Thursday, October 29, 2020

Plankton Week: Planktos and the Pope

One of the people who decided that iron fertilization of plankton to remove CO2 from the atmosphere was a good idea was Russ George. At the time the European Emissions scheme was coming off the 2006 €30 per tonne price level but the tout was €50; €80; €100 per tonne and Russ wanted some of that action, no point in letting the Chinese with the 'ol HFC-23 scam (HFC-23 is 11,700 times more powerful than CO2 as a greenhouse gas, the CCP would build factories to produce it and then get paid BILLIONS for shutting them down) or the Russians  with the Gazprom leaky pipes scam (unburned methane is 20x more powerful than CO2 as a greenhouse gas), the Russians were looking at $50 billion.

"I don't know if climate change is caused by burning coal or sun flares or what," said the Moscow-based carbon cowboy. "And I don't really give a shit. Russia is the most energy inefficient country around, and carbon is the most volatile market ever. There's a lot of opportunity to make money."
Yeah we've been doing this for a while. Rio, 1992.
Here's one of our posts on Russ George:

Planktos' Russ George Is Back

One of the Vancouver denizens.
In his last incarnation we got to watch his stock go to zero.
From Pacific Standard:
In July 2012, a commercial fishing charter called Ocean Pearl motored through the frigid waters of the North Pacific. It carried 100 tons of iron dust and a crew of 11, led by a tall and heavyset 62-year-old American named Russ George. Passing beyond Canada’s territorial limit, the vessel arrived at an area of swirling currents known as the Haida eddies. There, in an eddy that had been chosen for the experiment, George and his crew mixed their cargo of iron with seawater and pumped it into the ocean through a hose, turning the waters a cloudy red. In early August, the ship returned to port, where the crew loaded an additional 20 tons of iron. They dumped it near the same Haida eddy a few weeks later, bringing to an end the most audacious and, before long, notorious attempt yet undertaken by man to modify Earth’s climate.
The expedition was grand in its aims and obscure in its patronage. Funding George’s voyage was a village of Haida Indians on Haida Gwaii, a remote Canadian archipelago about 500 miles northwest of Vancouver. George and his business partners had gained the town’s support for a project of dumping iron dust into the ocean to stimulate the growth of a plankton bloom. The plankton would help feed starving salmon, upon which the Haida had traditionally depended for their livelihood, and also remove a million tons of carbon dioxide from the atmosphere. (In algae form, plankton, like all plants, absorbs CO2 through photosynthesis.) The intended result: a replenished fish population—and millions of dollars’ worth of “carbon credits” that could be sold on the international market.

Back on land, in Vancouver, George and his associates drafted a report on the expedition. It claimed that Ocean Pearl had seeded more than 3,800 square miles of barren waters, leaving in its wake “a verdant emerald sea lush with the growth of a hundred million tonnes of plankton.” According to the account, fin, sperm, and sei whales, rarely seen in the region, appeared in large numbers, along with killer whales, dolphins, schools of albacore tuna, and armies of night-feeding squid. Albatross, storm petrels, sooty shearwaters, and other seabirds had circled above the ship, while flocks of Brant geese came to rest on the water and drifted with the bloom.

But George did little to publicize these findings. Instead, he set about compiling the data in private, telling people that he intended to produce a precise estimate of the CO2 he had removed from the atmosphere and then invite an independent auditor to certify his claims.

If that was the plan, it quickly fell apart. In October 2012, the Guardian of London broke the news of George’s expedition, saying it “contravenes two UN conventions” against large-scale ocean fertilization experiments. Numerous media outlets followed up with alarmed, often savage, reports, some of which went so far as to label George a “rogue geoengineer” or “eco-terrorist.” Amid the uproar, Canadian environment minister Peter Kent accused George of “rogue science” and promised that any violation of the country’s environmental law would be “prosecuted to the full extent.”

George, for his part, spoke of media misrepresentation, and he stressed that he was engaged in cautious research. Amid the controversy, in an interview with Scientific American, he was asked whether his iron fertilization had worked. “We don’t know,” he answered. “The correct attitude is: ‘Data, speak to me.’ Do the work, get the data, let it speak to you and tell you what the facts might be.” While most commenters seemed to think George had gone too far, some expressed sympathy—or at least puzzled ambivalence. A Salon headline the following summer asked, “Does Russ George Deserve a Nobel Prize or a Prison Sentence?

GEORGE’S EFFORTS PLACE HIM in the company of a small but growing group of people convinced that global warming can be halted only with the aid of dramatic intervention in our planet’s natural processes, an approach known as geoengineering. The fixes envisioned by geoengineers range from the seemingly trivial, like painting roads and roofs white to reflect solar radiation, to the extraterrestrial, like a proposal by one Indian physicist to use the explosive power of nuclear fusion to elongate Earth’s orbit by one or two percent, thus reducing solar intensity. (It would also add 5.5 days to the year.)...MORE
Possibly also of interest:

Did Planktos Commit a Fraud Upon the Market? (PLKT.PK)
Planktos: $2 MM Private Placement
A Problem with Planktos
Is Something Very Wrong With Planktos? (PLKT.OB)
Planktos (PLKT.OB): Denied Landing Rights! AND What the hell is the boat doing in the Canary Islands?
Planktos Highlights Real Ocean/Climate Crises & Responds to Recent Misinformation Campaigns
And Il Papa?
A July 2007 post:
The Outlook wasn't brilliant for the Rustville nine that day:

They thought, if only Rusty could get but a whack at that -
We'd put up even money, now, with Rusty at the bat.

Ten thousand eyes were on him as he rubbed his hands with ore;

...With a smile of Christian charity great Rusty's visage shone;
He stilled the rising tumult; he bade the game go on;

..."Fraud!" cried the maddened thousands, and echo answered fraud;
But one scornful look from Rusty and the audience was awed.

...Oh, somewhere in this favored land the sun is shining bright;
The band is playing somewhere, and somewhere hearts are light,
And somewhere men are laughing, and somewhere children shout;
But there is no joy in Rustville - mighty Rusty has struck out.
Apologies to Ernest Lawrence Thayer. Original at the Baseball Almanac

After getting shellacked by the WWF; spanked by Greenpeace and clobbered by the International Maritime Organisation, Planktos had to go deep into the bullpen to bring out:
Il Papa.

Planktos/KlimaFa's New Vatican Climate Forest Initiative to Fully Green the Holy See
San Francisco -- July 12, 2007 -- By agreement with the Vatican, Planktos/KlimaFa is now pleased and honored to announce that the Vatican plans to become the world's first entirely carbon neutral sovereign state, and it has accepted KlimaFa ecorestoration offsets to achieve this historic goal. In a brief ceremony on July 5th the Vatican declared that it had gratefully accepted KlimaFa's offer to create a new Vatican Climate Forest in Europe that will initially offset all of the Vatican City State's CO2 emissions for this year.

His Most Reverend Eminence Cardinal Paul Poupard presided at the event and stated, “As President of the Pontifical Council of Culture; I am honored to receive this donation from the leaders of Planktos-Klimafa. This donation means an entire section of a national park in central Europe will be reforested.
And now, Numbers 11:32
"... he that gathered least, gathered ten homers..."
but Rusty still struck out. 

Of course it was just part of the stock promotion. January, 2008:
....The December 19, 2007 press release had no mention of Il Papa:
...As a result of the unanticipated events in the Canary Islands as well as the fact that the Company is presently in need of funds to support its ocean and forest-based projects, the decision has been made to remain in Madeira until the Company can better assess its priorities and funding needs. 
Madeira, nice hood.
Except maybe when the Pope you are jacking around was Benedict, formerly head of of the Congregation for the Doctrine of the Faith, also known as The Spanish Inquisition
The story so far: 
October 28

Meanwhile at ZeroHedge: BIG Trouble (AAPL; AMZN; TWTR; FB)

AAPL Plunges After iPhone Sales Miss, China Revenues Plummet, Lack Of Forecast

Amazon Slides Despite Crushing Expectations, Guiding Sharply Higher On AWS Growth, Margin Concerns

COVID-19 May Attack Testicles, Reduce Testosterone

Twitter Tumbles After Massive User-Growth Miss

Facebook Shares Pump'n'Dump Despite Crushing Earnings, Warns Of "Significant Uncertainty"

What's that about covid?

EIA Natural Gas Storage Report

We were thinking that with the very cold temperatures sliding across the northern tier of states (and less markedly, even down to Texas!) we might actually see a pull from storage but that was not to be.

 First up, the estimates going into the report via FX Empire:

...Natural Gas Weather [sic, he means 'Intelligence'] (NGI) is reporting that a Bloomberg survey of six analysts showed injection estimates ranging from 17 Bcf to 39 Bcf, with a median of 37 Bcf. Reuters polled 16 analysts, whose estimates ranged from increases of 17 Bcf to 46 Bcf, with a median injection of 38 Bcf. NGI projected a 42 Bcf injection.

Last year, the EIA recorded an 89 Bcf injection for the similar week, and the five-year average is a 67 Bcf build....

And from the Energy Information Administration:

Working gas in storage was 3,955 Bcf as of Friday, October 23, 2020, according to EIA estimates. This represents a net increase of 29 Bcf from the previous week. Stocks were 285 Bcf higher than last year at this time and 289 Bcf above the five-year average of 3,666 Bcf. At 3,955 Bcf, total working gas is above the five-year historical range. ...

And the price action, one week of 30-minute bars:

The December's are now the front futures with the second-month January's at 3.414  +0.003.

ICYMI—Chips: "Russian scientists create chip that accelerates development of 6G networks "

Way back in 2016 we posted "Artificial Intelligence: What Could Derail NVIDIA? A Lab in Shenzhen; A Basement in Moscow; An Office in Bristol (NVDA)".

Graphcore was the Office in Bristol, they came out of stealth mode by announcing a $50 million investment from Sequoia and then a $200 million funding round from Microsoft, BMW et al. The GOOG was the "lab in Shenzhen": AI: "Google moves into Shenzhen in latest China expansion" (GOOG; NVDA)

and.....unfortunately for my hope of joining the prognosticating pantheon, the Moscow AI chip effort seems to have withered on the vine and our spies appear to have joined the mafiya and were last seen zipping along Tverskaya Street in an armored Mercedes full of Ukrainian hookers and crypto hackers.

However! We do have this from Tass to offer until I figure out what the heck happened to the AI chip project:

September 17
Introducing sixth generation communication networks requires solving such technological tasks as deployment of relatively more base stations closer to the subscriber, according to the presidential representative on digital and technological development

Russian specialists created a new type of chip that accelerates the development of the sixth generation communications networks, presidential representative on digital and technological development, Dmitry Peskov said at an online conference, organized by TASS Thursday.

"I can't tell you where exactly, but one Russian lab has made a breakthrough in 6G just recently, creating a new type of chip that did not exist in the world before. What I’m saying is that the 6G is already in sight," Peskov said, adding that the lab in question was a civilian one.

Introducing sixth generation communication networks requires solving such technological tasks as deployment of relatively more base stations closer to the subscriber, he added.

"In several years, we will receive mass Internet from space, it will become very close to us. It must be perceived as a basic infrastructure," the presidential representative said, outlining the technological prospects for the coming years.....MORE


"It’s Never Too Early to Think About 6G"
One way to sidestep the whole Huawei-has-the-lead-in-5G issue....
"Ready for 6G? How AI will shape the network of the future"
Tired Of All the 5G Hype? Here's 6G

Meanwhile the cable industry appears to have attended the Nigel Tufnel school of marketing:
Ready for 10G? As wireless carriers push 5G, cable industry makes a case to keep broadband 

To be followed by:

Capital Markets: "Markets Continue to Struggle"

 From Marc to Market:

Overview: The spreading virus that is shutting down large parts of Europe, while the US is reluctant to return to lockdowns and refuses to have a nationwide requirement for masks in public hit risk assets yesterday. The S&P posted its largest decline in four-months yesterday (~3.5%), and the selling carried into the Asia Pacific region. Most bourses fell, led by the 1.6% slide in Australia and Taiwan's 1% fall. Chinese markets were more resilient and posted modest gains. Around 970 Chinese companies reported earnings today, and most appear to be reporting sequential improvement. The Dow Jones Stoxx 600 dropped almost 3% yesterday, but today is trying to snap a three-day 5.7% slide that brought it to five-month lows. It rose by about 0.5% in early dealing. The S&P 500 gapped lower yesterday and settled on its lows. US shares are trading firmer, and yesterday's gap (~3342.5-33888.7) is important from a technical perspective. Bond yields are slightly lower in Europe today. Italy sold a 10-year bond at a record low rate today (~0.23% and oversubscribed) The US 10-year Treasury yield is about 0.78%, having settled last week near 0.84%. The greenback is mostly firmer, though the yen and British pound are firm. Most European currencies are softer, ahead of the ECB meeting outcome. Emerging market currencies are heavier, and the Turkish lira remains offered near the record lows seen yesterday. The JP Morgan Emerging Market Currency Index struggles to sustain even modest upticks after falling in the first three sessions this week. Gold became nearly $31 an ounce less precious yesterday as it fell to new lows for the month (~$1869.5) and has steadied today, but uninspiringly so and has struggled to rise above $1885. December WTI fell within a few cents of its month low, a little below $37 a barrel yesterday, and is pushing near $36 now, a new four-month low. Rising US inventories and amid demand worries spurred by the virus are weighing on prices, and the next target is near $35.

Asia Pacific
Japan is in the spotlight today. First, the BOJ meeting concluded, and as widely expected, there was no change in rates or asset purchases.
It did tweak its economic forecasts. Growth in the current fiscal year was downgraded to -5.5% from -4.7%, which is closer to the market and the IMF's new projections. However, growth in the next fiscal year was adjusted to 3.6% from 3.3%. According to the Bloomberg survey, that still is a bit optimistic, which sees a 2.5% expansion and the IMF at 2.3%. The BOJ shaved its core CPI forecast to -0.6% from -0.5% this fiscal year and shifted it into the next fiscal year (0.4% vs0.3%).

The surprise from Japan today was not the BOJ, but the September retail sales report.
Although retail sales jumped 4.6% in August, economists had forecast a 1% gain in September (median forecast in the Bloomberg survey). Instead, they unexpectedly slipped by 0.1%. Adversely impacted by last October's sales tax increase, retail sales had been weak prior to the pandemic. The government's cash payments and pent-up consumer demand appeared to have been exhausted. Rather than fresh monetary moves to support the economy, the onus is on the Suga government, and a third supplemental budget is expected to be announced next month. Prime Minister Suga is opposed to unwinding the controversial sales tax increase.

Market participants are still digesting the implication of the PBOC's decision to drop the counter-cyclical component of the reference rate. The other two components are the official close of the onshore market and the other major currencies' subsequent price action. The counter-cyclical component was a proverbial black-box, but the net impact was to smooth out the yuan's movement. With it gone, there is a risk that the currency becomes more volatile, which may a policy objective as a way to encourage Chinese businesses to develop, in many cases, more sophisticated hedging capabilities. It may alter the calculus in choosing to hedge either in forward or the options market. Three-month implied volatility rose above 6.5% for the first time this year today. It began the year a little below 4.5%....


Wednesday, October 28, 2020

Earth May Experience A Glancing Coronal Mass Ejection On Sunday

From Spaceweather:

....POSSIBLE CME IMPACT: A coronal mass ejection (CME) might sideswipe Earth's magnetic field on Nov. 1st, causing minor geomagnetic storms. The incoming CME was not produced by giant sunspot AR2778. It was hurled into space on Oct. 27th by an erupting filament of magnetism unrelated to the sunspot. Aurora alerts: SMS Text


BIG SUNSPOT AR2778:There's a new spot on the sun--and it's a big one. Only two days old, AR2778 is already 8 times wider than Earth with a dozen dark cores sprawling 100,000 km across the solar surface. It is inset in this magnetic map of the sun from NASA's Solar Dynamics Observatory:

And so much more.

"Arctic Sea Ice is not freezing In October for the first time since measurements began, now having an unknown effect on weather development towards Winter"

I've commented on the lack of sea ice along the NSR so often in the last 18 months I'm starting to convince myself the Russians are heating their side of the Arctic basin just to keep the Northern Sea Route open and meet Putin's rather lofty targets for tonnage hauled.

Here's our preferred presentation of the sea ice situation, from Denmark's Polar Portal:

You'll note this map focuses on thickness and only incidentally on extent. This is preferred because of the way ice melts. The Danish Meteorological Institute has daily updated extent maps here.

And the headline story from Severe Weather Europe, October 26:

Arctic sea ice melt season usually lasts from March till September. After reaching the minimum extent in September, sea ice starts to grow back in October. But this year, the growth is much slower than last year, with almost no growth in some places. How did this unusual situation happen and can it mean something for the weather towards Winter 2020/2021?


The Arctic sea ice seasonal cycle can be seen in the image below from the Arctic-ROOS system. It shows the Arctic sea ice extent change over a year. The melt season usually starts in March, after the peak ice extent is reached, lasting all the way to September. The graph shows the last few years of data, where we can see the 2020 Arctic ice extent was second-lowest, only behind 2012, which still holds the record for the lowest ice extent since measurements began.

But comparing 2012 and 2020, we can see that this year we are also setting a new record, as the Arctic sea ice is not recovering as expected. The sea ice is refreezing back, but at a much slower rate than normal, meaning that some areas are severely falling behind.

That is even more evident when we look at the comparison of all the years since the active satellite observations began in 1979. This year we observed the second-lowest Arctic sea ice extent on record. But because of the unusually low ice growth in October, the current ice extent is now the lowest for any October in the past 41 years....


It's a bit slow to get going but about halfway in you'll see why it's linked.

Very well done. 

Plankton Week: “Give me a half tanker of iron, and I will give you an ice age.”

The headline quote is from oceanographer John Martin during a 1988 lecture at Woods Hole Oceanographic Institution. Here's NASA's Earth Observatory archive page on the statement.

It is a bit of an exaggeration, you may need ten of those Valemax bulk carriers, currently the second largest ships in the world at 400,000 dwt (Euronav's two TI oil tankers at 441,000 dwt are bigger), to make an environmental change but what a change it would be. The orders of magnitude of carbon the iron-fed plankton would sequester are almost mind-boggling:

...Martin gathered the results of the incubation experiments and laid out the evidence in support of the Iron Hypothesis together with some back‐of‐the‐envelope calculations and presented his findings at a Journal Club lecture at Woods Hole Oceanographic Institution in July of 1988. He estimated that using a conservative Fe : C ratio that 300,000 tons of iron in the Southern Ocean induce the growth of phytoplankton that could draw down an estimated two billion tons of carbon dioxide. Then, putting on his best Dr. Strangelove accent, he suggested that “with half a ship load of iron….I could give you an ice age.” The symposium broke up with laughter and everyone retired to the lawn outside the Redfield Building for beers (from Chisholm and Morel, Editors, preface to: What controls phytoplankton production in nutrient‐rich areas of the open sea? Limnology and Oceanography, 36, 8 December 1991). 

As repeated in "John Holland Martin: From Picograms to Petagrams and Copepods to Climate"
—Bulletin of Limnology and Oceanography, Wiley. 25 March 2016

This year's energy-sourced emissions of CO2 should come in at 30.6 gigatonnes ( 30,600,000,000 tonnes) of which a large part will reenter the carbon cycle, becoming plant material etc. but it is the stuff that remains in the atmosphere after the rest is sequestered that is available to feed the plankton.
So, very, very serious business.
Don't try this at home.
And from The Maritime Executive, September 20, 2020:
Who Governs Climate Intervention and Geoengineering on the High Seas? 
With a range of marine geoengineering field trials inching forward, attention is turning to how research and eventual deployment should be governed
Phytoplankton bloom in the Barents Sea. Iron could possibly be used to stimulate the growth of phytoplankton in the ocean which would then trap CO2 through photosynthesis. (Image: Norman Kuring / NASA)

In late March, as most of the world was adjusting to lockdown, oceanographer Daniel Harrison was setting sail for the Great Barrier Reef. Though Harrison, a native Australian, had sailed these waters many times before, this particular expedition was different.

On reaching Broadhurst Reef, 100km off the Australian coast, Harrison and his skeleton crew of local scientists – just a few with permission to travel – noticed white corals stretching out in every direction, a sign that the reef was bleaching, and dying, from heat stress. This would be the third mass bleaching of the Great Barrier Reef in just five years, an event that is becoming more likely as the global ocean warms.

Harrison and his team were there to test a radical intervention that, if successful, could spare the world’s largest coral reef from total loss. Known as marine cloud brightening, their approach involves spraying seawater into the air to help form bright clouds that reflect sunlight and cool the waters below. “This is like putting the reef on life support while we deal with the underlying cause. It buys us some time” says Harrison. “Obviously bringing emissions down is the critical thing.”

Climate intervention

While Harrison’s project is small in scale, and in its infancy, marine cloud brightening is just one of numerous practices – collectively known as geoengineering or climate intervention – that could cool the planet, offsetting some of the harm caused by greenhouse gas pollution. With global emissions rising, there’s a growing awareness that we’ll likely need such radical measures to avoid dangerous climate change. “Emissions reductions alone are not going to cut it,” says Phillip Boyd, a marine biogeochemist at the University of Tasmania, Hobart. “We’ve got an increasingly fast-moving problem, and so we may need increasingly fast-moving countermeasures,” says Kelly Wanser, founder of US non-profit Silver Lining, which advocates for research into climate intervention....


Coming up tomorrow, the Pope, and a Vancouver stock promoter.

Our series thus far:
October 27
Plankton Week: "Metal deposits from Chinese coal plants end up in the Pacific Ocean, research shows"
October 26
"Plankton Bloom Heralded Earth’s Greatest Extinction"

"British Virgin Islands Plans to Make Company Ownership Transparent"

Tardy but important, x3.

From the Organized Crime and Corruption Reporting Project, October 2:

Investigative journalists and civil society groups are encouraged by the news that the government of the British Virgin Islands, BVI, – one of the world’s most notorious financial secrecy jurisdictions – plans to make company ownership publicly accessible information.

The news was first revealed in a government press release last week, which said that it was working with the U.K. to implement a beneficial ownership registry that is “in line with international standards and best practices as they develop globally.”

The Premier of the British overseas territory, Andrew A. Fahie, reiterated his commitment to a public registry, saying that his government “will continue to closely monitor the developments in the international financial services industry and ensure that we remain in compliance with all the relevant requirements as this is important to the Territory’s competitive position.”

He added that this measure would be implemented “within a timeframe that we consider deliverable,” and committed to the standards set forth by the EU’s fifth Anti-Money Laundering Directive, which requires member states to release beneficial ownership registries by 2023. 

Transparency International U.K. said in a press release on Wednesday that it welcomed the announcement, and encouraged the U.K. government to publish a more detailed timeline so that all of its overseas jurisdictions follow suit and implement these registers in a timely manner.

“It is vital that the information on these registers is accurate, free to use and made available for full analysis. This would strike a major blow to the corrupt around the world, with an ever diminishing number of places to hide their dirty money,” said Rachel Davies Teka, Head of Advocacy for the organization.  

Its press release pointed to a Transparency International study that uncovered 1,107 BVI companies connected to corruption cases, amounting to hundreds of billions worth of funds that had been attained through bribery, rigged procurement, embezzlement, and other financial crimes....MORE

Related, October 6:
Cayman Islands Removed From EU Tax Haven Blacklist

And from Canada's National Post, October 20:

Jurgen Mossack and Ramon Fonseca currently reside in Panama, where the Central American nation does not extradite passport-holding citizens 

"Apple, Google and a Deal That Controls the Internet" (AAPL; GOOG; EVIL)

With the platform poohbahs testifying today, here's a story that should probably have a wider audience.

From the New York Times, October 25:

In a landmark antitrust complaint, the Justice Department is targeting a secretive partnership that is worth billions of dollars to both companies.
When Tim Cook and Sundar Pichai, the chief executives of Apple and Google, were photographed eating dinner together in 2017 at an upscale Vietnamese restaurant called Tamarine, the picture set off a tabloid-worthy frenzy about the relationship between the two most powerful companies in Silicon Valley. 
As the two men sipped red wine at a window table inside the restaurant in Palo Alto, their companies were in tense negotiations to renew one of the most lucrative business deals in history: an agreement to feature Google’s search engine as the preselected choice on Apple’s iPhone and other devices. The updated deal was worth billions of dollars to both companies and cemented their status at the top of the tech industry’s pecking order. 
Now, the partnership is in jeopardy. Last Tuesday, the Justice Department filed a landmark lawsuit against Google — the U.S. government’s biggest antitrust case in two decades — and homed in on the alliance as a prime example of what prosecutors say are the company’s illegal tactics to protect its monopoly and choke off competition in web search. 
The scrutiny of the pact, which was first inked 15 years ago and has rarely been discussed by either company, has highlighted the special relationship between Silicon Valley’s two most valuable companies — an unlikely union of rivals that regulators say is unfairly preventing smaller companies from flourishing. 
“We have this sort of strange term in Silicon Valley: co-opetition,” said Bruce Sewell, Apple’s general counsel from 2009 to 2017. “You have brutal competition, but at the same time, you have necessary cooperation.”

Apple and Google are joined at the hip even though Mr. Cook has said internet advertising, Google’s bread and butter, engages in “surveillance” of consumers and even though Steve Jobs, Apple’s co-founder, once promised “thermonuclear war” on his Silicon Valley neighbor when he learned it was working on a rival to the iPhone. 
Apple and Google’s parent company, Alphabet, worth more than $3 trillion combined, do compete on plenty of fronts, like smartphones, digital maps and laptops. But they also know how to make nice when it suits their interests. And few deals have been nicer to both sides of the table than the iPhone search deal.

Nearly half of Google’s search traffic now comes from Apple devices, according to the Justice Department, and the prospect of losing the Apple deal has been described as a “code red” scenario inside the company. When iPhone users search on Google, they see the search ads that drive Google’s business. They can also find their way to other Google products, like YouTube. 
A former Google executive, who asked not to be identified because he was not permitted to talk about the deal, said the prospect of losing Apple’s traffic was “terrifying” to the company.

The Justice Department, which is asking for a court injunction preventing Google from entering into deals like the one it made with Apple, argues that the arrangement has unfairly helped make Google, which handles 92 percent of the world’s internet searches, the center of consumers’ online lives. 
Online businesses like Yelp and Expedia, as well as companies ranging from noodle shops to news organizations, often complain that Google’s search domination enables it to charge advertising fees when people simply look up their names, as well as to steer consumers toward its own products, like Google Maps. Microsoft, which had its own antitrust battle two decades ago, has told British regulators that if it were the default option on iPhones and iPads, it would make more advertising money for every search on its rival search engine, Bing.

What’s more, competitors like DuckDuckGo, a small search engine that sells itself as a privacy-focused alternative to Google, could never match Google’s tab with Apple.

Apple now receives an estimated $8 billion to $12 billion in annual payments — up from $1 billion a year in 2014 — in exchange for building Google’s search engine into its products. It is probably the single biggest payment that Google makes to anyone and accounts for 14 to 21 percent of Apple’s annual profits. That’s not money Apple would be eager to walk away from....

Real Estate: "Hotel Owners at Major Crossroads Due to Covid-19"

 From The Real Deal:

All of the lights in the Hilton Times Square have been pitch black for weeks — one of several ominous signs for hotel owners in New York and other large cities around the country.

The owner of the 478-room property, just blocks away from Broadway and Bryant Park, disclosed plans to the state’s Labor Department last month to permanently shut its doors and lay off 200 employees.

The real estate investment trust Sunstone Hotel Investors had been struggling to make payments on a $77 million mortgage even before March, and the 44-story building became one of several name-brand hotels to permanently close this fall. The Hilton Times Square was soon followed by the Courtyard by Marriott in Herald Square and the Roosevelt Hotel on East 45th Street, which shuttered after nearly a century of business.

On the other side of the country, the Luxe Rodeo Drive Hotel in Beverly Hills also closed for good, after having embarked on a full renovation just before Covid hit. Owner Luxe Hotels told the Los Angeles Times it’s now considering “alternative options” for the high-end hotel.

Seven months into a pandemic that has hit the hospitality and retail sectors the hardest, many hotel owners around the U.S. are at a crossroads, despite an uptick in occupancy after most city and state shutdown orders were lifted. Some of the more highly leveraged owners are now deciding between repurposing their properties, selling at deep discounts, throwing the keys back to their lenders or buying themselves more time if they can afford to.

But forbearance agreements are quickly expiring, and temporary layoffs are becoming permanent. Without a federal bailout, an estimated 38,000 U.S. hotels could close permanently, while another 28,000 are at risk of being foreclosed on, according to the American Hotel & Lodging Association.

At the same time, from California to South Florida, hotel owners face growing threats from natural disasters, including fires, storms and flooding. One Napa Valley resort reportedly suffered extensive damage from California’s wildfires last month.

After a tumultuous 12 months, average hotel occupancy nationwide was at the halfway mark in September, down about 30 percent year over year, according to preliminary monthly data from hotel research firm STR. Average revenue per available room in New York, meanwhile, tumbled about 70 percent year-over-year to $53 a night from $182 in the same period. In California, RevPAR fell by nearly half to $71. In Florida, it dropped by about 30 percent to $46.

Suzanne Amaducci-Adams, a partner at the Miami-based commercial law firm Bilzin Sumberg, said many hotel owners have become paralyzed by the potential for new shutdown orders as Covid starts to resurge in major markets.

“I think people just don’t know what to do at this point,” said Amaducci-Adams, who runs her firm’s real estate practice. “Borrowers have been using their savings, whatever available cash they have on hand, and now that money has pretty much run out. Hotels are holding their breath.”

Still, distress always creates new opportunities, and there are plenty of buyers in the market, including Starwood Capital Group co-founder Barry Sternlicht and the British billionaire brothers David and Simon Reuben of Reuben Brothers....


Lebanon and Israel, Still Technically At War, In Second Round of Maritime Border Talks

 It is in the interests of the entire world (except maybe Iran and Turkey) to see Lebanon pull out of its social and economic dive.*

From AFP via Yahoo:

Lebanon and Israel, still technically at war and with no diplomatic ties, launched a second round of maritime border talks Wednesday under UN and US auspices to allow for offshore energy exploration.

The talks, expected to last for two days, were held at the headquarters of UN peacekeeping force UNIFIL in the Lebanese border town of Naqura, guarded by army roadblocks and with UN helicopters circling above.

After years of quiet US shuttle diplomacy, Lebanon and Israel this month said they had agreed to begin the negotiations in what Washington hailed as a "historic" agreement.

The announcement came weeks after Bahrain and the United Arab Emirates became the first Arab nations to establish relations with Israel since Egypt in 1979 and Jordan in 1994.

Lebanon -- which last saw military clashes with Israel in 2006 -- insists that the negotiations are purely technical and don't involve any soft political normalisation with Israel. 

"Today's session is the first technical session," said Laury Haytayan, a Lebanese energy expert. "Detailed discussions on demarcation should begin."

Lebanon, mired in its worst economic crisis since the 1975-1990 civil war, is looking to settle the maritime border dispute so it can press on with its offshore quest for oil and gas....


* October 18
"Lebanon spymaster holds ‘positive’ US talks on hostages and sharing intelligence"
It looks as though France might not be alone in its efforts to rescue Lebanon before it becomes another Somalia.
And with memories of the ammonium nitrate explosion still fresh, feelings toward Hezbollah—the assumed de facto owner of the stuff that goes boom—are as negative as they have been in years....

"Killing The I-Bank: The Disruption Of Investment Banking"

From CB Insights, October 26:

Investment banking is seeing its historical profit centers eroded by technology and regulations. Core processes are being automated or commoditized. From IPOs, to M&A, to research and trading, investment banks are getting smaller, leaner, and scrambling to keep up with innovation while capitalizing on the opportunities presented by the Covid-19 pandemic.

In 2006, investment banks were at the top of the finance world. With torrential growth and return on investment (ROI) driven largely by the trading of complex financial instruments, Lehman Brothers, Bear Stearns, Goldman Sachs and others achieved record profits and awarded unprecedented bonuses.

Over the next 2 years, everything fell apart.

After the collapse of Lehman and Bear Stearns and the global financial crisis that ensued, the business models of the world’s biggest investment banks needed to change.

In the US, legislation emerged to forbid investment banks from prop trading, or trading with their own capital, and forcing them to keep more capital on hand. This regulation reduced trading profits and created a need to cut costs, spurring investment banks to spin off unprofitable divisions or eliminate them entirely. While the rules against prop trading have more recently been loosened, the restriction has still changed how investment banks operate.

Moreover, as more and more companies raise large equity rounds, they’re also choosing to delay public offerings. And even when major tech companies do decide to go public, some, like Spotify and Slack, are doing so mostly without the help of banks. As a result, banks are facing dropping IPO profits. Even so, September 2020 was one of the strongest months for IPOs since Uber went public in May 2019.

At the same time, financial upstarts have built technologies that could eventually cut into the relationship-driven work that investment banks are used to doing.

The other functions of investment banks haven’t performed much better. Investment banking revenues hit a 13-year-low in 2019. In the world of asset management, the biggest players are now dedicated firms like Vanguard. Total assets under management (AUM) at the top asset managers now dwarfs total AUM at the top banks. And across equity research and sales & trading, poor performances and new regulations have led to widespread layoffs as banks have figured out they can do more with less.

It has been a tumultuous decade for the world’s biggest investment banks. Some banks have collapsed. Some have adapted and gone on to post record profits. But there’s no question that the way these institutions function has shifted, pushed along especially by the financial crisis and technology trends. Even as the regulation pendulum swings back toward more limited oversight, how investment banks operate is fundamentally changing.

Table of contents

1. The disruption of the IPO

Underwriting an initial public offering (IPO) is a highly profitable business for an investment bank.

A company decides it wants to raise money by going public, and an investment bank helps by connecting them with willing investors, promoting the company’s stock, navigating complex legal frameworks, helping determine a price for the stock, and purchasing an agreed-upon number of shares and reselling them, thus taking on risk for how the stock will perform. For this work, the underwriting bank can make tens of millions from an IPO — whether or not the stock performs well.

But today, the powerful tech companies fueling the world’s biggest IPOs are exerting their influence, using their size and name recognition to extract lower fees from the investment banks. Some are also exploring alternatives to the IPO, like the direct public offering (DPO) and alternative exchanges. And perhaps the trend that’s had the biggest impact — some big companies are electing not to go public at all.

Thanks in part to an abundance of cash being offered by venture capitalists and sovereign wealth funds, many startups are opting to stay private indefinitely. As a result, investment banks are having to chase more deals and reaping lower revenues for doing so.

IPOs once accounted for around 25% of investment bank revenues, but in recent years that figure has decreased to about 15%, according to Seeking Alpha. The lingering effects from the Covid-19 pandemic have pushed expected underwriting IPO revenue to just 7.5% of investment banking revenues in 2020, per IBIS World.

As revenue generated from underwriting IPOs has gone down, investment banks have turned to technology to lower costs and automate parts of the process. This is helping banks maintain profit margins — for now. But it also signals the susceptibility of the investment banks to commodification down the road by technology disruptors. For now, though, it is the contraction in IPOs that is having the biggest impact on this investment banking function.

One of the main things investment banks offer the companies whose IPOs they underwrite is legitimacy — they confer their prestige on them. Having a prominent investment bank co-signing and underwriting their IPOs is one way to gain the confidence of public investors.

And before the dot com crash, Goldman Sachs’ IPOs did tend to jump an average of 293% from their starting price through their first Friday on the market — compared to 26% for the bank Donaldson, Lufkin & Jenrette and 78% for Merrill Lynch.....


"Agriculture Giants Are Finally Making Money From Trading Again"

 From Bloomberg, October 27:

The world’s largest agricultural commodity firms are finally making money from trading again.

After years of lackluster returns as bumper crops curbed the volatility traders need to thrive, the stars seem to have aligned for the likes of Archer-Daniels-Midland Co. and Bunge Ltd. China is loading up on American corn and soybeans, profits from oilseeds processing have rebounded, and a drought in Brazil is boosting prices. Even the beleaguered biofuels market is improving.

“There’s really strong demand and a fight for execution, so it’s a better operating environment because of the improved demand outlook,” Paul Maass, chief executive officer of U.S. grain handler Scoular Co., said in an interview. “I think the whole market feels that.”

That’s a stark turnaround for an industry that was stuck with thin margins as farmers increased storage capacity and gained access to more information, relying less on grain handlers at a time when seed development meant big yields year after year. Facing smaller commodity profits, traders diversified into everything from beef to pet food, fish feed and veggie burgers.

Soybean futures have jumped to a four-year high in Chicago and wheat last week touched the highest in almost six years. Corn has rebounded 36% since sinking in April to the lowest level in a decade...


ESG: The Swiss National Bank May Be Forced To Sell Some Stocks

The great thing about ESG is that the definitions are so vague it can be practically anything you want it to be.

This is one of the reasons the largest of the asset gatherers, the BlackRock's of the world, and the indexers, the S&P's, are so attracted to those three little letters, they want to be the arbiters of what can carry the imprimatur.

It's also a very au courant product to sell.

From Upfina:

As part of its monetary policy, the Swiss National Bank owns $100 billion in U.S. stocks. A central bank buying stocks is a slippery slope because the unintended consequences are unknown. Having a small bid under U.S. shares doesn’t concern any bulls though. If they were to buy more shares and then suddenly sell them all at once creating a decline, it would cause an uproar. Some say the SNB would never sell their shares. That could be false very soon.

There will be a national vote on November 29th over whether the SNB needs to sell its shares in defense firms. This could cause them to selloff. The proposal to force the SNB to sell shares in firms that derive more than 5% of their sales from arms is supported by 54% of Swiss citizens and opposed by just over 40%. The SNB will need to sell its shares in 300 firms which together are worth 11% of its portfolio of global stocks.

This is another slippery slope because morality might not stop there. It’s possible the voters are asked to decide on an ESG ranking for the central bank’s positions in the future. It’s almost like they are passive shareholders in an index that takes out the stocks which aren’t deemed moral. Normally, many investors would say to try to maximize profits, but in this case, it’s the central bank owning the shares. There doesn’t seem like much downside for voters to support selling defense stocks. We don’t know when the sales will occur, but we do know when the vote happens, it should impact prices immediately. It will be a widely covered story.....


Just don't mention to your friendly neighborhood RIA the duplicity of presenting oneself as a proponent of passive investing and and at the same time pitching the activity inherent in ESG.

They twist themselves in such knots trying to justify the dichotomy that they risk putting pretzel makers out of business.

Tuesday, October 27, 2020

Plankton Week: "Metal deposits from Chinese coal plants end up in the Pacific Ocean, research shows"

This will be plankton week at the blog, with a cast of characters including the Pope and a Vancouver stock promoter....

Unlike soot, the effects of the metals are not all bad.*

From PhysOrg, October 23:

Emissions from coal-fired power plants in China are fertilizing the North Pacific Ocean with a metal nutrient important for marine life, according to new findings from a USC-led research team. 

The researchers believe these metals could change the , though it's unclear whether it would be for better or worse.

The study shows that smoke from power plants carries and other metals to the surface waters of the North Pacific Ocean as westerly winds blow emissions from Asia to North America. Peak measurements show that up to nearly 60% of the iron in one vast swath of the northern part of the emanates from smokestacks.

"It has long been understood that burning alters Earth's climate and ocean ecosystems by releasing into the atmosphere," said Seth John, lead author of the study and an assistant professor of Earth sciences at the USC Dornsife College of Letters, Arts and Sciences. "This work shows fossil fuel burning has a side effect: the release of iron and metals into the atmosphere that carry thousands of miles and deposit in the ocean where they can impact marine ecosystems."

"Certain metal deposits could help some thrive while harming other life,'' he added. "There are inevitable tradeoffs when the ocean water's chemistry changes."

The study was published on Thursday in the Proceedings of the National Academy of Sciences. Researchers from USC, Columbia University, University of Washington, MIT and the University of Hawaii, among others, collaborated.

USC-led team confirms that ocean metals stem from China

While wind-blown mineral dust from deserts has long been considered an important source of iron to open ocean waters, the new study shows how manmade sources contribute important micronutrients that plankton and algae need. Moreover, the study shows how fossil fuel burning affects not only global warming but marine environments, too....


We usually babble about the metal laden dust that comes off Africa in terms of its inhibiting effects on hurricane formation. But at a couple hundred million tonnes, it has an effect beyond that, or the colorful sunsets we saw in late June when a really big plume crossed over.

*Good News For Arctic Ice: China's Black Carbon Emissions Decreasing
We've been harping on how devastating the stuff can be for a very long time.* Here's a post from January 2020 that quickly makes our case:
IMO 2020 Low-Sulfur Rules May Result In More Black Carbon Emissions in the Arctic 
This could be very not good.
Spreading black carbon on the polar ice caps was one of the geoengineering proposals during the Global Cooling scare of the 1970's. It's also one of the concerns associated with China's coal-fired power plants. (mostly soot, larger diameter than what emerges from VLSFO combustion)
The stuff lands on the ice and reduces the albedo. It also directly absorbs infrared.
Very not good.....

Who Owns Ukraine's Farmland?

 As mentioned yesterday, that was the simple question yours truly asked before stumbling into the rabbit hole of "Why Was The American Government Training Neo-Nazis In Ukraine?".

The reason for the original query was the mandate from the IMF that in return for one of the tranches of  multi-billion dollar loans related to the whole PrivatBank theft, money laundering, Maidan, Victoria Nuland web of lies and corruption that Ukraine allow foreigners to buy farmland.

Some really good farmland, by all accounts.

Farmlandgrab keeps track of this stuff all over the world and a couple of their posts give a quick overview of what's what.

Here is one part of the puzzle, not the stuff that attracts the foreign money:

April 29, 2020

Ukrainian President Volodymyr Zelensky has signed a bill into law to amend certain legislative acts of Ukraine on the conditions of circulation of farmland No. 552-IX, which was approved by the Verkhovna Rada on March 31, 2020.

"This is a historic moment for all Ukrainians and for me personally," the presidential press service quoted the president as saying on April 28. "Ukraine has been waiting for this law since independence. It was a difficult struggle. But we knew we were doing it for Ukrainians."

The document provides for the formation of a legislative framework for the introduction of market circulation of agricultural land. The law will enable the realization of citizens' constitutional rights to dispose of their property freely and create transparent conditions for the acquisition of agricultural land by Ukrainian citizens.

The law provides for gradual land reform: from July 1, 2021, only individual citizens of Ukraine will be able to buy up to 100 hectare of agricultural land. During the second stage, which starts on January 1, 2024, the limit will grow to 10,000 ha, and legal entities will also be able to buy farmland.

Arable land shall not be sold to foreigners, legal entities with foreign shareholders and legal entities whose beneficiaries cannot be identified or whose beneficiaries are registered in offshore zones, as well as to persons under special economic and other sanctions. 
Here is more, linked the prior week:

...Rules for foreign purchasers of agricultural land plots
Ukraine will hold a referendum that will decide whether foreign entities will be allowed to acquire agricultural land plots.
Foreign entities are and will be prohibited from buying agricultural land plots in a 50-km zone from the border of Ukraine regardless of the referendum results....


On April 1, 2020 Farmlandgrab had a quick overview of the state of play from the World Socialist Web Site (WSWS among the cognoscenti):

A law to privatise farmland, ultimately for the benefit of global finance and agribusiness, was pushed through Parliament under pressure from the IMF in the context of the coronavirus crisis.

So, getting closer to an answer, more to come.

"Harvard Spins Out Natural Resources Into New Investment Management Firm, Solum Partners"; Australia: "Harvard University to cash out of NSW almonds and cotton farms"

Not sure if these two stories are related. First up Global AgInvesting, October 8:

Harvard University’s $41.9 billion endowment is spinning off its natural resources portfolio and team to launch Solum Partners, an independent management firm focused on investment opportunities in the global agriculture and food industries. The company will target large-scale, efficient ag production assets that present potential for vertical integration into distribution and marketing channels. 

Anchoring the new Boston-based firm, Harvard Management Co. and insurer American International Group Inc. (AIG) will commit $200 million each – and are expected to also invest in assets being bought by the firm from Harvard.

“Sustainable farming practices are critical to the security of the global food chain,” said Doug Dachille, chief investment officer, AIG. “We are supportive of opportunities that advance those endeavors.” 

Heading up this new firm and its team of 25 professionals as CEO will be 47-year-old native of Brazil and former managing director and head of Natural Resources for HMC, Colin Butterfield. Butterfield joined HMC in 2016, replacing Alvaro Aguirre-Simunovic who resigned from the position in October 2015 after 12 years with the company. 

Prior to HMC, Butterfield was CEO of Radar S.A., a Brazil-based $2.2 billion farmland investment management joint venture created by TIAA and Cosan S.A. While with Radar, he expanded the firm’s portfolio and improved its risk profile and increased profitability, while also serving as a member of TIAA’s Global Agriculture Fund investment committee.

Between 2010 and 2013, Butterfield was president of Cosan Alimentos, and between 2007 and 2010, held the positions of COO and CIO at Bracor S.A. Previously, he was a director at Cargill where he structured merger and acquisitions and business development plans for entry into the Brazilian sugar and ethanol market for the group between 2004 and 2007.

“Food value chains need to evolve,” said Butterfield. “Farmers are facing an increasingly challenging operating environment and much more demanding consumers.”

“We believe we are in a strong position to help producers navigate this evolution – drawing on our deep agricultural and financial know-how and focus on operational excellence.”

Coinciding with the announcement of the launch of Solum Partners is the announcement that the firm has acquired, with the backing of HMC affiliates and AIG, select investment assets that had been managed by the team while at HMC, including avocado, olive oil, apple, blueberry, and soybean production assets, as well as stakes in Westfalia, a global avocado distribution company, and California Olive Ranch, a U.S.-based producer of extra virgin olive oil....


And from the Australian Financial Review via Farmlandgrab, October 11: 

The $56.5 billion Harvard University Endowment Fund is preparing to sell another chunk of its Australian almond and cotton holdings after putting the Western Rosella Farming portfolio in the NSW Riverina on the market.
The Lachlan Valley portfolio, which has an asking price of $120 million, covers about 13,652 hectares and is made up of three properties: 524-hectare Moora at Hillston, 2419-hectare Euroley at Euroley and 10,708-hectare Newmarket at Maude.
The portfolio offering follows the January sale of the Ivy League university’s two other Hillston cotton and almond farms – Wyadra and Cowl Cowl – to Boston-based Hancock Agricultural Investment Group for more than $120 million, as revealed by The Australian Financial Review.
While no reason has been given for the decision to divest its Australian investments, the university fund has been actively reducing its real estate holdings over the past two years.
It will also expect a strong exit price after ASX-listed Rural Funds Group struck a deal to sell its Mooral almond orchards near Hillston to Hancock for $98 million, at a massive premium to their book value.
The diversified portfolio includes permanent plantings, such as almond orchards; approved greenfield development land, both dryland and irrigated row cropping; and livestock grazing.
The endowment fund has $US40.9 billion ($56.5 billion) of assets under management and is the biggest single contributor to Harvard University’s annual operating budget.
In the 2019 financial year the endowment fund provided a distribution of $US1.9 billion – or 35 per cent of Harvard University’s operating budget of $US5.5 billion....
Recently on our friend the almond: 

"Japan, Vietnam Boost Defence Ties as South China Sea Tensions Mount"

Just a filler at Yahoo, October 19 that may point to a changing view of China.

From AFP:

Japan and Vietnam agreed to step up security and defence cooperation Monday, reaching an agreement in principle for Tokyo to export defence equipment and technology to the Southeast Asian nation.

The deal comes as concerns mount over China's increasing assertiveness in the contested South China Sea, with Beijing expanding its military presence in the region.

The pact would allow Japan to export equipment, likely including patrol planes and radar, to Vietnam, according to Japanese news agency Kyodo.

"It is a big step in the field of security and defence cooperation between the two countries that we reached an agreement in principle on the transfers of defence equipment and technology," said Japanese Prime Minister Yoshihide Suga in Hanoi during his first visit overseas since taking office last month.

"And I believe that it will advance further."

The resource-rich South China Sea is claimed in its entirety by Beijing but is also contested by Vietnam, the Philippines, Malaysia, Brunei and Taiwan....


And a bit more on changing relations, from the Lowy Institute's The Interpreter blog, October 23:

 Reading between the lines: Duterte’s careful South China Sea speech

The President of the Philippines may stump up with more
nationalist rhetoric, but his true message to Beijing is plain.  


The Market for Quantum Technology: Early Revenue-Generating Applications

From EE Times, October 26:

Quantum technology comprises quantum computing, quantum cryptography, quantum networking (the Quantum Internet) and quantum sensors.  All of these sectors of quantum technology are already generating revenues today.  Apart from quantum sensors, all are interrelated in important ways, with the prospect of commercial quantum computing driving much of the investment in the emerging quantum technology market.  Quantum sensors use the sensitivity of quantum devices to increase the effectiveness of medical imagining, global positioning and other applications.  They are real and with us today, but I won’t have much to say about them in this article

Quantum Computing:  State of Play
As recently as two years ago articles were appearing from serious critics saying that quantum computers weren’t buildable in practice.  Today, much of that skepticism has dissipated; tier-one firms are investing in quantum computing.

Quantum computers or their components/access networks have already been developed by Alibaba, Amazon, IBM, Microsoft, Google, Honeywell, and Intel.  Also playing in this market are well-funded newer companies such as Rigetti, ionQ and D-Wave.

The involvement of household names like IBM, Google or Amazon not only adds credibility to quantum computing but also spreads its fame.  With such firms involved in this market, it is easy to get quantum computers onto the home pages of news outlets that ordinarily don’t cover advanced physics or supercomputing.

How quantum computers work and the applications they can solve:

This seems like a good place to attempt an explanation of how a quantum computer works.  A full explanation is well beyond the scope of this article, but suffice it to say that quantum computers perform calculations based on the probability of an object’s quantum state before it is measured.  This is compared to what a classical computer does — calculated on the basis of deterministic 1s or 0s.

At the practical level, this translates into quantum computers being able to process orders of magnitude more information than classical computers can in the same period of time.  So quantum computers embody a promise that quantum computers can solve problems that classical problems cannot solve in a reasonable time period.

Although quantum computers are already in use, there is some agreement that there are, as yet, no practical problems that can be solved by a quantum computer that cannot be solved by a classical computer.  This is a very controversial issue – but this so-called quantum advantage has supposedly been demonstrated for classes of theoretical problems. The areas where quantum computers have been found to be especially useful to date have been in optimization programs, artificial intelligence, and machine learning, and in simulation.

None of this is intended to imply that progress in quantum computing technology will be easy.  While the capacity of quantum computers is measured in qubits (not bits like classical computers), the quality of the qubits is also important.  It is difficult to maintain the quantum states of qubits as they are prone to quantum decoherence.  Quantum computers require significant error correction since they are more prone to errors than classical computers.

Some of the firms mentioned above are making quantum hardware and selling them to end-users.  Some are selling access to their computers over a dedicated cloud, making the otherwise enormously expensive quantum computers ($10 million -$15 million) accessible to thousands of users.  There is also a slew of companies (including Intel) that are developing processors for future quantum computers.

Banks, Investment and Quanta
Probably the biggest markets for quantum computers in the past few years have been R&D and government (including the military and the intelligence community).  This is typical of new computing products.  But in the view of Inside Quantum Technology, the market where we think quantum computing will first find big commercial success (the “killer app” for quantum computing?) is in the financial services sector (banks, insurance companies, investment firms, etc.)....


"Raising the American Weakling: "There are two very different interpretations of our dwindling grip strength"

 From, July 4, 2019:

When she was a practicing occupational therapist, Elizabeth Fain started noticing something odd in her clinic: Her patients were weak. More specifically, their grip strengths, recorded via a hand-held dynamometer, were “not anywhere close to the norms” that had been established back in the 1980s. 

Fain knew that physical activity levels and hand-use patterns had changed a lot since then. Jobs had become increasingly automated, the professional and service sectors had grown, all sorts of measures of physical activity (like the likelihood that a child walks to school1) had declined, and the personal computer age had dawned. But to see the numbers decline so steeply and quickly was still a surprise, and not just to her.

Unlike most findings in the sleepy field of occupational therapy, her findings, which were published last year in the Journal of Hand Therapy, touched off a media firestorm, as the revelation seemed to encapsulate any number of smoldering fears in one handy conflagration: The loss of human potential in the face of automation, of our increasing time spent on smartphones and other devices, the erosion of our masculine norms,2 of the fragility and general shiftlessness of millennials. Even taking into account the cautionary statistical notes—that the sample sizes of the 1980s studies were not huge, that Fain’s study was mostly college students—the idea of a loss in human strength, expressed through a statistical measure hardly anyone had previously heard of, seemed to hint at some latter-day version of degeneration.

That message was reinforced by the sheer predictive power of grip strength. In a study published in 2015 in The Lancet, the health outcomes of nearly 140,000 people across 17 countries were tracked over four years, via a variety of measures—including grip strength.3 Grip strength was not only “inversely associated with all-cause mortality”—every 5 kilogram (kg) decrement in grip strength was associated with a 17 percent risk increase—but as the team, led by McMaster University professor of medicine Darryl Leong, noted: “Grip strength was a stronger predictor of all-cause and cardiovascular mortality than systolic blood pressure.”

Gripping is part of a long story in which we have been getting weaker for millions of years.

Grip strength has even been found to be correlated more robustly with “ageing markers” than chronological aging itself.4 It has become a key method of diagnosing sarcopenia, the loss of muscle mass associated with aging.5 Low grip strength has been linked to longer hospital stays,6 and in a study of hospitalized cancer patients, it was linked to a “an approximate 3-fold decrease in probability of discharge alive.”7 In older subjects, lower grip strength has even been linked with declines in cognitive performance.8

“I’ve seen people refer to it as a ‘will-to-live’ meter,” says Richard Bohannon, a professor of health studies at North Carolina’s Campbell University. Grip strength, he suggests, is not necessarily an overall indicator of health, nor is it causative—if you start building your grip strength now it does not ensure you will live longer—“but it is related to important things.” What’s more, it’s non-invasive, and inexpensive to measure. Bohannon notes that in his home-care practice, a grip strength test is now de rigueur. “I use it in basically all of my patients,” he says. “It gives you an overall sense of their status, and high grip strength is better than low grip strength.”

The argument seemed to line up neatly. We are raising a generation of weaklings, more prone to everything from premature aging to mental disorders. Or is the opposite true? Is this just the latest step in the age-old weakening of our species as we emerged from the trees and built up civilization?...


Possibly related:

August 2014
Thanks, I think, to a reader.
"I would be willing to wager that if an average citizen from Athens of 1000 BC were to appear suddenly among us, he or she would be among the brightest and most intellectually alive of our colleagues and companions. We would be surprised by our time-visitor’s memory, broad range of ideas and clear-sighted view of important issues. I would also guess that he or she would be among the most emotionally stable of our friends and colleagues."...
November 2012
"New findings suggest scientists not getting smarter"

BlackRock Upgrades German Government Debt As European Economy Slows

 From the BlackRock Investment Institute, October 26:

Chart of the week
U.S. 10-year nominal and real yields, breakeven inflation rate, 2017-2020

U.S. 10-year nominal and real yields, breakeven inflation rate, 2017-2020


Sources: BlackRock Investment Institute and Refinitiv Datastream, data as of Oct.12, 2020. Notes: U.S. 10-year nominal yield refers to the 10-year Treasury yield. Real yield refers to the yield of 10-year Treasury Inflation-Protected Securities (TIPS). Breakeven inflation rate refers to the difference between the yields of a nominal bond and an inflation-linked bond of the same maturity – the 10-year maturity in this case.

Developed market (DM) government bond yields collapsed after the Covid shock and since appear to have found a bottom. The economic restart has been quicker than expected, even though the hardest part of the recovery lies ahead. Significant fiscal stimulus under a united Democratic government – an election scenario that markets are increasingly pricing in – could put upward pressure on Treasury yields. Yet the rise in yields would likely be limited as the Fed would act to prevent a sharp tightening in financial conditions, in our view. We already expected rising inflation over the next few years, as production costs rise and the Fed has pledged to allow inflation overshoots and let the labor market run hot. The monetary-fiscal policy revolution may also place greater political constraints on the Fed’s ability to lean against inflation. We see the prospects of a unified Democratic government accelerating the market pricing of these dynamics. Breakeven inflation rates, a market-based measure of expected inflation, have rallied since March. See the green line in the chart. We see inflation-adjusted, or real yields, falling further, supporting prices of Treasury Inflation-Protected Securities (TIPS).

We are upgrading German government bonds (bunds) to neutral, reflecting our greater caution on Europe’s economic prospects. As Covid infections have picked up , the focus on further policy response has shifted to more monetary easing including additional asset purchases. Our views on bunds or U.S. Treasuries shouldn’t be considered in isolation. We believe nominal DM government bond prices are headed lower, and expect bunds to have more modest price declines than U.S. Treasuries. Bunds are also likely to be less volatile, in our view, thanks to large-scale ECB asset purchases that have driven net issuance into negative territory, as well as the potential for further monetary policy support.

These latest changes in our tactical views align with our strategic views. We favor reduced exposure to nominal DM government bonds and greater allocations to inflation-linked bonds over a longer horizon, as interest rates remain near  their lower bounds and inflation risks grow. We don’t expect nominal bond yields to rise as much as the inflation backdrop might typically imply, as central banks keep rates low and allow temporary overshoots of their inflation targets. This environment could persist for some time, providing a favorable backdrop for risk assets....