner’s name does not appear on the certificate.

The signatures of four men do though: Emile Erlanger (loan banker), J Henry Schröder (London banker), Colin J McRae (Confederate agent) and John Slidell (Confederate commissioner)....

About That Pulitzer The New York Times Won For Fake News: The Movie

Over the years we've mentioned Duranty and the Times and the Pulitzer Prize but never had a full post.
Time to rectify that omission.
From the New Yorker, June 19:
The Polish director Agnieszka Holland, now seventy-one, has toiled in many fields. “The Secret Garden” (1993) and “Washington Square” (1997) point to a predilection for bookish costume drama, yet Holland also made three episodes of “The Wire.” Her most tenacious work has centered on lone figures, as they seek to outwit, or simply to withstand, the weight of authoritarian threat. “Europa Europa” (1990) is based on the true story of a German Jewish boy who joined the Hitler Youth. “Burning Bush” (2013), a three-part series for HBO, is based on the true story of Jan Palach, who immolated himself in protest against the Soviet invasion of Czechoslovakia. And Holland’s new film, “Mr. Jones,” is based on the true story of a young Welshman who found a terrible tale to tell.

The man in question is Gareth Jones (James Norton), an adviser to David Lloyd George (Kenneth Cranham), formerly the British Prime Minister. It is the early nineteen-thirties, and Jones is met with condescending mirth when he tells a group of graying British high-ups that Hitler is intent on war. Jones, however, knows whereof he speaks; he interviewed the Führer, on a plane, and, for his next scoop, he hopes to talk to Stalin. He therefore travels to Moscow, as an independent journalist, and although the interview never happens, the dogged Jones remains perplexed by the boom in Soviet industry. How is it being funded? “Grain is Stalin’s gold,” he is told. And where is much of the grain traditionally reaped? Ukraine. So that is where Jones goes. As Lloyd George said of him, “He had the almost unfailing knack of getting at things that mattered.”

What matters in “Mr. Jones” is the Holodomor, the famine that befell Ukraine in the years 1932-33. Current scholarship estimates that just under four million people died. They did not pass away from natural causes. The best and the most detailed English-language study of the subject is “Red Famine,” a 2017 book by Anne Applebaum, who demonstrates that starvation was a deliberate policy, enforced by Stalin through the requisition of crops and other products and the widespread persecution, deportation, or even execution of the non-compliant. His grand scheme of collectivized farming had failed, as any local farmer could have predicted, yet it was not ideologically allowed to fail. Who better than the Ukrainians, so often distrusted and demonized by Moscow, to be cast as scapegoats and saboteurs?

Dramatizing a theme of such enormity is a test for any filmmaker. Holland’s response is threefold. First, she shadows virtually every scene with a distorting darkness, as if prophesying doom, long before the action reaches Ukraine. Second, she introduces none other than George Orwell (Joseph Mawle) as a framing device. At the outset, we find him at work on “Animal Farm,” the implication being that the novel—which boasts a Mr. Jones, a farmer, in the opening sentence—was inspired, or informed, by what we are about to witness. (A curious move; if, as a film director, you have faith in the strength of your narrative, why should it need an extra boost?) Later, the link is made explicit, as Jones, returned from his mission, is introduced to Orwell, though whether such a meeting ever took place is open to debate.

Holland’s third tactic, as Jones journeys through the blighted landscapes of Ukraine, is to show us only what he sees, in the hope that a deep note of universal suffering will resound through the particular. Thus, when Jones eats an orange on a train and discards the peel, his fellow-passengers lunge and scrap for the nutritious prize. Alighting at a secluded railroad station, he passes a body on the platform. Lying there, frozen and unremarked, it is meant to represent the innumerable dead who are strewn around the countryside like litter. The same goes for the scene in which a baby, though still alive and crying, is tossed onto a cart with the already deceased, to save time; or the lumps of meat that are cooked and eaten by children, having been cut from the remains of their brother.

None of these monstrosities are inflated. Applebaum’s book includes a lengthy section on cannibalism. (Some parents consumed their offspring, survived, and, having woken to the realization of what they had done, went mad. By then, they were in the Gulag. How much hell do you want?) In a feature film, though, isolated horrors are liable to come across as eruptions of a foul surrealism rather than as testamentary evidence, and we don’t—or can’t—always make the imaginative leap in scale. When Jones himself grows famished, and chews in desperation on tree bark, we are scarcely moved, for the plight of one outsider, from the well-fed West, is of no consequence in the apocalypse of hunger.

This is no reflection on Norton, who is plausibly stricken as the pale and bespectacled Jones, and we share his frustration when his reports on the Holodomor, delivered after he is thrown out of the Soviet Union, have only a limited impact. They are scorned by the New York Times correspondent in Moscow, Walter Duranty, played by Peter Sarsgaard as a limping and low-lidded slimeball. (Just in case we doubt his nefarious credentials, he hosts a languid orgy at his apartment.) It was Duranty who, in brushing off Jones’s account of the atrocities, blithely explained to Times readers, “You can’t make an omelet without breaking eggs”—one of the most shameful phrases in the history of the newspaper. The eggs were human beings.

This determination not to know, or to look away when the facts admonish our beliefs, is among our most durable frailties, and Duranty was but the first of many skeptics....

Duranty was no skeptic, he lied.
Both the NYT and the Pulitzer peeps have felt the need to explain the award. Neither have disavowed the tchotchke:
New York Times Statement About 1932 Pulitzer Prize Awarded to ...

Pulling Water From Thin Air: Is Zero Mass Water For Real?

Long-time readers know we attempt to avoid questions in the headline, it's weak and waffley but in this case the query is sincere. Here's the story from Aquatech, July 2:

Zero Mass Water: Why all the hate?
Zero Mass Water attracted $50m investment from BlackRock yet atmospheric water generation continues to be a divisive technology in the water sector. Why? Tom Freyberg investigates.
Zero Mass Water (ZMW) has fast-tracked its position as the poster-child of the air-to-water market, after securing $50 million investment from BlackRock.

The Series C1 equity financing included Breakthrough Energy Ventures, which includes investors Jeff Bezos, Bill Gates, Richard Branson and Michael Bloomberg.

Yet, the company, and the wider atmospheric water generation (AWG) technology, appears to be extremely divisive in the global water sector.

To some, CEO Cody Friesen is a charismatic idol with an answer to the world’s water problems.
To others, a leader who is raising eyebrows of seasoned water practitioners by selling a technology with claims more akin to science fiction than reality.

With the promise to “do for drinking water what solar panels have done for electricity”, the ambitious Arizona-based start-up provides ‘Source Hydropanel’ technology.
The panels essentially take in sunlight and air to create water from the atmosphere, adding minerals, ozonating and then storing the water ahead of its use.

Why all the hate?
In May, Global Water Intelligence (GWI) published an analysis of the technology.
It was referenced as an “incredibly inefficient means of making water” that has caught the “imagination of billionaire backers and ill-informed philanthropists”.
The analysis reported that, as the unit produces 3.4 litres of water per day, it would cost $177,353 to meet a person’s daily needs (based on panels costing $3000, and providing 201 litres of water per day).

In a follow up article on LinkedIn, GWI publisher Christopher Gasson added that: “There is no place on earth where a hydropanel is the most cost-effective source of water.”

Stating that the panels are paid for by donors, including finance institutions such as the Asian Development Bank, US AID and the Inter American Development Bank, Gasson added that Zero Mass Water “is not really in the business of selling water”.

“In this crazy world of guilt-ridden billionaires, extreme poverty and anxiety about climate change and the environment, its main product is emotional,” he said.

A stone thrower’s opportunity
Tom Ferguson, VP of programming at Imagine H2O, said the $50 million investment is considerably larger than other recent equities rounds in the water technology market. “Typically they fall in the $2.5m to $10m range, so there is a shock factor to a round this big.”

He said it is second only to PrecisionHawk, which brought in a $75 million round but in agricultural technology, with Fracta’s $37m investment from Kurita in 2017 possibly a better comparison.
Commenting on the investment and criticism ZMW has attracted, he told Aquatech Online: “This is a stone thrower’s opportunity – whenever there’s a national news article there’s always a reason why the “non-water people” are wrong.”
“Whenever there’s a national news article there’s always a reason why the non-water people are wrong.”

He said: “This is one of those water innovations that it's easy to get excited about because it has this kind of science fiction, silver bullet, element to it. It’s being pitched that if we have this solution, we essentially solve the centralised water problem.”

Earlier this year Zero Mass Water launched the residential version of its Source Hydropanel at the Consumer Electronics Show (CES) in Las Vegas.

Ferguson said that $50m investment into ZMW is reminiscent of the Nebia shower head, which raised a lot of money initially but hasn’t yet been “a spectacular success despite several notable Silicon Valley investors betting on it in 2015”.

Discussing the question of the cost per unit of volume of water, he added: “Zero Mass Water survived the major due diligence process and obviously [Breakthrough Energy Ventures] think the productivity, weight, cost efficiency is going in the direction is needed to be.

“You have to assume that they’ve seen an engineering plan that we haven’t seen, and that they liked what they saw. These are sophisticated people.”

AWG competition heats up....

Friday, July 3, 2020

All the Salt In the Sea

From Inference Review:

Reading Seawater
“How inappropriate,” Arthur C. Clarke once observed, “to call this planet Earth when it is so clearly Ocean.1 Most of our planet is covered with water, almost all of it salty. “Water, water everywhere, nor any drop to drink,” the Ancient Mariner complained. Yet it remains surprisingly difficult to explain why the sea is salty.

Most coastal cultures have a story that explains the origin of sea salt. These accounts typically suggest that the waters were fresh to begin with and salt was added later. In Norse mythology, the sea was made unpotable through an act of revenge by two enslaved giantesses, Fenja and Menja, who tended a magic mill that they alone were strong enough to turn. Held captive on a ship and forced to grind salt day and night by the sea-king Mýsingr, the giantesses kept on grinding until they produced enough to sink the vessel. The still-churning millstone fell into the abyss, creating a whirling maelstrom and forever mixing salt into the sea.

For Pythagoras, the sea represented the tears of Kronos, a Titan born of Gaia and Uranus. Empedocles suggested that seawater was the sweat of the earth. Aristotle wrote at length on the composition of seawater in his treatise Meteorology, sweeping aside earlier theories with scorn. “Metaphors are poetical,” Aristotle sniffed, “and so that expression of [Empedocles] may satisfy the requirements of a poem, but as a scientific theory it is unsatisfactory.”2 Aristotle observed that seawater is not merely salty but also bitter, concluding that it must therefore be an admixture of water and various earthy residues borne by rivers. He recognized that this idea posed a problem. “If it is maintained that an admixture of earth makes the sea salt,” Aristotle wrote, “it is strange that rivers should not be salt too.” He suggested that the action of the sun’s heat on seawater played a transformative role, and offered a comparison with the production of cinders and bodily waste:
What heat fails to assimilate becomes the excrementary residue in animal bodies, and, in things burnt, ashes. That is why some people say that it was burnt earth that made the sea salt. To say that it was burnt earth is absurd; but to say that it was something like burnt earth is true. … [E]verything that grows … always leaves an undigested residue, like that of things burnt.3
Aristotle further argued that the accumulation of salt in the sea was counterbalanced by rainfall, thereby keeping its composition in a steady state, an early articulation of a key concept in chemical oceanography.

More than three centuries later, Pliny the Elder, in descriptions of salt extraction methods around the Roman Empire, still espoused Aristotle’s views, although he downplayed the excretory analogies. Pliny added his own elaboration, suggesting that because salt precipitated in pools and pans at night, the action of the moon must also be significant.4
The continuing influence of Aristotle and Pliny into the Middle Ages is reflected in the writings of the tenth-century Arabic philosopher and historian al-Mas’udi.5 In his Muruj adh-dhahab wa ma’adin al-jawahir (Meadows of Gold and Mines of Gems), al-Mas’udi described the continuous chemical exchange between earth and ocean. Water flowing into the sea carries salt absorbed from the earth; heat from the sun and moon evaporate the “sweet portions of the water,” which later fall as rain. “This process,” he remarked, “is constantly repeated.”6
After two millennia, Aristotelian doctrine was finally overturned by Robert Boyle. In the opening paragraph of his Experiments and Observations upon the Saltness of the Sea, published in 1675, Boyle scolded Aristotle:
[H]is Authority, perhaps much more than his Reasons, did for divers Ages make the Schools and the generality of Naturalists of his Opinion, till towards the end of the last Century and the beginning of ours, some Learned Men took the boldness to question the common Opinion…7
Boyle’s empirical approach laid the groundwork for the practice of modern chemistry. He systematically analyzed seawater through hydrometer measurements, as well as evaporation, precipitation, and primitive titration experiments. Boyle disproved Aristotle’s hypothesis that some unspecified action of the sun’s rays on water left behind a residue of concentrated salts, suggesting instead that evaporation of riverine waters was sufficient to explain seawater chemistry.

By the nineteenth century, geology was emerging as a discipline in its own right, revealing increasing evidence that the earth had a far longer history than previously imagined. In 1899, John Joly suggested that the earth’s age could be estimated from the salinity of seawater. He assumed that the sea had started as fresh water and had grown more saline over geologic time. Joly gathered information about the composition of river water from around the British Empire to determine the average annual flux of sodium into the sea. He divided the total inferred volume of sodium in ocean water by this number and estimated that the age of earth, or at least its oceans, was between 90 and 100 million years.8

Joly’s work was criticized by the geological community, not least for his assumption that the salt content of the oceans had increased continuously over geological time. This seemed inconceivable to geologists steeped in the uniformitarian doctrine popularized by Charles Lyell in his Principles of Geology, which stressed that the earth’s processes and natural laws have remained constant.9 Moreover, geologists had also documented thick evaporite, or rock salt, deposits left by ancient marine waters in sedimentary sequences around the world. These clearly indicated that sodium and other elements did not accumulate continuously, but could also exit the sea in large volumes. In arguing for a steady state in seawater chemistry, both Aristotle and al-Mas’udi had been correct in a way that Joly was not.

As it turned out, Joly’s efforts to date the earth were eclipsed in the following decade by the development of radiometric dating techniques. But his result was not entirely without significance. Joly’s estimate of approximately 100 million years is close to the residence time of sodium in seawater: the average time a sodium ion stays in the sea before leaving via mineral precipitation, salt spray, or other sinks. Sodium is, in fact, part of a geochemical cycle—atoms do not simply take one-way trips into the ocean.

The emergence of a more nuanced understanding of ocean chemistry can be seen in a paper published by William Rubey in 1951.10 Rubey amassed data about the chemical composition of present-day river and ocean waters, ancient marine deposits, and igneous rocks to ascertain whether ocean chemistry could be explained solely by rivers conveying the dissolved products of rock weathering. 

In what can be recognized as an early effort to model global biogeochemical cycles, Rubey attempted to balance the budgets of the various constituents of seawater. Like Aristotle, he assumed that the composition of seawater had remained constant over geologic timescales. In his mass balance calculations, Rubey was unable to account for the profusion of volatile elements and compounds found in seawater, including chlorine, its most abundant ion. He concluded that there must be another source for some of seawater’s major constituents and that source might be deep-sea “volcanoes, fumaroles, and hot springs.”11 He was right.

Charles Darwin's Cousin and the Beginnings of Big Data

From Delancey Place:
Today's selection -- from A Brief History of Everyone Who Ever Lived by Adam Rutherford.
The beginnings of big data in the 1800s:
"After reading his cousin's [Charles Darwin's] masterwork, [Francis] Galton began pondering whether humankind could be improved by selective breeding. Darwin was a focused scientist compared to Galton, though that title did not exist until 1834. The somewhat arbitrary subject areas of science that we cling to in school today were not so rigid back then, and most dabbled in multiple fields. Darwin was preoccupied with other living things as well as his pigeons, particularly worms, carnivorous plants, and barnacles, though he was also driven by geology, which was critical to the development of his evolutionary thinking.
Galton, by comparison, was more a polymath, and made not insignificant contributions to a whole range of fields. His myr­iad gifts to the world included the first newspaper weather map, the scientific basis of fingerprint analysis for forensics, a dizzying number of statistical techniques, many the underpinnings of all statistics used today, foundational work on the psychology of syn­esthesia, a vented hat to help cool the head while thinking hard; and much else over his long and distinguished career. He also gave us the word eugenics, more of which later, and the phrase nature versus nurture, which has plagued geneticists ever since, as this whole book I hope makes amply clear. He devised a new way to cut cakes, which was published in Nature, the journal from which both the structure of DNA and the first human genome would break out of the lab and enter the public consciousness. ...

"Galton did a couple of years of medical training in Birmingham and London, but went on to pursue mathematics, and the world of numbers would be the prime determinant of his intellectual legacy.
"Over his long and varied career, one thing was consistent among Galton's traits: He coveted data. He measured. It was in the statis­tics that he developed, and in his unquenchable thirst for measur­ing human characteristics, that he tried to formalize and lock down human differences. In Chapter 4 and elsewhere in this book, we explored the new business of genetic ancestry, where for around £100 and a froth of spit in a test tube, one of many companies will draw a sketch of your DNA. The results are, to my mind, of incon­sequential interest to an individual, but in collecting these samples the companies behind them, notably 23andMe, are amassing colos­sal datasets of human genomes in numbers that far outstrip ones available to academic scientific research.

"Galton had done it all before. He recognized the power of large collections of measurements -- we call it 'big data' nowadays -- and cannily also recognized our own fascination with ourselves, and willingness to reach into our purses to satisfy those egos....

"Rabobank: If 500,000 Rich Hong Kongers Leave The City, The HKD Peg Would Surely Collapse"

I'm not sure that it matters any more.

Lifted in toto from ZeroHedge:

Submitted by Michael Every of Rabobank
Brawn on the Fourth of July
The US is on holiday today to celebrate Independence Day, which actually falls tomorrow. This 4 July it can do so with some big, brawny numbers to focus on. First of all, jobs. US payrolls yesterday smashed expectations (which consistently have proved not to mean anything in this crisis), rising 4.8 million. Put another steak on the BBQ! Unfortunately, weekly initial claims out the same day showed no sign of any improvement and new unemployment filings were once again 1.4 million. Let’s swap the steak for potato salad. Indeed, with re-openings on pause or being rolled back, and the cut-off point for June payrolls data sampling being around the middle of the month, the likelihood is that things are already stalling even though we are millions of jobs away from getting back to where we were on 4 July 2019.

Of course, the other big number is the virus. New cases in the US continue to surge, with 55,000 in a single day being the latest snapshot. As the Fed keeps saying, if that number does not come down, the other economic numbers are not going to hold up.

Not that this matters for financial markets in any way. They are guaranteed to be alright regardless. More virus equals more free money; less virus means more growth; and if it also means less free money it must therefore shortly after mean more free money. Otherwise markets will go down - and as markets cannot go down, appropriate measures will of course be taken. (The latest being the German Bundestag voting to support ECB QE to end-run the German constitutional court’s questioning of that policy’s validity.) Ray Dalio makes a similar point forcefully today, but isn’t saying anything this Daily(o) has not been saying for a long time. Indeed, I mention what is happening in the real world purely for those who are interested in current affairs rather than markets. 

Where these two do intersect are a few key stress points which have the ability to make central banks look as impotent and irrelevant as they actually still are. (Have they sorted out inflation yet? How about climate change? Or inequality? Or curing the virus?)

Primary among these is still the US-China issue. The US Senate has just re-passed the latest Hong Kong bill and so President Trump has ten days to sign it or it becomes law anyway, unless he tries to veto it, risking a Congressional over-ride. Very soon, the clock starts ticking. As Bloomberg notes:

The law gives banks a kind of year-long grace period to stop doing business with entities and individuals the State Department determines to be “primary offenders” when it comes to undermining Hong Kong’s autonomy. After that period, the Treasury Department can impose a variety of penalties on those institutions, including barring top executives from entering the US and restricting the ability to engage in US dollar-denominated transactions. The sanctions would apply to Chinese banks as well as Chinese subsidiaries of US banks…[and will] mostly affect the largest Chinese lenders that do business with the US.”

So no USD for the largest Chinese lenders. How do they help Chinese firms transfer USD to repay external debt? How do Chinese importers transfer funds to those all round the world who sell to them? Simple questions: no simple answers to how China can avoid such US financial brawn.
Naturally, we can expect ‘markets’ to shrug at locking-in a 12-month countdown to a USD “nuclear option” because a constant over the past few decades has been the ‘Hollywood ending’ - as typified by Tom Cruise, an A-list star back in 1989’s “Born on the Fourth of July”, and amazingly still one today. (He seems to have his own personal central bank.) Yet how is that working out as regards Brexit, which is now similarly time-delimited? “EU-UK trade talks break up early over 'serious' disagreements” says the pro-EU Guardian as “EU Brexit negotiator Michel Barnier complained of lack of respect and engagement by UK”. The anti-EU Daily Express says “Boris Johnson blames EU for missing crucial deadline -as trade talks collapse” adding BoJo “has furiously hit back the at EU, blaming Brussels for missing a key deadline in post-Brexit trade talks as the two sides continue to trade vicious blows amid increasing fears of a no deal conclusion.” Tick-Tock.

Coincidentally, the UK is set for its own feeble independence day celebration tomorrow as pubs finally re-open (in the same way that its recently-flagged New Deal amounts to 0.2% of GDP in public spending vs. 40% for the US original). Let’s just hope this does not flag what has been seen in the US and Israel: that four weeks from now virus numbers will ‘mysteriously’ be surging again.
But back to areas where central banks can’t help. Yesterday the Daily presented the simple maths that if 500,000 Hong Kongers were to leave the city and take USD1m equivalent with them then ceteris paribus, the HKD peg would surely have to go as all FX reserves evaporated. In recent weeks we have seen the HK authorities publicly state they will not impose capital controls – which as a key global financial centre should always be unthinkable. Yesterday, after a Chinese official response strongly opposing the UK government making clear it will offer 2.9m Hong Kongers a path to citizenship, the HK authorities had to publicly disavow rumours of a travel ban on its citizens. Yes, that’s where we stand. What does monetary policy have to offer here?
One other one: Jeffrey Epstein confidante (and alleged co-offender) Ghislaine Maxwell has just been arrested by the FBI after mysteriously not being findable despite living in a tiny New Hampshire hamlet of just 1,600 people all along. The book has been thrown at her already, and questions are being asked about how many influential names are going to be named as she goes down. As social media is full of pictures of Presidents Trump and Clinton, and Prince Andrew all openly socialising with Maxwell, some are also remarking: “Ghislaine Maxwell committed suicide tomorrow” or that perhaps it will be a sudden case of Covid-19 instead.
Happy 4 July, America, and British pub-goers!

Thursday, July 2, 2020

Tracking Mining Man Dan Gertler's Sanctions Evading, Money Laundering, Government Bribing Business Endeavors

From Global Witness, July 2, 2020:

Undermining Sanctions
Controversial mining magnate Dan Gertler appears to have evaded US sanctions by using a suspected money laundering network stretching from DRC to Europe and Israel 
In December 2017, controversial mining magnate Dan Gertler had a problem. The United States had just sanctioned him for making his fortune through “corrupt mining deals” in the Democratic Republic of Congo (DRC), with the intention of ending Gertler’s lucrative career brokering deals between the Congolese state and some of the world’s largest multinational mining companies.

US sanctions against Gertler were set to not only destroy his reputation, but also proscribe American individuals, banks and companies from entering into business with him. In our globalised economy, where most transactions are carried out in dollars via US banks, this meant that even non-American entities would have to avoid doing business with Gertler. For an international businessman like Gertler, these sanctions should have come as a financial death sentence.

However, our joint investigation with the Platform for the Protection of Whistleblowers in Africa (PPLAAF) suggests that Gertler may have been able to evade US sanctions and continue to operate freely in DRC’s mining sector. His close connections to those with power and influence in DRC could have helped allow him to continue doing business, as has his apparent use of an international money laundering network.
 Key findings
  • Dan Gertler has seemingly used an international money laundering network stretching from DRC to Europe and Israel to evade US sanctions. This network likely helped him funnel millions abroad and retain access to DRC’s mining sector.
  • Two Congolese companies that may be proxies for Gertler secretly acquired new mining permits in the months leading up to the 2018 Congolese elections. These permits were granted by state-owned mining company Gécamines.
  • Evidence suggests that Afriland First Bank was central in setting up any scheme that may have enabled Gertler to evade US sanctions
  • Large mining companies including ERG and Sicomines continue to do business with a company still likely linked to Gertler, despite US sanctions against him.
  • Commodity giant Glencore has continued to pay Gertler millions of euros after sanctions were imposed.
Gertler in DRC: A brief history
Gertler made his fortune by acting as a gatekeeper to DRC’s mining sector. International mining companies seeking access had to work with Gertler, and many were willing to do so since DRC is home to many valuable natural resources, including diamonds, gold, copper and coltan....


Previously on Mr. Gertler: 
December 2017
This is going-on two months old but is good background for some stuff that will be coming out in 2018....
November 2018 
December 2019 
December 2019 
January 2020 

Poland Is Expanding Their LNG Terminal Again

From LNG Industry, June 25:

Polskie LNG signs LNG terminal expansion agreements
Polskie LNG, from the GAZ-SYSTEM Group, and Szczecin and Swinoujscie Seaport Authority have signed agreements with the consortium of companies PORR S.A. and TGE Gas Engineering GmbH for the expansion of the Lech Kaczynski LNG Terminal.
The value of the signed agreements totals to approx. PLN 1.9 billion. The investment project completion date is the end of 2023.

The agreements relate to the extension of the onshore as well as offshore part of the LNG terminal conducted in cooperation with the Szczecin and Swinoujscie Seaport Authority in the ‘design & build’ formula. The scope of the agreements covers the development of the design documentation (building permit design and detailed design), performance of construction and erection works, commissioning of the system, and obtaining of the required permits.
The investment project will be executed by two entities:
  • Polskie LNG shall be competent for, among other things, the construction of the new LNG tank (with a capacity of approximately 180 000 m3 gross) and the performance of the process part of the new berth intended for LNG loading, unloading, and bunkering.
  • Szczecin and Swinoujscie Seaport Authority shall be competent for the construction of the hydrotechnical part of the berth, the hydrotechnical infrastructure for the transmission pipe rack, and the complete mooring infrastructure.
“We are very happy that Polish seaports are involved in the changes that take place in the energy sector in our country. The Szczecin-Swinoujscie port complex is fully prepared to diversify the supply of strategic energy resources. The extension of the Swinoujscie President Lech Kaczynski LNG Terminal plays a key role in the regasification process and it is also crucial in terms of the energy resources supply for other European countries. What is more, this project forms part of the wider programme for strategic sea investments which will significantly increase Poland’s potential in the Baltic region”, said Marek Gróbarczyk, Minister of Maritime Economy and Inland Navigation.

“The investment project is an essential element of the strategy to increase the energy security of Poland. The national transmission system is consistently expanded to switch from the presently prevalent east-west direction of supply to the northern direction. Apart from the expansion of the LNG terminal in Swinoujscie, GAZ-SYSTEM Capital Group has been successfully pursuing a number of strategic investment projects such as: the Baltic Pipe Project, the North-South Gas Corridor, or the Poland–Lithuania gas interconnectors. Thus, we are building Poland’s energy independence and laying grounds for gas market diversification in our part of Europe”, noted Piotr Naimski, Secretary of State in the Chancellery of the Prime Minister, Government Plenipotentiary for Strategic Energy Infrastructure.....MORE
December 2019 
Natural Gas: "Novatek steps on gas pedal with Arctic LNG 2 construction, Plans Downstream LNG Business in Germany and Poland"
November 2019 
"First American LNG Shipment for Ukraine Arrives at Polish Port"
Poland has been trying to warn the rest of Europe of the risks in getting too dependent on Russian gas, in particular via the Nord Stream 2 pipeline.
December 2018
Natural Gas: Poland Is Already Expanding Its New LNG Terminal As Nord Stream 2 Heads For Germany

Feb. 12, 1940  
Berlin, Moscow Negotiate New Trade Accord".
-Reading Eagle
October 2018
The Nord Sream 2 Alternative: "Polish consumption, LNG imports grow"  
It isn't cheap to do what Poland is doing, paying for some independence from Russian sources, but it may prove farsighted on the day—and it will happen—Russia begins pressuring Germany over some geopolitical point or other.

October 2018
Natural Gas: Polish Oil and Gas Company (PGNiG) confirms US LNG supply deal
Ramping up the use of the new (and already being expanded) President Lech Kaczyński LNG Terminal. Qatar is currently Poland's largest LNG supplier with the next step in the diversification away from reliance on Russia to be increasing Norwegian gas via the Norway-Denmark-Poland Baltic Pipe by October 2022.

October 2018

Natural Gas: Russian Media Downplays Poland's Latest Moves

"U.S. LNG Industry Needs Prices To Double"

From OilPrice, June 26:
Last week, Tellurian said it would make the final investment decision on the Driftwood LNG project next year. On the one hand, the news is good: Tellurian had stopped making updates on the project after its long-term supply deal with India’s Petronet fell through. On the other hand, the announcement makes it the latest in a string of LNG companies pushing their FIDs back by a year, and this does not bode well for the industry. It is enough to look at the reason why Tellurian postponed its final investment decision, as explained by the chief executive: the company needs gas prices--specifically, Asian spot market prices--to be over $5 per million British thermal units (mmBtu). Right now, LNG trades at about $2 per mmBtu. Can it climb more than 100 percent within a year?

According to Shell, prices will rise by next year because new supply will be slow in coming this year. But that forecast was made in the supermajor’s LNG Outlook 2020, which was released in February. Since then, Shell has pulled out of the Lake Charles LNG project and is reportedly mulling over the sale of a stake in its Australian LNG business. While the latter is likely part of a divestment program running from before the crisis, the exit from the Lake Charles project is interesting, especially in light of the company’s continued optimism about the LNG market.

The company cited market conditions in its decision to pull out from Lake Charles LNG. India’s Petronet must have had the same market conditions in mind when it let its preliminary long-term agreement with Tellurian expire. Right now, LNG is much cheaper on the spot market than in long-term supply contracts. It is this price disparity that is changing timelines and pushing back FID dates. And ironically enough, it is U.S. LNG producers that contributed to this situation, though not willingly....

We still think U.S. spot or near futures can see $3.50 but the wildcard is oil. If Cushing prices trade at current levels or higher there will be more oil produced than we were looking for back in April and with the oil comes the "associated" gas, keeping a lid on prices.

The other factors to be aware of are generally cooler than average temperatures so far this season, meaning less demand for air conditioning: the last EIA Weekly Update had population weighted Cooling Degree Days running at -12 for the last week reported (no update this week, they get the holiday)

The last negative impact is from LNG shipments, which at 25 Bcf are half of some weeks in February and March.
And that 25 Bcf shortfall is enough to move prices by 10% on storage report day 

AquaBounty Is Now Selling Their Indiana-Raised Atlantic Salmon (but not the genetically modified fish, yet)

As intro'd in September 2019's "Here Come the Frankenfish: GMO Salmon Coming to a Store Near You"
They absolutely must not allow these things to get anywhere near ocean salmon (or Great Lakes salmon for that matter).
And though the writer takes a blithely upbeat look at this development, we are posting it for information purposes only....
That was followed in January 2020 by FrankenFish: "AquaBounty unveils 50,000 tonne target".

And here's the latest, from WISH-TV, Indianapolis, June 30:
Atlantic salmon now being harvested in Indiana
Albany, Indiana, is about 750 miles away from the Atlantic Ocean, but the Delaware County town of 2,100 Hoosiers is where Atlantic salmon is now being harvested.

Massachusetts-based AquaBounty Technologies Inc. (Nasdaq: AQB) announced the beginning of its commercial-scale harvest of conventional Atlantic salmon raised at its aquaculture farm in Albany. This fish farm is the company’s first in the U.S.

The company says the Indiana-based farm will ramp up the monthly harvest of conventional salmon throughout the summer and plans to reach 100 metric tons per month by early 2021.
The annual capacity of the farm is approximately 1,200 metric tons.

“For comparison, in the U.S., we consume about 400,000 tons of salmon a year,” said Mark Walton, chief technology officer for AquaBounty.

The company uses a Recirculating Aquaculture System to raise its fish which filters and reuses the same water in the tanks. AquaBounty says the RAS is a more efficient and sustainable way to raise Atlantic salmon....MORE
While Undercurrent News headlines the story:
AquaBounty harvests first conventional fish; GM salmon still growing...

Lasers For Shooting Pests Off Salmon Don't Work As Well As One Might Think

Oh it was looking like the future I was promised back in July 2019:
"Remote-controlled Salmon Farms to Operate Off Norway by 2020" 
"And then Mr. Poisonnier, the robots massage the salmon..."

And it just got better and better:
Also at IEEE Spectrum:
Lice-Hunting Underwater Drone Protects Salmon With Laser

Sadly, The Fish Site reports:
Study shoots down sea louse laser
The efficacy of a laser-firing device that has been designed to reduce sea lice pressures on farmed salmon has been called into question by new research.

Innovative lice lasers developed by Stingray have been deployed by numerous salmon farming companies over the course of the last decade, but this newly published study – which took place at a commercial salmon farm operated by Bremnes Seashore in Norway – suggests they are not always effective....MORE

157 Years Ago Today the Course Of History Was Changed

You can describe the opposing forces in the American Civil War a number of ways, depending on the point you wish to make:
  • Blue vs. Grey
  • Free states vs  Slave states 
  • Republicans vs Democrats
But in the feat of almost superhuman sacrifice we are looking at, the morality or the politics probably weren't top-of-mind. The overriding concern was sheer terror.

Toward the end of the second day of battle at Gettysburg, July 2, 1863, around 6:00 pm, the Confederates from Alabama were charging at a gap in the Union lines which when taken would allow them to wheel 90 degrees left and roll up the bluecoats by attacking from an unexpected and thus undefended direction.

When the 'Bama boys broke through it would force the Union forces to retreat, losing any chance at crushing the rebels and force a stalemate of the battle and more than likely the entire war, leaving in place the status quo ante and leaving the slaves in chains for at least another generation.

And then General Winfield S. Hancock, in a futile, desperate tactic ordered the 262 men of the 1st Minnesota Volunteer Infantry Regiment to charge the 1100 advancing rebs.
The Minnesotans had been in some bloody battles:
Bull Run
and Chancellorsville
And knew that those 5:1 odds meant, not some esoteric talking point, but that every single one of them would have five guns firing at them for the duration of the charge.
And they did it anyway.

Gen. Hancock whose order “Colonel [Colvill], do you see those colors?” (pointing at the advancing Confederate forces) “Then take them!”, later stated:
“I had no alternative but to order the regiment in. We had no force on hand to meet the sudden emergency. Troops had been ordered up and were coming on the run, but I saw that in some way five minutes must be gained or we were lost. It was fortunate that I found there so grand a body of men as the First Minnesota. I knew they must lose heavily and it caused me pain to give the order for them to advance, but I would have done it (even) if I had known every man would be killed. It was a sacrifice that must be made. The superb gallantry of those men saved our line from being broken. No soldiers on any field, in this or any other country, ever displayed grander heroism.”
Bruce Catton stated in Glory Road:
“The whole war had suddenly come to a focus in this smoky hollow, with a few score westerners trading their lives for the time the army needed…They had not captured the flag that Hancock had asked them to capture, but they still had their own flag and a great name…”
Lt. Col. Joseph B. Mitchell in his Decisive Battles of the Civil War stated:
“There is no other unit in the history of warfare that ever made such a charge and then stood its ground sustaining such losses.”
The "westerners" suffered 82.6% casualties, as far as is known the highest casualty rate of any U.S. unit in that or any other American war.

As we noted on the 151st anniversary of the charge: 

They were ordered to attack into 5:1 odds-against-them.
And they charged, with bayonets fixed.

"They had not taken the Alabama flag, but they had held on to their own," Historian Shelby Foote wrote.
"And they had given Hancock his five minutes plus five more for good measure."
General Hancock wrote of the First Minnesota's charge:
"There is no more gallant deed recorded in history"
In 1928 President Coolidge said:
"Colonel Colvill and those eight companies of the First Minnesota are entitled to rank as the saviors of their country."
By suffering casualties at the rate of one every two seconds they stopped the Confederate advance and forced Lee into the desperate gamble on the third and final day of the battle:
Gettysburg was the price the South paid for having Lee. The first day's fighting was so encouraging, and on the second day's fighting he came within an inch of doing it. And by that time Longstreet said Lee's blood was up, and Longstreet said when Lee's blood was up there was no stopping him... And that was that mistake he made, the mistake of all mistakes. Pickett's charge was an incredible mistake, and there was scarcely a trained soldier who didn't know it was a mistake at the time, except possibly Pickett himself, who was very happy he had a chance for glory.  
...William Faulkner, in "Intruder in the Dust", said that for every southern boy, it's always within his reach to imagine it being one o'clock on an early July day in 1863, the guns are laid, the troops are lined up, the flags are out of their cases and ready to be unfurled, but it hasn't happened yet. And he can go back in his mind to the time before the war was going to be lost and he can always have that moment for himself.
-Shelby Foote in Ken Burns' "The Civil War

Kinda makes this stock market stuff seem a bit sordid in comparison.

EIA Natural Gas Storage Report, July 2, 2020

First up, FX Empire with the guesses going into the report:
Today’s U.S. Energy Information Administration (EIA) natural gas storage report is expected to show a 77 Bcf build, down from last week’s 120 Bcf build.

NatGasWeather says, “Today’s EIA weekly storage report is expected to show a build of +74-79 Bcf by national survey averages, but with the most notable at +74 Bcf, slightly larger than the 5-year average of +65 Bcf. It was very warm to hot over most of the country besides the cooler central US/Plains. Our algorithm predicts a build of +68 Bcf....
And from the Energy Information Administration:
Working gas in storage was 3,077 Bcf as of Friday, June 26, 2020, according to EIA estimates. This represents a net increase of 65 Bcf from the previous week. Stocks were 712 Bcf higher than last year at this time and 466 Bcf above the five-year average of 2,611 Bcf. At 3,077 Bcf, total working gas is within the five-year historical range.  ....MUCH MORE
More usage, less fillage which is probably a good thing as those caverns are very full:

Finally, the CME with the NYMEX price action (30-minute bars, 1 week):

$1.716, up 4.5 cents.

"Hundreds of George W. Bush administration officials to back Biden, group says"

"Corrupted by wealth and power, your government is like a restaurant with only one dish. 
They've got a set of Republican waiters on one side and a set of Democratic waiters on the other side. 
But no matter which set of waiters brings you the dish, the legislative grub is all prepared in the same Wall Street kitchen."
ascribed to Huey Long (found the citation)

Here's the Reuters exclusive on the Bush boys
HT: FT Alphaville's Further Reading post

Mr. Long was Governor of Louisiana from 1928 to 1932 and U.S. Senator from Louisiana from 1933 to 1935.
Long was called "The most dangerous man in America" (though in private FDR said the MDMIA wasn't Long but rather General MacArthur)
Mr. Long was assassinated on September 10, 1935.

Another quote ascribed to Senator Long:
"Sure, We’ll Have Fascism in This Country, and We’ll Call It Anti-Fascism"
There is something huge bubbling beneath the surface of daily news and events and I'm not sure what the hell it is.
I do know that it probably involves money, on the order of tens of billions of dollars, and that one area to keep an eye on is where money of that magnitude hangs out,
Eisenhower's military-industrial complex, but expanded to include intelligence community contractors and politicians.

And that there might be one heck of a short-sale opportunity coming up.

"Tesla Stock Could Hit $2,000 in a Best-Case Scenario" (TSLA)

"Hi honey, what's new?"
"Tesla is over $1200"
"That nice dear, here take your medication"

From Barron's:
Tesla stock’s incredible run continues Thursday morning as more analysts lift estimates and—more important—target prices ahead of second quarter earnings.

The biggest splash came from Wedbush analyst Dan Ives, who boosted his bull-case target for Tesla stock (ticker: TSLA) to $2,000 from $1,500. It isn’t his base case. Ives’ official target price is now $1,250, up from $1,000. Still, $1,250 is the highest target price on the Street.

The bullish move has Tesla stock rising in premarket trading. Shares were initially up another 8.2% to more than $1,200, and jumped a little more after Tesla released delivery figures which, simply put, smashed second-quarter estimates.

Tesla delivered more than 90,000 vehicles in the second quarter. Analysts estimates were all over the place because of global pandemic, but the average estimate, according to FactSet, was roughly 72,000.

Ives, in his Thursday research report, pointed out deliveries were likely to beat estimates, but only predicted a number between 85,000 and 90,000 units. Even the most bullish estimates turned out to be to conservative.

Looking ahead, Ives sees a couple of additional positive catalysts for Tesla stock into year-end, including the much-talked about battery day and higher demand in China for locally built Model 3 sedans....

$1,211.28 last, up $91.65 (+8.19%)

Climateer Line of the Day: Enthusiasm Edition

Today's winner of the prestigious CLoD:

"...Markets won’t report themselves, however, so let’s get on with Thursday. "
—Bryce Elder

Do click through for an astounding bit of market ephemera.
Another variation of the age-old sentiment:
"That crack don't smoke itself"

Wildfire Season To Date: Below Average (excluding Minneapolis)

"...the torch has been passed to a new generation of Americans, born in this century..."
— John F. Kennedy, Inaugural Address, 1961

From the National Interagency Fire Center:

....Daily statistics7/1/20
Number of new large fires or emergency response 4 States currently reporting large fires:
Number of active large fires
Total does not include individual fires within complexes.
41 Alaska (19)
Arizona (5)
Colorado (2)
Nevada (4)
New Mexico (4)
Texas (1)
Utah (6)
Acres from active fires 736,649
Fires contained 5
Year-to-date statistics
2020 (1/1/20 - 7/1/20) Fires: 24,349 Acres: 1,431,958
2019 (1/1/19 - 7/1/19) Fires: 19,667 Acres: 1,068,210
2018 (1/1/18 - 7/1/18) Fires: 29,111 Acres: 2,534,701
2017 (1/1/17 - 7/1/17) Fires: 30,247 Acres: 2,855,889
2016 (1/1/16 - 7/1/16) Fires: 25,940 Acres: 2,140,425
2015 (1/1/15 - 7/1/15) Fires: 28,078 Acres: 2,265,750
2014 (1/1/14 - 7/1/14) Fires: 26,295 Acres: 894,081
2013 (1/1/13 - 7/1/13) Fires: 22,050 Acres: 2,259,418
2012 (1/1/12 - 7/1/12) Fires: 27,707 Acres: 2,073,954
2011 (1/1/11 - 7/1/11) Fires: 36,424 Acres: 4,795,942
2010 (1/1/10 - 7/1/10) Fires: 29,811 Acres: 1,486,681
10-year average Year-to-Date
2010-2019 Fires: 27,323 Acres: 2,065,523