Monday, May 31, 2021

MIT: "Assetization: Turning Things into Assets in Technoscientific Capitalism"

 From MIT Press an open access eBook with some intriguing chapter headings:

1: Introduction: Assetization and Technoscientific Capitalism

3: Datassets: Assetizing and Marketizing Personal Data
Thomas Beauvisage and Kevin Melle

In a 2011 report entitled “Personal Data: The Emergence of a New Asset Class,” the World Economic Forum (WEF) stated that “personal data is generating a new wave of opportunity for economic and societal value creation. ... As some put it, personal data will be the new ‘oil’— a valuable resource of the 21st century. It will emerge as a new asset class touching all aspects of society” (Schwab et al. 2011, 5). Starting from this observation, the report called for the establishment of a new data infrastructure, which would simultaneously give individuals high control over their personal data and facilitate the flow and exchange of data so far retained in isolated silos among individuals, companies, and public institutions. The report predicted that personal data would constitute a new form of currency for individuals— one that they would be free to manage themselves: “In practical terms, a person’s data would be equivalent to their ‘money.’ It would reside in an account where it would be controlled, managed, exchanged and accounted for just like personal banking services operate today” (Schwab et al. 2011, 10)

 4: A Crisis for Cures? Tracing Assetization and Value in Biomedical Innovation

7: Expropriating the Future: Turning Ore Deposits and Legitimate Expectations into Assets 

9: Turning Nature into an Asset: Corporate Strategies for Rent-Seeking 


If interested in chapter 3, here's what old Klaus and the WEF gang were writing a decade ago.

Indoor Farmer Bowery Farming Inc. Raises $300 Million Series C Round at $2.3 Billion Valuation

That's a lot of salad greens.

From AgFunderNews, May 25:

Bowery bags ‘biggest-ever’ vertical farming raise with $300m Series C

Bowery has closed a $300 million Series C round, marking what it claims is “the largest private fundraise to date for an indoor farming company.” New investor Fidelity Management & Research led the round. Amplo and Gaingels also came on board as new backers.

Existing investors GV, General Catalyst, GGV Capital, Temasek, and Groupe Artémis re-upped in the round.

A few celebrities also took the opportunity to add vertical farming to their portfolios. including Formula One driver Lewis Hamilton, basketball player Chris Paul, actor Natalie Portman, singer-songwriter Justin Timberlake, and chef and hunger advocate José Andrés.

Bowery has now raised $472 million in total funding and claims a valuation of $2.3 billion.

“It’s a really exciting milestone for the whole company and everybody is really thrilled,” founder and CEO Irving Fain tells AFN.

“Not just because it recognizes the work that we’ve done, but I take it equally for the work that’s still ahead and the belief of some really great partners in terms of what we’re going to accomplish in this segment.”

This landmark moment for Bowery offers Fain an opportunity to reflect on how far the New York-based startup has come since launching in 2015 – and where the broader indoor farming segment may be headed. 

Bowery’s sales and growth data paint an impressive picture, perhaps helping to explain the sizeable Series C raise. It claims to maintain category leadership in over 850 stores where its packaged leafy greens and herbs are sold. It also boasts a 750% boost in retail growth since January 2020 while adding Albertsons supermarkets to its list of retailers.

E-commerce sales have jumped 400%, too. 

“I think it’s becoming very clear that the demand for what we’re doing at Bowery is strong and the technology and the progress that we’ve made is really evidence [of that] to the team and the broader community. I think we felt like starting to expand more, quickly, made a lot of sense,” Fain says.....


And at AgFunderNews, May 27   

Future Food : How Bowery reached $2.3bn and is building its biggest farm yet

"China’s “Artificial Sun” Fusion Reactor Just Set a World Record"

 From Futurism, May 29:

The reactor got more than 10 times hotter than the core of the Sun. 

Is it hot in here, or is it just the fusion reactor? 

China broke a record with its Experimental Advanced Superconducting Tokamak (EAST) fusion reactor on Friday when it sustained a plasma temperature of 120 million degrees Celsius for 101 seconds, according to the state-run outlet Global Times. The reactor was also able to sustain a temperature of 160 million degrees Celsius for 20 seconds.

For perspective, the core of our solar system’s Sun “only” reaches about 15 million degrees Celsius, according to So, for a moment, EAST got more than 10 times hotter than that.   

This marks a big milestone for the EAST reactor, which has been dubbed the “artificial Sun” for its ability to replicate the natural nuclear fusion process of stars. Doing so could help unlock the mystery to creating sustainable, reliable fusion power.....



"EU sanctions expected to hit Belarus's potash, oil and finance"

You could whisper 'potash' in a hurricane and I'd probably query 'did someone say 'potash?''
Just ask Pavlov's dogs, you hear what you want to hear.
That said, we are playing catch-up, this article is five days old.

From Reuters via EuroNews, May 27:

The European Union will look at hitting Belarus’s big potash exports as well as its oil and financial sectors with new sanctions, as punishment for forcing down a Ryanair flight to arrest a journalist, EU foreign ministers said.

European leaders have described Sunday’s incident, in which a flight between EU members Greece and Lithuania was pressed to land in Minsk and a 26-year-old exiled dissident and 23-year-old student were arrested, as state piracy. They have promised to impose serious consequences.

Foreign ministers gathering in the Portuguese capital on Thursday said they were looking at targeting sectors that play a central role in the Belarus economy, to inflict real punishment on President Alexander Lukashenko.

“The hijacking of the plane and the detention of the two passengers is completely unacceptable, and we will start discussing implementation of the sectorial and economic sanctions,” EU foreign policy chief Josep Borrell told reporters in Lisbon.

Luxembourg Foreign Minister Jean Asselborn said: “The keyword, I think, is potash. We know that Belarus produces very much potash, it is one of the biggest suppliers globally, and I think it would hurt Lukashenko very much if we managed something in this area.”

Lithuanian Foreign Minister Gabrielius Landsbergis said the EU should consider hitting the oil sector, while Germany’s Heiko Maas spoke of measures to target financial transactions, which diplomats said would probably involve preventing the EU from lending to Belarusian banks.

Maas said Belarusian bond sales could be targeted too.

“We are talking about using financing means … particularly the question to what extent Belarus should be allowed in future to issue bonds, by the state or the central bank, in Europe,” he told reporters.

Exports of potash – a potassium-rich salt used in fertilizer – are one of the major sources of foreign currency for Belarus, and state firm Belaruskali says it produces 20 percent of the world’s supply.

The EU statistics agency said the bloc imported 1.2 billion euros ($1.5 billion) worth of chemicals including potash from Belarus last year, as well as more than 1 billion euros worth of crude oil and related products such as fuel and lubricants....


Potash is pretty much Belarus' only mineral and its largest export product.  

"Who owns Australia?"

 Gina does. 
And she's buying more.
(but selling off the cattle stations)

From the Guardian Australia via Farmlandgrab, May 16

Who owns the Australian outback is a vexed question. The true answer is First Nations peoples, whose ownership stems back 60,000 years. The legal answer is more complex. It’s a mess of titles – freehold, pastoral leases, crown leases, public land, native title and land held by Aboriginal trusts.
And no two jurisdictions store or share that data in the same way.

Visit the interactive map here
Six months ago Guardian Australia set out to learn who owns the outback. The data we received was unwieldy, incomplete, inconsistent and often came with a hefty price tag. There is no nationally consistent protocol for recording land tenure and land use information, or even clearly established definitions of what constitutes ownership or control of land.
So, in the absence of official data, we have collated large datasets from every state and territory and pieced together a database of land ownership. We then looked to the work of a rural newspaper, the Weekly Times, which has been tracking farm ownership. We also looked at information contained in media reports, official websites of known major landowners, cattle brand directories, government servers and other online maps.
The information we have sourced paints a picture of increasingly consolidated land ownership in outback Australia and a growing Indigenous estate.

What the data shows

Pastoral leases cover 44% of Australia, according to Austrade. Pastoral leases are defined by Austrade as a title issued for the lease of an area of crown land to use for the limited purpose of grazing of stock and associated activities. We were able to identify the leaseholders for just over half that area, pulling together data on more than 400 owners who together hold 700 stations covering 189.5m hectares – or about a quarter of the country.
The person who holds the most land in this pastoral-lease data, by far, is the Western Australian mining magnate Gina Rinehart, who controls 9.2m hectares, or 1.2% of Australia’s landmass, through three different corporate entities.
The biggest corporate landholder is the ASX-listed Australian Agricultural Company. AACo’s biggest shareholder is the Bahamas-based AA Trust, controlled by the British billionaire Joe Lewis, who is also the owner of the UK football team Tottenham Hotspur.
About 40% of Australia is covered by native title, in both exclusive and shared title. Australian government reports state that Indigenous communities hold the freehold title to 17% of the country, mainly in the Northern Territory and South Australia.
Guardian Australia’s definition of Indigenous tenure, for mapping purposes, includes exclusive-possession native title and freehold, which confer the right to exclude others from the land. This amounts to about 26% of Australia’s landmass. This definition does not invalidate non-exclusive native title – land that features other forms of ownership such as pastoral stations – or Indigenous ownership in areas where native title has been extinguished. When non-exclusive native title is included, the proportion of Australia is about 54%.
Keven Smith, a Torres Strait man and chief executive of Queensland South Native Title Services, says the connection of traditional owners to a place is not defined by whether they are able to be granted native title.

“If you ask the question of who owns Australia, I would say that First Nations people own this country,” Smith says. “Even though there’s limited application of native title over the four corners of this nation, cultural heritage is tenure-blind.”....


The Australian Financial Review says Ms Rinehart is the wealthiest person in Australia. (Mumbrella, May 27)

Memorial Day 2021


Fort Snelling National Cemetary, Frank Glick, 2011
"...that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion--that we here highly resolve that these dead shall not have died in vain, that this nation under God shall have a new birth of freedom, and that government of the people, by the people, for the people shall not perish from the earth." 
-Abraham Lincoln at Gettysburg, November 19, 1863

Sunday, May 30, 2021

"Atlantic Council [!] Scholars Made Millions Lobbying for Putin-Backed Pipeline"

 So I guess "Russia, Russia, Russia" is over?

This piece is from the Washington Free Beacon, owned by Elliot Management co-CEO Paul Singer so you don't know what sort of hedge fund motives might be attached to the story but be that as it may be, the fact you have the freakin' Atlantic Council guys lobbying for a very contentious Russian pipeline is pretty damn amazing.

Conflicts of interest abound at historically hawkish think tank

Two scholars at the Atlantic Council, the prominent foreign policy think tank that claims to staunchly oppose Russian influence, have raked in nearly $3 million lobbying in favor of a Russian pipeline that American officials worry will allow Vladimir Putin to increase his influence in Europe.

Since 2017, Richard Burt, an Atlantic Council board member, and Frances Burwell, a distinguished fellow, have lobbied for five European companies financing the Nord Stream 2 pipeline, which will transport gas from Russia to Germany. In addition to their perches at the Atlantic Council, Burt and Burwell are partners at McLarty Inbound, a consulting group that lobbies for foreign companies.

Burt and Burwell have used their positions at the Atlantic Council to further their work at McLarty. Burt has defended the pipeline at public Atlantic Council events and reportedly pitched it in private discussions with colleagues at the think tank. Burwell defended Nord Stream in at least one major media interview where she was introduced as an Atlantic Council fellow, though not as a McLarty lobbyist.

The conflict of interest highlights the complexity of competing interests at the Atlantic Council, which gives its experts and board members wide berth and which employs several former ambassadors vigorously opposed to the pipeline. It raises the question of whether the Atlantic Council, founded in 1961 to strengthen NATO and the Atlantic alliance, promotes a set of core beliefs any longer or has devolved into a free-for-all of competing views....


 For more details of the lobbying efforts in the U.S. the indispensable Open Secrets has the scoopage:

Lobbying fuels push for Russian pipeline as Biden weighs in

And among the folks lobbying Berlin:

...As the kids say: Find someone to look at you the way Putin looks at Gerhard Schröder.

They also hug a lot.
 A lot.

Herr Schröder was Germany's Chancellor before Mutti came in.
Gazprom has paid him a lot of money. A lot. 

And who knows who got to Steinmeier that he's blurting out:
"We owe Russia the Nord Stream pipeline over Nazi atrocities, says German president"

So You Think You Can Write; HA!

Here's a guy writing about toads. I don't care so much for toads and I'm guessing you don't either.
But read and be amazed:

Before the swallow, before the daffodil, and not much later than the snowdrop, the common toad salutes the coming of spring after his own fashion, which is to emerge from a hole in the ground, where he has lain buried since the previous autumn, and crawl as rapidly as possible towards the nearest suitable patch of water. Something – some kind of shudder in the earth, or perhaps merely a rise of a few degrees in the temperature – has told him that it is time to wake up: though a few toads appear to sleep the clock round and miss out a year from time to time – at any rate, I have more than once dug them up, alive and apparently well, in the middle of the summer.

At this period, after his long fast, the toad has a very spiritual look, like a strict Anglo-Catholic towards the end of Lent. His movements are languid but purposeful, his body is shrunken, and by contrast his eyes look abnormally large. This allows one to notice, what one might not at another time, that a toad has about the most beautiful eye of any living creature. It is like gold, or more exactly it is like the golden-coloured semi-precious stone which one sometimes sees in signet rings, and which I think is called a chrysoberyl.

For a few days after getting into the water the toad concentrates on building up his strength by eating small insects. Presently he has swollen to his normal size again, and then he goes through a phase of intense sexiness....


The only other toad story I know is a reference - Colonel of commandos Robert Laycock (later Major-General Sir Robert Edward Laycock) got stuck in the desert with one of his sergeants November, 1941, raids on four key points behind the German-Italian lines, including one of Rommel's headquarters led by Laycock himself. It was unsuccessful, but Laycock and a sergeant escaped and after thirty-six days of making their way through the desert, subsisting on such things as the entrails of a dead goat, were finally picked up by the advancing Eighth Army. The sergeant was particularly happy to be rescued, we are told, since Laycock whiled away the time on their journey by reading aloud to him The Wind in the Willows. "Safe at last!" the sergeant ejaculated. "Now, thank God, I shan't have to hear any more of that bloody Mr. Toad.''

Extra credit if you can name the author of the first story before clicking through.

School's out for the summer if you can name the author who used Laycock as his inspiration for one of his characters [pp9]

Crypto Miner Talking About Building One Of The Largest Solar Projects In The U.S.

 From OilPrice, May 27:

Crypto Mining Company Plans One Of The Largest Solar Projects In The U.S.

One crypto mining company is looking to make its solar power debut in Montana and is planning one of the largest solar projects in the United States known as the Basin Creek Solar Project.

The 1,600-acre solar project is destined for Montana and proposed by Madison River Equity LLC. But unlike other renewable energy projects that are met with mostly open arms, this one is meeting some resistance.

For starters, the size is staggering. It may seem odd that the 300MW solar project will power in excess of 40,000 homes when the entire county only has about 14,000. It also may seem strange that the 300MW project more than doubles the entire state’s solar capacity, which for now stands at 117MW.

But it’s important to note that Madison River Equity is a subsidiary of FX Solutions, which also manages a crypto mining company called Atlas Power. And Atlas has some large cryptocurrency ambitions that would see the miner add another eight buildings to its current operations.

Currently, the plan is for Atlas Power to purchase the solar project after it is built to power its mining operations, which is expected to use 75MW of power.  Atlas has previously mined bitcoin but is now looking at mining ethereum so it can use GPU processers instead of the power-hog ASIC machines....


"At Lunch with Freeman Dyson". Game Theory and Cooperation but no Comestibles

As noted in the introduction to February 2020's "On the Passing Of Freeman Dyson"
I always thought he was an interesting guy but it turns out he was a really interesting guy.... 
From Inference Review Vol. 6, NO. 1 / May 2021:

In this essay, I would like to tell the story of a minor discovery in mathematical game theory that Freeman Dyson and I made in 2011. Dyson was a personal friend and one of the great mathematical physicists of the twentieth century. He died in 2020, at the age of ninety-six. He was famously self-effacing, which is not to say that he lacked an accurate opinion of his own abilities. Freeman would deny that he had done anything at all and then allow friends—or even strangers—to vehemently contradict him. Our discovery was not of that character. It really was very minor. The reasons for telling the story now are less about the discovery itself and more about the tendency of scientists to seek lessons in moral philosophy in the least likely of places—high-school algebra, for example.

Imagine that a group of scientists gather to play a kind of terror game. They must propose scenarios that, should they eventuate, would shake their belief in the foundations of their fields. The mathematician’s proposed terror is that a long message, in English, is found to be encoded—in excess of any plausible random probability—somewhere in the first billion digits of pi.1 The physicist’s terror is that the interaction cross-section of a fundamental particle will have significantly different values when measured in different places on earth, or in the same place at different times.2 The biologist’s terror is that some feature of the living world will be unexplainable by the principle of natural selection. Within biology’s subspecialty of evolution theory, there is a small area of study known as evolution of cooperation. That study, some would say, lies closest to the biologist’s terror. That makes it worth poking at.

Cooperation and Defection

In biology, a cooperator is an individual who pays a cost for another individual to receive a benefit. When cooperation is mutually beneficial to two individuals of the same or different species—a condition termed direct reciprocity—then it is favored by natural selection. There are other possibilities. In so-called kin selection, an individual’s self-sacrifice may be favored if, on average, it helps another individual in the same gene pool to survive.3 The unit of survival is understood in this case to be not the individual, but the gene that two individuals share.4 It is harder to understand why individuals cooperate when defection would be more favorable or when the reciprocity is only indirect.

Suppose that two microbe species, A and B, both need processed nutrients a and b. The cooperative state might be that A produces a, B produces b, and each secretes a portion of its nutrient for the benefit of the other. But this equilibrium is not evolutionarily stable: a defecting A with a mutation that halts its sharing of a becomes a free rider, benefitting from B without paying the fare. Free riders, avoiding a cost, will tend to take over the population. The evolutionarily stable endpoint is noncooperation, even though cooperation would be better for both species.

Cooperation among humans seems hardest of all to understand. “Humans are the champions of cooperation,” Martin Nowak has remarked. “From hunter-gatherer societies to nation-states, cooperation is the decisive organizing principle of human society.”5 In much, if not most, of our cooperation, reciprocity is indirect. To be sure, some people give money to universities in the hope of getting their own children admitted—kin selection—but many more give to charities that are of no direct benefit to themselves or their kin. Many billionaires become philanthropists, but from the standpoint of evolution theory, why is this? A quirk of our culture, maybe? But cultures, too, compete for dominance with other contemporaneous cultures, and by a process akin to natural selection. Are we to understand that generosity is selectively favored? Or are the generous billionaires only transient?

Charles Darwin recognized that cooperation posed a challenge to his theory of natural selection. He described an elegant experiment to ferret out whether the aphid yields its excretion to the ant voluntarily, or involuntarily with the ant as a parasite.6 He provided a convincing argument that it was the former. Darwin, the consummate naturalist, hated overgeneralized theory. Yet the significant literature on the evolution of cooperation that has flourished in the last fifty years is almost entirely theoretical. Much of it is cast in the formalism of mathematical game theory, a subject that came into existence more than half a century after Darwin’s death in the work of John von Neumann and Oskar Morgenstern. Game theory describes how competing, sentient players, in a well-defined universe of choices and payoffs, may knowingly seek to optimize their own outcomes. Evolution is the blind watchmaker,7 optimizing only by trial and error. Exactly how the achievable outcomes of evolution correspond to the mathematical optima of game theory is not a settled question.

The Prisoner’s Dilemma

Go back to microbes A and B, but now promote them to sentience. They become Alice and Bob, who are arrested on suspicion of committing, together, a serious crime. Each has sworn not to betray the other. They are questioned in separate rooms.

“We already have enough evidence to convict you both of a misdemeanor,” the detective says to each, “that will put you away for one year.” Each, separately, says nothing. “But if you defect, rat out your partner and turn state’s evidence,” the detective continues, “we’ll let you go, scot-free. Your partner will get a felony conviction, six years in the state penitentiary.”

“What if we both turn state’s evidence?” Alice and Bob each ask.

“Well, I can’t let you both go free,” the detective says. “You’ll each get three years.”

Alice reasons as follows: there are only two possibilities. Either Bob will rat me out, or else he won’t. If he rats, then I’ll get six years—unless I rat also, in which case I’ll get just three years. So, if he rats, I should too. But what if he doesn’t rat? What a chump! I can rat on him and be out today. So, either way, I should defect. Bob employs the same reasoning and defects on Alice. They each get three years. The pair spend the time wishing that they had both kept their promises not to betray each other and escaped with misdemeanor convictions.

The prisoner’s dilemma (PD) game, played once, has no direct bearing on evolution. But consider the iterated prisoner’s dilemma (IPD) game, first posited at the RAND Corporation in the 1950s: Alice and Bob play many rounds of the same game with each other. After following the same logic for a few games, Alice tentatively tries a round of cooperation. In that round, Bob still defects and Alice gets six years. But Bob has now seen Alice’s signal. He tries cooperation himself. Alice reciprocates. And, for a string of games, they are both cooperating, receiving only misdemeanor convictions. In the IPD, there is information in the previous plays, and each player can try to use that information to devise a superior strategy that remains self-interested.

Is the best strategy to cooperate always? Certainly not. If Alice adopts that strategy, Bob will always defect, getting off scot-free, while Alice will always get six years. A good strategy would seem to be something like, “Cooperate most of the time, but don’t be a chump if the other player doesn’t follow suit.” Can this be formalized, or made crisp, in some way?...


And some of our visits with the old boy:
"The Brain Is Full of Maps A Talk By Freeman Dyson"

"The Key to Everything" Freeman Dyson on Geoffrey West's "Scale..." 
Until seeing this I wasn't aware Professor Dyson was still alive. The old boy hung out at Princeton's Institute for Advanced Studies at the same time Einstein was there. He knew all the physics brainiacs of the day, Feynman in particular and was sharp enough himself that Princeton grabbed him and made Dyson a Professor despite his lack of a PhD.
This review was recommended by one of the commenters on Izabella Kaminska's last posting at FT Alphaville which we linked in "UPDATED—A Map of Every City (plus Izabella Kaminska does a drive-by)".
And speaking of Ms Kaminska, why haven't the tech boffins at the Financial Times come up with a robo-Izzy until her return?
Although Einstein was at the Institute for Advanced Studies when Dyson arrived they didn't pal around. From the interview with Dyson:
...There were many famous scientists at Princeton when you got there, including Albert Einstein. Did you ever get to know him?
No, and he didn’t encourage young people to get to know him. He never came to seminars, never came to lunch. We always saw him walk by every day. He was tremendously busy with affairs of the world, so he was very much in demand. People came every day. Important people came to visit, so he just didn’t have time for saying hello to the kids.

But it sounds like he didn’t want to say hello. Was it simply not part of his makeup to talk with the up-and-coming generation?
That was true. He didn’t enjoy teaching. There were two important things for him. There was his own work, which he always continued, and there was his public activity as a politician, which he did extremely well. He was a really serious player in the international game and actually had a good effect....
"Alien Civilizations and Energy"

"The Incoherence of the Economists"

 This piece brings to mind another post, from 2009:

Keynes on Economists

The study of economics does not seem to require any specialised gifts of an unusually high order.
Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy and pure science? Yet good, or even competent, economists are the rarest of birds. An easy subject, at which very few excel! ....MORE

And the headline story from American Affairs Journal, October 2017:

What is an economist? There is an easy answer: economists are social scientists who create simplified quantitative models of large-scale market phenomena. But they are more than that. Besides their scientific role, economists have achieved a social cachet that far exceeds what one might expect from a class of geeky quasi-mathematicians. In addition to being scholars, economists today often advise national leaders, occupying some of the most influential roles in government. They are commonly treated like modern sages, given column space in our most prestigious periodicals, and turned to for analysis that goes far beyond pure economics and veers into politics, culture, and even morality. They command high salaries in government, academia, and the private sector, and they even have their own Nobel Prize.

Economists and their admirers presumably believe that the respect and social prestige accorded to them is earned rather than accidental—that they are respected and honored in proportion to their numerous accomplishments and the value they can provide to society. Skeptics like me disagree, and believe that economists are overrated, overpaid, and beyond some limited cases do not contribute to society as much as they would have us believe. At any rate, given their exalted status, it seems necessary to examine more closely what value economists actually provide to society and whether it justifies their popular acclaim.

The prominent economist N. Gregory Mankiw once jokingly suggested an analogy for the value that an economist provides to society. During a talk he gave about the Great Recession, he joked that being an economist during a recession is like being an undertaker during a plague: times are sad, but business is good. Undertakers make a valuable contribution to society, but a necessarily limited one: they do not predict plagues, nor do they cure any of the victims. If economists really were analogous to undertakers, we would expect that their social standing should be greatly reduced. Merely cleaning up some of the fallout of forces that one does not understand or control is not what brings one a plum cabinet post, exorbitant salary, or Nobel Prize.

In practice, economists seem to view themselves more like doctors during a plague. They confidently claim to have solid answers about the cause of the disease (or recession) as well as how to treat and eradicate it, and make a living from convincing people of this special expertise. Mankiw himself seriously compared economists working on the economy to doctors treating a sick patient in the pages of National Affairs in 2010. Even if one accepts this analogy, it leaves ample room for both positive and negative interpretations. During the Black Death, doctors enjoyed good business, but usually provided patients only a mixture of incompetence and superstition rather than healing or real knowledge. By contrast, during some of the great successes of medical history, like the eradication of smallpox, doctors provided expertise and effort that greatly increased human well-being.

In a recent article in aeon, Alan Jay Levinovitz offered yet another analogy for what economists do for society. He wrote that economics is “the new astrology,” and that its dazzling mathematics is only a distraction from its failure at “prophecy.” To make his case, he cited numerous failures of seemingly clever economists to predict the future, make money, or avert recessions.

An apologist for economics could respond to this by saying that economics is more like the early stages of astronomy than today’s astrology. For hundreds of years, legitimate and sober-minded astronomers advocated incorrect theories like Ptolemaic geocentrism because they didn’t know any better. However, they were on the right track: after more assiduous observation and study, astronomers corrected most of their incorrect notions and have collectively given to us a mature field that is capable of understanding distant galaxies and landing a rover on Mars. Though astrology was always irredeemable, astronomy only needed time and better observational technology to become the respectable field it is today. If economics is comparable, it only needs time and better observations in order to become as powerful and as correct as astronomy.

So which is it: are economists more like astronomers, working through occasional scientific imperfections to deliver valuable insights, or are they more like astrologers, charlatans pretending to have secrets to an esoteric mystery that is really nothing more than nonsense? Are they the doctors who eradicated smallpox, tireless and altruistic in their pursuit of truth and human flourishing, or are they the plague doctors who made a living peddling myths and quackery? These are not only idle philosophical questions. The millions of dollars that U.S. taxpayers spend annually on full-time government research economists and grants to academic economic research deserve to be properly justified or, if necessary, rerouted.

In this essay, I will attempt to quantify the performance of the economics profession over the last several decades.  I will argue that the data suggests that economics has progressed very little for many years, and performs especially poorly around the time of recessions, when it would be most important for economists to perform their duties well.  Because of this, I will also propose an adjusted and more modest role for economists in public life.

Case Study: Macroeconomic Prediction

To evaluate the performance of economists, it may be helpful to explore some data from the Survey of Professional Forecasters (SPF), a quarterly survey that has been conducted by the Federal Reserve Bank of Philadelphia since 1968. The survey is simple: the Federal Reserve Bank contacts professional economic forecasters and asks them to predict future values of a variety of macroeconomic indicators, including unemployment and nominal GDP. Surveyed professionals make predictions for the near future (including the current quarter) as well as the more distant future (up to about four quarters in advance). Anonymized records of predicted values and actual values since 1968 are available for free on the Philadelphia Federal Reserve Bank’s website.

In the SPF data, measuring the accuracy of a forecast is straightforward—it is simply the difference between a predicted value and the corresponding actual value, where the differences closest to 0 represent the best performance and the differences furthest from 0 represent the worst. An example data point might come from a forecaster who was surveyed during the second quarter of 1975, and was asked to make predictions about the final measured unemployment in the second quarter of 1976. If the forecaster guessed 4.5 percent unemployment but the actual realized value was 6.0 percent (for example), his absolute error was 1.5 percentage points. If another forecaster guessed 7.5 percent for the same quarter, his absolute error would also be 1.5 percentage points (overestimates and underestimates are treated the same).

After calculating the absolute errors for each forecast in every quarter, we can take the average of the absolute errors from all forecasters in a particular quarter to gauge the forecasters’ overall performance in that quarter. Then, we can look for two things: first, absolute performance in every quarter, to answer the question of how well economists perform at macroeconomic forecasting, and second, change over time, to answer the question of whether economists’ macroeconomic forecasting has improved over the decades.

The SPF dataset includes 6,808 forecasts of unemployment and 6,716 forecasts of nominal GDP. Here, I will only examine forecasts that are made four quarters ahead (for example, forecasts that are made in 1975, quarter 2, about the final realized unemployment rate in 1976, quarter 2).

The mean absolute errors over time for SPF predictions of U.S. unemployment are shown in the chart below. In this figure, the black dots show the quarterly mean absolute errors of unemployment forecasts. So a value of 1.5, for example, means that the average forecaster’s guess was 1.5 points away from (above or below) the true value: either guessing 4.5 percent or 7.5 percent unemployment when actual unemployment was 6.0 percent. The solid line shows a “Loess curve,” which is something like a rolling average of the plotted mean errors. (A Loess curve is based on a weighted local regression methodology rather than a raw average.) The dotted lines show a “confidence interval” for the solid Loess curve.

One of the easiest things to notice about the errors plotted in the above chart is how large they get. The majority of quarterly average errors are larger than half a percentage point, which is a considerable difference for a figure that is almost never outside the 6-point window between 4 and 10. In many quarters, the average error is larger than 1 percentage point and even exceeded 3 points in one quarter. The value of the Loess curve is never less than 0.5 percentage points.

As for the trend of the data, there is no sharp increase or decrease. There are many different methodologies for finding time trends in data, and some of these methods will indicate a slight downward trend for these errors. At best, the downward trend is very slight. However, there is evidence that the errors are stagnant:

  • The Loess curve reached its minimum value in 1996, two decades ago. Throughout the 2000’s the Loess curve rises, as does its confidence interval.
  • The most recent confidence interval contains the estimated Loess value from the earliest recorded quarter (1968, quarter 4). Similarly, the earliest confidence interval contains the estimated value from the most recent recorded quarter.

Another important thing to point out in this data is that the errors appear to be especially large just before and during recessions. We can see spikes around 1973–1975, in the early 1980’s, and the early and late 2000’s, all periods of recession. These spikes are similar to each other in maximum height. The period of best forecast performance was the 1990’s, a period of steady and sustained economic growth.

I believe the above figure is damning to the economics profession. It shows a profession that frequently makes large errors (see the many high error values plotted), that predicts recessions very poorly or not at all (see the bad performance around recession quarters) and that has improved little or not at all over the years (see the relatively flat and sometimes-increasing “average” line). The errors around recession years are consistent in their large size—I cannot see evidence for an increased ability to predict recessions. Looking at the chart, it is easy to wonder whether the hundreds of economics research papers published annually are worth the millions of dollars that are spent funding them. It is not clear that they deliver anything more than a flat Loess curve indicating stagnation. The yearly Nobel Prize in economics is meant to represent game-changing advances in the field. But it is not clear that big advances have happened at all in economics over the time plotted above, let alone the annual game-changing advances that the Nobel committee claims.

So, economists have a poor track record at prediction, and show little or no evidence of progress over the decades. If they cannot predict well or improve at prediction, it is not clear why we should believe that they have done any better at anything else they claim to be able to do. It is also not clear that we should continue to ask their opinions about the economy’s state or future. Neither is it clear from these poor results that we should exalt them to cabinet posts or give them column space in prestigious periodicals. What then is their value? I will consider this below.

Interpreting the Data

Before moving on to assess the value of economists in public life, it would be worthwhile to consider the implications and limitations of the data shown in the case study above. The SPF dataset is well-suited to an evaluation of the performance of economists for several reasons. First, simply because it consists of methodically collected data rather than anecdote, it rises above the anecdotal cases frequently made by pundits about economic issues. Second, because the survey has asked the same questions in the same way across its entire existence, it enables comparisons between different time periods that would otherwise be hard to compare, including times of peace and war, boom and bust, low interest rates and high, and a variety of different types of elected government administrations.

A third and very important advantage of the SPF as an evaluation metric for economics is that it provides a pure measure of the performance of economists and their knowledge rather than the performance of the economy itself. Evaluating economists based on the performance of the economy always runs into the impossible challenge of finding the right counterfactual as a reference point. In other words, any criticism like “you mismanaged the aftermath of the Great Recession and all of your policies led to a sluggish recovery” can be met with the response “the recovery was indeed sluggish, but it would have been much more sluggish without my perfectly wise and effective policies.” There is no obvious reference point for performance, so 3 percent growth could be argued to show poor management by economists since it is less than 5 percent growth, and 2 percent contraction could be argued to show good economic management since it is better than 4 percent contraction.

No matter how bad the performance of the economy, economists can cite an imagined world without them full of recessions to justify their existence and high salaries. With SPF data, by contrast, the 0 lower bound of absolute errors is indisputably the right reference point. No economist can argue that his 5 percent error rate was perfect because it was less than 6 percent – it is clear to everyone that 0 percent error is the right place to be.

A potential objection to this case study has to do with the validity of the inference from macroeconomic forecasting to the rest of economics. An economist might concede that macroeconomic forecasting is a relatively stagnant sub-field of economics, but argue that its poor performance does not reflect on the performance of microeconomics, or game theory, or optimal taxation theory or some other corner of economics.....


Always bear in mind that just using the tools of science (maths) doesn't make economics a science.

And the related: just because carbon traders use the tools of markets it doesn't make what they do market-based.

Here with a dissenting opinion on econ and the economists is Noah Smith writing at The Week in January 2014, before he went on to Bloomberg Opinion:  

Why Economics Gets a Bad Rap 

And for readers who are interested in practical economics, January 2011's: 


"The Profound Potential of Elon Musk’s New Rocket"

Mr. Bezos and his Blue Origin is not keeping up on the engineering side,
On the lobbying-for-loot side they are ahead.*


An aerospace engineer explains why SpaceX’s Starship will change everything.

On the late afternoon of May 5, SpaceX’s Elon Musk tweeted, “Starship landing nominal!” Musk is not known for understatement. But seeing that stainless steel behemoth soar was, for many, something more like phenomenal. Over 5 million people watched the spectacle on YouTube, perhaps many with bated breath, as every prior attempt at landing Starship had gone up in flames. Not SN15. This Starship, after having climbed 12 kilometers and then coasted down in a “belly flop” configuration—using its wide silver body as a brake—descended slowly, the force of its Raptor engines offering a soft, safe landing.

Some folks at NASA probably felt a sense of relief. To the astonishment of the space industry, in April, NASA had awarded SpaceX a $2.9 billion contract to modify Starship to serve as the system that’ll take astronauts to the moon. The favorite to win the job wasn’t SpaceX, but the heavyweight “National Team,” consisting of Jeff Bezos’ Blue Origin, veteran aerospace contractors Lockheed Martin, Northrop Grumman, and Draper Labs. The selection was so unexpected that, when word of it was first leaked by the Washington Post, some well-informed observers refused to believe it. Politics suggested the National Team was the safe and sure bet.
AND THE WINNER IS ...: Last year, NASA awarded preliminary design contracts for its Artemis program to three contenders (above)—the Blue Origin-led National Team, the Dynetics team, and SpaceX. With Starship, SpaceX offered something radical. NASA, defying expectations, bought it.NASA

Perhaps unsurprisingly, the losing teams (which also included an alliance of small businesses led by Dynetics) promptly protested NASA’s choice, temporarily freezing the program. But, since SpaceX offers the most capability, at less than half the price bid by the others, it will likely prevail. NASA will no doubt take heavy fire from Congress for not playing ball. Politicians believe that NASA exists to serve their need to provide economic benefits to their constituents.1 But the government agency also carries the banner of America’s pioneer spirit. It is a human organization, subject to all the flaws of the system that supports it. But it has its moments. And boy, was this one of them.

It was a milestone moment for Musk, too, of course, who founded SpaceX in 2002, fresh off the sale of his digital payments company PayPal, for no less of a purpose than getting humans to Mars. I know, I know. Entrepreneurs—they’re usually in it for the money, right? But the cynics are wrong about Musk. I was among those who helped convince him to make Mars his calling. If he wanted more money, he knew plenty of easier ways to get it than to start, of all things, a rocket company, a notoriously difficult venture with little chance of success. He was looking to do things of immortal importance. Colonizing Mars (along with electric cars and solar energy) made the cut.

Let me underscore just how transformative, and how profound, Starship could prove to be to our future in space, and to our understanding of life. I’ve been in this business for a decent chunk of time. In the late 1980s, I was on the team at Martin Marietta, now Lockheed Martin, that did the preliminary design for what is now called the Space Launch System, NASA’s flagship vehicle. It was originally devised as a quick and dirty way to create a heavy-lift booster out of the then-operational Space Shuttle system components. Starship is nothing like the Space Launch System. It’s unlike anything NASA has made before. It represents an entirely new concept of space operations, and the impact it very well may have on science is extraordinary....


 *Senators Want NASA To Give Jeff Bezos' Blue Origin Space Company A $10 Billion Consolation Prize

Remember when Space X won that contract to build the new lunar lander? Well, the Jeff Bezos-owned Blue Origin wanted that money too and it looks like the plucky, upstart company just might get it and more, thanks to the magic of lobbying.

Former Jalopnik contributor Elon Musk and lizard eater Jeff Bezos have both been called the “richest being to have existed” in the last year, but that’s not all they have in common! They also have vanity space exploration companies that compete for your tax dollars. Back in April, Musk’s Space X was awarded a $2.9 billion-dollar contract to develop a lunar lander. That meant that Bezos’ Blue Origin missed out on the contract, which is worth about .01 percent of Jeff’s $188.9 billion dollar personal fortune. No to worry though, it looks like Bezos’ pals in the US Senate are ready to hand him an even bigger payday for trying hard and having a good attitude....



Saturday, May 29, 2021

China Rattles Nuclear Sabre After Calls For Coronavirus Investigation

This post is not so much to focus on Ms. Zeng's reporting as it is on her calling attention to the comments of Hu Xijin, the chief editor of The Global Times.

That said she does get some good stuff e.g.

And the headline story:

MORE at her blog, May 29.

All via Investment Hulk


Media: "On the 'Girl Stunt Reporters' Who Pioneered a New Genre of Investigative Journalism"

When I read that Nellie Bly had done this my first though was "But what if she couldn't get out?"
Those places would drive you nuts.

From Literary Hub, April 16:

Kim Todd Remembers the Fearless Women Who Changed the Trajectory of Memoir and Reporting 

The Chicago Times’s Girl Reporter might seem exceptional in her readiness to risk scandal to tell a story no one else would, but she was not alone. The same script was playing out in cities from coast to coast. She was just one of the nation’s “girl stunt reporters,” pioneering a new genre of investigative journalism, going undercover to reveal societal ills. Throughout the 1880s and 1890s, women from Colorado to Missouri to Massachusetts dressed in shabby clothes and sneaked into textile mills to report on factory conditions, slipped behind the scenes at corrupt adoption agencies, fainted in the street to test treatment at public hospitals.

At the time, American journalism, a field on the cusp of professionalization, was plotting its future. A revolution in printing technology made putting out a paper cheaper than ever before, and an influx of immigrants offered a tantalizing new audience. Newspaper rooms, from San Francisco’s Examiner to New York’s World, battled viciously for market share with weapons of scandal and innovation. In the process, they shaped the growing metropolis, reflecting it back to itself. On the one hand, cities were engines of opportunity; on the other, magnets for sin. They drew people seeking better lives and sometimes swallowed them.

Publishers were looking for a new kind of story to fill those numerous pages, to tempt those new readers, to stoke their anxieties but also feed their hopes. And when Nellie Bly’s 1887 “Inside the Madhouse” series for the World hit the streets of New York, readers couldn’t get enough. She had faked insanity to get committed to the asylum at Blackwell’s Island so she could document the starvation and abuse of patients.

Even more compelling than the situation she revealed was the way she told the story—a firsthand account from a charismatic narrator, filled with dramatic twists and laced with warmth and humor. The exposé sold thousands of copies of the World, resulted in the municipality committing $50,000 for better asylum management, and created a publishing sensation.

Slipping on a disguise and courting danger suddenly became a way for writers to get a foot in the door. By crafting long-form narratives that stretched over weeks and read like novels, using engaging female narrators to explore issues of deep concern to women, and promising real-world results, stunt reporters changed laws, launched labor movements, and redefined what it meant to be a journalist. These footloose exploits were so sought after by readers and publishers that reporters willing to attempt them commanded high pay. And, while in 1880 it was almost impossible for a woman writer to escape the household hints of the ladies’ page (the kind of writing one female journalist termed “prostitution of the brains”), by 1900, papers were publishing more bylines by women than men....


Also at LitHub, a couple years earlier:
The Reporter Who Went Undercover at an Asylum

"China Warns Australia's Military Is 'Weak', Will Be 'First Hit' In Any War With Western Alliance"

This is exactly the sort of risk we were talking about in May 27's "Battery Metals and Rare Earths: The U.S. Will Use The Slightly Controversial Blanche DuBois Extraction Method".

From ZeroHedge, May 29:

Following now completed joint war games held by the US, Japan, France and Australia in the East China Sea off the southwest coast of Japan earlier this month, China has lashed out particularly at its large regional neighbor Australia, calling its military "weak" and "insignificant" at a moment the two are locked in a severe trade and diplomatic tit-for-tat dispute. 

Beijing voiced specific threats and warnings via its state-run English language mouthpiece Global Times, which recently wrote, "Australia's military is too weak to be a worthy opponent of China, and if it dares to interfere in a military conflict for example in the Taiwan Straits, its forces will be among the first to be hit."

"Australia must not think it can hide from China if it provokes," the report continued with its threats. "Australia is within range of China's conventional warhead-equipped DF-26 intermediate-range ballistic missile."

Exercise Jeanne d'Arc 21 - or ARC21, as the Western alliance called it, also featured rare amphibious assault landing drills, which is seen as aimed at challenging China's expansive claims over regional island-chains and contested reef areas on which it's built up military installations. 

Here's more from the GT column's response...

The ongoing joint exercises by Japanese, US, French and Australian troops, claimed to "serve as a deterrent to China," is only symbolic and of little military significance, as the drill was put together by participants that have different agenda or are too weak, experts said on Wednesday, while slamming Japan's outdated mindset of rallying alliances for confrontation.

The People's Liberation Army (PLA) doesn't even need to make pointed responses to the joint drill since it's insignificant militarily.

Japan was also focus of China's media attacks over the exercise as it was warned not to let its historic "militarism come back to life"....


"China needs to make a plan to deter extreme forces of Australia" 

"Why China prefers to maintain inflamed borders"

"What if the need for fabric, not food, in the face of a changing climate is what first tipped humanity towards agriculture?"

Clothing, very important, some links after the jump.

From Aeon:

The clothing revolution

Archaeologists and other scientists are beginning to unravel the story of our most intimate technology: clothing. They’re learning when and why our ancestors first started to wear clothes, and how their adoption was crucial to the evolutionary success of our ancestors when they faced climate change on a massive scale during the Pleistocene ice ages. These investigations have revealed a new twist to the story, assigning a much more prominent role to clothing than previously imagined. After the last ice age, global warming prompted people in many areas to change their clothes, from animal hides to textiles. This change in clothing material, I suspect, could be what triggered one of the greatest changes in the life of humanity. Not food but clothing led to the agricultural revolution.

My recent work shows that clothing wasn’t just the unique adaptation of a more-or-less hairless mammal to the changing natural environments. The development of clothing led to innovations with many repercussions for humanity, beyond survival in cold climates. A need for portable insulation from the cold in the Palaeolithic promoted major technological transitions. These include stone toolkits for working animal hides and, subsequently, bone tools such as pointed awls and needles to make tailored garments. Later, during the coldest stage of the last ice age, Homo sapiens in middle latitudes devised multi-layered outfits with an inner layer of underwear. Equipped with effective protection from wind chill, our species could penetrate into the frigid Arctic Circle, further north than cold-adapted Neanderthals had managed to venture. From the northeastern corner of Siberia, modern humans strolled across an exposed land bridge to enter Alaska by 15,000 years ago, if not earlier, to likely become the first hominins to set foot in the Americas. At the Broken Mammoth site in Alaska, archaeologists have unearthed the fragile technology that made the journey possible: a 13,000-year-old eyed needle.

Until recently, the scientific study of clothing was largely the work of physiologists who have explored its thermal properties, which are now well understood. The physiology of clothing allows us to say precisely how much clothing people must wear to survive at sub-freezing temperatures and at differing wind-chill levels. Early hominins in Africa had begun to harness fire between 1 and 2 million years ago, perhaps for cooking more than warmth. Fire was utilised as hominins spread into Europe and northern China, where Homo erectus retreated into caves to escape wind chill. However, even if earlier hominins were more hairy than modern humans, whenever they found themselves in cold conditions beyond certain well-defined survival thresholds, they needed to carry portable insulation while out in the open. For modern humans, exposure times for frostbite can be less than an hour, and life-threatening hypothermia can develop overnight, even in cities. From a thermal perspective, two aspects of clothing are important. First is the number of layers, with each extra layer increasing the total insulation value. The second aspect is whether garments are fitted, or tailored, to enclose the body, especially the limbs. Fitted garments offer superior protection from wind chill, a major risk factor for frostbite and hypothermia.

While clothing is one of the most visible of all human technologies, in the field of archaeology it’s almost invisible. Compared with stone tools surviving from the Lower Palaeolithic more than 3 million years ago, clothes perish rapidly and rarely survive beyond a single millennium. Among the notable exceptions are a pair of 3,000-year-old trousers worn by nomadic horse-riders in Central Asia, and a 5,000-year-old linen tunic from ancient Egypt. We have only a few precious cloth fragments from the early Neolithic, in Peru and Turkey. Not a shred of clothing survives from the Pleistocene, with just a few twisted flax fibres – used perhaps for strings or thread – found at a 34,000-year-old site in Georgia.

All the evidence we have for ice-age clothing is indirect but, nonetheless, the available evidence shows that people had tailored clothes in the last ice age. The world’s oldest eyed needles are found in southern Russia 40,000 years ago, and one needle in Denisova Cave is said to be 50,000 years old. In the vicinity of Moscow at a site called Sunghir, 30,000-year-old human burials have thousands of beads neatly arranged on the skeletons. Russian archaeologists think that these beads were sewn on to fitted garments, including trousers with legs and shirts with sleeves. Some of the skeletons appear to have two layers of garments, indicating the presence of multiple layers, so the Sunghir burials document the world’s oldest underwear. Artworks across Eurasia begin to show people wearing clothes from that time, including the so-called ‘Venus’ figurines.

The Venus of Willendorf figurine, estimated to be from around 25,000 years ago and now in the 
Natural History Museum, Vienna. Note the woven cap. Photo courtesy Wikipedia.

Scientific efforts to shed light on the prehistory of clothes have received an unexpected boost from another line of research, the study of clothing lice, or body lice. These blood-sucking insects make their home mainly on clothes and they evolved from head lice when people began to use clothes on a regular basis. Research teams in Germany and the United States analysed the genomes of head and clothing lice to estimate when the clothing parasites split from the head ones. One advantage of the lice research is that the results are independent from other sources of evidence about the origin of clothes, such as archaeology and palaeoclimatology. The German team, led by Mark Stoneking at the Max Planck Institute for Evolutionary Anthropology, came up with a date of 70,000 years ago, revised to 100,000 years ago, early in the last ice age. The US team led by David Reed at the University of Florida reported a similar date of around 80,000 years ago, and maybe as early as 170,000 years ago during the previous ice age. These findings from the lice research suggest that our habit of wearing clothes was established quite late in hominin evolution.......

...One mystery is that modern humans have been on the Earth for around 300,000 years and witnessed massive changes in climate through a number of glacial cycles, yet we had no agriculture anywhere until 12,000 years ago.

There was a connection between the textile revolution and the agricultural revolution



"Four Thousand Years Ago, Textile Traders Invented a Basic Social Technology: Mass Literacy"
"How Bills of Exchange Went from a Way to Bring Textile Proceeds Home to the 'Foundation of Modern Commercial Banking'"
Slovak President Sports a Stylish Ensemble: Boatneck Dress with Matching Pumps and Fabric Mask
"Fashion, Maslow and Facebook's control of social"

 And many, many more.

Steganography: Hidden In This Picture

 From The Last Word On Nothing:

Redux: Hidden in this picture

This is a picture of an old timey cash register, and thanks to the weirdness of tech and the weirdness of money, there could be actual money in it. Literal money that you can take out of the picture and spend.

Thanks to an app launched last month, you can now furtively smuggle money inside the image of your choice like you’re a WWII spy sending microdots full of secret documents on a “Wish You Were Here” postcard. “Bitcoin cash users can send transactions in a steganographic manner with the wallet hiding funds in plain sight,” reports It’s more evidence for the resurgence of steganography – the ancient and fine art of smuggling secret messages on apparently innocent carriers – made newly relevant by the demands of the digital age.

If you’re curious about steganography and why it’s in a renaissance, you might enjoy my story from earlier this year.

When the ancient Greeks wanted to get something done, they really committed. In 499 B.C., in a bid to get out of an unpleasant job assignment, Histaeus, the leader of Miletus, plotted a rebellion against the Persian king Darius the Great. Elaborately coded missives sent to co-conspirators would only rouse suspicion. He needed something much sneakier. So Histaeus shaved his favorite slave’s head, tattooed the message on his scalp, and then waited for the hair to grow back. When the tattoo was sufficiently covered up, he sent the slave to visit his co-conspirator, who knew where to find the goods.

This bit of stealth – not just sending a secret message but doing it in such a way that obscures any communication has taken place at all – is called steganography. In the 2500 years since Histaeus started his revolution, technology has helped steganography evolve, yielding methods from invisible ink to microdots, to secret bits stowed inside digital photos. But while this kind of thing makes for entertaining cocktail party chat, it has never borne much direct relevance to most people’s lives.

That’s about to change.

The past few years have seen fundamental changes in means, motive and opportunity for steganography. This has led to an alarming shift in how it is used: where it once mainly allowed (often) scary dudes to chat covertly with other scary dudes, it is now increasingly being used by those same scary dudes to chat covertly with your computer. These developments have so alarmed the folks at Europol that two years ago they put together a special initiative that would study the Cambrian explosion of new steganography tools, and look for ways to fight back.

“2018 is the year of the steganography renaissance,” says Chet Hosmer, founder of computer security firm Python Forensics. “But it’s not just about the tools the bad guys use. This might finally be the year the good guys start fighting back.”

The history of the arms race between the people trying to keep communications secret and those trying to smoke them out makes for good reading. During World War II, spies passed innocuous papers back and forth that would reveal their secrets in the form of microdots (photographed documents which the Germans managed to shrink down to the size of a totally missable period at the end of a sentence). There’s a long, dark internet rabbit hole waiting for the person who types “steganography” into the search bar.....


Friday, May 28, 2021

The WEF - Carnegie Endowment Cyber Threats Report

From the Carnegie Endowment for International Peace, November 18, 2020: 

International Strategy to Better Protect the Financial System Against Cyber Threats 


In February 2016, a few months after Carnegie began its work on this project, a cyber attack shook the finance world.1 Hackers had targeted SWIFT, the global financial system’s main information network, trying to steal 1 billion U.S. dollars, nearly 0.50 percent of Bangladesh’s GDP,2 from the Bangladeshi central bank over the course of a weekend.3 It was a wake-up call revealing that cyber threats targeting the financial sector were no longer limited to low-level theft but could now pose systemic risk.

Only a few months earlier, in 2015, the Carnegie Endowment for International Peace had launched an initiative to better protect the global financial system against cyber threats.4 Our first step was to develop a proposal for the G20 to launch a work stream dedicated to cybersecurity in the financial sector.5 In March 2017, the G20 Finance Ministers and Central Bank Governors outlined an initial road map to increase the cyber resilience of the international financial system. In the wake of the Bangladesh incident, Carnegie expanded its work, complementing the G20 project with the development of an action-oriented, technically detailed cyber resilience capacity-building tool box for financial institutions. Launched in 2019 in partnership with the IMF, SWIFT, FS-ISAC, Standard Chartered, the Global Cyber Alliance, and the Cyber Readiness Institute, this tool box is now available in seven languages.6 And we are continuing to track the evolution of the cyber threat landscape and incidents involving financial institutions through a collaboration with BAE Systems.7

To raise more awareness among senior officials of the growing threat, Carnegie also hosted a series of roundtables at the Munich Security Conference, including a cyber war game, dedicated to cybersecurity and the financial system. We co-hosted a high-level roundtable with the IMF for central bank governors and launched a workshop series at Wilton Park to strengthen the relationships among financial authorities, industry, and law enforcement as well as national security agencies....


The merging of the banks, their regulators and intelligence agencies is an interesting idea.

Previously from the World Economic Forum et al, Friday, October 18, 2019:

About the Event 201 exercise

Event 201 was a 3.5-hour pandemic tabletop exercise that simulated a series of dramatic, scenario-based facilitated discussions, confronting difficult, true-to-life dilemmas associated with response to a hypothetical, but scientifically plausible, pandemic. 15 global business, government, and public health leaders were players in the simulation exercise that highlighted unresolved real-world policy and economic issues that could be solved with sufficient political will, financial investment, and attention now and in the future.

The exercise consisted of pre-recorded news broadcasts, live “staff” briefings, and moderated discussions on specific topics. These issues were carefully designed in a compelling narrative that educated the participants and the audience.

The Johns Hopkins Center for Health Security, World Economic Forum, and Bill & Melinda Gates Foundation jointly propose these recommendations.


In recent years, the world has seen a growing number of epidemic events, amounting to approximately 200 events annually. These events are increasing, and they are disruptive to health, economies, and society. Managing these events already strains global capacity, even absent a pandemic threat. Experts agree that it is only a matter of time before one of these epidemics becomes global—a pandemic with potentially catastrophic consequences. A severe pandemic, which becomes “Event 201,” would require reliable cooperation among several industries, national governments, and key international institutions.

Recent economic studies show that pandemics will be the cause of an average annual economic loss of 0.7% of global GDP—or $570 billion. The players’ responses to the scenario illuminated the need for cooperation among industry, national governments, key international institutions, and civil society, to avoid the catastrophic consequences that could arise from a large-scale pandemic....


"Anthropocene: why the chair should be the symbol for our sedentary age"

This piece was written three years ago. After the last seventeen months it is more true than the day the editor hit 'publish'. And the damn things are killing us.

From The Conversation: 

Why are there no chairs in the Bible, or in all 30,000 lines of Homer? Neither are there any in Shakespeare’s Hamlet – written in 1599. But by the middle of the 19th century, it is a completely different story. Charles Dickens’s Bleak House suddenly has 187 of them. What changed? With sitting being called “the new smoking”, we all know that spending too much time in chairs is bad for us. Not only are they unhealthy, but like air pollution, they are becoming almost impossible for modern humans to avoid.

When I started researching my book about how the world we have made is changing our bodies, I was surprised to discover just how rare chairs used to be. Now they’re everywhere: offices, trains, cafés, restaurants, pubs, cars, trains, concert halls, cinemas, doctor’s surgeries, hospitals, theatres, schools, university lecture halls, and all over our houses (I guarantee you have more than you think).

If I was asked to make even a conservative estimate of the number of chairs in the world, I’d find it hard to go lower than 8-10 per person. Applying that logic, there could be more than 60 billion of them on the planet. Surely chairs should be one of the universal signals of the arrival of the Anthropocene? Just like the data required to justify the change in the name of our geological epoch, they are to be found on every continent.

As to why there are suddenly so many chairs, there is no single clear reason. It is a confluence of fashion, politics, changing work habits, and the lust for comfort. The last of these requires no explanation in a culture in which ease and comfort are among the strongest drivers of consumer decision-making.

A history of chairs

While chairs began to appear with a little more frequency in the early modern period, it seems that they became much more widely popular in the 18th and 19th centuries during the Industrial Revolution.

Before the 18th century, a chair was relatively easily come by, but the majority of the population had little use for them. Even today, it is not easy to sit in a hard wooden chair for sustained periods and upholstered chairs were prohibitively expensive. But the fashion for a new reclining culture (imported from the French court of the 18th century) helped to popularise their early use....


Repo: There's Too Much Cash

What a time to be alive.

From one of Investment Hulk's friends:

"Goldman says China is no longer center of commodities pricing"

From Reuters via's Successful Farming, May 28:

Goldman Sachs said it no longer saw China as the center of commodities pricing, reasoning the pace of demand recovery in developed markets suggested Beijing as a buyer has been crowded out by Western consumers.

"The bullish commodity thesis is neither about Chinese speculators nor Chinese demand growth. It is about scarcity and the DM-led recovery," the bank said in a note dated May 27.

While commodity prices fell after Chinese warnings over onshore speculation, "the fundamental path in key commodities such as oil, copper and soybeans remains orientated towards incremental tightness in H2, with scant evidence of a supply response sufficient to derail this bull market."

The market is beginning to reflect this, as copper prices are increasingly driven by Western manufacturing data rather their Chinese counterparts, it said.

"This is a role reversal from the bull market of the 2000's, with China now the incumbent consumer as the U.S. was when emerging Chinese demand squeezed out marginal U.S consumers," Goldman said.

China is the world's biggest market for copper, coal and iron ore.

Earlier this month, China's cabinet said Beijing would manage "unreasonable" price increases for copper, coal, steel, and iron ore....


Thursday, May 27, 2021

Battery Metals and Rare Earths: The U.S. Will Use The Slightly Controversial Blanche DuBois Extraction Method

 From the New York Post, May 26:

Biden looking to import materials needed for electric vehicles: report

The Biden administration is considering a plan to import the bulk of the materials needed to build electric vehicles and the batteries that power them instead of mining them domestically — a nod to environmental groups that make up a key part of the Democratic constituency, according to a report. 

The plan under consideration would entail buying the materials from overseas markets and allow US manufacturers to assemble them into batteries or electric vehicles in an effort to create American jobs but still remain in the good graces of environmental groups, Reuters reported on Tuesday.

The plan would allow the US to reduce its dependence on China for the materials, the report said​, but would be a blow to US miners. ​

“It’s not that hard to dig a hole,” ​an administration source told Reuters. “What’s hard is getting that stuff out and getting it to processing facilities. That’s what the US government is focused on.”

The Biden administration’s approach differs substantially from that of former President Donald Trump, who preferred boosting the ability of domestic mines to extract the materials​ by​ streamlining some environmental procedures.

The “federal strategy lays out a blueprint for America to once again be a leader in the critical minerals sector,” ​then-​​Interior Secretary David Bernhardt​ said in a statement in June 2019​. 

“As with our energy security, the Trump Administration is dedicated to ensuring that we are never held hostage to foreign powers for the natural resources critical to our national security and economic growth. The Department will work expeditiously to implement the President’s strategy from streamlining the permitting process to locating domestic supplies of minerals​,” he continued. ​​​

President Biden signed an order in February directing federal agencies to look for vulnerabilities in the supply chains for equipment needed in the battle against coronavirus but also for the materials needed to build large-capacity batteries for electric vehicles. ​

“While the US is a net exporter of electric vehicles, we are not a leader in the supply chain associated with electric battery production. The US could better leverage our sizeable lithium reserves and manufacturing know-how to expand domestic battery production,” the order said. 

The US Commerce Department is putting together a conference next month to attract more electric vehicle manufacturing to the US as part of the administration’s commitment to boost the domestic electric vehicle market with tax credits in the proposed infrastructure package.

Under the Biden administration’s approach, the US would rely on Canada, Australia and Brazil to produce the majority of the raw materials while American businesses would ramp up competition to turn those materials into computer chips and batteries, Reuters reported. 

Nailing down the supply chain for these materials doesn’t require the US to be their primary producer, the report said, citing a source.

According to figures from the World Bank, the US imports of minerals in 2018 relied mainly on Canada, China, Mexico, Brazil and South America.​

But labor leaders, many of whom support Democratic candidates, said they don’t want their workers left out of a lucrative job market.

“Let’s let Americans extract these minerals from the earth,” Aaron Butler of United Association Local 469 union, which does work for Rio Tinto Ltd.’s proposed copper mine project in Arizona and endorsed Biden in the election, told Reuters.

“These are good-paying jobs.”.....


In the final scene of the play A Streetcar Named Desire the character Blanche DuBois says to the psychiatric hospital doctor who has come to take her to the mental institution:

"Whoever you are—I have always depended on the kindness of strangers."

Among the cognoscenti this last line has two meanings: 1) the sadness of the fact she has actually received no kindnesses, only trades for sex and 2) a signal that she has completely broken with reality.

ThoughtCo has a good overview of the received wisdom.

Look, I get it. There are real advantages in trading a depreciating currency for other people's stuff while keeping your own stuff in the ground. 

And you don't have to deal with protesters from your own party at the mine sites.

It's just that, as we've seen over the last year, supply lines are fragile, a weak spot even without unfriendlies doing an interdiction.

Should someone actively attempt to halt transportation it would make the Ever Given snafu look like child's play. As just one example, China has been very active in extending their belt and road initiative in Panama, including a $1.4 billion bridge over the canal and rail and other infrastructure.

And that's just one potential flashpoint. The Chinese influence in Brazil, hitherto based on VALE and  iron ore could potentially go exponential as Brazil expands/modernizes its shipping and rail infrastructure. And then there's Australia...and...

Tune in next week as we use Anna Karenina to explain the administration's American Families Plan:

“All happy families are alike; each unhappy family is unhappy in its own way.”