"UK Is Most Corrupt Country in the World, Says Mafia Expert Roberto Saviano"

From the Independent:

Britain is the most corrupt country in the world, according to journalist Roberto Saviano, who spent more than a decade exposing the criminal dealings of the Italian Mafia.

Mr Saviano, who wrote the best-selling exposés Gomorrah and ZeroZeroZero, made the comments at the Hay Literary Festival. The 36-year-old has been living under police protection since publishing revelations about members of the Camorra, a powerful Neapolitan branch of the mafia, in 2006.

He told an audience at Hay-on-Wye: “If I asked you what is the most corrupt place on Earth you might tell me well it’s Afghanistan, maybe Greece, Nigeria, the South of Italy and I will tell you it’s the UK.

“It’s not the bureaucracy, it’s not the police, it’s not the politics but what is corrupt is the financial capital. 90 per cent of the owners of capital in London have their headquarters offshore.

“Jersey and the Cayman’s are the access gates to criminal capital in Europe and the UK is the country that allows it. That is why it is important why it is so crucial for me to be here today and to talk to you because I want to tell you , this is about you, this is about your life, this is about your government.”...MORE

HT: naked capitalism

Brave New World: “30yr Treasury yield should near 0% within two years”

I'm thinking that Nomura's top credit guy might have a deeper understanding of zero rates than most folks.

From FT Alphaville:

This is nuts, ‘US30Yr Bond Yield to Evaporate’ edition

You’ll have already seen Nomura’s chief credit strategist Toshihiro Uomoto attempt to explain the state of the world through chart, here. 

But we thought we’d also share his suggestion that the “30yr Treasury yield should near 0% within two years” as the “scarcity of products with a positive yield should continue facilitating the inflow of funds into the credit market.”

Tightening supply-demand/ Funds also flowing into credit from other asset classes: With the BOJ, ECB, and other major central banks maintaining strongly accommodative monetary policies, yields on sovereign bonds issued by the major countries have been steadily declining. The BOJ’s negative policy rate in particular has reduced the yield on Japan’s government debt, and there is now about ¥900trn of JGBs outstanding with a negative yield. Consequently a large amount of the Japanese money that had been invested in JGBs has instead been flowing into US Treasuries and the sovereign debt of other major countries...

...MORE

Tropical Storm Earl Forms In the Caribbean, May Briefly Achieve Category 1 Before Yucatan Landfall

From Wunderblog (on blogroll at right during the season):

After racing across the eastern Caribbean as an strong tropical wave, Invest 97L has finally been dubbed Tropical Storm Earl. Late Tuesday morning, an Air Force hurricane-hunter mission found that Earl had developed a closed circulation center with a minimum central pressure of 1001 millibars. Flight-level winds reached 52 knots (57 mph) just after noon EDT Tuesday. In an special update issued at noon EDT Tuesday, the National Hurricane Center placed the center of newly christened Earl about 535 miles east of Belize City, Belize, with top sustained surface winds of 45 mph. Carrying a large though somewhat disorganized assortment of showers and thunderstorms (convection), Earl was moving westward at 22 mph, a pace expected to slow over the next 24-48 hours as Earl approaches Belize and the Yucatan Peninsula. Even before Earl’s designation as a tropical storm, high winds in the Dominican Republic brought power lines down and sparked a fire aboard a bus, killing 6 and injuring 12 people, according to weather.com. Three others were killed after a tour boat overturned, although that incident had not yet been confirmed to be weather-related. The Meteorological Service of Jamaica issued a tropical storm warning for 97L on Monday night, and on Tuesday the Cayman Islands National Weather Service was cautioning small craft to exercise caution in open waters. Surface winds at Kingston, Jamaica, peaked at 29 mph early Tuesday morning, with only light rain observed, although showers and squalls have affected other parts of Jamaica....MUCH MORE

Swiss Re Pulls Back On U.S. Hurricane Exposure

From Artemis, July 29:

Swiss Re hit by losses, still expansive, but pulls back on U.S. hurricane risks

Global reinsurance giant Swiss Re reported a set of results this morning that were hit by major catastrophe losses, taking its combined ratio to the highest its been since 2013. The reinsurer remains expansive in its strategy of deploying more capacity, but has finally pulled back on U.S. hurricane risks.

Over recent years, when reinsurance prices have been on the decline globally, Swiss Re has actually been quite expansive, choosing to deploy capital into underwriting, particularly in large, complex, tailored transactions, but also into areas like property catastrophe risks where the price declines have been at their highest.

But in its latest results, (for more traditional reinsurance market news please sign up for our sister service here), the reinsurer reveals that it is finally pulling back on underwriting of U.S. hurricane risks, which is perhaps the best sign that the market is reaching (perhaps even reached) its pricing floor and that there is now so little margin even the large, globally diversified players are having to reduce their appetites.

That’s a positive for the reinsurance market and for the insurance-linked securities (ILS) sector, as Swiss Re has been taking large chunks of Florida programs in recent years, sometimes at pricing levels that have been tough to compete with....MORE

The Times of London Relaxes Its Paywall

From Digiday:

The Times of London is experimenting with its paywall funnel

The Times has a reputation for having the hardest paywall in the U.K., but it’s not opposed to some open-access experimentation — as long as it results in new subscribers. Last week the national newspaper introduced registered access, allowing non-subscribers access to just two stories a week in exchange for registering.

This doesn’t mark any kind of long-term relaxation of its paywall, which is turning a tidy profit: the number of subscribers has risen from 402,000 to 413,600 in the last year, with digital subscriptions growing from 170,000 to 182,500. In March, it changed its editorial mandate and dropped breaking news. Since then there’s been a 20 percent increase in weekday traffic from existing subscribers.

The two articles a week, in exchange for details like email address and country of residence, are intended as a sampling exercise to attract new subscribers.

This is the closest the paper will come to making any content free. “We don’t use the F word here,” The Times digital director Alan Hunter told Digiday. “It’s a way of experimenting with the subscription funnel. We’ll continue to do experiments like this for a long time.”

Anyone inside or out of the U.K. can access their two articles if they register on the website (or mobile site). There are no plans to do the same on domestic apps yet, nor the international Times of London app.

It’s not the first time The Times has experimented with making content open to people if they register some details. For the last few months it’s allowed subscribers to share articles from their iPad apps, via email and social networks like Facebook and Twitter. Whoever they share it with can read the article in full once they register. So far there’s been a “significant uptick” in non-subscribers coming to the site via articles that have been shared with them from iPad subscribers, according to Hunter....MORE

Saudi Arabia To 3D Print 1.5 Million Houses

From 3Ders.org:

While Dubai is keen to become a 3D printing world leader with their Dubai 3D Printing Strategy, they are by no means the only Middle Eastern nation to look into this technology. Last week a delegation of Chinese WinSun officials traveled to Riyadh, the capital of the Kingdom of Saudi Arabia, to discuss construction 3D printing. Among others, the Chinese construction 3D printing pioneers were invited to 3D print up to 1.5 million housing units over the next five years.

WinSun is the company that made construction 3D printing a practical reality. Back in 2014, the Shanghai-based company created headlines all over the internet for building not one, but ten 3D printed houses in less than 24 hours. Since then, Shanghai WinSun Decoration Design Engineering Co., to give its full name, has been building on that initial achievement with one 3D printed concrete creation after another. Back in March, they even unveiled two gorgeous 3D printed Chinese courtyards.

Through this new collaboration with the Saudi government, the Chinese pioneers are now thus about to bring their expertise to the real world. Just last week, WinSun Chairman Ma Yihe and Vice President Liu Wenmin arrived in Riyadh, where they were warmly welcomed by Dr. Bander B. Al-Abdulkarim and Nawaf M. Al-Dahmash, officials from the Kingdom of Saudi Arabia Department of Housing. Imad Al Abdul Qader, Director of Marketing at the Saudi Arabian General Investment Authority, was also present alongside other senior leaders from the domestic real estate industry.

These are not the houses. This is a model.

...MORE

Corn Hits Six Year Lows, Recovers A Bit; Wheat Hits Lowest In Ten Years

	Last	Chg
Corn	334-0s	-0-2
Soybeans	953-0s	-8-4
Wheat	401-2s	-4-6

From Agrimoney:

Corn futures sharply pare losses on export hopes...

Corn futures tumbled to six-year lows - only to recover on the news that the Brazilian government is working to open up its livestock feed sector to genetically modified corn from the US.

Corn had a weak start to the session, after weekly US Department of Agriculture overnight reported better-than-expected US crop ratings. 

The USDA saw corn condition at 76% good or excellent, despite the hot weather, where markets were expecting at 1 point drop in condition.

And the development of corn is well advanced, having got through the crucial month of July with no severe heat damage, with 91% of corn in the silking stage.

Favourable crop outlook.

Meteorologist Gail Martell said the good crop condition, and a benign weather outlook "points to a favourable corn harvest in the making. 

"Summer growing conditions in corn have been mostly favourable, though not ideal.

"Rainfall has been ample, promoting strong growth and development in corn," she said, although some periods of heat have "proved detrimental".

But the warm June temperatures, along with ample rainfall, "has spurred corn development," Ms Martell said. 

The prospect of ample US supply pushed December corn futures to session lows of just $3.29 a bushel, the lowest level for second-month futures since late 2009, but prices pared losses later in the session.

Brazilian demand

Rich Nelson, at the US broker Allendale, ascribed the change in mood to "a new story out there".

This was an announcement by the Brazilian government that it was working to allow the import of more varieties of genetically modified US corn, for use in the country's livestock industry.

Shipping corn to Brazil, the world's second ranked corn exporter, during the middle of its' second crop, or safrinha, harvest might seem like sending coals to Newcastle. 

But a crisis in corn supplies is developing in Brazil's southern livestock regions, sending prices soaring.

A long period during which the currency was very weak, making Brazilian corn highly competitive in international markets, lead to heavy exports.

Brazilian stocks were depleted, and much of the current crop was forward sold.

Now, with estimates of the safrinha crop ever declining, the corn supply is getting very tight....

...Wheat extends losses to 10-year low

But Chicago wheat markets plumbed a fresh 10-year low, under pressure from the weight of world supplies.

Adding to the bearish tone was the news out overnight that Japan and Korea had both taken steps to restrict US imports, due to concerns over unapproved genetically modified wheat verities.

And Gasc, the stat grain buyer for Egypt, appears to have curtailed its buying in Tuesday's tender, taking just one 60,000 tonne cargo, of Russian wheat.

...MORE 

"Chinese regulator: Uber, Didi deal failed to get approval"

From the Mercury News' SiliconBeat blog:

There may be trouble brewing for the Uber-Didi Chuxing deal announced Monday.

A Chinese regulator says the two ride-hailing giants failed to seek the necessary approval for Uber to sell its business in the country to rival Didi Chuxing, Reuters reported Tuesday. Uber, which has lost $2 billion struggling to compete with Didi in China, surrendered the market to its rival in exchange for a $7 billion stake in Didi.

But a potential snafu was revealed at a news briefing by Mofcom, China’s commerce ministry.

Reuters reports: “Mofcom has not currently received a merger filing related to the deal between Didi and Uber,” ministry spokesman Shen Danyang said. “All transactors must apply to the ministry in advance. Those that haven’t applied won’t be able to carry out a merger” [if they fall under applicable anti-trust and merger rules.]

With Didi claiming to control more than 87 percent of China’s private car market, and Uber claiming to control one-third (the two companies contest each other’s math here) the sheer enormity of these companies could raise the specter of antitrust issues.

Didi says regulatory approval isn’t necessary because neither company makes a profit, according to Reuters....MORE

See also the Financial Times, Aug. 2:

Uber fares in China soar after Didi deal
End to discounts nearly doubles cost of rides in Beijing

"This is What’s Cannibalizing the US Economy "

From Wolf Street, July 15: 

The sector is booming, but it’s a costly boom.

In the sluggish US economy, the goods-producing sector has been in decline since late 2014, but sales in its biggest sub-sector are booming: medicines.

Drugs are a physically small part of the goods-producing economy. But in terms of dollars, they’re the elephant in the room: According to the wholesales report by the Commerce Department, total drug sales by manufacturers to pharmacies, hospitals, and others in the distribution chain jumped 11.3% from a year ago (not seasonally adjusted) to $54.3 billion.

That was the largest of the wholesale categories in the report: larger than “Groceries” ($51.5 billion), “Electrical” ($45.0 billion),”Petroleum” ($43.4 billion), and Automotive ($36 billion). Drug sales accounted for 12.2% of total wholesales. For the last 12 months, it was 12.0%.

In May a year ago, manufacturers sold $48.8 billion in drugs, or 11.3% of total wholesales. In May 2014, drugs accounted for 9.4% of total wholesales. In May 2013, it was 9.1%. In May 2012, it was 8.8%.

You get the idea. Drug sales at the wholesale level account for an ever larger portion of total wholesales.

Total wholesales rose 0.3% in May year over year. Without the $5.5 billion increase in sales of drugs, total wholesales would have fallen 0.9% year-over-year.

Are Americans really consuming that much more in pharmaceutical products? Hardly: According to the Producer Price Index, prices charged by manufacturers of pharmaceutical products jumped 9.8% in May from a year ago.

So the Wall Street Journal reviewed corporate filings and conference-call transcripts of the 20 largest members of Big Pharma in the US and found that over two-thirds had attributed their sales increases in the first quarter at least in part to jacking up prices. Among them:...MUCH MORE

Oil: After Wildfires Canadian Production Back Online

And now with the President bombing the piss out of Libya again we should look forward to that supply starting to come back in size, by maybe November or so.
Brent $41.93, WTI $39.45 down 61 cents.

From RBN Energy:

Back in the High Life Again - The Oil Sands Rebound from May 2016 Wildfires 

Three months after a series of devastating wildfires wreaked havoc in Alberta’s oil sands region, production is essentially back to normal. Temporary shutdowns at several production sites initially reduced the oil sands’ output by more than 1 MMbbl/d –– or about one-third the area’s pre-fire production level –– which trimmed inventories and goosed world oil prices. But the short-term closures appear to have had little effect on the Canadian and U.S. refineries that process oil sands-sourced crude. Now, oil sands producers (stung more than many by the collapse in oil prices) are focused again on reducing production costs in an effort to stay profitable in a low-oil-price era. Today, we summarize the current, post-wildfires state of oil sands production and consider the region’s future in the new, tight-oil/Shale Revolution world.

The series of wildfires that swept through parts of Fort McMurray, AB and nearby oil sands production areas in early May 2016 caused damage totaling an estimated Canadian $3.6 billion (the equivalent of more than U.S. $2.7 billion), making the event the most expensive natural disaster in Canada’s history (by far, according to a July 2016 report by the Insurance Bureau of Canada). As we said in our initial look at the wildfires’ impact on oil sands production in mid-May (Over the Hills and Far Away), the wildfires consumed hundreds of thousands of acres (ultimately, more than 1 million acres had burned by the time the last, spotty fires were put out the first week of July) and forced tens of thousands of people from their homes. That spurred staffing shortages at many oil sands production facilities, prompting production scale-backs and a handful of temporary production shutdowns. As fierce and as far-reaching as the wildfires were, however, they didn’t cause any major damage to the oil sands production areas themselves, or to the pipelines that bring diluent in (to add to bitumen to improve its flow-ability) and crude oil out. Some pipeline flows were interrupted, though, and there was some damage to the electric grid ––but fortunately not enough to slow the rebuilding of oil sands production over the following few weeks.

The wildfires certainly had a major effect on production. For example, Suncor Energy, which holds interests in several oil sands production facilities (including a 54% ownership stake in Syncrude, a big oil sands joint venture with Imperial Oil and others), reported that operations at Syncrude –– which was completely shut down in early May (for the first time in Syncrude’s 40-year history) –– started ramping back up in June and returned to normal in mid-July. Suncor’s other operations were back online weeks earlier. Still, Suncor’s second quarter 2016 oil sands production averaged only 178 Mb/d, down 58% from second quarter 2015, when production averaged 424 Mb/d. More than 90% of the 246-Mb/d decline was tied to the wildfires themselves; the rest is attributed to the early-April completion of “turnaround” work at Suncor’s 240-Mb/d Upgrader 2. (Oil sands upgraders use coking and distillation to “upgrade” super-thick bitumen into synthetic crude oil, or SCO.) The fires also forced a pause in work at the Fort Hills oil sands mining project north of Fort McMurray that is a joint venture of Suncor (51%), Total E&P Canada (29%)and Teck Resources (20%). Even with that setback, the co-owners of Fort Hills (which will mine and process 121 million tons/year of oil sands and produce 180 Mb/d of bitumen) plan to make up for lost time and still complete the project (and produce “first oil” there) by the end of 2017....MORE

"Is QE unquestionably supportive for risk assets? I think not."

From Bond Vigilantes:

We have written about quantitative easing (QE) many times over the years, yet there remains more to be said: the great QE experiment is not yet over. Given the result of the EU referendum, speculation is rife as to whether the Bank of England will embark on another round of QE to stimulate the UK economy; arguably making this a good time to debate the efficacy of such strategies.

It’s safe to say that the most surprising aspect of QE has been the lack of inflation, but central banks which have undertaken – or are still undertaking – QE claim that it has worked by preventing deflation through portfolio rebalancing. The shift in funds into riskier assets has led to higher stock markets. My take on this? Central banks are over exaggerating their claims at best, or grabbing at straws at worst.

Let’s take the US model experience as an example. I agree that the Fed’s balance sheet and S&P 500 index have been positively correlated since 2009, but I would argue that the relationship is casual, not causal. The Fed announced its QE programme only after US stock markets had collapsed to cheap levels, and stopped it only once those markets had recovered. As such, the Fed seemed to use the S&P index as a temperature gauge for the economy (“the share price of the country” as it were), rather than the index appreciation being the direct result of the QE activity undertaken. QE started when stocks were cheap, and finished when they became fair value.

Not yet convinced? The above chart demonstrates a coincidental relationship, but what about other economies? The QE experiment in Europe was initiated in March 2015, a time when the Stoxx 600 equity market was much more buoyant, and not trading at distressed valuation levels. It seems ludicrous to argue that a causal link has been in play in Europe....MORE

HT: FT Alphaville's Markets Live

Handy Hints For Artists (and collectors) To Garner Top Dollar

A couple papers that may be of interest. First up "Pricing Color Intensity and Lightness in Contemporary Art Auctions":

Pricing Colour Intensity in Contemporary Art

Rachel A. J. Pownall

Abstract

Colours affect us in different ways. From the psychology and marketing literature we know that colours have an a ect on us and infuence our decision making process. However, little is known about how colours and the intensity of colour drive prices observed in auction markets for art. Using a unique set of data for Contemporary artworks, which include Warhol prints which in some cases di er only by their combination of colours, we are able to observe the infuence of colour and intensity using RGB values and luminosity as explanatory variables on prices achieved at auction. Controlling for other hedonic characteristics, empirical results and signifcant evidence of darker colours carrying a premium than equivalent artworks which are less intense in colour.

1 Introduction 
Sensational prices achieved recently at Contemporary Evening auction sales for Andy Warhol's artworks have hit the headlines. In 2007 his Green Car Crash sold for an auction record price of $71.72 million dollars, only to be superseded by his Silver Car Crash, selling in November 2013, for $104.5 million dollars. His iconic vivid images have reached sensational prices, but to what extent is it the color whose sensualness a ects us and drives the prices reached at auction? Fashion, tastes and fads play a role. In this paper we use prices of Warhol paintings which appeared at auction during 2012 such that we can focus on the current market for Warhol's artworks, and determine which colors, and their corresponding intensity, are currently favoured in the art auction market.

During the 1950s Pop Art emerged in the US and Andy Warhol was a leading artist in this movement. He used nonrepresentational colour and form to convey different sensations. In the 1960s he created, amongst other work, a large number of `mass-produced' silkscreen images. He often focused on a number of iconic celebrities, such as Marilyn Monroe, Chairman Mao, and Elizabeth Taylor for his artworks. Many of these prints belonged to a number of limited editions and hence has the advantage that they can be compared to each other at different times of sale, and also can be compared to other artworks of the same image, but which differ only in their use of color. This begs the research question as to how much prices for these contemporary artworks differ between these various color editions, and which colours and intensity attract a higher price?

Little is known about the value or premium that individuals put on the color of artworks. Roger de Piles (1673) set about ranking artworks according to a number of attributes, one of them being color...MORE (25 page PDF) 

And via the SSRN:

The Impact of Color Palettes on the Prices of Paintings

Elena Stepanova

Scuola Superiore Sant'Anna di Pisa
July 9, 2015
Abstract:     

We emphasize that color composition is an important characteristic of a painting. It impacts the auction price of a painting but it has never been considered in previous studies on art markets. By using Picasso's paintings, we demonstrate the method to analyze color compositions. In the case of Picasso's paintings sold at Chrisite's and Sotheby's auctions between 1998 and 2014 in New York, our econometric analysis shows that [controlling for all conventional painting and sale characteristics] some colors are associated with high prices. We also find that contrastive paintings (defined as works with colors that are distant from each other in the RGB color space) get high prices. We also analyse the works of Color Field Abstract Expressionists and find that, in the case of this school, the more distant the work's color composition is from the black/gray spectrum, the higher work's market price.

17 page PDF

Blythe Masters' Digital Asset Holdings Raids Finance Sector For New Hires

From FinExtra:

Digital Asset, a developer of distributed ledger technology for the financial services industry, today announced that it has made several key senior hires across its global offices.

The company has appointed Carol Mathis as its Chief Financial Officer. Mathis joins from RBS Corporate and Institutional Bank where she was Chief Operating Officer and previously CFO. The company has also hired Josh Varsano as Chief Human Resources Officer, Gavin Wells as Head of Europe, Kelly Mathieson as Product Manager, Gordon Weir as Head of Delivery, Andrew Pisano as Business Development Director, Emnet Rios as Director of Finance and Operations and Martin Korbmacher as a Strategic Advisor to help scale Digital Asset’s accelerated growth.

These recent appointments reflect the continued development of Digital Asset’s senior team and follow several key hires over the past year, signaling the firm’s commitment to expanding its services to meet the needs of its clients. Mathis, Varsano, Mathieson, Pisano and Rios are based in New York, while Wells and Weir are based in London. Korbmacher will be based in Frankfurt.

“I am delighted to welcome such talented and experienced individuals to our team. We are privileged to tap into the expertise of these world-class leaders with deep expertise and proven track records in the specific areas that will be critical to accelerating our efforts to the benefit of our customers,” said Blythe Masters, CEO of Digital Asset....MUCH MORE

Risk: 50% of Insurance-Linked Securities Capital Could Be Wiped Out By 1-in-200 Hurricane: Deutsche

We're two months into the 2016 Atlantic hurricane season and thing are still quiet. Invest 97L looks to be headed toward the Yucatán peninsula, possibly making landfall as a tropical storm but for the long haul Cape Verde's we're not seeing much of anything.

In the meantime here's something to think about. The ILS and cat bond biz has not been tested during its period of explosive growth, with no landfalling major (cat 3 and above) 'canes in the U.S. since Wilma in October 2005.

From Artemis:

A 1-in-200 year U.S. hurricane loss event could result in insurance and reinsurance losses of as much as $150 billion, which could wipe out as much as 50% of the entire catastrophe bond, alternative capital and ILS market, according to analysts at Deutsche Bank.

In an extensive new report Deutsche Bank explores the potential impact a 1-in-200-year U.S. hurricane loss event could have on the global insurance, reinsurance, and insurance-linked securities (ILS) market, estimating that such an event would result in an overall economic loss of between $200 billion and $250 billion.

The firm estimates that roughly 55% to 60% of the overall loss would be borne by the insurance, reinsurance and ILS markets, representing between $110 billion and $150 billion, with as much as $80 billion of this total coming from the reinsurance side, both traditional and alternative capital.

At the end of 2015 alternative reinsurance capital volume totaled $72 billion and while the underlying risks for collateralized reinsurance, ILWs and sidecars are unclear, for catastrophe bonds (which makes up approximately 30% of the space) roughly 50% of the outstanding market covers U.S. wind risks, representing $12 billion in capacity.

Assuming a similar risk distribution for other forms of alternative capital, Deutsche Bank estimates that roughly 50% of all ILS capital covers U.S. wind risks, which represents $36 billion of the market, and which could all be eliminated from the marketplace in the event of a 1-in-200-year U.S. hurricane.

The combined loss that would be borne by reinsurers and the ILS market represents 11% to 14% of the entire reinsurance capacity provided, says Deutsche Bank, which translates to a 10% reduction of overall traditional capacity, and the removal of the majority of alternative reinsurance capital that protects U.S. wind risks.

As the above chart highlights, Deutsche Bank estimates that primary insurers would take between $20 billion and $40 billion of the overall loss from a mega hurricane event in the U.S., reinsurance and alternative capital together could see losses of up to $80 billion, with the remaining $30 billion or so falling on public sector entities, the Florida Hurricane Catastrophe Fund (FHCF), Citizens Property Insurance Corporation (CPIC), and the National Flood Insurance Program (NFIP)....MORE

"Why Charlie Munger has known no wise people who didn’t read all the time"

From Knowledge.SparkCapital, Dec. 3, 2015:

Cached Thoughts and Variations on a Theme

There has been much written on the benefits of reading. It strengthens memory, reduces stress, improves empathy, expands vocabulary, makes you wiser, smarter and probably more useful. Vitrix fortuna sapietia, goes the aphorism: wisdom conquers fortune. Doubtful panacea, you may say, yet I feel that conventional wisdom still underrates reading’s usefulness. “Reading will improve your mind” is about as banal a claim as “exercise is good for your abs,” and this total banality causes us to accept the claim as given, without meditating on its nuance, thereby missing out on the depth of its value. The importance of reading becomes more apparent if we consider ways the brain and mind may work, and if we seek to maximize the likelihood of our efficacy.

This essay will attempt to convince you that reading will make you better at life because of the way the wetwear in your head (i.e your brain) works.

I’ll use a pair of metaphors to frame the argument. Metaphor one is the notion of thoughts in the brain resembling the cache in a computer — what feels to us like real time thinking is probably just our brains retrieving stored memories in response to particular triggers. Metaphor two is a bit wordier — it imagines a concept as a dynamic, catalytic thing surrounded by a sphere of hypothetical variations of what that concept could become. Bear with me, it will (hopefully) make sense in context. The gist is that each “new” idea is a variation of preexisting concepts, which themselves are variations of other preexisting concepts.

If you make it through the (~16 minute) journey, I offer a reward: a widely accessible strategy for maximizing our reading effectiveness. It’s called Charlie Munger’s Latticework of Mental Models.

Metaphor One: Cached Thoughts

There is a concept in neurology called the “100-step rule” which postulates a constraint on the real time processing speed of the brain. A typical neuron can transmit an impulse to a neighboring neuron about once every five milliseconds, or around 200 times a second. If we assume that what feels to us like “real time” thinking happens in about half a second, then information entering your brain can only traverse a chain about 100 neurons long as you compute a real time solution/action/thought. From the moment the light enters your eye to the moment you recognize you are looking at Donald Trump strangling a cat with his bare hands, a chain no longer than 100 neurons could be involved. In other words, there cannot be more than 100 serial (i.e. one after the other) “steps”. For comparison, the Intel Core i7 chip in your MacBook can execute well over 100 billion serial instructions per second.

“Not to worry,” retorts some eccentric looking gentleman at the back of the party, “the brain is a parallel computer. While each neuron can only trigger a 100-neuron long chain in real time, billions of neural cells can simultaneously fire 100-neuron chains in parallel. This parallelism vastly multiplies the real time processing power of the brain.” He then points to your MacBook, which has multiple processing cores, and describes how it breaks a computational problem into discrete parts that can be solved concurrently (i.e. in parallel) by the different processors, each running billions of serial calculations per second. “Like a neural network!”, he shouts.

It’s here that our brain-as-a-computer analogy begins to break down. The brain can compute in 100 steps or fewer what would take a computer billions of steps to solve. Indeed, the largest conceivable parallel computer can’t do anything useful in 100 steps, no matter how many parallel processors you add. To understand why imagine you had to get 100 bohemian nonconformists a distance of five million steps from Times Square, New York to Burning Man, Nevada by pushing them one-by-one in a wheelbarrow (if you have seen pictures of Burning Man, this scenario might make more sense). You decide that this would take a long time (and no one deserves that much exposure to dogmatic conversations about “non-GMO cruelty-free vegan pumpkin spice squad goals”). One way to speed this up would be to hire 99 Uber wheelbarrow pushers to each take a passenger. Now the task goes 100 times faster. However, it still takes you a minimum of five million steps to cross the country. Hiring ten million more Uber wheelbarrow pushers would not provide any additional gain in speed since the problem cannot be solved in less time than it takes to walk the five million steps. So too in parallel computing: after a certain point, adding more processors doesn’t matter and no matter how many processors you add, a computer can’t calculate anything useful in 100 steps.

How then does our brain, that most miraculous three-pound grey blob, achieve in less than 100 steps what the fastest parallel computer imaginable cannot solve in a billion steps? Well if you had to write real time programs for billions of 100Hz (using Hertz here as a proxy for serial actions per second) parallel processors, one trick you’d use as heavily as possible is caching. That’s when you store the results of previous operations and look them up in memory next time you need them, rather than recomputing from scratch. “It’s a good guess that the actual majority of human cognition consists of cache lookups,” says artificial intelligence researcher Eliezer Yudkowsky. In other words, the brain does not “compute” answers to most problems; it retrieves answers that were stored in memory. When I throw you a ball and your hand moves to catch it, that is not your brain computing Newtonian Physics in real time. You are smart, but no one is that smart. Rather, what happens is that your brain has stored in memory, from years of repetitive practice, the muscle commands required to catch a ball and this temporal sequence is automatically recalled by sight of the ball.

Something similar likely happens with cognition. Somebody says “gun control” and your mind automatically dips into your memory cache to withdraw precomputed thoughts. Recognition, association, pattern completion. Kahneman terms this System 1 Thinking: fast, instinctive and emotional as compared to its slower, more deliberate, and more logical System 2 counterpart. Say we have a debate about politics or religion or some similar light topic. The discussion flows rapidly back and forth. We each offer arguments, evidence, thoughts, facts, counterarguments. To an observer, our mental volleying seems like an incredible amount of real time cognitive processing, especially given we could not have fully anticipated each other’s arguments. But it’s a good guess that most of this debate is a battle of cached thoughts pulled out in response to invariant trigger words and that very little new real time thinking occurs; that our effectiveness as interlocutors is largely determined by precomputed work. Combine cached thinking pattern completion with the cognitive limits imposed by the 100-Step Rule and it’s no wonder debates on contentious topics are so maddeningly ineffective. We change our minds less often than we think and repeat cached thoughts that we have accepted as truth without deriving them ourselves from first principles.

One cynical conclusion is that debates, particularly political ones, are hardly about convincing your opponent to change beliefs. Indeed this pursuit is often pointless since confirmation bias, commitment and consistency, hindsight bias, narrative fallacy, availability bias, scope insensitivity, anchoring, affect heuristics, and a host of other System 1 malfunctions will trump your 100-neuron chain attempt at seriously considering disconfirming evidence. The recent presidential debates have been an acute reminder of this futility: we mistake cleverness for content as candidates throw out evocative soundbites to elicit “applause light” reactions from the audience. It reminds me of that scene in Thank You For Smoking, where the protagonist (Nick) is teaching his kid (Joey) how to win debates:

Nick: Okay, let’s say that you’re defending chocolate and I’m defending vanilla. Now, if I were to say to you, “Vanilla’s the best flavor ice cream”, you’d say …?

Joey: “No, chocolate is.”

Nick: Exactly. But you can’t win that argument. So, I’ll ask you: So you think chocolate is the end-all and be-all of ice cream, do you?

Joey: It’s the best ice cream; I wouldn’t order any other.

Nick: Oh. So it’s all chocolate for you, is it?

Joey: Yes, chocolate is all I need.

Nick: Well, I need more than chocolate. And for that matter, I need more than vanilla. I believe that we need freedom and choice when it comes to our ice cream, and that, Joey Naylor, that is the definition of liberty.

Joey: But that’s not what we’re talking about.

Nick: Ah, but that’s what I’m talking about.

Joey: But … you didn’t prove that vanilla’s the best.

Nick: I didn’t have to. I proved that you’re wrong, and if you’re wrong, I’m right.

Joey: But you still didn’t convince me.

Nick: Because I’m not after you. I’m after them

“I’d never fall for a trick like that,” you may say, but unless you are trained to do otherwise — to consider disconfirming evidence in the tiny window where intelligence has a chance to act — you will likely rely on cached thoughts, and repeat fragments of other people’s beliefs without doing any real thinking yourself. Jonathan Heidt illustrates this point painfully and hilariously in his book The Righteous Mind, where he asks subjects bizarre questions like “Is it wrong to have sex with a dead chicken? How about your sister?” Most people agree these things are wrong when under interrogation in psychology experiments. But none can explain why. It’s like they penciled a conclusion to an exam question at the bottom of the page and, when pressed to justify this conclusion, they went to the top of the page and started scribbling down confirming cached thoughts. It’s kind of like that guy who has to go on TV and automatically justify any position taken by the president.

“Well, what the hell does this have to do with reading?” Glad you asked and thanks for the smooth segue. French microbiologist Louis Pasteur once opined that fortune favors the prepared mind. This is particularly true in a mind constrained by 100-Step limits where preparedness is largely a function of the breadth, depth, and intermingling of cached thoughts (this includes spontaneous bursts of creativity, which are discussed in greater detail in Metaphor Two). Given these limitations, one obvious strategy for mental preparedness is voracious reading and an accumulation of vicarious experience. The more you read, the more effective you become and, paradoxically, the more humbled you will be by how little you know. You will begin to see novel links and better understand the world around you. You will be quicker and more useful in real-time discussion. Your base of cached thoughts will build and these thoughts will intermingle and combine in novel ways, often resulting in serendipitous invention.

Which brings me to the second prong of my “reading thesis”: variations on a theme are the crux of creativity....MORE

HT: Jake Cahan 

Ethanol: Rare Disease Brews Beer In Your Stomach

From Fox News Health:

For some people, having a digestive system that converts ordinary food into alcohol might sound like a dream come true: You never have to drink in order to get drunk! But this condition, called auto-brewery syndrome, is as real as can be, and for the people who have it, it can make everyday life a nightmare.

Also known as gut fermentation syndrome, auto-brewery syndrome is a rare condition in which a type of yeast, Saccharomyces cerevisiae, ferments food in the stomach, producing ethanol, the type of alcohol found in beer, wine, and spirits.

Thankfully, very few people have this viable yeast culture in their stomachs, but for those who do, living with it can be a real challenge. Just think about it: What if you suddenly became very drunk at random times throughout the day? Not only would it make interactions with family, friends, and colleagues exceedingly uncomfortable, when the intoxication wears off you’d have to deal with crippling hangovers, chronic fatigue, and other side effects of alcoholism....MORE

Theranos: Oh Dear, That Wasn't Well Received At All

Some of the kinder comments:

"Bait and switch"

 "When is everyone just going to say, enough is enough? Enough attention has been paid to theranos - and they wasted it."

"Question about Theranos having broad vision, but evidence "fell far short" of expectation garners applause from audience"

We may be back with the write-ups tomorrow. This is starting to feel really yucky. diagnostic lab technical term

Update2 Full House at AACC2016 Waiting for Theranos Update--Live Feed

I'm not aware of any live feeds so here are a couple twitter streams: 

1) Periscope Bottom of page
2) Matthew Harper at Forbes is liveblogging

Original post:

#AACC2016

Full house at #aacc2016 waiting for @theranos update. pic.twitter.com/IDr7r3ED6K

— Matt Mittino (@MattMittino) August 1, 2016

#Theranos

#Theranos madness: #AACC2016 now has FIVE overflow rooms for Elizabeth Holmes' presentation. FIVE.

— jodi gralnick (@jodigralnick) August 1, 2016

I hope someone will tweet from Holmes’ session at #2016AACC Looks like it starts at 4:30. #Theranos #nanotainer pic.twitter.com/CYF1U9p0LM

— Jessica Adams (@RxRegA) August 1, 2016

We have a periscope feed:

LIVE on #Periscope: Streaming: Elizabeth Holmes of Theranos speaks at science conference  https://t.co/d1QaK0vZvV

— scott budman (@scottbudman) August 1, 2016

Tesla-Solar City: Cousins Shouldn't Get Married (to each other) TSLA; SCTY--UPDATED

Update below.
Original post:
 
I wasn't going to link to anything on the TSLA/SCTY merger, it's a bad deal for Tesla and a good one for SolarCity but you can get that opinion almost anywhere.
And then I thought "We've been posting on SolarCity since before the IPO, we might as well book-end the story"
Here's our Dec. 13, 2012 post "After Price Cut Elon Musk's SolarCity Trades, Soars (SCTY)":

The stock was priced at $8.00, down from the $13-15 range the underwriters were throwing out earlier this week.
It is currently trading at $11.60, up 45%.

From earth2tech GigaOm cleantech:...

Speaking of bookends, the link was to Katie Fehrenbacher, at that time hanging out at an Om Malik property. Here she is writing for Fortune:

SolarCity Lowers Annual Guidance on Weaker Home Solar Demand
Is the market for home rooftop solar panels maturing in states like California?

As it goes through the process of being acquired by electric car maker Tesla Motors, solar installer SolarCity has lowered its forecast for how many solar panels it would install this year, blaming weaker than expected bookings in the first half of the year.

The news on Monday sent SolarCity’s SCTY -7.42% shares down 8% in morning trading to $24.56.

The solar company doesn’t plan to announce its full second quarter earnings until Aug. 9, but it likely had to release some financial metrics early because of updated deal terms for its acquisition that were also disclosed on Monday.

Tesla TSLA -2.18% announced that it planned to acquire SolarCity in late June, but the deal announced on Monday was slightly less lucrative for SolarCity. SolarCity shareholders will now receive fewer shares of Tesla—0.110—than the 0.122 to 0.131 shares that were originally proposed....

...MORE

So, thanks to cousin Elon, SolarCity's CEO Lyndon Rive ended up making quite a bit of money rather than facing an almost-certain insolvency.
We'll just have to wait and see how the kids turn out.

Update from Bloomberg: "Musk’s SolarCity Offer Wipes Out His Cousins’ Stock Options"

The last time I looked Lyndon Rive had around 4 million shares that he owned outright. That was a year ago and I haven't followed all the SEC Forms 4 that he's filed since that 10K but 4 mil. is the number that sticks in my head. On the other hand Yahoo Finance is showing 683K directly held shares (2,268,356 indirect) so maybe he sold some.

"An Earthquake Early-Warning App Just Went Rogue and Terrified Tokyo"

From Atlas Obscura:

False megaquake alert shakes Tokyo https://t.co/PqKo0XGly5 #Japan pic.twitter.com/ly0SiENVwI

— The Straits Times (@STcom) August 1, 2016

Billions of citizens worldwide rely on disaster apps, which provide quick and concise warnings about fires, floods, and earthquakes. These programs can save lives, warning people out of dangerous areas and helping connect communities during frantic times. You probably have one or two running in the background right now, just in case.

But even apps can cry wolf. Such was the case at 5 pm today in Tokyo, when a number of residents received an alert on their phone that just said, alarmingly, "Earthquake! Earthquake!"

"Users of the Yurekuru disaster warning app were told that a magnitude 9.1 earthquake was about to hit the sprawling metropolis,'" Agence France-Presse reports. Along with the cries of "earthquake," users were treated to a map of the country, most of which was absolutely swarmed with bright pink quake indicators. About five million people in Japan use the app....MORE

Saudis Offer Big Price Cuts To Asian Customers

They do not want to lose any more market share to Russia and Iran.
Brent $42.11, WTI $40.26 down $1.34.
From ZeroHedge:

Saudis Slash Oil Prices For Asian Markets; So Much For Solving That Banking Liquidity Crisis

Shortly after we spoke yesterday about the banking liquidity crisis in Saudi Arabia caused by the "Saudi circ ref" (low oil prices -> budget deficits -> more oil pumping -> even lower oil prices), almost on cue, the state-owned Saudi Aramco, the worlds largest oil exporter, announced the largest price cut for Arab light sweet crude sold into Asian markets in 10 months.  Aramco priced September exports to Asia $1.10 per barrel below regional benchmarks which is a $1.30 cut vs. August pricing.  Oil pricing into Asian markets has come under intense pressure in 2016 as the battle for market share has intensified between the Saudis, Russians and Iranians (a topic we've covered extensively here, here and here)....MORE

F1 Chief Bernie Ecclestone's Mother-in-law Freed, No Ransom Paid

Following up on last week's "Bernie Ecclestone's mother-in-law Aparecida Schunck 'kidnapped in Brazil with £28m ransom'".
From the BBC:

The mother-in-law of F1 boss Bernie Ecclestone, who was kidnapped in Brazil, has been freed unharmed without any ransom being paid, say police.

Aparecida Schunck, 67, the mother of Mr Ecclestone's wife Fabiana Flosi, was abducted from her Sao Paulo home on 22 July.

A ransom of $36.5m (£28m) was demanded, but none was paid, according to Elisabete Sato of the Sao Paulo police.

Ms Sato told the BBC there was a major police operation to free the victim.
Two suspects were arrested and the victim was not injured.

Ms Schunck was freed after being traced to a house near Sao Paulo after investigators monitored phone calls between the kidnappers and her family, police say.

Shortly after she was freed, Ms Schunck told Brazilian media: "I only ask for these bandits to be jailed so they can't abduct anyone else in Sao Paulo."

The house where Ms Schunck was held for nine days is located in a poor neighbourhood of the town of Cotia and is divided into five flats.

The owner of the house, who lived in one of the flats at the back of the building, said his wife had not stopped crying since she had found out that Ms Schunck had been held "right under our noses".

'No noise'
The owner said one of the suspects arrested on Sunday had started renting the flat three months previously and had told him he worked nightshifts....MORE 

Previously on the Formula One channel:

Formula One boss Max Mosley 'exposed as sadomasochist in Nazi orgy with five prostitutes'
Do Humans Add Value? "Where would be the fun in watching a driverless Formula 1 race?"
Thank You Daddy: "Petra Ecclestone Buys Candy Spelling’s $150 Million Mansion After A Massive Markdown"

Satyajit Das: "QE-forever cycle will have an unhappy ending"

Ya think?
So what to do? Dance faster, the band is still playing.

From the Financial Times:

A combination of QE and the prospect of fresh fiscal stimulus won’t generate a recovery
Policymakers have chosen to ignore the central issue of debt as they try to resuscitate activity.

Since 2008, total public and private debt in major economies has increased by over $60tn to more than $200tn, about 300 per cent of global gross domestic product (“GDP”), an increase of more than 20 percentage points.

Over the past eight years, total debt growth has slowed but remains well above the corresponding rate of economic growth. Higher public borrowing to support demand and the financial system has offset modest debt reductions by businesses and households.

If the average interest rate is 2 per cent, then a 300 per cent debt-to-GDP ratio means that the economy needs to grow at a nominal rate of 6 per cent to cover interest.

Financial markets are now haunted by high debt levels which constrain demand, as heavily indebted borrowers and nations are limited in their ability to increase spending. Debt service payments transfer income to investors with a lower marginal propensity to consume. Low interest rates are required to prevent defaults, lowering income of savers, forcing additional savings to meet future needs and affecting the solvency of pension funds and insurance companies.

Policy normalisation is difficult because higher interest rates would create problems for over-extended borrowers and inflict losses on bond holders. Debt also decreases flexibility and resilience, making economies vulnerable to shocks.

Attempts to increase growth and inflation to manage borrowing levels have had limited success. The recovery has been muted.

Sluggish demand, slowing global trade and capital flows, demographics, lower productivity gains and political uncertainty are all affecting activity. Low commodity, especially energy, prices, overcapacity in many industries, lack of pricing power and currency devaluations have kept inflation low.

In the absence of growth and inflation, the only real alternative is debt forgiveness or default. Savings designed to finance future needs, such as retirement, are lost....MORE

Insurance--Space Weather: Solar Storm Could Cause $330 Billion Insured Loss

From Artemis:

The University of Cambridge  has released a report exploring the potential impact space weather could have on the U.S. economy and insurance industry, noting that its stress test scenario shows the insurance industry could face losses of as much as $334 billion.

Much uncertainty surrounds the potential economic impacts an extreme space weather event could have on modern economies, leading the Cambridge Centre for Risk Studies to produce a stress test scenario (the Helios Solar Storm Scenario) that explores the impacts of a U.S.-wide power system collapse as a result of extreme space weather, such as solar storms and geomagnetic activity.

“This scenario describes how an extreme space weather event can cause direct damage and indirect debilitation of high voltage transmission grids in the USA, resulting in power blackouts along with consequential insurance claims and economic losses,” says the report, Helios Solar Storm Scenario.

The stress test includes three variations of the Helios Solar Storm Scenario, that differ in regards to damage distribution and restoration timeframes says the report, and which has the potential to result in an insurance industry loss of between $55 billion and a massive $333.7 billion.

To put the above figures into context, the report notes that the lower end of the loss estimate would still be roughly double the volume of insurance payouts from both superstorm Sandy and hurricane Katrina, and fairly close to the overall insured loss from global catastrophes in 2015.

A wide range of business lines could be affected by space weather events, says the report, highlighting a selection of potential loss areas. This includes, power transmission operators, power generation companies, companies that lose electricity, satellites, homeowners and specialty lines, such as event cancellation.

The report considers three scenario variants, S1, S2 and X1, with the former being considered the baseline scenario. “It involves limited damage to EHV transformers in the US, with only 5% of those units suffering any damage, and restoration periods of moderate length,” says the report....MORE

We've checked in with the Cambridge risk boffins a few times including two that focused on robots:
"Stephen Hawking Joins Anti-Robot Apocalypse Think Tank"
BBC: "Risk of robot uprising wiping out human race to be studied"

On the other hand the folks at Oxford are a bit more chipper:
New Doomsday Analysis Says Humans are Doing Better than Expected

In the meantime, over at SolarHam (on blogroll at right) we read:

July 31, 2016 @ 00:150 UTC
Geomagnetic Storm Watch

Good evening. A middle latitude coronal hole (03) will move into a geoeffective position during the next several days and a solar wind stream flowing from this zone could lead to geomagnetic storming at higher latitudes. A faint coronal mass ejection (CME) observed on July 28th may enhance activity further with an expected arrival by August 2nd. A minor (G1) to moderate (G2) geomagnetic storm watch will be in effect during the beginning of the upcoming week. Stay tuned to SolarHam.com for the most up to date information. 

Image courtesy of SDO/AIA. 

Hmmmm...

Computer Simulations Reveal Benefits of Random Investment Strategies Over Traditional Ones

This is a repost from 2013.

The Joy of Randomness: Central Bank Strategy, Management Technique and Stock Selection 

From Technology Review's Physics arXive blog:

Computer Simulations Reveal Benefits of Random Investment Strategies Over Traditional Ones
 
Central Banks could use random investment strategies to make markets more stable, say econophysicists  

Back in 2001, a British psychologist carried out an unusual experiment in which he asked three people to invest a virtual £5000 in the UK stock market. The three people were a professional trader, an astrologer and a 4 year old girl called Tia.

The results were something of an eye-opener. At the end of the year, the trader had lost 46.2 per cent of the original investment and the astrologer 6.2 per cent. Tia, on the other hand, had made 5.8 per cent. Others have carried out similar experiments with similar results in which investments were chosen by a chimpanzee or by throwing darts.

The implication in these experiments is that random investment strategies are as good as, or even better than, traditional ways of making investments.

Today, Alessio Biondo from the University of Catania in italy and a few pals test this idea for themselves. These guys have simulated the performance of four traditional strategies using 10 years of historical data from the UK, German and US stock markets. They then compare the results with those from an entirely random strategy.

The traditional approaches are all based on the past performance of the market and include, for example, the “momentum strategy” which measures how fast the price of something has changed in the recent past and then uses this to predict how much it will change in the near future. Another approach is called the “up down strategy” in which the prediction for tomorrow’s market behaviour is exactly the opposite of today’s....MORE

We've looked at the phenomena  in a couple other contexts:

Random Stock Selection Again Beats Index; 99.9% of High Priced Managers

There may be a problem or two with the sample size, replication, error bars, pretty much the whole statistical schmear, but if I put that in the headline would you have read this far?
From Joe Meth (Stock Chartist)...

And:
Okay, Enough With Politics: Attention Managers, You Can Improve Corporate Efficiency by Randomly Promoting Employees

That last piece of research was awarded Harvard's own Ig Nobel prize in 2010.

Ya see, ya got your complex systems and ya got your chaotic systems and then ya got your complex-chaotic systems like weather or the economy or the stock market and when you endeavor at those levels of sophistication you realize:

"Nobody knows anything"

-William Goldman

Completely off-topic sidebar:
If you're interested, Mr. Goldman will show you how to write a movie script.

Wikipedia is Pivoting Into News With its Redesigned Android App

From The Next Web:

Wikipedia is getting a fresh new look on Android and set of features, following up on an update to the iOS app a few months ago.

The main screen of the app now shows you an ‘explore’ feed which will recommend photos, articles and other content based on your previous reads and current events.  The feed is divided into Google Now like cards depending on the type of suggestion. Some highlights

• “In the news” occupies the top of of your feed. As you’d expect, it includes new or updated articles based on current news
• ‘Trending articles’ includes the five most popular articles of the day
• ‘Featured article’ is a piece handpicked by Wikipedia editors on a daily basis.
• ‘Because you read’ is based on your previous interests
• ‘Continue reading’ to follow up on unfinished articles
• And ‘Randomizer’ for whatever the random number generator feels like throwing at you
• Picture of the day, for… a photo of the day

...MORE

Speaking of randomizers, coming up next: "Computer Simulations Reveal Benefits of Random Investment Strategies Over Traditional Ones"

Chinese Lottery Winners Collect Prizes Dressed as Cartoon Characters to Protect Their Identity

File under: Things I did not know.

From Oddity Central:

A Chinese man was recently in the news for not only winning millions of yuan in a lottery, but also for the bizarre costume he wore while collecting his prize. The man, believed to be about 40 years old, was so worried about revealing his identity that he actually turned up dressed as the popular Disney character Baymax.

Speaking to reporters, the man revealed that he had won 170 million yuan (approximately $27 million) even though he rarely buys lottery tickets.  As for the strange costume, the man revealed that his wife forced him into wearing it, fearing that old friends and long-lost relatives might suddenly show up expecting a small share of the prize. But no costume can actually help him evade the mandatory 20 percent tax on lottery winnings, which means he will have to cough up about 34 million yuan to give back to the state.

As it turns out, this man isn’t the first lottery winner to adopt the eccentric practice of accepting winnings in disguise. Lots of Chinese winners tend to be very cautious about protecting their identity, to dodge thieves and relatives. So they turn up wearing superhero masks or costumes. In fact the tradition dates back to about 25 years or so.

In October 2014, a man from Shanxi province collected his 520 million yuan ($85 million) prize dressed in a yellow bear suit. He actually wore the suit throughout a press conference, answering all sorts of questions from reporters. Unlike the Baymax man, this guy said that he routinely spent 20,000 to 30,000 yuan on lottery tickets each year. His persistence finally paid off when he won the third largest jackpot handed out in China’s history.

In August last year, a man dressed as Mickey Mouse took home a whopping 398 million yuan, while another man in a panda costume collected the 565 million yuan jackpot in 2011. Several pictures on Chinese social media show other winners wearing pollution masks, Avengers masks, Spiderman masks, and party masks!,,,MORE

Thanks, I think, to a reader.