Monday, January 29, 2024

"Spoilage alert: Red Sea crisis hits Europe’s fresh food trade "

Following on January 28's "Mandy Rice-Davies Moment Ahead: 'Biden Adviser Sees Limited Inflation Impact From Red Sea Attacks'".

From Politico.eu, January 26:

Houthi attacks on shipping are disrupting shipments of perishables, with exporters in southern Europe most affected.  

When Houthi missiles began raining down on container vessels in the Red Sea last year, European leaders feared a blowback on energy supplies. Three months on, it’s food that is under fire, with exporters and shippers warning of growing damage to the fruit and vegetable trade.

Shipping companies have halted operations through the strait of Bab el-Mandeb and re-routed around the Cape of Good Hope, adding delays of up to three weeks for transport to and from Europe. Besides a five-fold surge in container costs, that means that fresh produce is more likely to rot en route.

“There is significant risk,” Marco Forgione, director general at the Institute of Export & International Trade, told POLITICO, citing a range of product categories beyond fruits and vegetables. 

From meat and grains to tea and coffee, if the disruption continues it will “tear into the wider food economy,” he argued. Processing is another weak link, with disordered palm oil deliveries slowing down the preparation of higher-value foods. 

Exporters are particularly affected in southern European countries like Italy, Greece and Cyprus. Since their cargoes must now leave the Mediterranean to the west and go the long way round to the Middle East and Asia, many are struggling to get perishables to foreign markets on time, imperiling goods worth billions of euros.

“The lengthening of times can create problems in the preservation of the fresh produce with the risk of losing important slices of the market,” Coldiretti, Italy’s largest agricultural lobby, has warned.

In many cases, the “shelf life of fresh products [does] not allow for lengthening the journey by 15 to 20 days,” Cristian Maretti, president of Legacoop Agroalimentare, which represents Italian farming and food cooperatives, told Ansa....

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The article raises the important point that shipping to-and-from the eastern Mediterranean is terribly affected. So why aren't NATO members Greece and Turkey raising more of a stink?

https://www.researchgate.net/publication/343469963/figure/fig1/AS:960043272900629@1605903561542/Map-of-the-Mediterranean-Sea-and-northern-Red-Sea-Gulf-of-Suez-Three-Mediterranean.png

"BYD misses earnings estimates as global EV demand softens"

From Bloomberg via Yahoo Finance, January 29:

BYD Co.’s earnings fell short of analyst expectations as demand for battery-powered cars softened late last year.

Preliminary 2023 net income rose at least 75% from the previous year to between 29 billion yuan ($4 billion) and 31 billion yuan, the company said Monday in a filing with the Shenzhen Stock Exchange. But the total fell short of an average analyst estimate of 31.5 billion yuan.

BYD shares fell about 4%, extending losses over the past year to roughly 37%.

BYD sold 526,409 fully electric cars in the final quarter of 2023, surpassing Tesla Inc. for the first time as the largest seller globally. The growth has been driven mainly by its much broader lineup of cheaper models in China....

....MORE

January 25's "Lithium price plunges on slowing Chinese demand for electric vehicles" from the FT was a 'tell' and a solid analysis.

And January 22's "Nickel prices keep slumping even as mines close

And January 21's "China reins in electric car makers amid fears they will flood the West"

Related January 22: "Electric cars will never dominate market, says Toyota

"Why Did Car Insurance Get So Expensive?"

From Bloomberg, January 25:

Rates in the US have risen 37% since January 2020 as repair tabs for high-tech, sensor-laden vehicles have soared.

Not that long ago, repairing a car after a crash was pretty straightforward: Replace damaged parts, pound bent metal back into shape, touch up the paint and send the driver on their way in a vehicle that looks new. But today’s autos are so loaded with technology and built with such specialized materials that repairing even a minor fender bender can be a tedious and expensive exercise in both computer science and engineering.

“It’s the complexity of vehicles these days,” says Ben Clymer, who co-owns a chain of body shops in Southern California. “Repairing a base model Kia is nothing like it was just a few years ago. It might have 10 different computers and all kinds of sensors.” All that complexity, combined with rising prices for parts, Clymer says, “really creates the perfect storm for higher repair costs.” It’s driving up auto insurance rates at the fastest pace in almost a half-century.

The average repair bill for a traditional vehicle today runs $4,437, according to auto insurance processing company CCC Intelligent Solutions. For an electric vehicle, the average fix is 49% higher, or $6,618, thanks to their added tech gadgetry and the special handling required to work with their electric powertrains.

Insurers—who watched the average collision insurance claim soar 64% from 2018 to 2022, to $5,992, according to the Insurance Information Institute—have moved to offset the higher repair costs by aggressively hiking drivers’ premiums.

The cost of auto insurance in the US rose more than 20% in 2023, the biggest annual jump since 1976, data from the US Bureau of Labor Statistics show. Rates are up 37% since January 2020, adding to an affordability crisis caused in part by the price of cars surging about 30% in that same time frame, to almost $49,000 on average, according to research group Cox Automotive Inc....

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RAND: "The U.S. Must Close the Long-Distance Power Transmission Gap with China"

From the RAND Corporation via The National Interest, January 13:

A 2023 RAND study found that China, as part of its efforts to create a Global Energy Interconnection (GEI), has taken a significant lead on the United States in developing the technologies required to move power long distances. China has emerged as the world’s leader in the transmission technologies needed to connect power grids across regions and even countries. China ranks first in the three of four metrics used to determine national standing on these technology groups. It has also published more academic papers and filed more patents on some of these technologies, such as transmission at ultra-high voltage (UHV) levels and submarine cables than the United States has. And while China has already developed thirty-four UHV lines on its territory, the United States has none.

A 2023 RAND study found that China, as part of its efforts to create a Global Energy Interconnection (GEI), has taken a significant lead on the United States in developing the technologies required to move power long distances. China has emerged as the world's leader in the transmission technologies needed to connect power grids across regions and even countries. China ranks first in the three of four metrics used to determine national standing on these technology groups. It has also published more academic papers and filed more patents on some of these technologies, such as transmission at (UHV) ultra-high voltage levels (PDF) and submarine cables than the United States has. And while China has already developed thirty-four UHV lines on its territory, the United States has none.

The gap in long-distance transmission technologies between the United States and China raises significant national security implications, the first of which is China leveraging its growing commercial and civilian penetration of foreign power grids for espionage or military purposes. China’s growing technological and technical prowess in transmission technologies has enabled Chinese companies to grow their global market share while exporting Chinese technologies and standards abroad, often at the expense of established competitors. As Chinese products and standards flood the market, China could benefit from lock-in effects and become the provider of choice for super grids globally, increasing dependency on China for key clean energy supply chains. Therefore, similar to other energy transition technologies such as solar or batteries for electric vehicles, China’s technological lead may allow it to set market dominance in long-distance transmission.

The U.S. government recently announced a commitment of $1.3 billion to address its transmission needs. The United States should go a few steps further by working to reduce the technology gap with China on long-distance transmission. This would both address its current domestic transmission needs while also mitigating potential national security risks arising from China’s GEI efforts. There is a third benefit here, too: improved transmission infrastructure helps lower power prices and leads to fewer power outages, both of which benefit consumers. Limited transmission capacity, on the other hand, can lead to disaster and even death. It was, for instance, identified as one of the major causes behind the Texas blackouts during winter storm Uri, which caused 246 deaths in 2021.

The United States will also need a transmission expansion to enable its energy transition. The DOE report mentioned above also points out that a high level of renewable energy deployment would, in turn, require a 60 percent expansion of the U.S. transmission system—a challenging goal but one that also presents a significant opportunity. Indeed, regions of the country with relatively low consumption and significant renewable generation already frequently see negative electricity prices....

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Recently:

January 8: "There’s a Shortage of Electrical Wires, Transformers. That’s Good for These Stocks."
January 12: (Big) Batteries: "‘World leading' Tesla battery online to help kick coal out of Hawaii" (TSLA)
January 16: "BlackRock Acquisition Triples Its Business of Building Airports, Roads, and Utilities"

Sunday, January 28, 2024

Mandy Rice-Davies Moment Ahead: "Biden Adviser Sees Limited Inflation Impact From Red Sea Attacks"

Mandy Rice-Davies [was] a former model and showgirl known for her role in the Profumo affair.
When informed by the prosecuting attorney that Lord Astor disputed her version of events and denied having an affair she responded:

"Well, he would, wouldn't he?"

From Bloomberg via gCaptain, January 28:

President Joe Biden’s energy security adviser said the impact of Houthi rebel attacks on commercial ships in the Red Sea is limited and pledged continued US action to curb the Iranian-backed group’s ability to disrupt markets.

Cost pressures have been more on logistics than on energy commodities, Amos Hochstein said on CBS’s Face the Nation on Sunday. “The costs do go up,” Hochstein said. “But if you look at what they impact, the inflationary impacts are relatively muted.” 

Two months of missile, drone and hijacking attacks against civilian ships in the Red Sea have caused the biggest diversion of international trade in decades, pushing up global shipping costs and forcing hundreds of cargo ships to take alternative routes. Yet oil prices are lower than on Oct. 7 when an attack by Hamas militants on Israel triggered a war between the two sides....

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The introduction was from 2012's "Mandy Rice-Davies Sighting at FT Alphaville":

Mandy Rice-Davies is a former model and showgirl known for her role in the Profumo affair.
When informed by the prosecuting attorney that Lord Astor disputed her version of events and denied having an affair she responded:

"Well, he would, wouldn't he?"
From the FT Alphaville post:
Spooks on the payrolls

...The report slipped out onto the DOL website this week. The Associated Press and Bloomberg have already torn it apart. But then, they would....
To the best of my knowledge, Mr. Cotterill is not a former model and showgirl.

We are keepers of the M.R-D flame:
Mandy Rice-Davies Alert: Christina Romer Says Maximum Tax Revenue at 84% Marginal Rate
She would, wouldn't she.*

*For British politicians of a certain age [often referred to as octo or nona-genarians -ed] the scandal surrounding Secretary of State for War John Profumo's affair with the alleged mistress of a Russian spy was highlighted by the testimony of Miss Rice-Davies, a friend of the alleged mistress, Christine Keeler.
From Wikipedia:
While giving evidence at the trial of Stephen Ward, charged with living off the immoral earnings of Keeler and Rice-Davies, the latter made a famous riposte. When the prosecuting counsel pointed out that Lord Astor denied an affair or having even met her, she replied, "Well, he would, wouldn't he?"
We've tried to keep the phrase alive, using it about once per year:

2007
Gore Says Markets are Key in Battle to Combat Climate Change
"Well, he would, wouldn't he?"
Mandy Rice Davies*
2007
ICE, Skating on Thin
TESTIMONY OF JEFFREY C. SPRECHER CHAIRMAN AND CHIEF EXECUTIVE OFFICER, INTERCONTINENTALEXCHANGE, INC.

Warning: Mandy Rice-Davies moment ahead.
"...we do not believe that a complete overhaul of the current regulatory structure is either warranted or advisable."
2008
UN Can Regulate Emissions Trading Without Conflict of Interest
All together now: A Mandy Rice-Davies Moment!*
2009
Major Problems at California's Public Pension Fund, CalPERS And: A Mandy Rice-Davies Moment!
One of these days I'll have to tell the story of how CalPERS got to this point. It is an ugly tale. For now we'll just post the slow motion train wreck.
On a positive note: Mandy Rice-Davies* moment ahead!  
One of my favorite usages:
Lord McIntosh of Haringey:  My Lords, I am proud of many things that this Government have done. I pause to anticipate the interjection—"He would say that, wouldn't he?"...
Lords Hansard text for 6 Feb 2002

"Chinese developer Evergrande to be liquidated after debt talks fail: reports"

From MarketWatch, January 28, 9:41 p.m. ET:

Troubled Chinese property developer Evergrande faces liquidation after failing to reach a restructuring deal with its creditors, according to multiple reports Sunday night.

The Wall Street Journal reported that talks between Evergrande and its creditors began last week with the hope of reaching a deal that would let the company continue to operate, according to the Journal, which cited sources familiar with the matter.

But those talks failed, and a Hong Kong court on Monday ordered the company’s liquidation, in a stunning fall from grace, the New York Times and Bloomberg reported. Evergrande has more than $300 billion in liabilities....

....MUCH MORE

"A roadmap for green metals in 2024"

Something that reads as a bit of an 'advertorial' from Mining.com:, January 25:

Last year was a bloodbath for mining stocks tied to the green energy transition. But with markets rallying in the early part of 2024, ‘green miners’ continue to lag.

Unfortunately, that doesn’t bode well for a sharp turnaround in 2024. Dampening that outlook further is the string of negative news over the last week.

Mining billionaire Andrew Forests’ privately owned Wyloo Metals announced a shutdown of its nickel operations in Western Australia due to falling prices. Lithium giant Albemarle (NYSE: ALB) revealed job cuts and a trimming of its capital expenditure. It also unloaded its stake in Liontown (ASX: LTR) after last years’ failed takeover bid. LTR’s stock price has now plunged more than 44% since the new year.

Even the insiders have lost faith. Pilbara Minerals (ASX: PLS) CEO, Dale Henderson, sold around 1.2 million shares following the company’s latest earnings result.

But to get a handle on what 2024 looks like, we should first clarify why green metal stocks sold down so heavily in 2023.

You see, mega renewable energy projects are expensive. So too are the mining developments which supply the raw materials for these metal intensive projects. Given we’ve just embarked on one of the most hawkish monetary regimes in modern history, it explains why the sector plummeted last year.

But according to the former chief of commodities at Goldman Sachs, Jeff Currie, ‘green’ metals could return with a vengeance this year. That’s based primarily on expected rate cuts.

You see, rising rates have diminished the public’s appetite for extravagant renewable mega-projects. It’s perhaps one of the reasons why crude came back into focus last year. Fossil fuels are energy dense, making them a relatively cheap option. We could also add uranium to the list, another energy-packed commodity that can supply reliable, base load power....

....MUCH MORE

If rate cuts are the driver we get into all sorts of effects. Lower costs for large solar and wind arrays also mean lower costs to bring new mines into production - though doing the latter can take ten years just to jump through the regulatory hoops. 

Additionally, rate cuts would have an almost instantaneous depressant effect on the currency, a reaction that might be better captured by silver than by copper.

Also, should the grid go down, having a bag of junk silver coins might keep the fam from starving as you ponder your next move toward global domination. And more efficiently than your kilo bars of gold. There's something to be said for divisibility into smaller units of trade.

Finally, it is at this point that the hard-cores chime in with "Lead, go long lead in the form of bullets."

Of course if they were for real and not play-acting they'd be chasing down the quasi-mythical .50 caliber depleted uranium ammo.

Which brings us right back around to green power. CCJ for the timid and "NAC Kazatomprom" for the adventurous. Dually listed LSE (KAP) and Kazakhstan Stock Exchange, Astana (KAZP)

Société Générale: "Should the world's central banks (Fed, ECB, BoE...) launch a coordinated "green quantitative easing" programme to simply print the $3.5 trillion a year needed to finance the energy transition?"

Sure, why not? Let me just elbow my way to the head of the line and...ah, Monsieur Cantillon, I knew you'd be nearby.

From Société Générale's 2050 Invesors podcast: "Fed up with Carbon: Central Banks & Climate Change" (choice of French of English) edition, January 24:

Through the 2050 Investors podcast, Kokou Agbo-Bloua, Societe Generale's Head of Economics, Cross Asset & Quant Research, proposes to investigate tomorrow's economic and market mega-trends, ahead of 2050's global sustainability targets. Join him every other week as he deciphers a key mega-trend that relates to the economy, the planet, markets and you....

Transcript [English, French]

“FED” UP WITH CARBON:
CENTRAL BANKS &
CLIMATE CHANGE

EPISODE 29
Should the world's central banks (Fed, ECB, BoE...) launch a coordinated "green quantitative easing" programme to simply print the $3.5 trillion a year needed to finance the energy transition?

Is this a realistic solution or too green to be true?

This episode of the 2050 investors podcast puts the 'central' back in central banks. Since their creation in the 17th century, central banks have been tasked with managing monetary policy, overseeing the banking system and the core mandate of maintaining 'price stability'. But climate change is becoming a major threat to their mandate, posing a real risk to economic and financial stability in the medium to long term.

In this latest episode, Kokou explores the delicate balancing act that central banks must perform as they seek to be independent in ensuring that inflation remains under control, while at the same time contributing to economic and financial stability and playing a central role in the fight against climate change. There is more to central banking than meets the eye. 

Don't worry if you've forgotten your Economics 101 course, or if you've never taken one, because we're going to give you a quick crash course in the complicated role of the central bank, using references from the series Money Heist (La Casa de Papel) to the wonderful and magical world of Lord of the Rings.

And, of course, we take you down memory lane with a brief history of central banks and their evolution from World War I through 20th century Japan to the recent 'inflation outbreak' following the Covid19 pandemic.

Later in the episode you will hear extracts from an episode of "The ECB Podcast" entitled "Tackling climate change as a central bank, between motivation, obligation and limitation".

In "The ECB Podcast", Isabel Schnabel and Frank Elderson, Executive Board members of the European Central Bank, explain the role of the ECB's Corporate Sector Purchase Programme (CSPP), which buys green bonds issued by companies in order to reduce their carbon footprint....

....MUCH MORE

What's New at eFinancialCareers?

 It's been a while since we stopped by, let's see what the zeitgeist is:

"My daughter is very unhappy with her Goldman Sachs bonus"

The eFinancialCareers Lifestyle Survey - 2024

The last bank paying $600k to 23-year-olds

Carried interest in private equity? KKR just explained exactly how it works 

Hedge fund hires who joined $12bn fintech given one hour to leave

"JPMorgan people are happy, Goldman are good, Morgan Stanley are moody, Citi are sad"  

It was ever thus:

B67964709210012f2fe300163e41dd5b

 

"Bayer ordered to pay $2.25 billion after jury links herbicide Roundup to cancer"

As if Germany wasn't deindustrializing fast enough, the American judiciary is there with a little nudge off the ledge.

From the Washington Post, January 27:

A jury handed down a $2.25 billion verdict, including $2 billion in punitive damages, against agrochemical giant Monsanto, according to the lawyers of a man who said he developed cancer from using the company’s weed killer, Roundup.

John McKivison, 49, filed a lawsuit in Philadelphia against the company after he was diagnosed with non-Hodgkin’s lymphoma, which he said was due to using Roundup on his property for 20 years.

On Friday a jury returned a unanimous verdict, finding that Roundup was a cancer-causing product, that Monsanto was negligent and that Monsanto failed to warn about the dangers of Roundup, McKivison’s lawyers Tom Kline and Jason Itkin said in a joint statement.

“The jury’s punitive damages award sends a clear message that this multi-national corporation needs top to bottom change,” they said, calling the verdict “a condemnation of 50 years of misconduct by Monsanto.”

In an emailed statement, Bayer, Monsanto’s parent company, said it planned to appeal the verdict and what it called the “unconstitutionally excessive” damages. It said the jury’s verdict “conflicts with the overwhelming weight of scientific evidence and worldwide regulatory and scientific assessments” on Roundup....

....MUCH MORE

This is the largest jury award, to date, in the Roundup cases. But wait, there are a few other problems.

Most recently:
Bayer AG's Crash: Analysts React
Wounded Giant: Bayer Has Problems Beyond Monsanto Jury Awards
 
We have many, many more posts on the match made in hell.
Here's one from 2021:
"Pension Funds Allowed to Sue Bayer Over Due Diligence in Monsanto Acquisition"
There have been some bad mergers and/or acquisitions over the years, AOL - Time Warner comes to mind both for its top-tick timing and the $54 billion write-down of some of the intangibles in the deal two years after consummation, but Bayer's purchase of Monsanto may be the worst in history. 

Saturday, January 27, 2024

"The Story of the Decade"

From City-Journal, January 25:

New documents strengthen—perhaps conclusively—the lab-leak hypothesis of Covid-19’s origins.

The day is growing ever closer when Washington may have to add to its agenda with Beijing a nettlesome item it has long sought to avoid: the increasingly likely fact that China let the SARS2 virus escape from the Wuhan lab where it was concocted, setting off the Covid-19 pandemic that killed some 7 million people globally and wrought untold economic havoc.

New documents may explain why no one has been able to find the SARS2 virus (aka SARS-CoV-2) infesting a colony of bats, from which it might have jumped to people. The reason would be that the virus has never existed in the natural world. Documents obtained by U.S. Right to Know, a health advocacy group, provide a recipe for assembling SARS-type viruses from six synthetic pieces of DNA designed to be a consensus sequence—the genetically most infectious form—of viruses related to SARS1, the bat virus that caused the minor epidemic of 2002. The probative weight of the recipe is that prior independent evidence already pointed to SARS2 having just such a six-section structure.

The documents unearthed by U.S. Right to Know, and analyzed by its reporter Emily Kopp, include drafts and planning materials for the already-known DEFUSE proposal, an application to DARPA, a Pentagon research agency, for a $14 million grant to enhance SARS-like bat viruses.

The new recipe is in striking accord with a theoretical paper published in 2022 that predicted the SARS2 virus had been generated in exactly this way. Three researchers—Valentin Bruttel, Alex Washburne, and Antonius VanDongen—noted that the virus could be cut into six sections if treated with a pair of agents known as restriction enzymes and so had probably been synthesized and assembled in this way.

Restriction enzymes, made naturally by bacteria as a defense against viruses, are an invaluable tool for biologists because they cut DNA at specific points known as recognition sites. These sites occur randomly across the genome, so a natural virus treated with a restriction enzyme will be cut into pieces of different sizes. However, researchers who want to synthesize a virus from scratch in order to manipulate its parts more effectively will often rearrange the recognition sites so that they are evenly spaced. This allows short chunks of DNA, all of roughly equal length, to be synthesized chemically and then strung together in a complete viral genome. Bottom line: if your virus has evenly spaced recognition sites, it’s a pretty good bet that it was made in a laboratory.

Bruttel and his colleagues guessed that a commonly used pair of restriction enzymes, known as BsaI and BsmBI, might have been used to assemble the SARS2 virus’s genome. When they examined the structure of SARS2, they found that the recognition sites used by these enzymes were indeed evenly spaced across the genome, marking it into six sections. “Our findings strongly suggest a synthetic origin of SARS-CoV2,” they wrote.

Their paper did not receive the attention it deserved, in part because of the difficulty of ruling out a natural explanation for the even spacing. The small group of virologists who adamantly oppose the lab-leak hypothesis attacked the paper as “confected nonsense” (Edward Holmes) and “kindergarten molecular biology” (Kristian Andersen).

The recipe in the new DEFUSE drafts, however, closely resembles the one posited in the Bruttel article in saying that new viruses would be constructed from six sections of DNA synthesized in a lab. The documents even include a form for ordering the BsmBI restriction enzyme....

....MUCH MORE

Probably related, the China-beat journalist who ended up as United States deputy national security advisor from September 22, 2019 to January 7, 2021.

"We must make public health authorities accountable for their COVID lies" (and who the hell is Pottinger?)

Fake Science And U.S. Intelligence: How Dr. Deborah Birx Got The Covid Job (some answers to: who the hell is Pottinger?)

Dr. Deborah Birx was appointed Coordinator of the White House Coronavirus Response Task Force on February 27, 2020:

....the National Security Council recruited and appointed her to the job, through Deputy National Security Advisor for Asia, Matt Pottinger

But why? Why would someone with no relevant medical or scientific background be appointed to a top pandemic-response position? The answer, I believe, is that Birx was installed in that position in order to impose the untested, unscientific, totalitarian pandemic mitigation measures copied directly from China – measures chosen by the biosecurity community because they feared the havoc and backlash of a leaked genetically altered virus. But that’s jumping too far ahead into the realm of speculation.

Dr. Birx’s Fake Science Revealed in Her Own Words

That's Debbie Lerman writing at the Brownstone Institute, August 12, 2022.

She also wrote a piece for Brownstone August 4: "How Did Deborah Birx Get the Job?" and it is here that we begin....

China Property Crisis: "buy a house, get a wife for free.”

From The Wall Street Journal, January 23:

Desperate Chinese Property Developers Resort to Bizarre Marketing Tactics
The country’s real-estate slump is getting worse—and looks set to drag on for years

China’s real-estate crisis has dragged down the economy, caused massive layoffs and pushed multibillion-dollar companies to the point of collapse.

Economists think it’s about to get worse.

Sales of newly built homes in China fell 6% last year, returning to a level not seen since 2016, according to China’s statistics bureau. Secondhand home prices in its four wealthiest cities—Beijing, Shanghai, Guangzhou and Shenzhen—declined by between 11% and 14% in December from the year before, according to the broker Centaline Property.

China’s real-estate crisis has dragged down the economy, caused massive layoffs and pushed multibillion-dollar companies to the point of collapse.

Economists think it is about to get worse.

Sales of newly built homes in China fell 6% last year, returning to a level not seen since 2016, according to China’s statistics bureau. Secondhand home prices in its four wealthiest cities—Beijing, Shanghai, Guangzhou and Shenzhen—declined by between 11% and 14% in December from the year before, according to the broker Centaline Property.

Developers are starting fewer projects. Homeowners are paying back their mortgages early and borrowing less. Once-thriving property companies are stuck in protracted negotiations with foreign investors, following defaults on about $125 billion of overseas bonds between 2020 and late 2023, according to figures from S&P Global Ratings.

Chinese developers and local governments are so desperate to attract home buyers that some have resorted to bizarre marketing strategies.

A property company in Tianjin ran a video advertisement featuring the slogan “buy a house, get a wife for free.” It was a play on words, using the same Chinese characters as the phrase “buy a house, and give it to your wife”—but presented in a sentence structure typically used to offer freebies for home buyers. In September, the company was fined $4,184 for the ad.

A residential compound in eastern China’s Zhejiang province promised last year to give home buyers a 10-gram gold bar.

Earlier this month, Sheng Songcheng, former head of the statistics department at the People’s Bank of China, told a local conference that the housing downturn would last another two years. He thinks new-home sales will fall more than 5% in both 2024 and 2025.

Wall Street economists are also ringing alarm bells about how long the real-estate slump will last....

....MUCH MORE

Also at the Journal:

Enthusiasm Ebbs for a Diversity Initiative in Venture Capital
‘It feels like the world has moved on,’ says the creator of the Diversity Rider, launched in 2020

They appear to have adopted The Onion's editorial sensibilities to survive the current turmoil in the media biz.

"A Famed Analyst’s Final Forecast Is the Fall of the U.S. Economy"

One of those "Wow, is he still alive?" stories.

From the New York Times, January 27:

Dick Bove, the ubiquitous banking expert, is going out swinging after more than half a century in the business.

Over his 54 years as a financial analyst, Richard X. Bove perfected the art of grabbing attention.

Through thousands of newspaper interviews, cable news appearances and radio segments, Mr. Bove turned what can be a dull, by-the-numbers career into a more showy one. Weighing in on the economy and the inner workings of Wall Street, he often bucked conventional wisdom and made enemies along the way. By his own recollection, he never turned down a media request; American Banker once called him “the country’s most quotable bank analyst.”

Last week, a few hours after completing a spot on Bloomberg television, the 83-year-old announced his retirement. He took that weekend off — and then jumped right back in. In an interview with The New York Times, Mr. Bove (pronounced “boe-VAY”), who goes by Dick, shared a dire outlook on the U.S. economy and his former profession.

“The dollar is finished as the world’s reserve currency,” Mr. Bove said matter-of-factly, perched in an armchair outside his home office just north of Tampa, from which he predicted that China will overtake the U.S. economy. No other analysts will say the same because they are, as he put it, “monks praying to money,” unwilling to speak out on the mainstream financial system that employs them.

Many analysts are rewarded for coming up with unique but inconsequential and “arcane” ideas, he said, peppering his criticism with profanities. Mr. Bove worked at 17 brokerage firms during his career.

As he spoke, a technician was trying to restore his home internet after his final employer, the boutique brokerage Odeon Capital, pulled the plug on his last day....

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"The Burgeoning Science of Search and Rescue"

From UnDark, January 22:

By analyzing reports of people who got off-track, researchers are advancing the science of “lost person behavior.”

On May 5, 2023, a 19-year-old hiker named Matthew Read headed out on a roughly 12-mile trek in an underpopulated part of Glacier National Park in Montana. Read, a chemical engineering student, had stopped in Glacier while driving home to Michigan, and the pine-surrounded path he embarked on was known for its big views of the Livingston Range, a set of jagged peaks to the east.

He would get a longer look at them than he anticipated.

By Sunday, two days later, the young hiker had yet to return. That afternoon, national park rangers started a ground search; that night, a helicopter team scanned from above. The rangers, though, were thwarted by a lack of clues, the chopper by meteorology: Clouds hung low, fog obscured the view.

That Monday, the search team grew to 30 people, and included the U.S. Border Patrol and Flathead County Sheriff’s Office, along with search dogs. It would expand to the North Valley and Flathead search and rescue, or SAR, teams.

In situations like this, a subfield of science can help those SAR teams know where to start — and how a college kid lost in big bear country might behave. It’s called, appropriately, lost person behavior.

The study expanded in the 2000s, with a researcher named Robert Koester. In 2008, Koester compiled, analyzed, and published data on how different types of people behave when wandering the wilderness — and how to find them. His work has become foundational to the field of lost person behavior, and a cornerstone of how SAR teams plan missions to find people who have wandered off the beaten path.

While it’s hard to come by solid numbers because there is no mandatory centralized place where SAR teams must file reports, in 2021, nearly 3,400 people needed help getting out of the wilderness in U.S. national parks alone (a minority of the land where people need rescue).

In the 16 years since Koester’s initial work, he and other researchers have added nuance, filled in gaps in the initial framework, and built new technological tools. But moving new research out of the ivory tower and into the outback isn’t simple: When searchers are seeking a kid who wandered from camp in mountain lion country or an alpinist unconscious in an avalanche, trying a new tactic isn’t often at the top of the priority list.

But in a field where even minutes matter, efficient search tactics can mean the difference between life and death. Those high stakes inspire researchers to travel farther down the path, following the data where it forks.


Systematic searches largely trace back to World War II, when spotter planes would use grid searching to detect German U-boats.

Around the late 20th century, SAR professionals in the U.S., the U.K., Canada, and Australia were formally reporting land-based rescue missions, pulling out statistics on things like why people had become lost, and for how long. The most influential of these professionals was a researcher named William Syrotuck, who analyzed a few hundred cases total, wrote up the results in book form, and represented the first attempt to sort lost people into categories (children, hunters, hikers, elderly persons), take stock of their collective actions separately, and chart how far they tended to wander.

The statistics on lost people didn’t come from large sample sizes, and so their behavior profiles weren’t quite cemented until Koester came along....

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"Does Europe at last have an answer to Silicon Valley?"

From The Economist, January 8:

ASML, a mighty Dutch tech firm, is at the heart of a critical supply chain

TEN TIMES a second an object shaped like a thick pizza box and holding a silicon wafer takes off three times faster than a manned rocket. For a few milliseconds it moves at a constant speed before being halted abruptly with astonishing precision—within a single atom of its target. This is not a high-energy physics experiment. It is the latest lithography machine dreamed up by ASML, a manufacturer of chipmaking tools, to project nanoscopic chip patterns onto silicon wafers. On January 5th Intel, an American semiconductor giant, became the first proud owner of this technical marvel’s initial components for assembly at its factory in Oregon.

Like the outwardly unassuming machine, its Dutch maker is full of surprises. The company’s market value has quadrupled in the past five years, to €260bn ($285bn), making it Europe’s most valuable technology firm (see chart 1). Between 2012 and 2022 its sales and net profit both rose roughly four-fold, to €21bn and €6bn, respectively. In late 2023 ASML’s operating margin exceeded 34%, staggering for a hardware business and more than that of Apple, the world’s biggest maker of consumer electronics (see chart 2).

Such stellar performance, which is set to shine brightly again when ASML reports quarterly results on January 24th, is now routine. The firm holds a monopoly on a key link in the world’s most critical supply chain: without its kit it is next to impossible to make cutting-edge chips that go into smartphones and data centres where artificial intelligence (AI) is trained. With global semiconductor sales forecast to double to $1.3trn by 2032, every big country and every big chipmaker wants ASML’s gear. The company has become so important in the Sino-American techno-tussle that, as it recently emerged, America’s government pressed ASML to cancel planned deliveries of even its older machines to China.

Yet ASML’s spectacular success is also underpinned by two other, less obvious factors. The company has created a network of suppliers and technology partners that may be the closest thing Europe has to Silicon Valley. And its business model ingeniously combines hardware with software and data. These unsung elements of ASML’s success challenge the notion that the old continent is incapable of developing a successful digital platform....

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Friday, January 26, 2024

It's Morning In St. Petersburg and Oświęcim

First St. Petersburg. Marking the 80th anniversary of the lifting of the Siege of Leningrad, January 27, 1944.

From retired Indian diplomat  M. K. Bhadrakumar at his Indian Punchline blog, January 17:

An anniversary West would rather forget

An epochal anniversary from the annals of modern history is coming up in another ten days that remains a living memory for the Russian people. The Siege of Leningrad, arguably the most gruesome episode of the Second World War, which lasted for 900 days, was finally broken by the Soviet Red Army on 27th January 1944, eighty years ago to be exact. 

The siege endured by more than three million people, of whom nearly one half died, most of them in the first six months when the temperature fell to 30° below zero. It was an apocalyptic event. Civilians died from starvation, disease and cold. Yet it was a heroic victory. Leningraders never tried to surrender even though food rations were reduced to a few slices of bread mixed with sawdust, and the inhabitants ate glue, rats — and even each other — while the city went without water, electricity, fuel or transportation and was being shelled daily. 

It was on the 22nd of June, 1941 that the German armies crossed the Russian frontiers. Within six weeks, the Army Group North of the Wehrmacht, armed forces of the Third Reich, was within fifty kms of Leningrad in a fantastic blitzkrieg and had advanced  650 kms deep into Soviet territory.

A month later, the Germans had all but completed the city’s encirclement, only a perilous route across Lake Ladoga to the east connected Leningrad with the rest of Russia. But the Germans got no further. And 900 days later their retreat began. 

The epic siege of Leningrad was the longest endured by any city since Biblical times, and, equally, citizens became heroes — artists, musicians, writers, soldiers and sailors who stubbornly resisted the iron from entering their souls. Petrified by the prospect of surrender to the Soviet Union, the Nazis preferred to lay down arms before the western allied forces, but Gen. Dwight Eisenhower, Supreme Commander of the Allied Expeditionary Force in Europe, ordered that the honour of victory should go to the Red Army. 

Herein lies one of the greatest paradoxes of war and peace in modern times. Today, the anniversary of the siege of Leningrad has become,  most certainly, an occasion that the US and many of its European allies would rather not remember. Yet, its contemporary relevance is not to be glossed over, either.

The Nazi leadership aimed to exterminate Leningrad’s entire population by enforced starvation. Death by starvation was a deliberate act on the part of the German Reich. In the words of Joseph Goebbels, Adolf Hitler “intended to have cities like Moscow and St Petersburg wiped out.” This was “necessary”, he wrote in July 1941, “because if we want to divide Russia into its individual parts,” it should “no longer have a spiritual, political or economic centre.”....

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Part of the early time line via Wikipedia:

  • September 22: Hitler issues "Directive No. 1601" ordering "St. Petersburg must be erased from the face of the Earth" and "we have no interest in saving lives of civilian population."
  • October: Food shortages cause serious starvation of civilians. Civilian deaths exceed hundreds of thousands by the end of the Autumn. Shostakovich and his family are evacuated to Kuybishev.
  • November 8: Hitler's speech in Munich: "Leningrad must die of starvation."

A year later to the day, January 27, 1945, the Soviet Red Army liberated the few remaining victims at the Auschwitz murder factory at Oświęcim, Poland.

This event is commemorated as Holocaust Remembrance Day. As well it should be. From the Washington Post, January 27, 2020:

The first transport of Jews to Auschwitz was 997 teenage girls. Few survived.

But it wasn't just Auschwitz. The second deadliest extermination camp was Treblinka. Between 750,000 and 900,000 were murdered at Treblinka, second only to the ~1.1 million toll at Auschwitz. And because it was not in operation as long as Auschwitz the murder rate was higher at Treblinka, averaging over 1,000 per day for two years, and up to 10,000 on a few days.

And it wasn't just the extermination camps. Some 1.6 million people were shot to death in the so-called Holocaust by Bullets in Lithuania, Belarus and Ukraine. The most famous of these sites is Babyn Yar, Kyiv, Ukraine where 34,000 were shot to death in two days. At Majdanek in Lublin Poland and two smaller camps some 43,000 were shot to death in November 1943's Operation Harvest Festival by the SS, the German Order Police, and the Ukrainian Sonderdienst and Trawniki men. In October 1941 The Romanians along with Germans and Ukrainians murdered 30,000 in one very bad day in Odessa Ukraine.

And it wasn't just the big shooting sites. In the town of Rava-Ruska Ukraine, northwest of Lviv, 5000 people were shot in December 1942. Witnesses said:

'Blood oozed through the soil at grave sites.
You could see the pits move, some of them were still alive'

—Daily Mail, August 24, 2015 

There are ten thousand places where this happened. And it wasn't just the shooting sites.

As the Germans crossed into the Ukrainian SSR the Ukrainians went nuts on their Jewish neighbors. Then as now they seemed to get off on stripping, humiliating and terrorizing women and girls:

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgs88jHG0AIGtOAezVZKCkWXk2DrmXSuF0mFwnxThs1TTYoZMQ13QQ-x9cU2i6lSRI9iGfyPYMlTI9FkG3mpD74ERiBgt4EFLMcqgy7mGBwtPOM_leii6ANyOnJ7MMGAgj5UzwHSWzBxY0/s1600/Lviv-pogroms-1941-15.jpg

Some of the contemporaneous reports say that she was raped before this picture of her, stripped and terrorized, was taken.

The newly arrived Germans were groovin' on the Ukrainian pogrom action [4000 murdered]:

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi8m8jIW-kbnYYL2rdC1zIARoP7VJEqHWkksSXfdqZbGNikpl0HR84Mw06gzPiwsVJV_cpwyZHW-Gfbis8OQxuGpVUXnozD4GUgPzDuE6ebtnYfWoXSImwPaff05hFD7dQ-anSrt5a-Hpg/s1600/Lviv-pogroms-1941-6.jpg

The Germans had attacked the Soviets on June 22, 1941 and by June 30 had fought their way to Lviv. From the diary [German, English translation] of Felix Landau, SS senior non-commissioned officer just as the Ukrainians were getting going:

Lwow - 5 July 1941... There were hundreds of Jews walking along the street with blood pouring down their faces, holes in their heads, their hands broken and their eyes hanging out of their sockets. They were covered in blood. Some were carrying others who had collapsed. We went to the citadel; there we saw things that few people have ever seen. At the entrance to the citadel there were soldiers standing guard. They were holding clubs as thick as a man's wrist and were lashing out and hitting anyone who crossed their path. The Jews were pouring out of the entrance. There were rows of Jews lying one on top of the other like pigs, whimpering horribly. The Jews kept streaming out of the citadel completely covered in blood. We stopped and tried to see who was in charge of the Kommando. Nobody. Someone had let the Jews go. They were just being hit out of rage and hatred...

That's what is at the core of Holocaust Remembrance Day. 

"Hanging wallpaper with Ernest Hemingway" (Great Writers do Home Repair)

 A repost from 2013.

Everything expresses itself in hardware. It has a more general application even than finance...
      — Earl Codrington, to May-Beth Sleason, in Hugh Hood, Be Sure to Close Your Eyes (1993)

A book that came out during the height of the financial crisis, the ultimate DIY guide "Sartre's Sink".

Via The Independent:
Hanging wallpaper with Ernest Hemingway
Tools: Pasting brush, Wallpaper brush, Decorator's scissors, Pasting table, Plumb line
Materials: Wallpaper, Wallpaper paste
The old man had worked for two days and two nights to strip away the old wallpaper and now on the morning of the third day the time to hang the new paper had come and he was tired. His palms were blistered from long hours scraping away the old paper and the blisters had begun to weep. The old man felt the pain in his hands as he looked again at the bare walls of the room. "Room, thou art big. But I will finish this trabajo that I have begun," he said. "Or I will die trying."
The old man held the line delicately in his right hand. He threaded it through the eye on the lead weight, then he made fast the end of the line to hold the weight in place. The lead weight pulled firmly now and as he let the line run through his fingers he raised his arms so that the weight did not touch the ground, and the line remained taut and straight. Now he was ready. His right hand holding the line between thumb and forefinger, the left feeding the line, the old man raised his hands and climbed the first of the steps and offered the line to the wall where it swung like the pendulum of a clock. He could feel the tension on the line as it swung and he waited patiently. "It is losing momentum, soon it will circle and stop," he thought. Then he felt the weight go still and saw that the line hung straight between heaven and earth, and the old man took the pencil from behind his ear and drew a mark on the wall beside the plumb line....MORE
..."If the boy were here he could have the next length pasted and ready," he thought aloud. "A man should not work alone." His legs and shoulders were stiff, and the pasting brush dug into the wounds in his hands. And he felt then the depth of his tiredness and the pain of life....
The Independent article has four of the pastiches but not the title story. To make up for that here's:

The Great Red Porcupine Trapped in the Snake Pit Narco Guerrilla Gardening OR Putting Up a Garden Fence with Hunter S Thompson
Tools: Spade or post auger, Spirit level, Hammer, Saw
 
Materials: Fence posts, Arris rails, Featheredge boards, Post mix or sand cement and hardcore, Nails, Brackets
 
To my mind the corvette convertible is the only vehicle that can carry a ten-foot length of timber in style, but when it comes to making a handbrake turn or high-speed manoeuvres in excess of a hundred miles per hour, it begins to show its limitations as a serious hauler of lumber. By the time we arrived back at the house the car looked like it had been involved in a high-speed collision with Uncle Tom's Cabin. As I lowered the volume on Dylan's "Subterranean Homesick Blues" and extricated myself from the woodpile I could hear the voice of my attorney somewhere in the thicket of timbers that had sprouted in the seat next to me: "Man, this is no way to travel." What remained of the ten ten-foot arris rails, five ten-foot gravel boards, eighty four-foot featheredge boards and six eight-foot four-inch by four-inch sawn posts we'd stacked so neatly in the bucket seat was now piled against the windshield. In the trunk six bags of post mix (a lethal concoction of ready-mixed hardcore, sand and cement), twenty brackets and six pounds of nails made the car's nose point skyward so that it looked like a giant red porcupine was trying to climb up onto the sidewalk. It was important to keep my attorney's spirits up while I assessed his chances of survival. "Sweet Jesus, don't you just love the smell of fresh-cut timber in the morning?" I asked. "Can you move your legs?"

"Fuck no. I'm paralysed, call a doctor, a real doctor. Those bastards from the Pentagon have been testing some kind of napalm down at Bob's Premier Sheds and Fencing. My leg won't bend." Sure enough the Samoan's leg was rigid as I pulled it out across the passenger seat. Something was protruding from just above the knee and I feared that, in the emergency stop, he had suffered an open fracture. In his current state I doubted he was capable, but as a doctor I had to ask, "Are you in pain?"

"I can't feel a fucking thing."

"That's good." He needed to be reassured. "The bone has probably cut straight through the nerve." His screaming was cut short when he saw the neighbour peering from the window. "What's that old bitch looking at?" Now that he'd stopped screaming I felt emboldened to investigate the wound. "Hold still," I said, sliding the blade of an eight-inch hunting knife up his trouser leg and opening the fabric to the knee....
One of the more ambitious projects:
Tiling a bathroom with Fyodor Dostoevsky 

Fiat: Lincoln and the Decision To Issue Greenbacks

From one of the internet's tiny treasures, Delancey Place, January 22:

Today's encore selection -- from Ways and Means by Roger Lowenstein. 

In one of the most momentous developments of the Civil War, the U.S. -- which had not had a national currency of any type to that point -- elected to begin printing currency. It was a highly contested decision, and yet that currency, which came to be called “greenbacks,” was a key early part of the successful financing of that war:
 
"In the desperate winter of 1861-1862, the financial crisis threatened to halt the Union armies. The Treasury was empty; the banks had suspended; the government had no currency. Chase had few ideas, other than a labored program for bank reform. Almost by default, the Republican Congress seized the initiative. The most likely vehicle for financial resuscitation was the House Ways and Means Committee. Ways and Means had two subcommittees. One dealt with revenue, but revenue legislation was unlikely to provide help in the near term. 

The other subcommittee, on currency, was chaired by Elbridge Spaulding of New York State. Spaulding had been working on Chase's proposal to reform the banks, but when the banks went off gold, Spauld­ing realized there would not be time. He himself was an investor and director in Bank of Attica and the Farmers and Mechanics' Bank, both in Buffalo. In the 1860s, it was not uncommon for representatives to tailor legislation affecting personal investments. Spaulding, who had been a popular Whig mayor before running for Congress, was untrou­bled by any idea of conflict of interest. He simply reckoned that the banking channel was stuck and it was in the public interest -- also in his private interest -- to unstick it. On December 30, 1861, with the Union nearly overwhelmed by fiscal problems, Spaulding reported another bill -- for a government currency.

"In theory, Spaulding could have proposed more of the Treasury demand notes, but as we have seen, the demand notes were refused in some quarters. Spaulding wanted a universally acceptable currency that the Treasury could use to pay for the war. His bill was revolutionary. As if by a conjurer's trick, it authorized the Treasury to print United States Notes to distribute to soldiers, suppliers, and others. The catch was that, unlike virtually every other bill in circulation, Spaulding's notes would not be redeemable for silver or gold. This meant the gov­ernment would not be constrained by the supply of metal; it could print as much as it liked, or at any rate as much as Congress authorized.

"And Spaulding's notes would not pay interest. Today, we scarcely pause to consider that the money in our wallets does not yield a return. After all, it is 'money.' In 1861, virtually all government paper did pay interest. That was the inducement for holding it. Finally, Spaulding's paper would not have a maturity date. This, too, was unusual. A matu­rity date was a pledge that the paper could be exchanged for something of value at a specified time. But these notes would not be redeemable. They were issued for perpetuity.

"To the Civil War mind, these features were both shocking and blasphemous....

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"As Singapore Police Probe Money Laundering Ring, a Private Equity Entrepreneur Disappears"

From the Organized Crime and Corruption Reporting Project, December 22, 2023:

The founder of an Asian private equity firm has disappeared from his Singapore home and workplace as police sought to question him in connection to an alleged $2-billion money laundering ring busted in August this year, a Straits Times/OCCRP investigation has found.

Su Binghai, an entrepreneur of Chinese origin, is a “person of interest” in an ongoing investigation into the alleged laundering ring, a source familiar with the case told the Straits Times.

The source, who spoke on condition of anonymity, did not provide further details. Su Binghai has not been formally named as a suspect, which does not happen in Singapore until after an arrest.

Corporate registry data shows that Su Binghai founded the private equity outfit New Future International in 2017. He became a co-owner of the firm the following year along with Wang Dehai, one of 10 people arrested by Singapore police during the bust on August 15.

Two other New Future International directors, Su Bingwang and Su Fuxiang, are also “persons of interest,” said the source, without adding details. (It is not clear if the three Sus are part of the same family, but the three often cited the same residential address in their Hong Kong corporate filings.)

None of the Sus could be reached for comment.

Singapore’s August raids on the alleged money laundering ring sent shockwaves through the country’s political elite, and have raised questions about how lax regulations and an easily exploited residency program have contributed to a flood of dirty money into the Southeast Asian financial hub. Most of those arrested lived in upmarket areas, and many belonged to prestigious golf clubs.

Headquartered in Hong Kong, Su Binghai’s New Future has a Singapore-based offshoot and multiple subsidiaries. The company maintains offices in both cities and its website showcases a portfolio of countries and industries in which the company says it invests, though it does not provide details and reporters could find no public record of any specific investments it has made. Police have not said that New Future is subject to investigation.

The owners of New Future have been obscured since 2019, when its ownership entity was shifted from Hong Kong to the British Virgin Islands, a tax haven with high levels of corporate secrecy.

Su Binghai, who remains a director of New Future, holds multiple passports and an entree into elite social circles in Hong Kong and Singapore. He, Su Bingwang, and Su Fuxiang, each own tens of millions of dollars worth of property around the world.

When a Straits Times reporter visited Su Binghai’s Singapore residence this month, a domestic worker said that more than 10 uniformed police had visited the property in September, just weeks after the raids, looking for her employer. But Su Binghai and his wife had already left the home and did not say where they were going or when they would return, she added. The worker identified Su Binghai from a photo and confirmed he was her boss.

Another domestic worker answered the phone at a Dubai number registered to Su Binghai, and told OCCRP that “Mr Su” was not there. She was unable to provide information on his whereabouts.

Like Su Binghai, the two other New Future directors suddenly left their Singapore homes and workplaces in September, two colleagues and a neighbor told the Straits Times. (Singapore’s police did not respond to requests for comment about the Sus’ links to Wang Dehai or whether they had left the country.)

The plush home of one of the company’s directors, Su Bingwang, is located on Singapore’s Rochalie Drive, close to embassies and other grand homes. When the Straits Times visited this month, it was empty.

A neighbor confirmed that a Su Bingwang had lived there for about a year, and added that movers had turned up in September to remove items from the home. The home is currently being advertised on real estate websites as a rental for $33,800 per month.

When the Straits Times visited New Future’s Singapore office on December 1, a staff member asked unprompted if the reporter was there about “the money laundering case.”....

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Chaos And Weird Truths

Two from Latecomer Magazine. First up, Weird Truths:

Eric Schwitzgebel is a professor of philosophy at University of California, Riverside, and a prolific blogger. In this interview we discuss spatially distributed consciousness, science fiction, and whether we have too many professional philosophers. See Eric's Latecomer article where he criticizes moral reasoning about the far future.

— Editor

The Future

What are the existential or catastrophic risks you are most worried about?
ES:

I’m most worried about the risks we aren’t aware of. Right now, the odds that superintelligent AI rise up and destroy us in the next few decades, or that humanity completely destroys itself in a war or something like that seems unlikely since we are pretty robust to the kinds of technologies we have right now. But technological power tends to increase over time. My assessment of risk is a little more abstract in the sense that if we assume continued increase in technological power, we're not very good at foreseeing what technological possibilities will exist in the future. If we combine that assumption that we will become increasingly vulnerable as technological power increases, then at some point something is reasonably likely to happen that will make earth uninhabitable. I don’t think we know which thing that will be. It might be as unforeseeable to us as superintelligent AI was to a medieval farmer.

What risks do you think are the most overblown?
ES:

I don't think there's a longtermist consensus that's overblown. I'm on the pessimistic side on our ability to continue to exist as a species. So I kind of accept the pessimistic conclusions, but not the optimistic ones. And in particular, I reject the claim that we're in an unusual period of high risk, and that if we get safely through it we'll enter a period of extended very low risk. I think both MacAskill and Ord say stuff like that. To me, that seems like wishful thinking.

Do you consider yourself a transhumanist? Do you feel any attachment toward the current evolutionary state of humanity (i.e. not genetically edited, not fused with machines, etc.)?
ES:

Yes and no, with a big “but”. I don’t think of “transhumanism” the movement, as something I belong to. I think there's something pretty awesome and special about humanity's current biological form. I also think there's something awesome and special about dogs and garden snails. But I also think that our descendants, whether they're biological, cyborg or AI, could be as awesome as we are, or even, even maybe more awesome. And if people want to envision that future and try to bring it about, I don’t have a problem with that.

So you feel an attachment to our current biological state, but not enough that you'd ever try to put the brakes on technological advancement?
ES:
I think there are ethical and risk-related reasons to put brakes on technological advancement. But I don’t think it's super important to preserve the human form as it currently exists....

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And Fifty Years of Chaos:

James Yorke is a mathematician at the University of Maryland.

Almost fifty years ago, when my student T. Y. Li and I wrote a math paper titled "Period 3 Implies Chaos", I could not predict the effect that title would have. Chaos. It would go on to have a life of its own, far beyond the mathematical proof contained in our short paper. Since then, the word has risen and fallen in popularity, while others, like complexity, have emerged. But the principles are the same: there are limits to what we can accurately predict. Many systems are sensitive to initial conditions. And above all: a fully deterministic system can still be unpredictable.

This reflection could have easily been titled “50,000 Years of Chaos.” Humans have always known that slight differences can have dramatic consequences: a boulder lands a meter away from a man’s sleeping head—a meter that contains an entire world. 1 Benjamin Franklin knew about sensitivity to initial conditions when he popularized the old piece For Want of a Nail. Mathematicians merely put numbers to a principle that needed no introduction.

When novelists use Heisenberg’s uncertainty principle as an explanation for divorce, they are speaking by analogy. 2 Chaos, on the other hand, is both a formal mathematical discipline, and a fact about the contingency of our daily lives—we buy health and life insurance in order to manage it. A world that is shorn of chaos doesn’t look anything like ours. But chaos is also a phenomenon that applies to precise numerical quantities, whether those quantities are water molecules or animal populations.3 The reason why it took so long to mathematically formalize, is because people wanted to find clean linear solutions to differential equations. But the vast majority of such equations are not easily solvable, being nonlinear and chaotic. As Stanislaw Ulam famously quipped, “to call the study of chaos ‘nonlinear science’ was like calling zoology ‘the study of non elephant animals’.”4

Most of the world that we see around us is chaotic, with linear solutions being the rare exceptions. A lot of great math has been done with such ideal linear constructions, but the real world is hairy with impurities and noise. To clarify, there is a difference between random noise and chaos, although it can often be difficult to distinguish one from the other.5 Furthermore, not all systems are chaotic, sometimes it is possible to trim down a system so that chaos does not emerge. Water is chaotic as a gas, much less chaotic as a fluid, not chaotic as ice, all depending on a single parameter: temperature.

Chaos persists. Of course, the field already existed before it was named, a loose spiderweb stretching across disciplines. When we wrote our paper, Edward Lorenz had already written about his “strange attractors”—those generalized patterns of movement lacking any precise repetition.6 But the antecedents of chaos stretch back in the scientific literature. In my opinion, James Clerk Maxwell (1831-1879) was likely the first person to understand chaos as sensitivity to initial conditions. For instance, take his writings about the behavior of gas molecules, where a simple collision results in an unpredictable direction of rebound due to initial starting conditions. Maxwell wrote that “small differences in the initial conditions produce very great ones in the final phenomena” and urged scientists to pursue “singularities and instabilities, rather than the continuities and stabilities of things.”7 In 1890, Henri Poincaré (1854-1912) wrote about the three body problem, demonstrating that the orbits of three celestial bodies often behave chaotically and are difficult to predict.

Chaos says that we cannot predict the future with precision or certainty, especially when the future is distant. Given an entirely deterministic universe, we still can’t predict the temperature a year from now.8 This is because we can’t fully quantify our current state! Even if we measure an object’s location to three hundred decimal places of accuracy, its behavior will still diverge from our predictions. Each additional digit of precision extends our predictive ability, so that twenty decimal places of precision, rather than ten, doubles the length of time we can make accurate predictions. But it is immensely difficult to increase precision. Adding more decimal places of accuracy doesn’t do very much—any inaccuracy will be quickly magnified across time. The reason we can’t predict the future precisely is because we can’t measure the present precisely.9 LaPlace’s demon can’t even tie his own shoes....

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