"Ghost Ships: What happens when ships become data?"

 From Logic Magazine, December 22, 2022:

It seemed like half of Los Angeles had turned out for boat tours at the Port of Long Beach: parents corralling toddlers, couples on dates, even dog owners in line for pet-friendly tours. The port offers free guided tours to the public once a year, a sort of goodwill gesture to the community that has suffered decades of pollution as a result of its activity, and that of the adjoining Port of Los Angeles. After two hours of waiting, I filed onto an erstwhile whale-watching tour boat, where I took in the port’s enormous container ships. Like my fellow tourists, I was excited to get a glimpse of the scale of operations necessary to keep the nation supplied with toilet paper, plastic toys, and every other conceivable good.

Squinting against the sun, I tried to imagine the ships another way: as numbers on a screen, cells in a spreadsheet, dots on a grid. I’d been reading about the information transfer that accompanies the movement of these vessels, and I knew that the scale of this data is nearly as impressive as the ships’ sheer size. Ships like those docked at Long Beach are vital links in the global supply chain, but they’re also floating “data terminals,” as the global maritime industry consultancy Lloyd’s Register put it in 2015. Increasingly, these vessels receive and transmit an enormous amount of information: about their position, of course, but also about weather, traffic, temperature, maintenance, staffing, ocean conditions, and much more. The streams of information are so complex that they threaten to exceed humans’ ability to interpret them. That’s partly why many newer vessels—“smart ships,” in industry parlance—use complex algorithms (some of them devised by Google and Microsoft) to chart their courses. Within the next decade, carriers hope to launch fleets of automated or remote-controlled vessels—“ghost ships,” as they’re sometimes called.

Further away from the port, in office blocks and operations centers, fleet management centers house another tranche of data: information about which containers hold which goods, which ships carry which containers, where those ships are headed, and who paid for what. Elsewhere, “quants” with PhDs in astrophysics collate historical data with information about geography, weather, stock prices, and ship movements, searching for opportunities to place stock market bets on global trade.

At the port, I marveled at the feat of coordination represented by all these containers, all of this loading and unloading. But I also knew something strange about the shipping industry: despite all its technology, global shipping is still infamously paper-heavy. Important documents, like bills of lading and letters of credit, tend to pass physically from person to person, from driver to dockworker to engineer to trucker to warehouse supervisor. While a container moves across the ocean, its accompanying paperwork might literally be flown across the world to meet it.

That’s slowly changing: in the cloistered world of global shipping, a gold rush is taking shape, as companies vie to connect and commodify shipping data. Advanced real-time data about shipping promises to improve the speed and reliability of global logistics. But it could also have other, stranger implications. As ships edge toward automation, the prospect of rich shipping data makes it increasingly possible to imagine a future in which shipping is controlled by machines. And because shipping and banking are so deeply intertwined, better data could attune the movement of cargo near-seamlessly with the priorities of financial markets.

An Industry Built on Paper
Shipping may be unusually dependent on paper, but it’s not for any lack of data. And there are lots of different kinds, including data about ship locations, ships themselves, what ships are carrying, and the buyers and sellers of ship cargo. Ship locations are relatively easy to come by: anyone with an internet connection can monitor the movement of large ships. The UN’s International Maritime Organization requires large vessels to transmit their location information using a VHF-radio protocol called the automated identification system, or AIS. A Google search will yield numerous portals where you can view ship movements in near-real time.

Data about what’s happening on ships is increasingly sophisticated, but it’s usually proprietary, held mainly by the ship operators. The newest shipping vessels are covered with sensors of all kinds, monitoring everything from cargo temperatures to fire hazards to hull conditions. On the bow of a ship’s mast, an anemometer might measure wind speed and direction. On the bottom of the hull, an echosounder can detect the depth of the seabed. In the engine room, meters measure the flow of fuel, monitoring the engines’ efficiency and condition. Increasingly, the data is reported back to shore in near real-time: 5G technology and low-Earth orbit satellites have increased the practicability of worldwide connectivity. This is important, since technologists in the shipping industry envision a near future in which one captain controls a fleet of crewless ships from an onshore computer. But detailed as this shipboard information is, it’s generally not available to anyone outside the ship operators.....

....MUCH MORE

"What Microsoft’s numbers say about the state of the tech economy" (MSFT)

From Seattle's own, GeekWire (also covering Redmond), January 25:

Things really began to change in December.

That’s when Microsoft’s Azure cloud platform started to lose some of its momentum, experiencing “moderated consumption growth,” in the words of Amy Hood, Microsoft’s chief financial officer, on its earnings call Tuesday afternoon.

Microsoft says Azure’s revenue growth was 38% for the quarter overall, adjusted for foreign currency fluctuations. That was already down from 46% growth a year ago. But by the end of December, the growth had slipped even more, to the mid-30% range. And Microsoft says it could drop another 4 to 5 points next quarter.

Many parts of Microsoft’s business are showing signs of a storm. But if its results Tuesday were an instrument for measuring the tech economy, this change in the cloud is as close as the industry will get to a barometer.

“Just as we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize that spend,” Microsoft CEO Satya Nadella said in his prepared remarks to analysts and investors on the earnings call. “Also, organizations are exercising caution given the macroeconomic uncertainty.”

In other words, companies are spending less, and trying to get more out of what they’re spending.

Microsoft was is the first big tech company to report earnings for the quarter ended Dec. 31. Companies including Amazon and Google, Microsoft’s main rivals in the cloud, will report their results next week.....

....MUCH MORE

As good a birds-eye view of what's what as you are likely to find.

Commodities: Rice Looks Nice

On November 7 with U.S. rice futures at 16.75 we posted: 

Commodities: Something's Up With Rice

Following up on October 12's "USDA October 2022 World Agricultural Supply and Demand Estimates (WASDE)":

***

...Two notes on chartology. Wheat, despite the ho-hum report has not (yet) broken the series of higher highs and higher lows while rice is beginning to look interesting from the long side:

Both charts via FinViz (also on blogroll at right). 893 and 16.75 respectively.

Starting late last year there's been a shortage of rice in The Philippines and in parts of Africa.

Then the world's largest exporter, India, halted shipments, although they've recently allowed some exports to foreign customers who had financing in place in September when the export ban was announced.

Sri Lanka's production is a basket case due to a lack of fertilizer, something their great organic adventure did not help and may have caused.

On the other hand the U.N.'s Food and Agriculture Organization (November 4) is looking for 2023 production to be flat but....

On the third hand the International Monetary Fund's quarterly Finance & Development journal interviewed the FAO's Chief Economist and published under the headline:

A Looming Food Crisis
FAO’s Maximo Torero Cullen discusses how global food supply difficulties could tip into a full-blown catastrophe

.... MTC: If the war continues, in 2022 and 2023 we could potentially have a food access problem coupled with a food availability problem, because Ukraine and Russia would significantly reduce their exports, including fertilizers. This is a situation we have to avoid. Under the current conditions, we estimate Ukraine could reduce their exports of wheat and maize by around 40 percent, and Russia might do something similar.

We are also observing that, because of the increase in the cost of fertilizers, rice production has been affected for next year, and prices are starting to rise. In addition, a poor monsoon season is potentially affecting rice sowing in India. These developments pose risks because rice is a key staple around the world, including in sub-Saharan Africa.

If I had a say in which countries should have access to fertilizers, the key exporters of rice would be a priority, because they will supply the rice we need to minimize food access problems in the next year....

Unfortunately, American rice futures, chart above, are a very thin market, the largest open interest is in the January 2023 contract, 6000 total. 

And should India lift the export ban, even with flat production prices would tumble, which is why we have the "on the other hand" type of post.

*****

Well, wheat definitely broke the series of higher highs/higher lows, and now, with U.S. rice futures having settled at 18.26 on Friday, we see at ZeroHedge :

Friday, Jan 27, 2023 - 09:45 PM
Thai Rice Prices Jump As Global Food Crisis Reignites

Soaring rice prices is the latest example of persistent food inflation. The grain is responsible for feeding billions of people, and prices were relatively stable last year while wheat soared until now.

Since November, Thailand's white rice prices jumped to two-year highs, up 23% to $523 per ton. 

....MUCH MORE

I don't know about "global food crisis" (yet) but something is going on in rice markets.

Poker+ "Eat, Pray, Know When to Hold ’Em: A Profile of Annie Duke"

From The Los Angeles Review of Books, January 26:

IN 2004, Annie Duke won the first televised world championship in poker. She would later say that, even though she had been playing for a decade at that point, she felt like an imposter when she arrived as the only woman in the arena. Something like three percent of professional poker players were women when she started, and the numbers have never shifted all that much. The 2004 ESPN event was poker’s coming-out party to national audiences. The game looked like it might have a future as a legitimate, professionalized pursuit, and the pressure on Duke was immense. On live television, lipstick cameras would display each player’s hand to the audience. “[M]y mistakes were no longer going to be private to me,” Duke worried on a 2015 podcast appearance. She felt like she might be exposed, “that everybody was right and I was actually a terrible player. […] I was bad and I had just gotten lucky and now everybody was going to know it and what they were saying was true.” She had bangs and wore a black UltimateBet hoodie, but not sunglasses or a hat. You could see her pale face, tense but serious, through every hand.

Early in the tournament, Phil Hellmuth, then and now a feared champion, berated Duke for folding on a pair of 10s. She had studied the other players, and she thought she had caught one of their tells, a physical tic that gave away his hand. In the moment, Duke felt she had made the right decision. But Hellmuth’s dressing-down got to her. She started tilting, the term in poker for an emotional state where players stop being able to step back from the game and start making bad decisions. She already felt like she had been invited as a token girl, like she was out of her league. And when Hellmuth questioned her, she started to question herself. On break, she tried to pull herself together.

And she did. Duke was able to turn stereotype threat into what NPR’s Hidden Brain called a “stereotype tax.” She took the chauvinistic idea that a girl can’t bluff and leveraged it against the men at her table. During the final hands, when it was just her against Hellmuth, Duke turned on the charm. You can hear it even in the timbre of her voice, when she tells him how well he’s playing, or when she says she feels so lucky to be there.

Hellmuth didn’t think she could bluff him. So he went in hard, and he let the charm offensive throw him off. After Duke’s victory, the camera followed him down a dark hallway as he muttered and cussed to himself in disbelief. He says, “She fucking check-raised me six times, I know she didn’t have it all six times.” This is intercut with Duke laughing and saying, “Oh, my god! I won!” and calling her brother. Hellmuth still can’t believe she beat him. “She had to be fucking 30 to one to win this. I love Annie but …” and more bleeped-out cussing.

Hellmuth got played....

....MUCH MORE

FTX—Sam Bankman-Fried's Mother: "The philosophy of personal responsibility has ruined criminal justice and economic policy. It’s time to move past blame"—Barbara H. Fried

Following on yesterday's "Sam Bankman-Fried’s Mother and Brother Not Cooperating With Financial Probe, FTX Lawyers Say".

Sam's mom is a law Professor. Here's her mini-bio at the Stanford Center on Poverty and Inequality.

From Boston Review June 28, 2013, some of Ma Fried's thinking:

 

Beyond Blame

Barbara H. Fried

In an article published shortly before his death, the political scientist James Q. Wilson took on the large question of free will and moral responsibility:

Does the fact that biology determines more of our thinking and conduct than we had previously imagined undermine the notion of free will? And does this possibility in turn undermine, if not entirely destroy, our ability to hold people accountable for their actions?

Wilson’s answer was an unequivocal no.

He has lots of company, which should come as a surprise given what scientific research into the determinants of human behavior has told us over the past four decades. Most of that research, as Wilson says, points to the same conclusion: our worldviews, aspirations, temperaments, conduct, and achievements—everything we conventionally think of as “us”—are in significant part determined by accidents of biology and circumstance. The study of the brain is in its infancy; as it advances, the evidence for determinism will surely grow.

One might have expected those developments to temper enthusiasm for blame mongering. Instead, the same four decades have been boom years for blame.

Retributive penal policy, which has produced incarceration rates of unprecedented proportions in the United States, has been at the forefront of the boom. But enthusiasm for blame is not confined to punishment. Changes in public policy more broadly—the slow dismantling of the social safety net, the push to privatize social security, the deregulation of banking, the health care wars, the refusal to bail out homeowners in the wake of the 2008 housing meltdown—have all been fueled by our collective sense that if things go badly for you, you’ve got no one to blame but yourself. Mortgage under water? You should have thought harder about whether you could really afford that house before you bought it. Trouble paying back your college loans? You should have looked more carefully at job prospects for sociology majors before you took out the loans. Unless of course “you” are “me,” in which case the situation tends to look a bit more complicated.

This has also been a boom time for blame in moral and political philosophy, partially in reaction to John Rawls’s A Theory of Justice (1971), which is widely credited with reviving these fields. Rawls focused not on personal responsibility but on ensuring fair conditions that would create opportunities for everyone to pursue their aims. Within a decade, however, Rawls’s theory was under attack from the left and right for giving insufficient attention to personal responsibility and associated attitudes toward blame. On the right, Robert Nozick’s 1974 Anarchy, State, and Utopia heralded a major libertarian revival, centered on individual rights and individual responsibility. On the left, Ronald Dworkin proposed an alternative to Rawls’s vision of liberal egalitarianism, one that brought personal responsibility into the egalitarian fold. On the one hand, Dworkin argued, our fate should not be shaped by “brute luck”—circumstances, whether social or biological, not subject to our control. But as to anything that results from our choices, blame away. As the philosopher G. A. Cohen said of Dworkin’s argument, it has “performed for egalitarianism the considerable service of incorporating within it the most powerful idea in the arsenal of the anti-egalitarian right: the idea of choice and responsibility.”

Why exactly are we trying so hard to make the world safe for blame? What have we gained and what have we lost in the effort? And is there an alternative?....

....MUCH MORE

A couple of the pull-quotes:

"Recent decades have been boom years
for blame—our collective sense that if
things go badly for you, it’s all your fault."
***
"Parental income and education are the best
predictors of whether a three-year-old will
end up in the boardroom or in prison."

 

In the instant case the latter thesis has not yet been adjudicated in a court of competent jurisdiction.

Information Storage and Retrieval: "The search engine of 1896"

 From The Generalist Academy:

In 1896 Paul Otlet set up a bibliographic query service by mail: a 19th century search engine.

This is the 900th post on this site. Every time I hit a new century I like to write a bit about the nature and history of knowledge itself. For example, a hundred posts ago I wrote about Universal Decimal Classification, an attempt to systematically label and organise all human knowledge. Well, that classification was the head of a much more ambitious endeavour, and today I’d like to explore it a little more.

The end of the 19th century was awash with the written word: books, monographs, and publications of all kinds. It was fiendishly difficult to find what you wanted in that mess. Bibliographies – compilations of references on a specific subject – were the maps to this vast informational territory. But they were expensive and time-consuming to compile.

Paul Otlet had a passion for information. More precisely, he had a passion for organising information. He and Henri La Fontaine made bibliographies on many subjects – and then turned their efforts towards creating something better. A master bibliography. A bibliography to rule them all, nothing less than a complete record of everything that had ever been published on every topic. This was their plan: the grandly named Universal Bibliographic Repertory....

....MUCH MORE

Previously: 

Information Infrastructure: The Filing Cabinet

I admit it. I get a bit obsessive with information storage and retrieval. As noted in an April 2020 post:

This is a couple months old but if I don't post it now it may not re-emerge from the link-vault in my lifetime.
(filing systems: very important you remember how things were indexed and cross-indexed)* 

*You may think of your filing system as a thing of beauty:

 Strahov Library, Prague via Wikimedia

When it has actually morphed, without your noticing, into something like this:

Central Social Institution, also Prague, via Vintage.es

And today's story from Places Journal, May 2021:....

Ye Olde Artisanal Information Retrieval Algorithm Shoppe

And many more. If interested (and who wouldn't be?) use the 'search blog' box. upper left.

Where Do You Go To Get Your $15 Million Violin Repaired?

From Chicago Magazine, January 17:

The Violin Doctor
He’s trusted to repair some of the world’s most fabled — and expensive — instruments. How does John Becker manage to unlock the sound of a Stradivarius?

It’s a few minutes past 10 in the morning, and John Becker stands just inside the door to his company’s office in the Fine Arts Building downtown. He wears a black workman’s apron, which he fits to his body by wrapping the ties around his torso twice. With his shoulders slightly hunched, he quietly observes the almost surreal scene unfolding before him.

A few feet away, Joshua Bell and James Ehnes, two of the most prominent solo violinists on the planet, hover over an Arts and Crafts–style wood table. Normally, Bell, a former child prodigy known for his virtuosic, animated playing, and Ehnes, a musician’s musician celebrated for his technical prowess, would be the superstars in the room. Both have won multiple Grammy Awards, and between the two of them, they have performed in nearly every major concert hall and with all the best orchestras in the world. But here, in Becker’s studio inside his office, another icon takes center stage.

“I’m really nervous and excited,” says Bell, his hands stuffed in his pockets. “It’s like meeting my wife again after two months. I’m a little overwhelmed.”

“Oh yeah, I understand the feeling,” Ehnes chimes in, his tone nearly giddy. His eyes are set on an object perched on a gray cloth that covers the tabletop. “I’ve never seen this violin before. It’s incredible. It’s so beautiful.” He pauses as though to take in every contour. The spruce wood — a swirl of orange and red hues — glows under the morning light. “It’s stunning.”

The violin in question belongs to Bell. The 310-year-old instrument, which Bell has said is worth as much as $15 million, is among the roughly 650 made by the renowned 18th-century Italian craftsman Antonio Stradivari that survive today. Bell left it with Becker for repairs, and over the past two months, the master luthier applied protective polish to preserve the original varnish, removed the top to make internal repairs, and handcrafted several cleats to reinforce tiny cracks in the wood. Bell has flown in from New York to retrieve the violin, which has been his concert instrument since 2001, before he departs on a tour of South America and Italy.

Ehnes plans to leave his own Strad with Becker for more minor repairs — a bridge adjustment, a varnish touchup, a new sound post — which will take only a day. The Canadian has made this essential stop before heading to concerts in South Korea and Japan.

Becker turns to Bell and asks if he wants to give the violin a try. It may look beautiful thanks to the fresh polish, but after 213 hours of painstaking work, the true test is how it feels and sounds.

“Yes, I do,” Bell responds, eagerly picking up the instrument.

Becker doesn’t play violin, but his ears are more attuned to the famed sound of Stradivarius instruments than perhaps anyone else’s in the world. He steps back as Bell raises his bow.....

....MUCH MORE

"Managing Decline: The Economy of Value Extraction"

Jobs ChatGPT will never do, old brand packaged food management, followed by Private Equity "lever it up, strip it out" bankruptcy bust-outs:

March 7, 2017
M&A In European Food

I'm not sure that consumer packaged goods is the area to be in, at least not in the U.S. and not based on names like Kellogg or General Mills.
For a quarter-century those manufacturers ratcheted prices as though they were tobacco companies but people find it easier to give up their Cheerios than their cigarettes.
The managements milked that approach for pretty much all it was worth so, as operating entities, they aren't all that attractive but someone will decide the only thing left to do is to asset strip or dividend recap the life out of the former cash cows.
Top o'the market to ya.... 

A repost from June 6, 2020, days of covid, riots in the streets and none dare call it capitalism. Some things never change.

The first named author, Wm. Lazonick, has appeared on the blog a couple times, a very interesting guy.
From American Affairs Journal, Summer 2020 / Volume IV, Number 2:

REVIEW ESSAY
How the Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored
by William Lazonick and Jang-Sup Shin
Oxford University Press, 2019, 256 pages

As I sit down to write, the coronavirus has completely paralyzed the U.S. economy. At this juncture, most conversations that are not about the plague seem a little off point. But some—like the ones in William Lazonick and Jang-Sup Shin’s recently published book, Predatory Value Extraction—are having their moment, too. Yes, it’s time to talk about share buybacks. Because they are, as Lazonick and Shin argue so persuasively, key to capitalism’s future. When we’re rebuilding whatever it is we have left after this is over, we should probably leave buybacks out of it entirely.

While the book takes aim at an entire ideology of corporate resource allocation, its main argument is the same one Lazonick has been making for years: the American corporation has been looted—legally—via the profligate use of stock buybacks. If you didn’t believe it before, you should have as of March 21, when the airline industry sent a letter to Congress begging the federal government for $29 billion in grants and another $29 billion in loans. If you give us the cash, they said, we will place limits on executive compensation and eliminate buybacks and dividends over the life of the loans. The implication? That they would stop doing the opposite. Over the last ten years, the industry has distributed most of its free cash flow to shareholders via buybacks (and some companies even more than that).

But let’s get back to the book, shall we? If you had acquired a negative point of view about the use of buybacks before the airline bailout, odds are it can be traced to Lazonick, emeritus professor of economics at the University of Massachusetts Lowell and currently president of the Academic-Industry Research Network. His September 2014 essay in Harvard Business Review, “Profits without Prosperity,” pushed the debate about the merits of buybacks into the public square. It was the kind of article that gets you a book contract, and—voilà!—a little over five years later his collaboration with Shin, an economics professor at the National University of Singapore, landed on bookstore shelves.

There’s a sureness to the book’s narrative that makes it clear that Lazonick has told it many, many times. That’s a good thing, because even as the tone from the corporate suite has begun to sound a little more progressive of late, the fact of the matter is that the looting continues unabated. And now here we are, being blackmailed into opening the public purse to the very same people who have just finished looting the corporate one.

What is the book’s main argument? During the middle of the twentieth century, America’s largest companies engaged in a retain-and-reinvest strategy; they were value creators. As they’ve shifted, over the course of the past several decades, to one of downsize-and-distribute, they have become value extractors. “[The] relation between value creation and value extraction within major business corporations has become unbalanced,” they write, “and, given the importance of big business to the U.S. economy, this imbalance has affected the entire U.S. economy.”

We’re talking about how we share the “gains of innovation”—if companies reinvest, they share those gains with employees in the form of greater employment security, higher incomes, and greater benefits. When they simply distribute excess cash (or, worse, borrow in order to distribute), they are favoring shareholders above all others. We’ve been leaning that way since the 1980s, but the size and proportions of the distributions are getting a little ridiculous. That’s where buybacks come in. In good times, companies use them to increase demand for their shares in the market, in order to prop up the prices of those shares. That’s drawn a horde of greedy outsiders—primarily hedge funds and institutional investors—who have conspired, not through plotting but simply through their actions—to keep the buyback machine well oiled.

In doing so, they deprive companies of the ability to summon what Lazonick and Shin call “the social conditions of innovative enterprise”—strategic control, organizational integration, and financial commitment. It’s a persuasive story that can be summarized as “if you spend all the money on supporting your share price, you aren’t going to have much left to position the company for the future.” I agree with that. Of course, there is no guarantee that a company that’s trying to innovate will be successful. But I think we can agree that a company that isn’t trying to innovate is unlikely to do so by accident.

Yes, I am aware that this is America, where capital is labor’s king, but Lazonick and Shin are right—things have gotten out of hand. And the size of the theft is so large as to deny our imagination a proper response: how angry should we be that the managerial class has collectively overseen the pissing away of about $4 trillion of corporate resources on behalf of just a single category of stakeholder, the shareholder? Adding insult to injury, it hasn’t just been with organic free cash flow; buybacks are often been paid for with borrowing, too.

Of course, where you stand on this whole issue depends entirely on the altar at which you kneel. Do stockholders deserve more than everyone else? Or are they simply the greediest and most effective interest group trying to get its hands on the fruits of capitalism? Yes, I have read the arguments in support of buybacks. And no, I don’t have time for any of them. They’re all small-ball, taking an unfair system for granted, and asking us to worry that we might kill the patient by taking them off of anabolic steroids and spending the money on healthy food instead. If large-scale public crises are good for anything, it’s that they can provide opportunities to put an end to personal or collective failure. This is one of those times, and buybacks are a collective failure whose time has come....

....MUCH MORE

Our take on buyback's is simpler, perhaps bordering on simplisme:

October 6, 2019
"Share Buybacks and the Contradictions of 'Shareholder Capitalism'”

In the U.S. stock buybacks are just a straight-up tax dodge with the added attraction of boosting shares-based management compensation. If interested see "The Real Reason Stock Buybacks Are a Problem"

The smart kids, members of Phi Scamma Jamma, are still pitching a differential between tax on earned income and tax on capital gains even though the efficacy of capital gains tax breaks in performing their original purposes, investment and job creation, has been declining since the 1970's and is now just an excuse for a loophole. See "TAXES, CAPITAL AND JOBS" for an exceptionally lucid discussion, again, if interested.

And today's headliner, from American Affairs Journal:

In the jargon of finance, America is suffering from a capital allocation problem. The country seems incapable of making the necessary investments to fuel future productivity and growth, or to ensure widespread prosperity. At the government level, public spending on basic research and development as well as infrastructure investment has declined significantly over the past several decades. This trend, of course, should not be surprising, as reducing government spending has been a conscious policy objective for many years, especially (though not exclusively) for conservatives.

Over the same period, however, business investment has also declined. As a percentage of GDP, corporate investment has been in a long-term downward trend since 1980. And this trend is much more pronounced when viewed as a percentage of corporate profits or market capitalization.

This latter fact is particularly problematic for advocates of “free market” policies: if “getting government out of the way” does not lead to more entrepreneurial investment in the private sector, then what’s the point? Indeed, the entire neoliberal/libertarian economic policy toolkit has essentially been discredited by its failure to generate increased business investment in recent decades.....MORE

Back in the olden days they were more direct and perhaps more honest about purloining passing property:

Old school rent extraction device

 

Also on Lazonick: 

Harvard Business Review Announces "The Best Management Article Of 2014"

From Forbes:

Good news: Harvard Business Review has announced that Bill Lazonick is the 2014 HBR McKinsey Award winner for the best HBR article in 2014 for his brilliant, hard-hitting piece, “Profits Without Prosperity” (September 2014 HBR). Lazonick is a professor of economics at the University of Massachusetts Lowell, where he directs the Center for Industrial Competitiveness.

In the article, Lazonick described the horrifying impact of massive stock buybacks: net disinvestment, loss of shareholder value, crippled capacity to innovate, destruction of jobs, exploitation of workers, runaway executive compensation, windfall gains for activist insiders, rapidly increasing inequality and sustained economic stagnation. Lazonick’s article explained with quantitative detail why buybacks are an economic, social and moral disaster.

The article revealed for instance that share buybacks weren’t done for the most part when stock prices were low: astonishingly, most of the big purchases came when the stock price was high. Why? “Because stock-based instruments make up the majority of executives’ pay, and buybacks drive up short-term stock prices.” These firms are engaged, the article said, in “what is effectively stock-price manipulation.” In September 2014, The Economist called them the “corporate cocaine.”...MORE

Here is Profits Without Prosperity, HBR, September 2014 

"She chose freedom"

From the BBC, January 24, 2018:

A domesticated cow escaped from her farm and spent the winter with a herd of wild bison in Poland's Białowieża Forest.

She 'chose freedom', says a local scientist https://t.co/KXu90vZC7S

— Notes from Poland 🇵🇱 (@notesfrompoland) January 24, 2018

Both our headline and the BBC link are from a Jan 20, 2023 Notes from Poland story, "Unprecedented herd of 170 bison spotted in Poland" on the herd that coalesced this winter of 2022 - 2023.

The Tesla Short Squeeze (TSLA)

These sorts of moves can cripple you financially or at minimum make you question your understanding of life and your place in the universe.

Or something. The stock is up $19.09 (+11.91%) at $179.36. That's on top of Thursday's $15.84 (10.96%) gap up. Total +$34.93 (+24.19). Keeping in mind that his is a $565 billion market cap, I wouldn't touch it here.

From ZeroHedge:

The Squeeze Is On: Tesla Shares Rocket Higher, Now Up 20% In Two Days, MS Re-its "Top Pick

Tesla shares have continued to move sharply higher since the company's earnings report this week, with shares now over 70% higher than recent lows that were made just weeks ago.

Shares caught a tailwind when earnings this week were far less catastrophic than many on the street anticipated. Shares had been crushed, falling more than 70% from peak to trough over the last year and setting up an environment where shares could whipsaw higher, carrying out shorts, on any better than expected news. 

Recall, for the quarter, Tesla reported:

• Revenue was a record $24.318BN, up 37% Y/Y, beating the consensus estimate of $24.1BN

• Adj EPS $1.19, up 40% Y/Y, and also beating the consensus estimate of $1.12

• Free cash flow $1.42BN, down 49% Y/Y, and missing estimates of $3.13BN

• Capital expenditure $1.86 billion, up 3%, missing estimates of $1.9 billion

Bottom line: Tesla reported better-than expected profits amid growing skepticism about the auto industry, and signaled strength as it faces growing questions about demand for its all-electric vehicle lineup. Today's squeeze is also being helped along by what appears to be retail piling back into the stock via massive, near dated call buying:...

....MUCH MORE, they really hit all the highlights 

As always we, the directionally challenged, thank the Tyler Durdens (for they are multiple) for the arrow on the chart.

"Party City: volatile helium costs forces retailer to rethink its business" (PRTY)

As foretold by that woman in Delphi.*
Or London.
Or Davos.

Or wherever oracles hang out.

From the Financial Times:

Bondholders’ plan to swap debt for new equity will help insulate company from worst effects of price swings

The air has leaked from Party City’s balloons, in more ways than one. Filing for bankruptcy this month, Party City cited the usual factors troubling US retailers such as higher expenses for freight and labour. But the purveyor of banners and festive paper plates has a unique challenge: commodity risk.

Party City is best known for its helium balloons and the price of the gas has jumped. Worse, the company’s overall total debt load of $1.8bn far exceeds its current profitability. A plan by Party City’s bondholders to swap their debt for new equity will repair its balance sheet and help to insulate it from the worst effects of helium price swings.

A series of supply shocks in 2022 among suppliers in Russia, Qatar and the US has sent prices of helium — a byproduct of natural gas production — skyrocketing. Helium production in the US in part comes from the federal government’s Bureau of Land Management. Its facility in Texas was shut for months in 2022, which only added to the mayhem in the helium market. The US government selling price for helium in 2022 at one point neared $600 per thousand cubic feet, more than double the price in 2019....

....MUCH MORE

* 

The Blind Spot takes a closer look at the epic fallout in the helium and neon market, where prices were already being squeezed due to a failure in the strategic US reserve before Putin invaded. $$ Paywall https://t.co/pRlRjNBYpv

— Izabella Kaminska (@izakaminska) March 10, 2022

There’s a major crisis brewing in the noble gas markets - specifically in neon and helium - and it will have a meaningful impact on critical industries from semiconductors to defence and aerospace. Here’s my deep dive ($$) into what’s going on: https://t.co/lOZNvcGLDH

— Izabella Kaminska (@izakaminska) May 1, 2022

Neon too. The joy is going out of our lives.

I used to say "that's funnier than three helium atoms: HeHeHe" No more

Last seen in December 2021's ""The Race to Find ‘Green’ Helium" (figure it out, make yourself a billionaire)"

How Can We Have A Bear Market Rally? Because Financial Conditions Aren't Getting Tighter, Au Contraire....

....financial conditions have been getting looser since October 7.

Here's the Chicago Fed's National Financial Conditions Index (NFCI) via the Federal Reserve Bank of St. Louis' FRED database. The zero line marks neutral, below zero conditions are loose, and for the last three months they've been getting looser.

Here is the Chicago Federal Reserve Bank's methodology and current data page.

"Sam Bankman-Fried’s Mother and Brother Not Cooperating With Financial Probe, FTX Lawyers Say"

From CoinDesk, January 26:

Seeking to locate allegedly misappropriated funds, the lawyers from the bankrupt crypto exchange have gotten some answers from the founder's father. 

At least some of Sam Bankman-Fried's immediate family aren’t cooperating with the probe into the collapsed crypto exchange FTX and should be cross-questioned in court, the company’s lawyers have said in a legal filing made Wednesday.

The FTX founder’s brother, mother and father were his “advisors,” and should be subpoenaed alongside former company executives as the company’s new management seeks to find out what happened to allegedly misappropriated funds, the filing said.

“The Debtors and their advisors have been working tirelessly and nonstop over the last 70 plus days … to implement controls, recover and protect estate assets,” said the legal filing made jointly by FTX and creditor representatives. “Key questions remain, however, concerning numerous aspects of the Debtors’ finances and transactions," the filing continued.

FTX wants to know who received potentially stolen funds from FTX, and what communications they had with its executives – but alleges that some potential witnesses aren't playing ball despite requests to cooperate voluntarily.

Sam Bankman-Fried’s mother, Barbara Fried, “has ignored the requests altogether,” the attorneys say, while “the debtors have not received meaningful engagement or any response from [former chief engineer Nishad] Singh or Mr. Gabriel Bankman-Fried,” Sam’s brother....

....MUCH MORE

 They have secrets. And the secrets extend all the way from Stanford to Washington D.C.

Capital Markets: "Subdued Ending to a Quiet Week, Ahead of Next Week's Fireworks"

 From Marc to Market:

Overview: Leaving aside the Australian dollar, which is benefiting from the optimism over China's re-opening and a reassessment of the trajectory of monetary policy after a stronger than expected inflation report, the other G10 currencies traded quietly this week and are +/- less than 0.5%. The risk-on honeymoon to start the year remains intact. The MSCI Asia Pacific Index has risen every day this week and index of mainland shares that trade in Hong Kong rose nearly 6.3%. This suggests positive impulses for Chinese stocks when the mainland markets re-open Monday. Europe's Stoxx 600 is up about 0.5% this week. In the US, the S&P 500 closed above the downtrend line from January 2021 and made new highs for the month yesterday. US stock futures are trading with a slightly heavier bias now. 

Bond markets are under some pressure today. Benchmark 10-year yields are 5-10 bp higher in Europe and with few exceptions are higher on the week. The 10-year US Treasury yield is up about five basis points near 3.55%, which is slightly below the week's high. Crude oil is firm with the March WTI contract above $82. This month's high is a little higher. It settled near $81.65 last week and, barring a setback, it would be the third consecutive weekly gain and the sixth in the past seven weeks. Meanwhile, the average price of US retail gasoline continues to drift higher and around $3.50 is up about 9.5% so far this year. Yesterday's US GDP figures reduce the chance of surprise from today's personal income and consumption reports, including the deflators. The University of Michigan reports its final January confidence and inflation expectation survey results. The focus is on next week's Fed, ECB, and BOE meetings, and the US jobs report....

....MUCH MORE

There's Brave, There's Crazy Brave and Then There's Witold Pilecki Sneaking Into Auschwitz

 A repost from September 2017:

Tomorrow (September 19) is the anniversary of Withold deliberately getting himself arrested so he could get into Auschwitz to have a look around, see what the Nazis were up to.

As I noted back in 2014:

At the time Witold entered Auschwitz, late September 1940, it was a medium scale torture and mass shooting concentration camp operation with mainly Polish Christian victims.

Concurrent with the 1941-42 construction of the Aktion Reinhard extermination camps, Bełżec,Chełmno, Sobibór, and Treblinka, Auschwitz II-Birkenau was built adjacent to the concentration camp and industrial scale mass murder began.

In addition to surviving 31 months in the camp Pilecki was one of only 900-some people known to have escaped, out of the millions who entered the camp.

After his escape he went to Warsaw to help organize the Polish resistance that culminated in the Warsaw Uprising of 1944.

After the Germans surrendered Witold was instrumental in developing anti-Soviet intelligence operations....

Somewhere around a third to a half of the people who attempted the escape were successful so 300-400 or so. A point, which in no way detracts from his amazing skills, is that he, and virtually all the rest of the escapees made it out of Auschwitz I. As far as I know only two people made it out of Auschwitz II-Birkenau—simply because it was out of the freight cars, into the gas chambers, up the smokestack, in 6-to-12 hours.

Back to the survival skills, when he went to Warsaw following the escape he initially presented as an enlisted man and only after many of the officers above him were killed did he reveal himself to actually be a Captain of Cavalry/Intelligence.

Somehow he survived the Uprising as well, although captured he continued working for the Home Army and then made his way to Italy.

In 1947 the Soviets thought "This is a very resourceful guy".
So they killed him.

One last thing.
The Poles really, really dislike it when the murder factories are referred to as Polish.
The Reinhard camps were conceived of, designed by and staffed by German Nazis.
And Ukrainians in some places.

To pound the point home they released an amazing piece of scholarship earlier this year, a database of all the known commanders and personnel:
Database containing Auschwitz personnel made available online  404

The lists have up to 57 data fields for each entry, beginning with:

ABE Arthur Walter
ABEL Gustav
ABEL Franz

A whole bunch of Germans. Thousands of 'em.
There are Polish names in there but even in those cases they are often not Poles.
One of the very last names, ZWOLINSKI Stefan, is an example:

Miejsce urodzenia / Geburtsort / Place of Birth: Kimpolung

That's Romanian Moldova (I looked it up)
So don't call them "Polish concentration camps".

On to a Polish guy.
Lifted in toto from VICE:

Witold Pilecki, before his incarceration. 
All photos courtesy of the Rotamaster Pilecki Museum

On September 19, 1940, Witold Pilecki, a Polish soldier, was captured by German SS officers and sent to the concentration camp in Auschwitz. Considering he was a spy, things had turned out exactly as he’d planned. Captain Pilecki's mission was to organize resistance from within the most horrific symbol of the Holocaust, send information to the Allies, and record the horrors he witnessed for the sake of history.

Pilecki arrived in Auschwitz sometime in the evening between September 21 and 22, 1940, and described what he found as "another planet"—a hell in which every building's walls were covered in swastikas and corpses lay everywhere. Pilecki went on to live in inhumane conditions for nearly 1,000 days and become the first person to inform the Allies about the appalling conditions of detention and the atrocities committed by the Nazi regime.

Pilecki’s comprehensive 1945 report on his undercover mission was published in English in 2012 under the title The Auschwitz Volunteer: Beyond Bravery. Yet, for some reason, his story still isn't widely known. I wanted to know more about the career of this exceptional man, so I got in touch with the people who recently translated the book in French—former director of the AFP bureau in Warsaw, Urszula Hyzy, and Patrick Godfard, who is a professor of history.

VICE: The book was published in English in 2012, with the New York Times describing it as "a historical document of the greatest importance." How come it was only translated to French now?

Urszula Hyzy and Patrick Godfard: Pilecki was a "disturbing" character for the Allies, who pretended for a long time not to know what was happening in the camps, and for the Communists, who were responsible for his death in 1948. In communist Poland, it was forbidden to talk about Pilecki and his children were barred from higher education.

The Auschwitz Volunteer remained in the archives of the Polish Underground Movement Study Trust in London [Studium Polski Podziemnej] before being discovered by the historian and former prisoner Józef Garlinski, who wrote Fighting Auschwitz: The Resistance Movement in the Concentration Camp in the 1970s. It was not until after the end of the Cold War that the book was published in Poland.

....MUCH MORE, unfortunately the picture links have rotted so here's a colorized version of his camp identification photo set via another source:

Auschwitz Liberation Day, January 27, 1945

When the Jews say "Never again" I believe them, and I think of this scene in Poland:

Those are Israeli F-15's flying over the site of the German death camp, Auschwitz, at Oświęcim Poland, September 4, 2003. The Israelis had been invited to an air show commemorating the 85th anniversary of the founding of the Polish air force.

"MAD VLAD Putin plotting to ‘grab US weapons left behind during Afghan evacuation and seized by Taliban’, Kremlin insider claims"

From The Sun, January 24:

VLADIMIR Putin is plotting to grab weapons seized by the Taliban during the US evacuation of Afghanistan, a so-called Kremlin insider claims.

The Russian tyrant is reportedly in the midst of negotiations with the terror group to recognise the Taliban government.

In return, Putin wants US equipment snatched from Afghanistan by the Taliban to be handed over, according to Telegram channel General SVR, which claims to be fed information by a Kremlin insider.

US troops scrambled to withdraw from Afghanistan in August 2021 as the Taliban surged across the war-torn nation in a matter of weeks.

At the same time as seizing regions, militants plundered stocks of Western artillery.

It is thought Taliban fighters may have stolen as many as half a million US weapons and up to 50,000 vehicles....

....MUCH MORE

The pictures are pretty whack, as the kids used to say.

Turnabout Is Fair Play: The Time To Invade Canada Is Now! (apparently their tanks don't work very well)

Fair is fair.*

From the National Post, January 25: 

How Canada sabotaged its own fleet of tanks 

Maybe the reason we can't provide tanks to Ukraine is because a decade of neglect has rendered a significant portion of our tanks inoperable  

When asked last week about whether Canada will send tanks to Ukraine, Prime Minister Justin Trudeau said, “We’re not there yet.” As it turns out, maybe the reason we aren’t “there” is because a decade of neglect has rendered a significant portion of our tanks inoperable.

To understand how Canada managed to sabotage its own fleet of tanks, it is important to understand some history.

In the mid-1970s, then-prime minister Pierre Trudeau reluctantly refreshed Canada’s arsenal of tanks by purchasing new Leopard 1 tanks from West Germany. Our NATO allies had demanded that Canada maintain a presence in Europe to deter a possible Soviet invasion, so procurement was primarily driven by foreign policy, not military, concerns.

Then, the Cold War ended and, throughout the ’90s, the Canadian Armed Forces (CAF) debated whether to switch to medium-weight heavy vehicles, which are nimbler than tanks but also more fragile. The debate was fraught, as critics argued that lighter vehicles would inadequately protect Canadian personnel.

In 2003, Canada decided to decommission the Leopard 1s and shift away from using tanks more generally, but was prevented from doing so by the war in Afghanistan. Fearful of casualties stemming from inadequate armour, Canada sent its Leopard 1s to the Middle East but quickly realized that newer vehicles were needed.

Ottawa subsequently purchased a fleet of over 80 slightly-used Leopard 2 tanks (a newer, but nonetheless decades-old model) from the Netherlands. The fleet cost $650 million to acquire and was expected to cost another $650 million to maintain over 20 years.

As with the preceding fleet, the purchase of the Leopard 2s had a political dimension — the continued use of tanks was seen as critical for maintaining Canada’s perceived commitment to its allies.

When Canada concluded its Afghan combat operations in 2011, the tanks were put into storage and essentially abandoned. There isn’t much public information on what happened over the ensuing decade and media coverage on the state of the tanks has been virtually nonexistent.

However, in recent years, the Canadian Forces College has published two academic papers alleging that chronic under-investment in maintenance has left Canada’s tank fleet “barely usable.”....

....MUCH MORE

And from the turnabout is fair play file:

• Canada's secret plan to invade the US: How gung-ho 1920s colonel planned to take Detroit, Seattle and Portland in five-pronged attack over $22 billion debt row 
• Canadian colonel formulated plan to invade US after traveling to Vermont in a disguise for intelligence research
• Defense Scheme No. 1 would have taken cities such as Seattle and Detroit
• US had own plan to take over Halifax and cut Canada off from Great Britain
• Charles Lindbergh flew spy mission over Hudson Bay, recommended the use of chemical weapons
• New book War Plan Red details conflict between the two neighbors

The United States and Canada have been described as the closest of allies, though tensions between the two countries as recently as 80 years ago saw Canada mock up invasion plans against its southern neighbor.

The beginning of the 20th century saw both the US and a Canadian lieutenant colonel formulate plans to send soldiers into each other's heartlands in the event of war.

A new book titled War Plan Red by Kevin Lippert details the long history of conflicts between the two North Americans nations, which included spy missions flown by famed aviator Charles Lindbergh....

....MUCH MORE 

Okay, not the most accurate map. I can imagine some slightly bewildered Canuck down on the Kentucky - Ohio border asking the way to Detroit, eh.

One concern though, should the U.S. move on Toronto and environs (nice 'hood):

"How quickly could Canada build an atomic bomb?"

Somehow related:

"That time the US President, an expert in nuclear physics, heroically lowered himself into the reactor and saved Ottawa, Canada’s capital?"

Tesla Stock UP 6.5% In Early Pre-Market Action (TSLA)

Last $154.16 up $9.73 (+6.74%)

One of the more interesting bits in the 8K filing (and slide deck) was "Energy Storage" up 152% year-over-year in Q4. Elon is successfully building an entire new business inside of Tesla.

From TheStreet, January 26:

Tesla Stocks Soars As Bullish Musk Pushes Case For Big 2023 Gains After Q4 Earnings Beat

"If it's a smooth year, actually, without some big supply chain interruption or massive problem, we actually have the potential to do 2 million cars this year," said Tesla CEO Elon Musk.

Tesla  (TSLA) - shares surged higher in pre-market trading after the carmaker posted better-than-expected fourth quarter earnings and vowed to exceed its own forecast of a 50% annual delivery growth rate over the long term.

CEO Elon Musk also said orders for the month of January to date were "the strongest in our history" and were nearly twice the rate of Tesla's global production, adding that without disruption, the company could deliver 2 million cars this year.

The group's stated forecast, however, calls for a delivery target of 1.8 million, a 37% increase from last year's levels that clashes with its 50% forecast but comes amid what Musk predicted will be a "pretty difficult recession this year."

"There just always seems to be some freaking force majeure thing that happens somewhere on earth," Musk told investors on a conference call late Wednesday. "And we don't control if there's like earthquakes, tsunamis, wars, pandemics, etc."...

....MUCH MORE

The stock is now up more than 50% from the $101.81 low on January 6, though it still needs to more than double to get back to the glory days pricing of November 2021.

BigCharts 

Yesterday: "Tesla Earnings Top Forecasts, Musk Vows 50% Annual Growth Rate; Margins Narrow On Price Cuts"

Capital Markets: "Euro Closed above $1.09 but Follow-Through Buying Limited"

From Marc to Market:

Overview: After some intraday penetration, the euro finally settled above $1.09 yesterday. However, follow-through buying has been limited and technical and option-related resistance is seen in the $1.0940-50 area. The dollar is more broadly mixed today, with the dollar-bloc and Norwegian krone leading the advancers. The euro, yen, and sterling are nursing small losses near midday in Europe. The recovery of US equity indices yesterday after gap lower openings failed to help most of the Asia Pacific markets. However, the re-opening in Hong Kong saw sizeable gains and South Korea's Kospi continued it advance after re-opening yesterday, despite news that the economy contracted by 0.4% in Q4 22. Europe's Stoxx 600 has recouped the losses of the past two sessions, and US futures are trading with a firmer bias.

Bond markets are under pressure and benchmark 10-year yields are up mostly 3-5 basis points in Europe and US. There is a host of US economic data today and the first estimate of Q4 GDP is the highlight. Also, strong demand has been seen as this year's Treasury auctions and $35 bln of seven-year notes will be sold today. Gold made a new marginal high near $1950 before reversing lower and is now near $1935. There is much attention in the energy space as US natgas prices are below $3 for the first time since May 2021. Europe's benchmark is off for fourth consecutive session and is near its lowest level since September 2021. March WTI is consolidating mostly between $80-$81.

Asia Pacific
China markets do not re-open until Monday, but some preliminary reports on travel, movie-going, and other activities will feed into to the optimistic narrative. The early findings suggested improvement year-over-year. On the other hand, some observers are concerned about a surge of Covid post-holiday and in rural parts of the country with less medical infrastructure. Still, the optimism about post-Covid Chinese economy seems to be a strong conviction idea rippling through some industrial metals like copper and iron ore, and helps explain the strength of the Australian dollar, Brazilian real, and Chilean peso. Before the Lunar New Year, the Chinese yuan was nearly flat for the year (~0.15%). 

The IMF's Deputy Managing Director Gopinath seemed critical of the Bank of Japan's December surprise, urging it to communicate more clearly about its policy intentions. She warned of the upside risks still to Japanese inflation and advocated a more flexible approach to managing its Yield Curve Control. She suggests three possible options to allow more flexibility around the long-term JGB yields, 1) widen the 10-year yield band, 2) shorten the yield curve target (which the IMF had previously suggested), and 3) shift back to a quantity target of JGB purchases. That said, the IMF expects core Japanese inflation (excludes fresh food) to peak here in Q1 and gradually fall back to below 2% by the end of next year. It projects growth this year in the world's third-largest economy at 1.8% and then slowing to 0.9% next year....

....MUCH MORE