Archive for the 'business' Category

Game changer?

Saturday, January 31st, 2015

In our view, Microsoft hasn’t had a good idea since Office 97. Now we hear from Leo Laporte that tech reviewers whom he trusts say that HoloLens is great. Here’s some more info from Vox and Forbes and HBR. We don’t get it quite yet, but give us time. More interesting to think about than the low lifes stinking up the country.

More bad news for the euro?

Friday, January 30th, 2015

We discussed the comments of the ECB head earlier. We weren’t the only ones who noticed. Reuters:

Italy should consider leaving the single currency and reintroducing the lira, Welfare Minister Roberto Maroni said in a newspaper interview on Friday. Maroni, a member of the euro-skeptical Northern League party, told the Repubblica daily Italy should hold a referendum to decide whether to return to the lira, at least temporarily. He also said European Central Bank President Jean-Claude Trichet was one of those chiefly responsible for the “disaster of the euro.”

The euro “has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis,” Maroni said. In this situation, the answer is to give the government greater power to defend national industry from foreign competition and “to give control over the exchange rate back to the government.”

The euro is crumbling faster than anyone thought. Oh, wait, the story above is 10 years old. Sorry, we’re just trying to be funny; actually we do think the euro is toast.

For another good laugh, check out Wretchard today. Ummm, maybe not so funny.

Another series of impressively depressing writings

Thursday, January 29th, 2015

WRM. VDH. Spectator. Had enough?

Fast

Wednesday, January 28th, 2015

Reuters

The company sold 74.5 million iPhones in its fiscal first quarter ended Dec. 27, while many analysts had expected fewer than 70 million. Revenue rose to $74.6 billion from $57.6 billion a year earlier.

Profit of $18 billion was the biggest ever reported by a public company, worldwide, according to S&P analyst Howard Silverblatt. Apple’s cash pile is now $178 billion, enough to buy IBM or the equivalent to $556 for every American.

Apple Chief Executive Officer Tim Cook said the Cupertino, California-based company would release its next product, the Apple Watch, in April.

The iPhone did not exist a decade ago. We wonder if official measures of productivity are way off today, much less than is actually happening. The instantaneousness of everything has its large downsides, but we think that historians may find that this current period of economic downturn and dislocation would have been far worse without the vast power and speed of these tiny talking computers.

Of course productivity is roughly defined as an increase in output when inputs remain constant. Most of the uses of the tiny computers in supply chain reductions, energy conservation and optimization, shorter and more accurate decision algorithms, etc. have yet to be discovered or implemented. Therefore, even with the ridiculousness of loons at the EPA etc., the economy might actually do well.

The 24 hour and 50 year forecasts predict catastrophe!!!

Tuesday, January 27th, 2015

HuffPo:

forecasters have projected a record snowstorm for the Northeast in the coming hours, which isn’t exactly the sort of thing that makes people think about global warming. But in declaring a state of emergency on Monday, New York Gov. Andrew Cuomo (D) noted that this type of monster storm is “part of the changing climate.”

“I’ve only been governor four years. I believe I’ve gone through more emergency disasters in four years than any governor in history has gone through,” said Cuomo. “There is a pattern of extreme weather that we have never seen before.” Cuomo cited Superstorm Sandy in 2012, which hit New York and New Jersey particularly hard, as well as the 7 feet of snow that fell on Buffalo this past November. “It’s something we have to adjust to, it’s something that’s very costly, and it’s also something that’s very dangerous,” said the governor.

Climate change deniers are gonna deny, but there is increasing evidence that ties atmospheric warming trends to heavier snowfall events.

It’s the argon dammit!!! The argon that’s the problem. All our problems will be over (except for some tiny ones) if we can just get rid of the argon.

EQ test

Thursday, January 22nd, 2015

George Friedman:

The plan is an attempt to spur economic activity in Europe by increasing the amount of money available. It calls for governments to increase their borrowing for various projects designed to increase growth and decrease unemployment. Rather than selling the bonds on the open market, a move that would trigger a rise in interest rates, the bonds are sold to the central banks of eurozone member states, which have the ability to print new money. The money is then sent to the treasury. With more money flowing through the system, recessions driven by a lack of capital are relieved. This is why the measure is called quantitative easing.

The United States did this in 2008. In addition to government debt, the Federal Reserve also bought corporate debt. The hyperinflation that some had feared would result from the move never materialized, and the U.S. economy hit a 5 percent growth rate in the third quarter of last year. The Europeans chose not to pursue this route, and as a result, the European economy is, at best, languishing. Now the Europeans will begin such a program – several years after the Americans did – in the hopes of moving things forward again.

The European strategy is vitally different, however. The Federal Reserve printed the money and bought the cash. The European Central Bank will also print the money, but each eurozone country’s individual national bank will do the purchasing, and each will be allowed only to buy the debt of its own government. The reason for this decision reveals much about Europe’s real crisis, which is not so much economic (although it is certainly economic) as it is political and social – and ultimately cultural and moral.

The recent leaks have made it clear the European Central Bank is implementing quantitative easing in this way because many eurozone governments are unable to pay their sovereign debt. European countries do not want to cover each other’s shortfalls, either directly or by exposing the central bank to losses, a move that would make all members liable. In particular, Berlin does not want to be in a position where a series of defaults could cripple Europe as a whole and therefore cripple Germany. This is why the country has resisted quantitative easing, even in the face of depressions in Southern Europe, recessions elsewhere and contractions in demand for German products that have driven German economic growth downward. Berlin preferred those outcomes to the risk of becoming liable for the defaults of other countries.

The major negotiation over this shift took place between European Central Bank head Mario Draghi and German Chancellor Angela Merkel. Draghi realized that if quantitative easing was not done, Europe’s economy could crumble. While Merkel is responsible for the fate of Germany, not Europe, she also needs a viable free trade zone in Europe because Germany exports more than 50 percent of its gross domestic product. The country cannot stand to lose free access to Europe’s markets because of plunging demand, but it will not underwrite Europe’s debt. The two leaders compromised by agreeing to have the central bank print the money and give it to the national banks on a formula that has yet to be determined – and then it is every man for himself.

The European Central Bank is providing the mechanism for stimulating Europe’s economy, while the eurozone member states will assume the responsibility for stimulating it – and living with the consequences of failure. It is as if the Federal Reserve were to print money and give some to each state so that New York could buy its own debt and not become exposed to California’s casual ways.

Economist:

When the European Central Bank’s (ECB) governing council meets on January 22nd, it will take a historic decision. Among the main central banks, the ECB alone has abstained from a big programme of quantitative easing involving the creation of money to buy sovereign bonds with the aim of spurring growth and inflation. The economic case for QE in the euro area is overwhelming: the feeble economic recovery that has followed Europe’s double-dip recession is faltering; headline inflation has turned negative and longer-term inflation expectations have also declined to a worrying extent. Mario Draghi, the ECB’s president, seems determined to adopt QE in some form, but he will have to compromise on the way that the risks are shared among the euro-zone national central banks in order to get the policy through.

Insiders expect a programme of sovereign-bond purchases of around €500 billion ($580 billion) to be announced on Thursday. Anything less would be likely to disappoint markets that have already been anticipating a move by the ECB to adopt QE, causing, for example, the euro to weaken. The need to purchase government bonds arises from the scale with which the ECB needs to intervene. The central bank wants to raise the balance-sheet of the Eurosystem (the ECB along with the euro zone’s 19 national central banks) from €2.2 trillion to €3 trillion. Since late last year it has been conducting a form of QE by buying private assets, mainly covered bonds, a particularly safe form of debt issued by banks, and also some asset-backed securities. Such purchases may reach around €200 billion over a year. But the amount of eligible and available covered bonds, of around €1 trillion, is dwarfed by the value of sovereign bonds, of over €6 trillion. At one time it seemed that the ECB might buy conventional corporate bonds, but it seems to have decided that the market is too illiquid for it to operate in at scale.

But a big bond-buying programme is tricky in a monetary union where there is not one federal government but 19 national ones, of widely varying creditworthiness, ranging from triple-A for Germany’s to junk for Greece’s. The indications are that Mr Draghi will have to bow to stipulations set by Jens Weidmann, head of the German Bundesbank, if he is to get QE approved. Most notably, purchases of sovereign debt will not be made under the usual risk-sharing arrangements at the ECB, whereby the 19 national central banks of the euro zone share any losses in rough proportion to the size of their economies. The Bundesbank would normally expect to shoulder a quarter of any losses incurred by the ECB. But in this instance, each central bank is likely to be largely responsible for buying the bonds of its own country and will have to bear any losses on them on its own.

That is a good deal for the Bundesbank, because German bonds are so safe. But it marks a big break in precedent and will be seen as unsatisfactory by many members of the governing council. The compromise is necessary because on this occasion Angela Merkel, Germany’s chancellor, is backing Mr Weidmann. That is in sharp contrast with the previous clash between Mr Weidmann and Mr Draghi, in 2012, over the (unused) policy of “outright monetary transactions”, a conditional commitment to buy bonds of countries under siege in the markets, which gave teeth to Mr Draghi’s pledge to do “whatever it takes” to save the euro. Mrs Merkel fears that QE will allow laggard governments, including those of Italy and France, to further delay indispensable structural reforms. The chancellor also worries that purchases made through the usual risk-sharing approach would in effect create by the backdoor “Eurobonds”, jointly issued bonds with the risk mutually shared among member states, to which she is strongly opposed.

Some way will also have to be found to deal with the problem of Greece, which in elections on January 25th may choose a new government that seeks some form of debt relief and tries to backtrack on reforms. One possible solution might be to stipulate that junk-rated sovereign bonds will be bought only if the country concerned is abiding by the terms of a euro-zone bail-out programme (Greece’s is due to expire at the end of February).

Markets may shrug off these messy details in their elation that QE is at long last under way, injecting money into the euro-zone economy and signalling the ECB’s commitment to arrest the fall in inflation. Most members of the ECB’s council will grudgingly take the view that it is better to get a big amount of QE along these lines than a much smaller dose with the usual risk-sharing arrangements. The effect of the QE that the council undertakes may also be stronger if, as is now expected, the bonds purchased will be held to maturity. But a package along these lines will set an unfortunate precedent, for it will embody the very fragmentation within the euro area that the ECB has been seeking to combat. That will add to the danger that the long-awaited QE programme may be coming too late to arrest the slide into a deflationary mindset.

WSJ:

In order to appease those who are worried that taxpayers across the Eurozone will end up carrying the can if one country defaults, the majority, if not all, of these purchases are likely to be undertaken by the national central banks. These will buy their own government’s debt in proportion to the size of the economy and will be limited to a maximum of about a quarter of outstanding debt. The ECB will provide the money for the purchases.

Man, this is hard to understand. It looks like the ECB will give Euros to the 19 other central banks, and those banks will buy their governments’ debt from banks and other institutions, up to 25% of that debt, which varies all over the place, depending on the fiscal discipline in the 19. Total sovereign debt is 6+ trillion Euros, so the program could be as large as 1.5 trillion Euros if all participated. Then the theory is that banks will lend the extra money and institutions will also invest or lend. Uh-huh.

We won’t bother quoting from the negative piece in the Telegraph on this, but this all doesn’t make too much sense to us. Aren’t the low-productivity countries with high debt just getting another kick at the can, another reason to spread more money around without any structural changes? It’s hard to see how this ends well.

Near term result, via WSJ: “Euro Slides to 11-Year Low Against Dollar.”

Glittering Jewel

Tuesday, January 20th, 2015

Eugene Robinson in WaPo:

scientists have had their debate. It’s over. Among climate scientists, there is consensus approaching unanimity that climate change is being driven by the rapidly increasing concentration of heat-trapping carbon dioxide in the atmosphere, which, in turn, is being caused by the burning of fossil fuels. It is known through direct observation that carbon dioxide levels have risen an astounding 40 percent since the beginning of the Industrial Revolution. The rise began after human society began burning coal and petroleum products on an unprecedented scale…”Hottest Year On Record” is a headline that encourages sanity on climate change.

Let’s regulate the methane of those parping cattle. And argon while we’re at it. Lord, what fools these mortals be!

Sigh

Sunday, January 18th, 2015

NYT:

Speaking to reporters aboard the plane taking him to Manila on Thursday, Francis said he believed that man was primarily responsible for climate change and that he hoped the U.N. climate meeting in Paris in November would take a courageous stand to protect the environment. “I don’t know if it is all but the majority is, for the most part, it is man who continuously slaps nature in the face,” he said.

The phrase Climate Hebdo comes to mind. Check out IBD, and of course there’s always argon.

Iacta alea est

Thursday, January 15th, 2015

Via CFR:

Dr. Leslie H. Gelb is among America’s most prominent foreign policy experts. A Pulitzer Prize winner, former correspondent for the New York Times, and senior official in state and defense departments, he is currently president emeritus and board senior fellow at the Council on Foreign Relations (CFR). He served as president of the organization from 1993 to 2003. Prior to his tenure as president of CFR, Dr. Gelb established a distinguished career at the New York Times, where he was a columnist from 1991 to 1993, deputy editorial page editor from 1986 to 1990, and editor of the op-ed page from 1988 to 1990. He was national security correspondent for the Times from 1981 to 1986, where he won the Pulitzer Prize for Explanatory Journalism in 1986. He was diplomatic correspondent at the Times from 1973 to 1977. Dr. Gelb was a senior associate at the Carnegie Endowment for International Peace from 1980 to 1981, where he was a consultant to the German Marshall Fund of the U.S. From 1977 to 1979, he was an assistant secretary of state in the Carter administration, serving as director of the Bureau of Politico-Military Affairs, where he received the State Department’s highest award: the Distinguished Honor Award. He was a senior fellow at the Brookings Institution from 1969 to 1973, during which time he was also a visiting professor at Georgetown University. He was director of Policy Planning and Arms Control for International Security Affairs at the Department of Defense from 1967 to 1969, where he also served as director of the Pentagon Papers Project. While at the Defense Department, Dr. Gelb won the Pentagon’s highest award, the Distinguished Civilian Service Award. He was executive assistant to U.S. Senator Jacob K. Javits from 1966 to 1967, and an assistant professor at Wesleyan University from 1964 to 1966. Dr. Gelb currently serves on the Center for National Interest Board of Directors, the Iraq and Afghanistan Veterans of America Board of Directors, the Diplomacy Center Foundation Board of Directors, the Peter G. Peterson Foundation Board of Advisors, and the Truman National Security Project Board of Advisors. He is a former trustee for the Carnegie Endowment for International Peace, trustee emeritus for Tufts University, and the former Chairman of the National Security Network Advisory Board. He formerly served on the School of International and Public Affairs at Columbia University Dean’s Council, the James A. Baker III Institute for Public Policy at Rice University Board of Advisors, the Watson Institute for International Studies at Brown University Board of Overseers, and the Joan Shorenstein Center on the Press, Politics and Public Policy at the Harvard Kennedy School of Government Advisory Board. He is a member of the Council on Foreign Relations and the International Institute for Strategic Studies, and a fellow at the American Academy of Arts and Sciences. Dr. Gelb received his BA from Tufts University in 1959 and his MA in 1961 and PhD in 1964 from Harvard University. He is the author of Power Rules: How Common Sense Can Rescue American Foreign Policy (2009) and Anglo-American Relations, 1945–1950: Toward a Theory of Alliances (1988). He is also co-author of The Irony of Vietnam: The System Worked (1980), which won him the American Political Science Association’s Woodrow Wilson Award; Our Own Worst Enemy: The Unmaking of American Foreign Policy (1984), and Claiming the Heavens: The New York Times Complete Guide to the Star Wars Debate (1988). He is the recipient of an Emmy Award and an Alfred I. DuPont-Columbia University Award.

It’s pretty hard to get much nearer the peak of the media-government-university establishment than this. That’s why his list of things that are beyond-urgent-and-vital-but-are-never-gonna-happen is so tragicomic. And you know that things are only going to get worse from here. HT: PL

How come the obvious isn’t obvious to everyone?

Monday, January 12th, 2015

VDH discusses multiculturalism:

there is a clear pathway to economic prosperity and a secure lifestyle; countries as diverse as South Korea, Japan, and Chile are proof of it. Within wide parameters, success only asks adherence to a mostly free market, some sort of freedom of expression, religious tolerance, a separation of science from orthodoxy, the rule of law, and consensual constitutional government — along with a cultural ethos of rough parity between the sexes, merit-based evaluation instead of tribal favors, and tolerance for ethnic and religious minorities. Fail that, and human misery follows of the now familiar Middle East sort, in turn followed by the tired blame that the Jews, the Americans, the Europeans, or the West caused these self-generated pathologies. If the Western establishment were truly moral, it would reject multiculturalism as a deductive, anti-empirical, and illiberal creed. It would demand that critics abroad first put their own house in order before blaming others for their own failures, and remind Western elites that their multicultural fantasies are cheap nostrums designed to deal with their own neuroses.

“Anti-empirical” — nice touch. As for us, we’re going to continue reading The Looming Tower on our very long flight today. Victimhood plus religion can be a deadly combination; we’re reminded of what Spengler wrote a decade ago.

Chicken, meet roost

Monday, January 5th, 2015

NYT:

Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar.

Members of the Faculty of Arts and Sciences, the heart of the 378-year-old university, voted overwhelmingly in November to oppose changes that would require them and thousands of other Harvard employees to pay more for health care. The university says the increases are in part a result of the Obama administration’s Affordable Care Act, which many Harvard professors championed.

The faculty vote came too late to stop the cost increases from taking effect this month, and the anger on campus remains focused on questions that are agitating many workplaces: How should the burden of health costs be shared by employers and employees? If employees have to bear more of the cost, will they skimp on medically necessary care, curtail the use of less valuable services, or both?

“Harvard is a microcosm of what’s happening in health care in the country,” said David M. Cutler, a health economist at the university who was an adviser to President Obama’s 2008 campaign. But only up to a point: Professors at Harvard have until now generally avoided the higher expenses that other employers have been passing on to employees. That makes the outrage among the faculty remarkable, Mr. Cutler said, because “Harvard was and remains a very generous employer.”

In Harvard’s health care enrollment guide for 2015, the university said it “must respond to the national trend of rising health care costs, including some driven by health care reform,” otherwise known as the Affordable Care Act. The guide said that Harvard faced “added costs” because of provisions in the health care law that extend coverage for children up to age 26, offer free preventive services like mammograms and colonoscopies and, starting in 2018, add a tax on high-cost insurance, known as the Cadillac tax.

Richard F. Thomas, a Harvard professor of classics and one of the world’s leading authorities on Virgil, called the changes “deplorable, deeply regressive, a sign of the corporatization of the university.”

Mary D. Lewis, a professor who specializes in the history of modern France and has led opposition to the benefit changes, said they were tantamount to a pay cut. “Moreover,” she said, “this pay cut will be timed to come at precisely the moment when you are sick, stressed or facing the challenges of being a new parent.”

The university is adopting standard features of most employer-sponsored health plans

Also from Harvard: “climate scientists offered an increase of 2 degrees Celsius (or 3.6 degrees Fahrenheit) as the ‘safe’ limit or ceiling for the long-term warming of the planet. We are now seeing dangerous effects worldwide, even as we approach a rise of only 1 degree Celsius…we have underreacted to the reality, now unfolding before our eyes, of dangerous climate change.” BTW, Harvard professors are very well paid, indeed too well paid based on the foregoing.

China changes

Sunday, December 28th, 2014

FT:

Beijing lifted controls on credit and flooded the economy with cash, much of which was funnelled into an expanding property bubble. The result was a construction boom and an unprecedented increase in total debt to GDP from 147 per cent at the end of 2008 to 251 per cent by the end of June this year, according to estimates from Standard Chartered. Credit expansion has slowed in recent months but is still growing a lot faster than GDP while providing less and less growth for each renminbi borrowed…Despite many years of extreme overcapacity and falling profits – the price of steel is now less than the price of cabbage in China – steel production in China was up 5.4 per cent in the first nine months of this year. Bankruptcies are another area where the pain has not yet really begun.

NYT:

Mr. Xing borrowed heavily to expand. The debt could be serviced as long as coal prices were high, but they began to fall in 2012 as the economy slowed. Mr. Xing sought to diversify, using his close ties with local officials to lease farmland and build apartment blocks, small dams, walnut plantations and a paved, solar lamp-lit road from the city to his home village. When coal prices collapsed, Mr. Xing’s company filed to restructure $5 billion in unpayable loans. The housing blocks are still concrete shells, and farmers say that the walnut plantations are not mature enough yet to harvest and that Liansheng owes them money. Mr. Xing was detained in March, and his whereabouts is unknown.

GE China CEO:

China is going through some fundamental changes. The next decade or two or three will be very different. If you look at some of the challenges the country is facing, they’re very much lined up with where GE’s core competencies are. Energy demand is going to continue to increase. Urbanization is going to continue. There will be more roads and more airports. There are definitely more people aging. Quality and affordable health care will be a big priority for the government. The point here is that, our portfolio and our technologies, they are a good fit…GE has over 18,000 employees in China today. Over 90% of employees are local…the direction the new administration is taking the country is the right one. They are trading the speed of growth for the quality of growth, shifting to more consumer-oriented growth.

Reuters:

China’s trade will grow 3.5 percent in 2014, implying the country will fall short of a current 7.5 percent official growth target, according to a report on the Ministry of Commerce’s website that was subsequently revised to remove the numbers. The initial version of the report published on the website on Saturday, which quoted Minister of Commerce Gao Hucheng, was replaced with a new version that had identical wording but with all the numbers and percentages removed…

Foreign direct investment will amount to $120 billion for the year, the earlier version of Ministry of Commerce report said, in line with official forecasts. The earlier version of the report also said outward non-financial investment from China could also come in around the same level. That would mark the first time outward flows have pulled even with inward investment flows in China, and would imply a major surge in outward investment…The earlier version of the report also predicted that retail sales growth would come in at 12 percent for 2014, in line with the current average growth rate.

Stratfor:

The rules that Beijing issued Dec. 22 will require local governments above the county level to create special departments for registering ownership and land use rights, housing and a variety of natural resources. They will mandate that local authorities keep entries electronically and in print and that they update them regularly. These records will then be subject to both central and provincial oversight. According to news reports, the regulations will require property owners to register their holdings with local authorities. Anyone found guilty of “abuse of power” or otherwise failing to fully disclose their holdings will be prosecuted…

the central government’s effort to expand a property tax scheme, which it is currently being piloted in Chongqing and Shanghai municipalities, to the national level. If effectively implemented, the effects of such a tax on China’s property markets would be manifold. Such a tax could provide a crucial supplemental revenue source for local governments, which are responsible for the vast majority of government-related expenditures in China today. Similarly placing a regular tax on homeownership would incentivize those who own more than one property to put their additional properties to productive use. Currently, homebuyers pay taxes at purchase but not thereafter. This means that many treat second and third homes as investments rather than as sources of income through rent. The new tax would create the basis for a more stable and sustainable rental market and curb extreme property speculation…

Beijing’s efforts to widen a municipal bond pilot program currently in progress in 10 regions and cities across the country will also be critical. By opening municipal bond markets, central authorities aim to create new ways for local governments to raise capital. This would allow these governments to repay outstanding debts and to cover new expenditures, further reducing their reliance on land sales for revenue generation. Beijing will need to implement bond markets and the national property registry in tandem over the coming years. This is essential. For a national property registry to be effective in curbing speculation, a municipal bond market must be in place. This would give investors new avenues for generating reasonable returns on their investments…

Opposition to these and other reforms still in the planning stages will run high. Most objection will come from local governments and a range of local-level actors — particularly property developers and speculators. Municipal governments will hesitate to carry out top-down reform initiatives that, in spite of long-term benefits, will likely result in direct revenue loss, slowing local economic activity and causing a rise in unemployment. Local government officials, too, are often directly and indirectly tied to property developers and speculators. Because of this, they will hesitate to carry out measures that either limit their own financial prospects or implicate them in illegal activity.

Stratfor addressed some related issues a few months ago. This is impressive stuff; these are difficult and complex changes. Obviously the changes are essential to getting to a self-sustaining economy and not the one that was 70% dependent on exports for success. Good luck!

Meanwhile, back in grad school

Friday, December 26th, 2014

The other day we looked in on college life. Here’s grad school:

Val Rust’s dissertation-prep class had devolved into a highly charged arena of competing victim ideologies, impenetrable to anyone outside academia. For example: Were white feminists who use “standpoint theory”—a feminist critique of allegedly male-centered epistemology—illegitimately appropriating the “testimonial” genre used by Chicana feminists to narrate their stories of oppression? Rust took little part in these “methodological” disputes—if one can describe “Chicana testimonials” as a scholarly “method”—but let the more theoretically up-to-date students hash it out among themselves. Other debates centered on the political implications of punctuation. Rust had changed a student’s capitalization of the word “indigenous” in her dissertation proposal to the lowercase, thus allegedly showing disrespect for the student’s ideological point of view. Tensions arose over Rust’s insistence that students use the more academic Chicago Manual of Style for citation format; some students felt that the less formal American Psychological Association conventions better reflected their political commitments. During one of these heated discussions, Rust reached over and patted the arm of the class’s most vociferous critical race–theory advocate to try to calm him down—a gesture typical of the physically demonstrative Rust, who is prone to hugs. The student, Kenjus Watson, dramatically jerked his arm away, as a burst of nervous energy coursed through the room. After each of these debates, the self-professed “students of color” exchanged e-mails about their treatment by the class’s “whites.” (Asians are not considered “persons of color” on college campuses, presumably because they are academically successful.) Finally, on November 14, 2013, the class’s five “students of color,” accompanied by “students of color” from elsewhere at UCLA, as well as by reporters and photographers from the campus newspaper, made their surprise entrance into Rust’s class as a “collective statement of Resistance by Graduate Students of Color.” The protesters formed a circle around Rust and the remaining five students (one American, two Europeans, and two Asian nationals) and read aloud their “Day of Action Statement.” That statement suggests that Rust’s modest efforts to help students with their writing faced obstacles too great to overcome. The Day of Action Statement contains hardly a sentence without some awkwardness of grammar or usage. “The silence on the repeated assailment of our work by white female colleagues, our professor’s failure to acknowledge and assuage the escalating hostility directed at the only Male of Color in this cohort, as well as his own repeated questioning of this male’s intellectual and professional decisions all support a complacency in this hostile and unsafe climate for Scholars of Color,” the manifesto asserts. The Day of Action Statement denounces the class’s “racial microaggressions,” which it claims have been “directed at our epistemologies, our intellectual rigor and to a misconstruction of the methodological genealogies that we have shared with the class.” (Though it has only caught on in recent years, the “microaggression” concept was first coined in the 1970s by a black psychiatrist.) Reaching its peroration, the statement unleashes a few more linguistic head-scratchers: “It is, at its most benign, disingenuous to the next generations of Scholars of Color to not seek material and systematic changes in this department. It is a toxic, unsafe and intellectually stifling environment at its current worse.” The Ph.D. candidates who authored this statement are at the threshold of a career in academia—and not just any career in academia but one teaching teachers. The Day of Action Statement should have been a wake-up call to the school’s authorities—not about UCLA’s “hostile racial climate” but about their own pedagogical failure to prepare students for scholarly writing

The above was a footnote to a Heather Mac Donald piece on the big lie of today. You can see from what goes on in grad school that this pernicious foolishness isn’t going to stop on its own any time soon. Too many people have too much invested in this nonsense. Actually, we’re pretty optimistic that things can change; look at the pathetic level of jibber-jabber from allegedly smart people. Oops, we watched a replay of the MTV music awards yesterday, and we’re depressed again. There’s no hope for this country if this is what the culture has become. Help!!

Squirrelly

Wednesday, December 24th, 2014

BBC:

“Carbon has been accumulating in permafrost for tens of thousands of years. The temperature is very cold, the soils are saturated, so that when plants and animals die, rather than decompose, the carbon has been slowly, slowly building up. “Right now the carbon storage is about 1,500 petagrams (1,500 billion tonnes). To put that in perspective, that’s about twice as much as is contained in the atmosphere.” The fear is that as the planet warms, the permafrost will thaw, releasing even more greenhouse gases into the atmosphere and causing temperatures to rise further still…

“If ground squirrels are adding nitrogen to an area – and that area doesn’t have plants because they dug them up – this may result in increased loss of carbon from the system.” She concluded that squirrels were playing “a far more important role in this permafrost carbon cycle than we thought”. The team now wants to return to the area to quantify how much carbon is being unlocked by the squirrels

Squirrels? And we thought cows were the greatest threat to the planet. Can’t keep us with all this. (And in case you’re looking for something that’s a bit of fun, don’t read this.)

Quote of the day

Tuesday, December 23rd, 2014

Clift:

the rest of us are all going to be rushing to get to Cuba before it turns into Miami Beach, while it’s still that unspoiled seemingly place, with the classic cars

It never seems to occur to these people that if your cars are 60 years out of date, that probably goes for things like medical care too.

Bright college years

Monday, December 22nd, 2014

What’s happening in Michigan?

As members of the Arab, Latina/o, Desi, and Asian-American communities, we are severely disappointed and humiliated by the formal response of an Asian-American fraternity member who “authored” and organized the anti-Black event, “World Star Hip Hop Presents: Hood Ratchet Thursday.” The subsequent apology by the fraternity’s president reframed this as an isolated incident instead of examining the event as a form of structural racism thriving in the University at large. We must move the conversation beyond addressing “micro-aggressions” to interrogating the racial landscape of our campus. As it stands today, white student enrollment is at 70 percent while Asian-American student enrollment has been exponentially increasing. However, Black enrollment, at less than 4 percent, is the lowest since 2006. These statistics are more than just numbers; they translate into real, unequal power relations within and outside of communities of color. We write this letter to provoke critical conversations in our communities that examine how non-Black communities of color contribute to and benefit from the status quo. As non-Black people of color it is time we hold ourselves accountable for our communities’ complicity in anti-Blackness. We don’t share common racialized experiences with Black students at the University of Michigan. All “minorities” do not have the same experience with institutionalized racism. It is disingenuous for any of us to say we “sympathize as a fellow minority” as this erases differences and suggests that the University is an equal playing field for all students of color. It is not. This racist event, hosted by a multicultural fraternity, reflects a broader trend on campus in which non-Black people of color co-opt Black voices. Now that more non-Black people are consuming hip-hop, our communities have created and fetishized caricatures of Black people for our own pleasure and entertainment. Non-Black people of color need to interrogate our own racist, essentialist notions about “Black culture.” We cannot “transcend” “racial definitions” when hip-hop music was created as a form of Black resistance. As non-Black people of color we cannot claim to “appreciate” music without understanding its historical origins. We cannot consume mainstream hip-hop without considering that most popular hip-hop today is produced and regulated by six corporations, all headed by white men, who control 90 percent of mainstream media. Just as mainstream media’s construction of Black culture does not define blackness, Theta Xi’s appropriation of Black culture does not define Blackness. Additionally, let us not pretend that this incident along with other hate crimes affect all marginalized groups in the same way. It is important to recognize that not “all women” have been traumatized by this event in the same manner. Gendered and racialized words like “ratchet” and “twerking” specifically target Black women. To say that this affects all women is reductive and clearly ignores that race and gender cannot be separated. We cannot erase the specificity of Black experiences by using selectively collective language like “our community” to discuss how this incident exacerbated the“problematic campus climate.” It is time for ourselves and for our communities to examine how we benefit from existing US racial structures. As non-Black people of color, we are granted the ability to assimilate and reproduce whiteness. By umbrellaing under “people of color” we absolve ourselves of political accountability. A white/non-white racial paradigm dismisses how the reality of anti-Black racism structures racial inequalities. While the term “people-of-color” may be useful in building movements across communities, it should not lead to “people-of-color-blindness.” On our campus, we cannot “foster healthy values” by exploiting Black students’ lived experiences to enlighten us on anti-Black racism. Instead we should work to examine our relationships to Blackness with the same specificity we use to examine our relationships to whiteness. For our racial justice work to be meaningful and sustainable, we must constantly work to unlearn anti-Black attitudes and practices, specifically in our respective non-Black communities. We do not write this letter to claim authority, but to incite political meditations on how our communities can reimagine our anti-racist work on campus and beyond

Wow, someone’s parents are sure wasting a lot of money. Hmmmm, we know an ex-mayor who’d fit right in as university president at Michigan. Hey, Brandeis is cool too!

Trifecta, etc.

Saturday, December 20th, 2014

Conrad Black:

a Saudi move on this scale, with the resulting self-inflicted reduction in their income, makes no sense for the marginal impact it will have on American future production and imports; it is a geopolitical move targeted much closer to home.

Al-Badri’s flimflam, for which there is much precedent in the history of OPEC (essentially, the cartel is a perpetual quarrel among thieves pretending to be price-fixing), naturally seeks to disguise the fact that Saudi Arabia is trying to discourage the use of Iranian and Russian oil revenues to prop up the blood-stained and beleaguered Assad regime in Damascus, to finance Iran’s nuclear military program, and to incite the continuing outrages of Hezbollah and Hamas in Lebanon and the Palestinian Territories against Israel. The exotic community of interest that has suddenly arisen between the historically Jew-baiting Saudis and the Jewish state is because the countries in the area fear, with good reason as far as can be discerned, that the UN Security Council members, plus Germany, may be on the verge of acquiescing in Iran’s arrival as a threshold nuclear military power. The oil-price weapon, in the face of the terminal enfeeblement of the US administration, is the last recourse before the Saudis and Turks, whatever their autocues of racist rhetoric, invite Israel to smash the Iranian nuclear program from the air.

It is perfectly indicative of the scramble that ensues when a mighty power like the United States withdraws, fatigued but undefeated, from much of the world, that Saudi Arabia, a joint venture between the nomadic and medieval House of Saud and the Wahhabi establishment that propagates jihadism with Saudi oil revenues, makes common cause with Israel in a way that inadvertently relieves much of the Russian pressure on Ukraine, which was not an objective in Saudi calculations at all. From the Western standpoint, this is a lucky bounce of the political football. But it is Saudi judgment of its self-interest opposite the contending factions in Syria and the hideous prospect of a nuclear-armed Iran that is discommoding the Saudi leaders, not the ineluctable exploitation by the United States of its own oil resources

It’s commonest for people to see ambiguous things through an internal prism that shapes the picture into something to which their internal, unconscious, self-regard can relate. (In the two examples linked here, for example, the first self-relating was to victimhood, and the second self-relating was the desire to be adored by hundreds of millions; in that regard the stories are not at all contradictory.) Anyway, back on planet earth, E&P CEO’s see the oil price plunge as about shale, and some geopolitical pundits see Iran as the prime target. As for us, we’ve always thought that shale, Iran and Russia were all in the mix, and that it must have seemed elegant to the price plungers that launching the only weapon Saudi Arabia has in its arsenal could produce a trifecta.

Bonus fun: we saw the Decatur plant of Caterpillar on CNBC yesterday, and is that a hoot! Reminds us of our favorite TV series, Industry on Parade, writ very very large. A GMW of 1.4 MM lb? Are you kidding? Man, we’d love to visit that place!

Yes, but what’s the timing?

Friday, December 19th, 2014

Spengler hits the nail on the head; can’t say it better, so let him say it. JOM pokes fun at the misplaced hauteur of the bien-pensants. WRM adds to the mix, as does Harvey Mansfield. As for us, we see things coming to a head too, but what about the timing of some new preference cascade? Hard to say, since we were totally surprised when oil went to $147 a barrel, and were just as surprised that it’s now down to $50 or so. Suffice it to say that we will probably be shocked by the particulars of some nasty events that make the “micro-aggression” meme a crumbling thing, but we won’t be surprised if it happens in the next 24 months or so…

A tale of two cities, Godfather II, and more

Thursday, December 18th, 2014

Hanoi, via Michael J. Totten:

Vietnam’s Communist Party figured out that communist economics were bankrupt even before the Berlin Wall fell, a mere ten years after winning the war and conquering the south, and in 1986 it implemented the reforms known as Doi Moi. Decades later, the result is an extraordinary explosion of new prosperity that nullifies nearly everything the party did and said when it first came to power…

Vietnam developed what some have called “street front capitalism” where microbusinesses proliferated. You’ll still see them all over Vietnam now. Women sell fresh produce and baked goods from baskets. Men grill meat and sell it to passersby who sit on little stools and eat at tiny tables right on the sidewalk. Everything you can imagine is sold from little stalls in the night markets.

Nowhere in the world have I seen so many boutiques, from cafes and pubs to clothing and electronics stores. I can’t say with this with certainty, but I suspect, due to the sheer number of Vietnamese involved in one kind of small business another, that more people in Vietnam understand the basics of business and capitalism than people in the United States. And that’s in the north, which still lags behind the south. “When the communist leadership decided in the mid-1980s to put Karl Marx and Adam Smith into a blender and see what came out,” David Lamb wrote…

When Vietnam was still economically Marxist it was one of the world’s poorest countries. “Ninety percent of the roads were unpaved; farmers in the most impoverished provinces got by on the equivalent of perhaps five dollars per month; nationally, bicycles outnumbered cars forty-to-one…Personal freedoms had vanished for all but the communist elite. Food was rationed. A pair of shoes was beyond the means of most families, unless they were prominent Party members”…

“The results of Doi Moi over the first eight or nine years were dazzling,” Lamb wrote. “The annual inflation rate fell to single digits from 700 percent. Farmers, freed from collectivization, transformed Vietnam from a rice importer into the world’s second-largest rice exporter after Thailand. The gross domestic product grew by nearly nine percent a year. Thirty-five thousand small businesses started up in the private sector.”

Havana, etc. via Michael J. Totten:

the waiter at the restaurant where I had lunch handed me a card indicating the establishment has a page up on Trip Advisor in case I felt like writing a review once I got home. The Internet scarcely exists in Cuba. It’s banned in private homes. No Cubans surf Trip Advisor when they wonder where they should go out to lunch. Who can afford to go out to lunch? The government imposes a Maximum Wage of twenty dollars a month.

These people have been crushed into poverty and are kept there by force. The restaurant is strictly for foreigners from nations with minimum wages rather than maximum wages. The staff have probably never seen their own Web site. And yet, they have 157 reviews. You might think, if you looked it up on the Internet, that eating out and vacationing in Cuba is no stranger than doing so in Puerto Rico or Aruba or anywhere else in the Caribbean. Yet Cuba is little different from East Germany when it was still cut off from West Berlin by the Wall…

Police officers pull over cars and search the trunk for meat, lobsters, and shrimp. They also search passenger bags on city busses in Havana. Dissident blogger Yoani Sanchez wrote about it sarcastically in her book, Havana Real. “Buses are stopped in the middle of the street and bags inspected to see if we are carrying some cheese, a lobster, or some dangerous shrimp hidden among our personal belongings.” If they find a side of beef in the trunk, so I’m told, you’ll go to prison for five years if you tell the police where you got it and ten years if you don’t…

Beef is reserved for the elite and those who get tips from tourists or remittances from abroad. A Cuban who kills a cow is supposedly in big trouble. “You’ll be charged with murder,” one person told me. I’m not sure what that means, exactly, and the closest I can come to verifying it is an article in The Economist published in 2008. “In a place that before 1959 boasted as many cattle as people, meat is such a scarce luxury that it is a crime to kill and eat a cow.” Another person told me that farmers will sometimes push a cow onto the road around a blind corner when they hear a car coming. That way the animal (though possibly also the driver) will be killed “naturally” and can be eaten without the threat of a prison sentence.

We have friends in South Florida whose families became refugees and whose small businesses were confiscated and destroyed by Castro and his thugs; we understand where Marco Rubio is coming from. However, it’s not obvious to us that flooding Cuba with US tourists and their connectivity demands, as well as some US investment, is a bad thing, even if it is proposed by the US branch of Hasta la Victoria Siempre LLC.

Is an alternate ending for Godfather II not possible? The Castros are now Batista. When Hyman Roth and Michael Corleone went to Havana in December of 1958, they had no idea that the Batista regime would fold the next month. Maybe tens of thousands of mini-Roths, and refugee relatives from Miami, New Jersey, etc. would make it easier for the current thugocracy to remain in power, but maybe not. Could a lot of new people and new money undermine a “maximum wage”? Police states appear often very strong until suddenly they’re not. Is there a Hanoi under the surface of Havana? And what becomes the next stage for Hanoi, BTW? We don’t have the answers to the questions above, but don’t predict stability in inherently unstable conditions.

One thing leads to another, sometimes in strange ways — Fibonacci???

Friday, December 12th, 2014

From an E&P CEO:

the Saudis want to chill investment in new oil supply to help protect OPEC’s future. In round numbers we have had about 5 MBOPD increase in world oil demand over the last 5 or 6 years. Over the same time period US oil production has grown from nearly 4 MBOPD (from 5 to 9 MBOPD) — 80% of the increase in WORLD demand!

This is NOT good for OPEC. I suspect that we will have ugly oil prices ($60 – $75) for around a year as that is long enough to stop many current oil supply investments and, more importantly, serve to chill the appetite for future large investments in oil supply growth (deep water, arctic, marginal shale, marginal tar sands, etc) which is the Saudi goal in my opinion. I do not believe that the current price ($65) is a sustainable price going forward. It would not encourage enough new supply

This seems plausible enough, and if true, might have seemed even elegant in the planning, since it kills or wounds three birds with one stone (Iran needs $136 oil to balance its budget, Russia $100). But that was then and this is now, and things seem to have spun out of control. All of which led us to Cramer’s discussion of what the charts are telling us about the future price of oil.

Suddenly a word appeared that we had not heard in a long time — Cramer said that trading often forms Fibonacci sequences. Fibonacci? Huh? Suddenly it’s everywhere. We couldn’t find our copy of Vincent Scully’s book, but sure enough, the Golden ratio is right there at the Parthenon. Jeepers. (Ancient Greeks? — watch out AS!)