Big Numbers, Small Numbers Are Processed In Different Sides Of The Brain

From Science 2.0:

Left and right brained makes a difference, even for those good at math. Large numbers are processed in the left side of the brain while small numbers are processed in the right side of the brain, according to a new paper.

The brain is divided into two halves - the left side controls the right half of the body, and vice versa. Generally, one side of the brain is more dominant than the other. For example, people who are right-handed tend to have more activity in the left side of their brains.

Previous studies have highlighted the general region where the brain handles numbers - in an area called the fronto-parietal cortex, which runs approximately from the top of the head to just above the ear. But scientists are in the dark about how exactly the brain unpicks and processes numbers. However, previous observations from stroke patients, who often suffer damage to the right side of their brains, have given clues that suggest large numbers and small numbers are handled on different sides of the brain.

Right Cold (Right side of the brain activated) Baseline shows the participants drawing a clock blindfolded. Caloric-only shows the clocks drawn by the participants as they had cold water trickled into their right ear. Caloric plus RIV shows the clocks drawn by the participants as they had cold water trickled into their right ear and watched vertical or horizontal lines through goggles. In the latter two conditions the volunteers showed a preference for small numbers. credit: Imperial College London

Dr. Qadeer Arshad, lead author of the study from the Department of Medicine at Imperial College London, said, "Following early insights from stroke patients we wanted to find out exactly how the brain processes numbers. In our new study, in which we used healthy volunteers, we found the left side processes large numbers, and the right processes small numbers. So for instance if you were looking at a clock, the numbers one to six would be processed on the right side of the brain, and six to twelve would be processed on the left."

In their study, the team temporally deactivated either the left or right side of the brain of healthy volunteers. They did this using a complex technique – the volunteers were asked to wear goggles that showed them a picture of either a horizontal or vertical line. At the same time, the participants underwent a procedure called the caloric reflex test. This is commonly used to diagnose ear and balance disorders and involves trickling either hot or cold water into a person’s ears....MORE

Move Over Industrial: On the Economics of the NEOLITHIC Revolution

I had intended to post this last year but it got knocked out of the queue by a Nobel Laureate talking about coffee and kidneys.
From A Fine Theorem, July 1, 2015:

The Industrial and Neolithic Revolutions are surely the two fundamental transitions in the economic history of mankind. The Neolithic involved permanent settlement of previously nomadic, or at best partially foraging, small bands. At least seven independent times, bands somewhere in the world adopted settled agriculture. The new settlements tended to see an increase in inequality, the beginning of privately held property, a number of new customs and social structures, and, most importantly, an absolute decrease in welfare as measured in terms of average height and an absolute increase in the length and toil of working life. Of course, in the long run, settlement led to cities which led to the great inventions that eventually pushed mankind past the Malthusian bounds into our wealthy present, but surely no nomad of ten thousand years ago could have projected that outcome.

Now this must sound strange to any economist, as we can’t help but think in terms of rational choice.

Why would any band choose to settle when, as far as we can tell, settling made them worse off? There are only three types of answers compatible with rational choice: either the environment changed such that the nomads who adopted settlement would have been even worse off had they remained nomadic, settlement was a Pareto-dominated equilibrium, or our assumption that the nomads were maximizing something correlated with height is wrong. All might be possible: early 20th century scholars ascribed the initial move to settlement to humans being forced onto oases in the drying post-Ice Age Middle East, evolutionary game theorists are well aware that fitness competitions can generate inefficient Prisoner’s Dilemmas, and humans surely care about reproductive success more than they care about food intake per se.

So how can we separate these potential explanations, or provide greater clarity as to the underlying Neolithic transition mechanism? Two relatively new papers, Andrea Matranga’s “Climate-Driven Technical Change“, and Kim Sterelny’s Optimizing Engines: Rational Choice in the Neolithic”, discuss intriguing theories about what may have happened in the Neolithic.

Matranga writes a simple Malthusian model. The benefit of being nomadic is that you can move to places with better food supply. The benefit of being sedentary is that you use storage technology to insure yourself against lean times, even if that insurance comes at the cost of lower food intake overall. Nomadism, then, is better than settling when there are lots of nearby areas with uncorrelated food availability shocks (since otherwise why bother to move?) or when the potential shocks you might face across the whole area you travel are not that severe (in which case why bother to store food?). If fertility depends on constant access to food, then for Malthusian reasons the settled populations who store food will grow until everyone is just at subsistence, whereas the nomadic populations will eat a surplus during times when food is abundant.

It turns out that global “seasonality” – or the difference across the year in terms of temperature and rainfall – was extraordinarily high right around the time agriculture first popped up in the Fertile Crescent. Matranga uses some standard climatic datasets to show that six of the seven independent inventions of agriculture appear to have happened soon after increases in seasonality in their respective regions. This is driven by an increase in seasonality and not just an increase in rainfall or heat: agriculture appears in the cold Andes and in the hot Mideast and in the moderate Chinese heartland. Further, adoption of settlement once your neighbors are farming is most common when you live on relatively flat ground, with little opportunity to change elevation to pursue food sources as seasonality increases. Biological evidence (using something called “Harris lines” on your bones) appears to support to idea that nomads were both better fed yet more subject to seasonal shocks than settled peoples.

What’s nice is that Matranga’s hypothesis is consistent with agriculture appearing many times independently. Any thesis that relies on unique features of the immediate post-Ice Age – such as the decline in megafauna like the Woolly Mammoth due to increasing population, or the oasis theory – will have a tough time explaining the adoption of agriculture in regions like the Andes or China thousands of years after it appeared in the Fertile Crescent. Alain Testart and colleagues in the anthropology literature have made similar claims about the intersection of storage technology and seasonality being important for the gradual shift from nomadism to partial foraging to agriculture, but the Malthusian model and the empirical identification in Matranga will be much more comfortable for an economist reader....MORE

China Decides It Needs A New Tech Bubble

From Vanity Fair, March 3:

Chinese investors are pouring money into tech start-ups as markets falter.

Wealthy Chinese investors are in a bind. All the usual, typically safe investment vehicles—commodities, stocks, even stable real estate—have been anything but usual or safe over the last couple months. The Chinese economy has slowed and inflation has picked up, the yuan has been under pressure, oil has tanked, and gold markets have been rattled. Real-estate markets in previously inviolable zip codes like Manhattan, a longtime sure bet for foreign investors looking to park their money in the stability of multi-million-dollar apartments, have started to sway.

With the new reality of so much risk and little hope for returns in these markets, Chinese investors are pushing their money toward technology start-ups, according to Reuters. Investments in these companies more than doubled last year, according to CB Insights research, leaping to $32.2 billion. So far this year, venture-capital investments have already climbed to $4.7 billion. That stands in stark contrast to the Shanghai Composite Index, which is down nearly 20 percent in 2016. Established-enough Chinese start-ups like the ride-hailing Uber competitor Didi Kuaidi have benefited the most. The company saw its valuation jump 25 percent to about $20 billion—dwarfing its American competitors.

We’ve watched this movie before in the U.S. As investors got tired of waiting to wade back into the muck of traditional markets in the wake of the financial crisis, they looked for new places to strike gold. They set their sights out West, to Silicon Valley, pouring their money into small start-ups with huge funding rounds, hoping for a payday. The result was the birth of dozens of new billion-dollar companies. On a hope, a prayer, and the blood, sweat, and tears of many a millennial, these unicorns hung on and continued to raise money. But now, the chickens are coming home to roost.....MORE

"Tackling the Future of Digital Trust—While It Still Exists"

This is a subject the Financial Times' Izabella Kaminska has been hammering home for the last couple years, usually in connection with fintech or cryptocurrency but also more generally. Here RAND and UC Berkeley join in via the brainiacs at the Institute of Electrical and Electronics Engineers, Feb. 26, 2016.

From IEEE Spectrum:

 

Last week, some 50 cybersecurity experts and observers took on a unique challenge: imagining a future in which bad things have happened in the digital world, and figuring out how to recover from them. The event, designed to help form solutions to problems before they happen, rather than in a panicked reaction afterwards, was sponsored by the Hewlett Foundation and run by the Rand Corp. and the University of California at Berkeley’s Center for Long-Term Cybersecurity.

In the second of two workshops (I wrote about the first workshop, on IoT security, here), the participants, split into groups of eight or so, tackled the idea of digital trust. Among the important questions were: When digital trust is broadly compromised, how do we rebuild it? and How do people identify themselves in the meantime?
Here’s the scenario that kicked off our deliberations:

It is March 2021, and the trafficking of medical records is commonplace. Just last year, a four-year-old girl died after ER physicians administered a medication to which she was allergic. Her medical records had been stolen and sold, and the information had been modified to fit the profile of the buyer’s daughter. We also learned last year that the Drug Enforcement Authority IDs issued to about 100 doctors—the credentials that let them sign electronic prescriptions—were stolen. Looking back at recent events, we remember when the theft of electronic medical records—like the 2015 breach of 90 million health records held by Anthem and Premera—shocked us. (Though that 2015 data breach was folded into our cybersecurity fantasy scenario, it was, of course, not fictional.) 

Internationally, in 2018, local elections in India were disrupted when people with Muslim or Sikh surnames were turned away from the polls because their voting registrations had been deleted. In the U.S., a Department of Motor Vehicles database hack compromised 10 million driver’s license records. One state, fearing that imposters would vote multiple times in a close statewide election using phony credentials, reissued new licenses to all drivers in that state.

And, in early 2021, auditors discovered randomly added small amounts, on the order of pennies, to countless transactions at credit and debit clearing providers, with over $100 million stolen and systems shut down for a day to fix. Also in 2021, all three credit reporting agencies were hacked, with false histories created, and real histories altered. Finally, the Electronic Payments Network and the Automated Clearing House, both organizations that process transactions between financial institutions, was hacked. The hack was quickly discovered and patched, but the fix was bungled and phony transactions still went through—to the tune of billons of dollars. At this point, the clearinghouses are manually checking all transactions, slowing the system horribly. People are lining up at banks and ATMs looking to get their hands on cash, and paycheck and other automatic deposits are erratic.

That was the dire scenario. The challenge: Figure out how to restore and maintain trust in the global economy....

...MORE

Monkey Steers Wheelchair With It's Little Monkey Mind

He's quite a show-off but the research is probably going to get him a Nobel sometime this decade.
From Gizmodo:

Researchers have developed a wireless brain interface that allows monkeys to control the movements of a robotic wheelchair using their thoughts alone. The breakthrough suggests that similar interfaces could allow severely paralyzed individuals to navigate all sorts of robotic devices with their minds.

Prior to this study, researchers used brain-machine-interfaces (BMIs) to help primates control artificial limbs. But as this new research shows, it’s also possible to take the recordings from cortical implants and use them to facilitate whole-body movement. Though the new research was geared towards the movements of a wheelchair, the findings strongly suggest that more sophisticated robotic devices could be controlled via BMIs, while requiring no physical intervention whatsoever. The details of this work can now be found in Nature’s Scientific Reports.

The new study, headed by brain interface expert Miguel Nicolelis from Duke Health, is the first to succeed at using BMIs for whole body locomotion. By implanting a wireless, high throughput multi-channel device in the brains of monkeys, the researchers demonstrated that the animals can learn to roam freely with an electronic wheelchair using about 300 neurons. The device allowed them to imagine a trajectory from moment-to-moment and navigate towards a target using the wireless connection.

 

The experiment is part of Nicolelis’s Walk Again Project, which is geared towards technologies that can read the brain waves of paralyzed people and translate them into signals that can control artificial limbs and other assistive devices....MUCH MORE

Previously on Doc Nicolelis:
Nov. 2015
Here's The Most Advanced Human Brain-to-Brain Interface
July 2015
Mind-Meld: Neuroscientists Link Three Monkey Brains Into Living Computer

March 8, 2015

Doc Nicolelis: "Brain-to-brain communication has arrived. How we did it"

Apr. 23, 2014

"World Cup Mind-Control Demo Faces Deadlines, Critics"

Nov. 6, 2013
Huh, The Brain/Machine Interface Biz Made Some Progress Last Month
September 17, 2013 
Where In the World Is Izabella Kaminska?--"Scientist Hacks Into Another Scientist's Mind"
March 2, 2013 
Update: Not Everyone is Impressed With Dr. Miguel Nicolelis' Latest Intercontinental Mind-Meld
Feb. 23, 2013 
Maybe He Didn't See the Part Where the Monkey Controlled a Robot on the Other Side of the World With Its Little Monkey Brain 
Feb. 21, 2013
UPDATED--"A leading neuroscientist says Kurzweil’s Singularity isn’t going to happen...."
Feb. 8, 2013
"In Scientific First, Researchers Link Two Rats' Brains via Computer" (What's next, the paralyzed walk?) 

40% of Econ Experiments Can't be Replicated

I've mentioned* the fact that if you can't can't replicate what you're doing, what you're doing isn't science. It might be metaphysics, it might pseudoscience, it might be be religion, it might be any number of things but it isn't science.

From the journal Science:
About 40% of economics experiments fail replication survey

When a massive replicability study in psychology was published last year, the results were, to some, shocking: 60% of the 100 experimental results failed to replicate. Now, the latest attempt to verify findings in the social sciences—this time with a small batch from experimental economics—also finds a substantial number of failed replications. Following the exact same protocols of the original studies, the researchers failed to reproduce the results in about 40% of cases.

"I find it reassuring that the replication rate was fairly high," says Michael L. Anderson, an economist at the University of California, Berkeley, not involved with the study. But he notes that most of the failures came from studies using a 5% "p value" cut-off for statistical significance, suggesting "what some realize but fewer are willing to discuss: The accepted standard of a 5% significance level is not sufficient to generate results that are likely to replicate."

Psychology's high-profile replication efforts, which were cautiously welcomed by the research community, have triggered policy changes at some scientific journals and modified priorities at many funding agencies. But the overall failure rate has also been called into question, because most of the original studies were reproduced only once, often without strictly following the initial protocol. And most of the replication studies allowed the replicators to choose their targets.

The latest attempt at social science do-overs—a replication of 18 studies in experimental economics—went to great lengths to avoid such criticisms. "We did not want to pick out studies on any subjective basis," says lead author Colin Camerer, an economist at the California Institute of Technology in Pasadena. Instead, the team set its criteria based on the experimental setup and whether a study produced one central result. They combed through papers published from 2011 through 2014 in two of the field's top journals, American Economic Review and the Quarterly Journal of Economics and came up with a set of 18 that met their criteria.

"Our approach was very lawyerly," Camerer says. Before starting, the researchers drew up a three-page "replication report" for each study, spelling out how it would be executed and interpreted. The report was sent out to the original authors for feedback. "The idea was that in retrospect nobody could say we were not clear about the replications [or that we] were being unfair." And it all went smoothly, he says. "To our pleasant surprise, basically all of them were a combination of flattered and happy we were going to replicate their study."

Eleven of the 18 economic replications succeeded, they report today in Science. "Our takeaway is that the replication rate is rather good," says Camerer, noting that the study topics from the successful replications reflect "most of the things we study in experimental economics [that] are replicated over and over: Do prices move toward where supply meets demand? Are there ‘price bubbles’ in artificial markets? Do people contribute in ‘public goods’ where spending some of your own money helps the group?"

"The authors were fair and collegial," says Homa Zarghamee, an economist at Barnard College in New York City whose 2011 study failed to replicate. "They took great care to exactly replicate our study methodologically," she says. But she adds that the failure doesn't mean the results from the original study were a false positive....MORE

*I may have gone a bit further than just mentioning. From June 17, 2014:

"Most Financial Economics Research is ‘Likely False’"

Reproducibility is pretty much the cornerstone of science. And yet some Bozo can come out and say:

People on all sides of the recent push for direct replication—a push I find both charming and naive—are angry....

and keep his pathetic little job. As the young people used to phrase the rejoinder: L

By the way, that was  James Coan, who calls himself Dr. although he apparently didn't have the intellectual horsepower to become a Chiropractor or D.D.S., writing in the Journal Medium.

Rather than the two honorable professions named above he's a freakin' Associate Professor of Clinical Psychology at the University of Virginia.
Jefferson weeps.

See, the thing is, if what one is writing about can't be reproduced, that kind of writing is called 'Literature'.
And, although gentle reader probably doesn't care, yes, I know the difference between replication and reproducibility.

With that note on the current state of the so-called soft sciences here's Barron's Focus on Funds with a much more upbeat post:

You might have heard of the study “Why Most Published Research Findings are False.” But who knew Ph.D.s had this much righteous indignation?

Two months back, we heard the argument that tinkering with investment backtests amounts to fraud.

...MORE 

If interested see also the Federal Reserve paper embedded in October 2015's "Ha! Ahead of the 2015 Economics Nobel, The Federal Reserve Proves Economics Is NOT A Science" 

Talking With The CEO of Edmond de Rothschild Private Bank

From the Financial Times:

Lunch with the FT: Ariane de Rothschild

The chief executive of Edmond de Rothschild bank talks about history, succession, and why she can’t do diplomacy 

As we cross the Geneva head office of Edmond de Rothschild, the private bank and asset management group, on our way to lunch, Ariane de Rothschild opens a door. “I’ll just show you the birds,” she says.

We enter a room lined with display cases full of hummingbirds, stuffed in the 19th century for a French collection. Each bird is mounted on a branch, its breast feathers iridescent and its long bill poised as if to probe pollen from a flower. The birds look vividly out of place in this sober temple to the accumulation of great wealth.

Baroness de Rothschild recalls how she read about the dusty collection in a magazine, acquired it and had it painstakingly restored before moving it to this office. “I said it will be good for the bankers, and I thought they were going to make fun of me but they really like it. So I achieved what I wanted. I said, ‘Please can you open your minds to other things around you?’ ”

There is something of her hummingbirds in de Rothschild, a wilful, colourful creature enclosed by history and money. She holds the famous name by marriage, but has come to wield great, and controversial, authority within the family. A year ago her husband Benjamin named her chief executive of Edmond de Rothschild, and she has plunged into a legal tussle with his cousin David de Rothschild, who runs the separate Rothschild Group. The latter is the best-known of the family banks, and was formed from NM Rothschild & Sons, the UK merchant bank, and the French bank rebuilt by David after its predecessor was nationalised in 1981.

We exit the bank and she checks the route to the restaurant she has booked with a chauffeur who is waiting outside. Then we leave him behind and set off on foot, de Rothschild striding in a rolling gait with her shoulders thrown back. As we cross a street, I notice she is wearing unusual shoes for a private banker — purple pumps with metal skulls on the front....MUCH MORE

Turkey: Police Take Over Country's Largest Newspaper With Tear Gas, Water Cannons

Just to rant a tiny bit: Either the U.S. or Turkey has to get the hell out of NATO.
Thank you.
From Deutsche-Welle:

Turkish police raid Zaman opposition newspaper using tear gas, water cannon

Turkish police have raided the premises of opposition newspaper "Zaman," using tear gas and water cannon to break up a protest rally. Court-appointed managers were then escorted into the building.  

Hours after a court placed the "Zaman" newspaper under the management of trustees, police used tear gas and water cannon to raid the country's largest-circulation newspaper. Police then entered the building with court-appointed managers and evicted the newspaper workers.

The court order came as a result of a case brought by a public prosecutor in Istanbul for the editorial board and management to be replaced by people named by the court. "Zaman" Editor-in-Chief Abdulhamid Bilici addressed his colleagues, calling the court decision a "black day for democracy" in Turkey.

Late on Friday, police broke up a protest rally which had gathered outside the newspaper's offices in Istanbul.

"Zaman" is linked to moderate Islamic cleric Fethullah Gulen who has lived in the US since 1999. Gulen was placed on trial in absentia last year on charges of attempting to topple the government.
The court order also affects the English-language "Today's Zaman," and a news agency linked to the group. Last October, courts placed four other media organizations owned by a company linked to Gulen, under trusteeship. Their editorial line then became pro-government....MORE

"Axel Springer Report Gives Peek at Business Insider Finances"

From Ad Age:

Net Loss of €1.1 million From Oct. 30 Through Dec. 31

 

Axel Springer's 2015 Annual Report on Thursday shed light on the financial progress of Business Insider, the New York-based digital media site it purchased in October.

From Oct. 30 through Dec. 31, B.I. generated revenue of €9.4 million (about $10.2 million based on average exchange rates for that period) and a net loss of €1.1 million (about $1.2 million), the report said.

According to the report, had B.I. been part of Axel Springer since the beginning of 2015, it would have lost the company €10.8 million (about $12.0 million based on average exchange rates in 2015) in consolidated net income on consolidated revenue of €38.5 million (about $42.8 million).

An accompanying presentation said B.I.'s revenue increased 41% in 2015.

Germany's Axel Springer, which has invested in several U.S.-based digital media companies, including NowThis and Thrillist Media Group, sees B.I. as a great growth opportunity.

"The medium-term planning of Business Insider is based on the assumption that the revenues will grow significantly," Axel Springer said in the report. "This growth shall predominantly be triggered by the further development of the Business Insider brand portfolio (e.g. Tech Insider, Insider), the extension of the fee-based market research offering ('BI Intelligence') and the expansion into new international markets."

B.I. has long been expected to begin licensing more of its content, beyond the company's BI Intelligence service, in an effort to generate additional revenue. It's not clear yet what form that will take, and when it will be implemented....MORE

(Possibly) Identifying The Next Amazon

From FiveThirtyEight:

The Next Amazon (Or Apple, Or GE) Is Probably Failing Right Now

When Jeff Bezos founded an online bookstore in 1994, no one could have guessed that in less than 15 years, Amazon would fundamentally reshape the U.S. retail landscape. No one, that is, except Bezos himself: As Brad Stone’s book about Amazon, “The Everything Store,” makes clear, Bezos’s goal from the start was to change the way Americans shop. 

Amazon’s remarkable rise carries two important lessons for economists: First, one ambitious, innovative company can have a huge impact not only on an industry but also on the economy as a whole. Today, Amazon employs more than 230,000 workers, a figure that doesn’t count thousands more who work as contractors in the company warehouses, sell products on its marketplace and rent out their labor on its “Amazon Mechanical Turk” platform. Amazon has contributed to the decline of entire industries — department stores, bookstores, movie rentals — while helping to create whole new ones. 

The second lesson: Amazon’s success was almost completely unpredictable, at least from the outside. To an economist looking at data on new ventures, Amazon was merely a bookseller, hardly a business known for its breakout growth even before the Internet upended the industry. And even if someone had looked more closely, what distinguished Amazon from Pets.com or Kozmo.com or any of the other high-flying startups that came crashing down to earth when the tech bubble burst in 2000? 

As a result of those lessons, policymakers concerned with entrepreneurship at both the local and national level have long favored what economist Robert Litan dubbed a “shots on goal” approach: Try to encourage as many startups as possible. Most of those companies will fail. Of the survivors, most will never grow into major economic engines. But statistically, a few will turn out to be the next Amazon, with huge rewards for their local economies. 

In research set to be published on Monday, however, a team of researchers at MIT argues that Amazon’s rise wasn’t so unpredictable after all. The researchers believe they have found a set of characteristics that can identify which companies have a shot at success. That could allow cities and states to move beyond the shots-on-goal approach and instead try to foster the specific types of companies that are most likely to create jobs and drive innovation. 

“The shots-on-goal approach, really, I think was the best that could be done based on the information that was available before,” said Catherine Fazio, who is studying the policy implications of the new research. “But if you have further insight into the entrepreneurial potential … then you can start to experiment with programs and have a more tailored approach.” 

The new research comes amid a three-decade-long slump in U.S. entrepreneurship. In 1980, Americans started more than 450,000 new companies, according to data from the Census Bureau; in 2013, the most recent year for which data is available, there were just over 400,000 new companies even though the U.S. population is nearly 40 percent larger. The startup drop-off has corresponded with a decline in other measures of economic dynamism — Americans are changing jobs less often, for example, and are moving across the country less frequently — leading economists to worry that the U.S. as a whole has become more risk-averse. 

The new research, led by economists Scott Stern and Jorge Guzman, calls that narrative into question. Startups as a whole may be declining, they find, but the kind of entrepreneurship that economists care the most about — fast-growing, innovative companies like Amazon — hasn’t shown the same downward trend; in fact, in the past few years, those kinds of startups have surged in number....MORE

HT: Ritholtz@BloombergView

"February jobs report: solid headlines, decidedly mixed internals"

From the Bonddad blog:

- by New Deal democrat
HEADLINES:

• +242,000 jobs added to the economy

• U3 unemployment rate unchanged at 4.9%

With the expansion firmly established, the focus has shifted to wages and the chronic heightened unemployment.  Here's the headlines on those:
Wages and participation rates

• Not in Labor Force, but Want a Job Now: down  -103,000 from 5.973 million to 5.870 million

• Part time for economic reasons: unchanged at 5.988

• Employment/population ratio ages 25-54: up +0.1% from 77.7% to 77.8% 

• Average Weekly Earnings for Production and Nonsupervisory Personnel: unchanged at $21.32,  up +2.4%YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)

December and January were revised upward by +9,000 and +22,000, for a net change of +31,000. 
The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were neutral to negative.

• the average manufacturing workweek was unchanged at 41.8 hours (but last month was revised up +0.1.  This is one of the 10 components of the LEI, the net will be a posittive.

• construction jobs increased.by +19,000.  YoY construction jobs are up +253,000.  

• manufacturing jobs decreased by -16,000, and are up +25,000 YoY.

• Professional and business employment (generally higher-paying jobs) increased by +23,000 and are up 604,000 YoY.

• temporary jobs - a leading indicator for jobs overall decreased by -9,800.

• the number of people unemployed for 5 weeks or less - a better leading indicator than initial jobless claims - increased by +48,000 from 2,249,000 to 2.297,000.  The post-recession low was set 6 months ago at 2,095,000.

Other important coincident indicators help us paint a more complete picture of the present:...MORE

The trouble with food and energy

An ongoing series showing off the capabilities of the bank's databases.
From the Federal Reserve Bank of St. Louis' FRED blog:

There are many ways to measure inflation. One popular method used for monetary policy purposes is to look at the price index for personal consumption expenditures excluding food and energy. Why exclude food and energy? Aren’t those important items that matter a great deal to households? The reason is straightforward: These price categories are considered to be excessively volatile, and including them would make it more difficult for policymakers to pin down the inflation trend. The graph above makes this point visually by comparing the PCE inflation rates with and without food and energy.

Usually when you add items to an index, you reduce the volatility of that index. This same premise is at work when you add assets to an investment portfolio—i.e., when you diversify to reduce volatility. But this does not happen when the item you add is excessively volatile. And, again, food and energy are excessively volatile. Food is subject to large price variations due to external shocks, mostly on the supply side, such as weather. Energy is subject to shocks as well: supply shocks such as discoveries, wars, political risk, and infrastructure issues and demand shocks such as climate events. This happens with food and energy much more than it does for other items included in personal consumption expenditures....MORE

Also at the FRED blog:

Two shades of coffee

Money and Barter: Did Money Come First?

From Real World Economic Review:

In the beginning, there was barter. Then, and forever after, there was money

That’s the myth every student of economics learns, that money grows out of barter. The idea is that monetary exchange solves the problem of the double coincidence of wants—that a person who is interested in trading needs to find someone who wants what they have and has what they want. Money makes trade much easier, so the story goes, and thus becomes a remarkable example of both human ingenuity and economic progress.
The fact is, as Ilana E. Strauss [ht: ja] explains, the story is false. Human beings did not invent money to solve the difficulties of barter exchange. Barter turns out to be a historical myth.

various anthropologists have pointed out that this barter economy has never been witnessed as researchers have traveled to undeveloped parts of the globe. “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money,” wrote the Cambridge anthropology professor Caroline Humphrey in a 1985 paper. “All available ethnography suggests that there never has been such a thing.”

Humphrey isn’t alone. Other academics, including the French sociologist Marcel Mauss, and the Cambridge political economist Geoffrey Ingham have long espoused similar arguments.

When barter has appeared, it wasn’t as part of a purely barter economy, and money didn’t emerge from it—rather, it emerged from money. After Rome fell, for instance, Europeans used barter as a substitute for the Roman currency people had gotten used to. “In most of the cases we know about, [barter] takes place between people who are familiar with the use of money, but for one reason or another, don’t have a lot of it around,” explains David Graeber, an anthropology professor at the London School of Economics.

A good example is the kind of exchange described by Fibonacci in his Liber Abbaci. He devoted the ninth chapter to “barter of merchandise and similar things.” But it wasn’t pre-monetary barter. Instead, as Randy K. Schwartz explains,

A barter was often recorded as such in a register or account book, as if actual coins had been exchanged, when in fact no coins at all were involved.
Because coins were still scarce, the widespread custom among merchants was to set the barter price for a commodity by “marking up” the cash price by a certain percentage. The two barterers had to agree on the markup rate ahead of time, or else one would feel cheated.

In other words, this was exchange that took money as the unit of account but, because coins were scarce, it took the form of the direct exchange of goods—say, wool for cloth.
And there are many other examples in the historical and anthropological record of forms of exchange that precluded money—centralization and redistribution, gifts, potlatch, trade at the edges of and between non-monetary societies, and so on. But there was no original barter economy, which was then surpassed by the use of money.
That’s a myth that began with Adam Smith:...MORE

Stephen Wolfram On Artificial Intelligence & The Future Of Civilization

If Wolfram and AI isn't your cuppa we have other Edge selections after the jump.
From Edge:

STEPHEN WOLFRAM, distinguished scientist, inventor, author, and business leader, is Founder & CEO, Wolfram Research; Creator, Mathematica, Wolfram|Alpha & the Wolfram Language; Author, A New Kind of Science. Stephen Wolfram's Edge Bio Page
 
THE REALITY CLUB: Nicholas Carr, Ed Regis

What makes us different from all these things? What makes us different is the particulars of our history, which gives us our notions of purpose and goals. That's a long way of saying when we have the box on the desk that thinks as well as any brain does, the thing it doesn't have, intrinsically, is the goals and purposes that we have. Those are defined by our particulars—our particular biology, our particular psychology, our particular cultural history.

The thing we have to think about as we think about the future of these things is the goals. That's what humans contribute, that's what our civilization contributes—execution of those goals; that's what we can increasingly automate. We've been automating it for thousands of years. We will succeed in having very good automation of those goals. I've spent some significant part of my life building technology to essentially go from a human concept of a goal to something that gets done in the world.
There are many questions that come from this. For example, we've got these great AIs and they're able to execute goals, how do we tell them what to do?...

AI & THE FUTURE OF CIVILIZATION
Some tough questions. One of them is about the future of the human condition. That's a big question. I've spent some part of my life figuring out how to make machines automate stuff. It's pretty obvious that we can automate many of the things that we humans have been proud of for a long time. What's the future of the human condition in that situation?

More particularly, I see technology as taking human goals and making them able to be automatically executed by machines. The human goals that we've had in the past have been things like moving objects from here to there and using a forklift rather than our own hands. Now, the things that we can do automatically are more intellectual kinds of things that have traditionally been the professions' work, so to speak. These are things that we are going to be able to do by machine. The machine is able to execute things, but something or someone has to define what its goals should be and what it's trying to execute.

People talk about the future of the intelligent machines, and whether intelligent machines are going to take over and decide what to do for themselves. What one has to figure out, while given a goal, how to execute it into something that can meaningfully be automated, the actual inventing of the goal is not something that in some sense has a path to automation.

How do we figure out goals for ourselves? How are goals defined? They tend to be defined for a given human by their own personal history, their cultural environment, the history of our civilization. Goals are something that are uniquely human. It's something that almost doesn't make any sense. We ask, what's the goal of our machine? We might have given it a goal when we built the machine.

The thing that makes this more poignant for me is that I've spent a lot of time studying basic science about computation, and I've realized something from that. It's a little bit of a longer story, but basically, if we think about intelligence and things that might have goals, things that might have purposes, what kinds of things can have intelligence or purpose? Right now, we know one great example of things with intelligence and purpose and that's us, and our brains, and our own human intelligence. What else is like that? The answer, I had at first assumed, is that there are the systems of nature. They do what they do, but human intelligence is far beyond anything that exists naturally in the world. It's something that's the result of all of this elaborate process of evolution. It's a thing that stands apart from the rest of what exists in the universe. What I realized, as a result of a whole bunch of science that I did, was that is not the case.

My children always give me a hard time for this particular quote: "The weather has a mind of its own." Well, that's an animistic type of statement, and it seems like it has no place in modern scientific thinking. But that statement is not as silly as it first seems. What that's representing is, if we think about a brain—what is a brain doing? A brain is taking certain input, it's computing things, it's causing certain actions to happen; it's effectively generating a certain output.

We can think about all sorts of systems as effectively doing computations, whether it's a brain, whether it's a cloud responding to the different thermal environment that it finds itself in. We can ask ourselves, are our brains doing vastly more sophisticated computations than happens in these fluids in the atmosphere?

I had first assumed that the answer to that was, yes, we are carefully evolved, we're doing much more sophisticated stuff than any of these systems in nature. But it turns out that's not the case. It turns out that there's this very broad equivalence between the kinds of computations that different kinds of systems do. That realization makes the question of the human condition a little bit more poignant, because where we might say, "There's one thing we've got—we're special, we've got all this intelligence and all these things which nothing else can have." But that's not true. There are all these different systems of nature that are pretty much equivalent in terms of their computational, or for that matter, intellectual, capabilities....MUCH MORE including audio, video, pop-up books...

Um, no pop-up books actually, I seem to be regressing, rapidly.

Previously on the Edge channel:
"The Man Who Runs The World's Smartest Website"
Edge Magazine's Master Class In Forecasting With Phillip Tetlock
Edge.org Conversation on the Work of Daniel Kahneman
"187 Big Thinkers Answer the Question: What Do You Think About Machines That Think?"
J. CRAIG VENTER: THE BIOLOGICAL-DIGITAL CONVERTER, OR, BIOLOGY AT THE SPEED OF LIGHT @ THE EDGE DINNER IN TURIN
Science/Not Science: Crusading Against Multiple Regression Analysis
Brian Eno: "Just A New Fractal Detail In The Big Picture"

Inflation: TIPS Breakevens Start to Rise as Economic Data Improves

From Barron's Income Investing, March 2:

With Treasury yields rising (and yields move inversely to prices) while some stronger economic numbers are posted, some market strategists are starting to like Treasury Inflation-Protected Securities (TIPS) over Treasuries.

Barron’s noted that TIPS were “Cheap and Contrarian” in a Feb. 6 Current Yield column. Since then, the benchmark-tracking iShares TIPS Bond (TIP), has climbed in price about $1 to $112.39 as of mid-day Wednesday.

Fiera Capital’s Chief Investment Officer Jonathan Lewis commented Wednesday:

The continued firmness in oil, the better-than-expected economic reports, and the buoyancy of commodity currencies are all signaling a positive future for TIPS relative performance vs. nominal Treasuries. In the past few days we have seen data that confirms the economy is not slipping into recession, and in the days ahead we have a series of central bank meetings that are likely to add fuel to the “risk on” fire. Not only is oil up meaningfully since its bottom but so are the Canadian dollar, New Zealand Dollar, Norwegian Krone, the Mexican Peso and the Chilean Peso. These currencies are signaling that the dollar rally is fading, growth expectations are shifting into higher gear, and the outlook for China is brightening.

TIPS are getting this message loud and clear. While nominal Treasuries are down for the day, TIPS are down by a smaller amount. The market is saying inflation protection is valuable. While 5-Year TIPS break-evens are up from their low, they are only at 1.33 and still way down from the 2.40 level they reached in 2013. Given the acceleration of price pressures in yesterday’s ISM report, TIPS are still cheap and likely to outperform.

Manning & Napier’s Marc Bushallow is also lately a fan. He wrote a primer on TIPS last week... 

...MORE

Recently:
No Inflation? Look At This (#3 will shock you)
"The Treasury Market Raises Its Inflation Outlook" (buy TIPS)
The Velocity of M1 Money Stock May Have Stopped Declining
A Look At The Consumer Inflation Numbers
You Want Inflation, "Why doesn’t the ECB just buy oil?"

No Inflation? Look At This (#3 will shock you)

That's my feeble attempt at clickbait.

And before some grammar cop goes all pedantic semantic, I know these charts don't describe inflation, just a price rise in a limited subset of producer prices that may or may not feed into a type of cost-push inflation somewhere down the road.
Or not.

And as for the clickbait, they're charts of base metals. I mean, I don't have a lot to work with here.
Thank you.

From Polemics Pains:

Metals - The path to inflation. 

Many folk are debating whether the bounce in stocks is just a bounce or if a base is in. Many more are also in fevered debate over the intricacies of whether there are hints of slowdowns in deflation in country data. Meanwhile an elephant is lumbering around the room unnoticed, helping itself to their sandwiches. Metals. The rise in the price of metals has been continuing quietly for a while now, but for those of you who haven't been watching here's a charty catch up...MORE

Iron

Nickel

Zinc 

HT: Mr. Keohane's Further Reading post.

Previously in the clickbait series:

This Machine Writes Better Clickbait Than You: How it works will shock you
"Before You Say You've Never Discriminated Against Someone, Listen To This Battlecry From A Model"
Clicking On Clickbait WILL Lower Your IQ
Why Is FT Alphaville Obsessed With North Korea's Kim Jong-Un?
Bloomberg: Goldman Sachs, Sex, Viagra, Tiger Woods, and Barack Obama
The New Trend In Apps: Content Blockers

Arrrgh--Updated--Journalism: BuzzFeed Releases Internal Style Guide--Updated 

Buzzfeed Story Generator

And In Today's SunEdison News... (SUNE)

From Bloomberg: 

SunEdison Drops After Suspending Preferred Dividend, Downgrades

SunEdison Inc. fell after suspending its preferred dividend in an effort to conserve cash and two analysts reduced their ratings on the world’s largest renewable energy developer.

SunEdison fell 13 percent to $1.55 at 9:30 a.m. in New York. The Maryland Heights, Missouri-based company has slumped 93 percent in the past year as it loaded up on debt in a global acquisition spree.

Analysts at Macquarie Group and Needham & Co. cut their ratings to the equivalent of hold after SunEdison said after the close of trading Wednesday that it had suspended dividends on preferred shares....MORE

$1.61 down 10.34%.

Syria's Electric Grid Is Down And The Entire Country Is Without Electricty

Lifted in toto from Reuters:

Electricity supply cut across Syria, Internet partly down: state media

Electricity was cut across Syria on Thursday and Internet connections were also party down, state media said.
"The electricity network has been cut in all governorates," SANA news agency said, citing a source in the Electricity Ministry. "Attempts to find the cause of the outage have begun."

A Reuters witness confirmed that electricity had been cut in Damascus, and the Syrian Observatory for Human Rights, which monitors the five-year-old conflict in Syria, said that power had been cut in the "vast majority of governorates".

SANA reported the Syria Telecommunications Company as saying Internet services were partially halted "as a result of sudden damage to one of the network hubs and repair teams have been sent to fix it".

A Handy Guide To Getting Your Money Out of China

From FT Alphaville:

So you want to get your money out of China? Cut out and keep edition

You’re a rich Party official go-getter on the Chinese mainland, with an eye on how much the renminbi might fall over the next year.

You know there’s a very decent chance that capital controls are going to be tightened up soon.

You know that at the moment you can still get your capital out of China — even if it’s a bit more than the annually permitted $50,000 per person — and that it’s probably going to cost you to do so.

But you don’t want to pay over the odds. After all, you didn’t get wealthy paying more for services than you had to.

Well… Good news. Bernstein’s Michael Parker and team have your back:

Bernstein are here to help you learn “how to turn a small fortune in China into a (slightly) smaller fortune elsewhere”. Click chart to enlarge....

...MUCH MORE, including some interesting accounting entries.

Markets: It's Quiet Out There, Too Quiet

From Marc to Market:

Markets Calm; Waiting For...?

The global capital markets are quiet today, as investors await fresh impetus which could come in the form of tomorrow's US national employment figures.  There is also next week's ECB meeting that looms large for investors.  

The euro is trading quietly.  In fact, through the European morning, the euro has been confined to a little more than a third of a cent above $1.0850.   It has not been above $1.09 since Monday, and despite contrasting economic signals, and the anticipation of more easing by the ECB, the single currency has not been pushed through $1.08.  

The dollar is straddling the JPY114.00 range, inside yesterday’s range. With a little more effort to test the nearby cap in the JPY114.55-JPY114.85 range, the five-day moving average could cross above the 20-day average for the first time since early February.  

Sterling extended yesterday's recovery to poke briefly through $1.4100 and reached its highest level since February 23.  The $1.4125 area corresponds to a retracement objective since EU Summit that struck the agreement with Prime Minister Cameron, which was shortly followed by London Mayor Johnson's decision to campaign for Brexit.   

Although sterling's advance is mostly about market positioning and the unwinding of some momentum trades, including on the crosses, macro considerations have stalled its recovery. The service sector PMI today completed the trifecta of disappointing reports. All three--manufacturing, construction, and services--all came in below expectations.  The service PMI was expected to soften a little from the January 55.6 reading.  It actually fell to 52.7, the lowest in about three years.   

The surveys warn that the UK economy may be losing some momentum prior to whatever disruptions the Brexit uncertainty generates.   However, positioning is still key and sterling may prove resilient to the disappointing economic news after the knee-jerk reaction as it has done in recent days.

In contrast, the eurozone service PMI was better than expected.  Recall that flash reading was 53.0.  This has been improved to 53.3 but is still down from the 53.6 reading in January and the 54.2 December results.  Germany saw its flash revised upwards (55.3 vs. 55.1) while France was revised down (49.2 vs. 49.8).  Both Italy and Spain came in a little better than expected.  The composite PMI was lifted to 53.3 from 53.0 in the flash report; it is still the lowest reading since January 2015.  The euro was not impacted by the service PMI reports.  

Given how the year began, with steep stock market losses, new lows in oil, and uncertainty but weak impulses from China, it is hardly a surprise that sentiment measures, in general, were undermined.  Investors need to be sensitive to the potential that the survey are weaker than the actual macro data.  The hypothesis then would be that sentiment can recover provided the markets continue to stabilize.  Another way to think about it is that if the tightening of financial conditions are relaxed, the real economic impact could be modest...

 

...Previously, the resilience of the service sector had been seen as a function of the transition in China away from manufacturing and toward services.  As we noted previously, falling producer prices may have exaggerated the transition away from manufacturing.  Chinese stocks were narrowly mixed while the yuan strengthened slightly.

Oil prices remain firm near eight-week highs.  The market appears to be putting more emphasis on US output than inventory accumulation.  While Saudi Arabia, Russia, and a few others have agreed to freeze output at the elevated January levels, US output has fallen.  With yesterday's government report, the cut in output has extended for the sixth week and now is at its lowest level since November 2014.  

At the same time, the government reported that inventories rose by a dramatic 10.4 mln barrels.  This is more than a day's output (roughly 9.08 mln barrels a day).  Inventories in Cushing rose for the fifth week and are at new record highs.

One of the consequences of the recovery in oil prices is rising 10-year break-even measure of inflation expectations.  The difference between the 10-year conventional yield and the inflation-linked securities is thought of a handy metric of inflation expectations, even though it is among the worst forecasting tools for CPI that the San Fransico Fed looked at within 48 hours of the September 2015 FOMC statement that explicitly cited market-based measures of inflation expectations. 

Recall the 10-year breakeven had dipped below 1.20% on February 10.   The 10-year break-even has risen nine consecutive sessions coming into today.  Pushing through 1.52%, it is at its highest level since January 11.  If it continues to recover, look for the Federal Reserve to recognize this in its statement in a couple of weeks....MORE

Using Science To Improve the Lives of the Rich (alt-headline: Ms Kaminska cares, cares deeply, about the travails of the wealthiest among us)

The first part of the headline is based on the mission statement of LoS Capital:

At Long or Short Capital LLC, we leverage our superior intellect and extensive investing experience to recommend explicit Long or Short positions and related abstract trades, which may or may not be possible with real world financial derivatives. We use science to improve the lives of the rich....

I was reminded of LoS when I saw this piece on the plight of the Ultra High Net Worth denizens of ce mond.
From FT Alphaville:

UHNWI contraction *alert*

 We’re calling it an upcoming billionaire crisis. And we’re linking it to the reversal of global capital flows, tax-haven agreements and the drawdown of the world’s mega surpluses on the back of the petrodollar slump.

We’re on watch, as a result, for all indications of crisis in billionaire and UHNWI land.

Exhibit two to suggest something is definitely up, Knight Frank’s 2016 Wealth Report, as released on Wednesday:

One of the most interesting findings is that a significant proportion of respondents – leading wealth advisors and private bankers from around the world – expect their clients’ wealth to increase at a slower rate over the next 10 years than the past decade. Succession and inheritance issues, wealth taxes and the global economy were identified as the main threats to future growth.

And with respect to 2015:

Despite this long-term growth trend, data from 2015 shows the first annual dip in ultra-wealthy populations since the global financial crisis began in 2008. Last year only 34 of the 91 countries for which individual data is compiled saw a rise in UHNWIs. Almost 6,000 people dropped out of the UHNWI wealth bracket in 2015 – a 3% slide....

...MORE

On Sunday you may have seen this at the Financial Times:

Saudi Arabia seeks US investment to plug gap in oil revenues

Truth be told, things are even tighter in the Gulf than the proud Saudis are willing to let on.

This morning the Emirates did the walk of shame in this Bloomberg story: 

Biggest U.A.E. Bank Says Dollar Supply Tight After Oil Drop

Do you understand? They...don't...have...enough...dollars.
And their need is being broadcast for all the world to see.

As if to mock the fallen even further, the Hurun Rich List 2016 announced (24Feb'16) that the very pinnacle of the UHNW hierarchy is still growing:

DESPITE GLOBAL SLOWDOWN, 2188 BILLIONAIRES IN WORLD, UP 99 TO NEW RECORD

Finally, for folks interested in learning more about LoS, this is as good a place to start as any.
During the 2008 debacle of the ratings agencies we featured some LoS improvements to the less-than-nuanced approach favored by the fraudsters.
And a few months after the market turned and the survivors had staggered out into the sunlight, we passed on some LoS tips on fortune recovery.

"El NIño’s Long-Awaited Grand Performance Is On Its Way to California "

From Wunderblog:

After a crushingly dry February, it looks as if early to mid-March is likely to bring California some of the serious moisture it needs from the 2015-16 El Niño event--and perhaps some unwanted flooding and mudslides. Long-range models are increasingly confident that the low-latitude jet stream that’s been dodging the California coast for weeks will finally plow into the state over the next 10 to 15 days, hauling copious amounts of Pacific moisture inland with it. The last few runs of the GFS and ECMWF models have become especially bullish on the development of one or two atmospheric rivers (ARs) heading into California over the next week or two. Roughly 30% to 50% of annual precipitation in the West Coast states occurs from just a few AR events per year. 

The first significant storm should plow into northern and central California this coming weekend, followed by a stronger series of storms affecting most of the state during the following week. The 0Z Wednesday operational run of the GFS model doused parts of the central and northern California and Sierra Nevada with 10” to 20” of precipitation over the ten-day period ending at 7:00 pm EST Friday, March 11. The GEFS and ECMWF ensembles, though less dramatic than individual runs, still paint a very wet picture for the state. It remains unclear how far into southern California the biggest rains and mountain snows will extend. The outlook for very heavy precipitation is a bit more confident from central California all the way north to Washington. Already, some California reservoirs arereleasing water: though this may seem odd while the region is still in drought, it’s a long-employed strategy to help reduce the odds of flooding when torrential rains are predicted....MUCH MORE

Ex-Chesapeake CEO McClendon Dies In High Speed Crash Day After Indictment (CHK)

From CNBC:

Police: McClendon crashed traveling at 'high rate of speed'

Aubrey McClendon, a founder and former chief executive of Chesapeake Energy, died in a car crash Wednesday at age 56, a day after he was charged with conspiring to rig bids for oil and natural gas leases. 

McClendon crashed into an embankment while traveling at a "high rate of speed" in Oklahoma City on Wednesday morning, said Capt. Paco Balderrama of the Oklahoma City Police Department. McClendon's vehicle was engulfed in flame, he said. 

"He pretty much drove straight into the wall," Balderrama said....MORE