Nothing Matters: It’s Like the Whole Market Has Gone Nuts

You see, Tesla is different. It just reported another doozie, a loss of $408 million in the second quarter, after its $702 million loss in the first quarter, for a total loss in the first half of $1.1 billion. In its 14-year history, it has never generated an annual profit.

It has real and popular products and surging sales, but it subsidizes each of those sales with investor money. And here’s where it’s different this time: investors don’t care. They dig how the company has been consistently overpromising and underdelivering. They dig the chaos at the top. They dig everything that should scare them off.

Yeah, its shares plunged [TSLA] 11% afterhours today, but that takes those shares only down to where they’d been on May 1. Big deal. Shares are down 32% from the peak. But their peak should have been a small fraction of that. Even today, the company is still valued at over $40 billion.

Tesla lacks a viable business model in the classic sense. Its business model is a new business model of just burning investor cash that it raises via debt and equity offerings on a near-annual basis because investors encourage it to do that, and love it for it, and eagerly hand it more money to burn, and they’re rewarding each other by keeping the share price high. It’s just a game, you see. And nothing else matters.

Then there is Boeing [BA]. It just reported the largest quarterly loss in its history of $2.9 billion due to a nearly $5-billion charge related to its newest bestselling all-important 737 Max, two of which crashed, killing 346 people, due to the way the plane is designed. The flight-control software that is supposed to mitigate this design issue is not working properly. And a software fix that is acceptable to regulators remains elusive.

The plane has been grounded globally since March. No one, especially not the regulators, can afford a third crash. So today, Boeing announced that it may further cut production of the plane or suspend it altogether if the delays continue to drag out. This is big enough to start impacting US GDP.

The entire 737 Max episode has been tragic from the first minute, and the cost in human lives has been huge, and it has cost and continues to cost billions of dollars to deal with, among calls that the plane should never fly again.

And what does Boeing’s share price do? It dipped 3% today and is up 2% from a year ago, before all this happened. In essence, two crashes and the grounding of its bestselling plane, and the potential suspension of production of this plane, and its uncertain future … and the stock has ticked up over a 12-month period.

Instead of spending the resources necessary to design a modern plane from ground up, Boeing kept basing its new models on versions of its many-decades-old 737 airframe that wasn’t designed at all for what it is being used for today. This was a decision Boeing made to save some money and pump up its share price.

But here we go: From 2013 through Q1 2019, Boeing has blown a mind-boggling $43 billion on share buybacks (buyback data via YCharts):

Blowing these $43 billion on share buybacks has caused Boeing to have a “total equity” of a negative $5 billion. In other words, it has $5 billion more in liabilities than in assets. This company is out of wriggle room. If it can’t borrow enough money to make payroll, it’s over.

But nothing matters.

If Boeing had invested some of this money that it blew on share buybacks to design a new modern plane from ground up to replace the ancient 737 airframe, these tragedies could have been prevented, and Boeing wouldn’t have this nightmare on its hands. But the corporate cost-cutters and financial engineers, rather than real engineers, had the final word.

Markets don’t care about any of this. They don’t care about real engineers either. They love corporate cost-cutters and financial engineers. They want share buybacks, and if something bad happens, they’ll overlook the $5 billion to pay for the fallout because it’s just a “one-time item.”

And now Boeing still has this plane, instead of a modern plane, and the history of this plane is now tainted, as is its brand, and by extension, that of Boeing. But markets blow that off too. Nothing matters.

Companies are getting away each with their own thing. There are companies that are losing a ton of money and are burning tons of cash, with no indications that they will ever make money. And market valuations are just ludicrous.

by Wolf Richter, Wolf Street |  Read more:

Image: YCharts and Wolf Street

[ed. See also: The Companies with the Most Debt in America (Wolf Street).]

Sally Mann
via:

One Nation Under Fear

Among the puzzling questions of world history and national identity, a few stand out. How, one might ask, did the Vikings, once the roving terrors of the world, manage to become equable Nordic socialists with lessons to teach us in the arts of decency and fairness? And how did the tough, soldierly Romans, conquerors of the world, manage to evolve into the charming, pleasure-loving Italians, with their gifts for good food, good wine, and civic instability?

Soon, a similarly unexpected question may be asked about Americans. How did a people who settled a continent, created enormous wealth, and fought and (mostly) won war after war devolve into a nation of such tremulous souls? And how did it happen so quickly? Where once there was the generation of the Second World War, ready to leave home and fight fascists on the far sides of the world, we now have a nation that at times seems composed largely of field mice, prone to quiver when they detect an unfriendly shadow. As a people, we seem to value security and prosperity above all. When someone threatens either, or seems about to, we become (in this order) confused, then terrified, and then very angry.

Those who dislike us around the world (and of course there are more than a few) tend to see us as a powerful, imperial beast, brutally pursuing our own ends across the globe. We are strong and violent, and when we want something, we assert ourselves with overwhelming force. But is that really the case?

Our Shrinking Tolerance for Risk

What appear to the outside world as instances of bullying, and what appear to us as expressions of strength, may reveal themselves, on closer examination, to be actions driven by fear. We are a people obsessed with security. Our imagination of what counts as a threat to our security is hyperactive and becoming more so all the time. Two years into World War II, it took the fierce attack on Pearl Harbor to persuade Americans that it was finally time to fight. Once persuaded, they did. Now it takes only the least incitement to make us feel threatened. When even the most shadowy forces and conditions imperil what we call “our security,” we assault them with the furor of the easily scared.

The most salient instance: We went to war with another nation, Iraq, because we believed that it had weapons that threatened us. How could these weapons have threatened the peace and prosperity of the United States of America? Even had the weapons existed, there is no way that they could have done us harm. Saddam Hussein had no viable delivery system, and he wasn’t going to create one anytime soon. But we went at him, and at Iraq. A display of imperial will? That’s how it looked to the rest of the world, no doubt. But the deeper reason, I suspect, was fear. We have become a nation and a people that simply cannot abide risks.

On September 11, 2001, we were attacked in a cowardly and devastating way. We needed to do something about it. But rather than seek out and punish the perpetrators of this heinous crime, we invaded an entire country, Afghanistan. A small radical group, Al Qaeda, was able to push the most powerful nation in the world into war because its members perceived, rightly, that we were too insecure to live with any level of risk. Fear creates overreaction; fear leads to overkill.

Why do we call our enemies terrorists as often as we do? At first glance, calling someone a terrorist seems to be a way to denigrate and diminish him. Terrorists are sneaky and invisible. They fight dirty. A terrorist lacks the nerve to put on a uniform and face his enemy directly. He plants bombs and attacks civilian targets. OK, one gets the point.

But it’s possible that the word terrorist and its promiscuous use tell us more about ourselves than about our antagonists. A terrorist is—it’s so obvious that one can readily miss it—someone who is capable of terrifying us, of inspiring fear. And it seems that all of our antagonists are now called terrorists. Saddam Hussein, the head of a large country, was a terrorist, and so was Gaddafi and so is Assad. So were the members of the Taliban. And so, it sometimes seems, is every angry male with a computer, a peculiar ideology, and a random thought or two about disrupting our tranquility.

We call them terrorists because they terrify us. We call them terrorists because, large and small (mostly they are small), these figures make us afraid. And why do we feel fear so readily?

It is not an easy question to answer. But manifestations of that fear are all around us, as much in our domestic lives as in what we call our foreign policy—America is now devoted to the protocols and the apparatus of security. We strip down at the airport; we worry about identity theft; we fret about having our passwords stolen. (Like kids in a dozen insignificant clubs, we have a dozen passwords each.) Every door we approach is a locked door; every entry requires that we be checked and vetted. The metal detectors are everywhere; the man always wants to see your identification. Are your papers in order? Are you who you say you are?

The Age of Anxiety

This security obsession cuts two ways. It can make us feel better: The cameras are on at the public event and on the subway. My bank checks my online password every time and asks a few personal questions to boot. The officials from the Transportation Security Administration tear into my luggage when I go to the airport. But there’s a subtext to it all, isn’t there? If we expend so many resources, material and temporal, on security, then there must be something we need to be secured against. If the monster isn’t out there, why are we be putting all these resources into keeping it at bay?

But then comes the realization: They’re doing all that for a reason, aren’t they? There really is something to be afraid of out there. It’s only logical: Be afraid.

Why, we repeatedly ask, are there so many guns in America? Because the law says we can possess them—at least that’s part of the reason. But there’s more to it than that. There’s a part of gun ownership that gun control advocates never understand. They simply don’t listen to the gun owners who tell them time and again why they believe they need all those guns. People who would add limits to firearms possession tend to think of gun owners as dangerous brutes, inclined to violence and bullying, who live in blood-red states, hunt their meat, beat their women, and scream Scripture at their kids.

But listen to what gun owners actually say when they talk about the need to defend themselves. They put it simply: My gun is here for protection. I use it to prevent harm from coming to myself and to my family. They know that having a gun is dangerous. They know that accidents happen and that family members shoot each other and themselves by horrible chance. But they honestly believe they are in so much danger day to day that only by having a gun can they breathe easily. I believe they mean what they say.

Forget the fact that it is probably safer not to have a gun than to have one, at least if what you’re afraid of is dying violently. More people shoot themselves or their family members by accident (or in a moment of rage) than shoot dangerous assailants. But this reality doesn’t sway gun owners. It’s hard to think straight when you’re scared. And gun owners—at least the majority of them—are scared. They tell us so all the time, but we don’t listen.

Perhaps we are too anxious to pay attention. We are told, and told again, that anxiety is the default emotional setting of our day—that we live in the Age of Anxiety. In 2013, The New York Times recently ran a series on anxiety, written mostly by anxious people. The assumption was that these people were talking about a condition that afflicts us all, at least to some degree. It turns out there are a million kinds of anxiety, a million signs and symptoms. People fall apart in subway cars because they believe that the train is going to crash; pulse rates and blood pressure go through the roof when people go for a job interview, see a boss, bump into a former lover. A competitor sends nervous volts through our systems. Everyone, it seems, is in a state of anxiety.

Anxiety isn’t easy to define, but it might generally be described as trepidation about what will come our way in life. We are anxious about our prospects, our future dignity, our prosperity, our security, the humiliating specter of poverty and neglect.

What is the remedy? Everyone knows the answer. Take Paxil. Take Zoloft. Take what you need to steady your nerves. And when that stops working, take something else. Buy confidence, buy serenity, buy assurance, buy calm, and buy it from the doctors and the drug companies. If you have a stronger disposition, you can exercise, you can meditate, you can change your diet, and conquer anxiety, as it were, organically. (...)

If there is a monument to our abiding culture of fear, it is the American prison. Prisons rise up like enormous tombs all over the country. They and the 2.5 million people who live in them chart the geography of twenty-first-century American fear. America sends a larger percentage of its people to prison than any other country—a greater percentage than Russia, China, even North Korea. America’s inmate population is proportionately bigger by far than that of India, the United Kingdom, Canada, or Australia. And these prisons are not there primarily to rehabilitate. Inmates in US prisons, 37 percent of whom are black (although African Americans make up only 13 percent of our population), are there primarily to be punished and kept apart from us, the ever-fearful ones.

America, some say, is a brutal nation. America functions under the principle of an eye for an eye. We are a stern, severe country that tolerates no wrongdoing. I disagree. I think we are a scared country. Young black males frighten people. So, in disproportionate numbers, they swell our prisons, often serving out mandatory sentences after being arrested in legally questionable searches and convicted for transgressions so slight as the possession of a joint or a hit of cocaine. Are we feeling any safer yet?

It would seem not. Sometimes, the more you do to quell your fear, the more frightened you become. Not long ago in my town, the authorities took it upon themselves to arrest two young men who allegedly were making false identification cards and selling them online. One is not in favor of false IDs. They can be put to all sorts of nefarious uses, although I’d wager their most common use is to persuade doormen that a young man or woman of twenty or so years is actually twenty-one. When it came time to arrest the malefactors, one might have expected the authorities to send two officers to the front door and one around the back, just to be sure.

The authorities sent an armored car. Yes, a fully rigged-out combat vehicle that might have rolled down the streets of Fallujah a few years ago. They sent it into a residential neighborhood in an out-of-the-way southern town along with a squad of paramilitary troopers armed and equipped, you might think, to storm a bunker filled with, yes, terrorists!

by Mark Edmundson, The Hedgehog Review |  Read more:
Image: Robert Pizzo

Jerry Garcia, David Grisman, Tony Rice

Tainted by Association

When I first heard the allegations of serial sexual misconduct against the American folk-rock singer Ryan Adams earlier this year – that he had emotionally and psychologically abused several women and underage girls, using his status in the music industry as leverage – I didn’t want to believe it. Yet this desire to not-believe strongly preceded any acquaintance I had with the actual facts. Indeed – and as I am now ashamed to admit – I initially read the facts with great skepticism, hoping that they were wrong. Only with effort have I forced myself to put aside my initial disbelief, and consider things impartially, making a more balanced assessment. Why?

One answer comes from feminist theory. As a man who has been raised in a male-dominated society, one that tends to privilege the status and testimony of men, and to cast aspersions on those of women – most especially when it comes to issues of sex – I am ideologically conditioned to react this way. Sadly, I suspect there is much truth in this. But it is not the only explanation in play. Another consideration is that I didn’t want Adams to be guilty because I like his music. And the worry that I had – initially, without even realising it – was that, if Adams is indeed guilty, then I won’t be able to enjoy his music any more. And I don’t want that to be the case. Hence, I initially read the accusations against Adams with skepticism, precisely because I (subconsciously) wanted to protect my future enjoyment of his records.

It is not uncommon to find that one’s enjoyment of something is irrevocably damaged if that thing turns out to be closely connected to somebody who has committed serious wrongs. Many people will now feel deeply uncomfortable watching films associated with Harvey Weinstein. Similarly, critically acclaimed movies starring Kevin Spacey – even if made long before any accusation of wrongdoing was levelled against him – will no longer seem the obvious choices for Saturday night viewing that they once were. And this is not simply because we want to take a moral stand against Weinstein or Spacey (though that might certainly be true). It is because we feel that the films themselves are tainted.

But this is odd. A film or TV show, after all, is a thing ultimately independent of the private actions of the actors or producers who happened to help make it. And yet one seems to bleed inexorably into the other. Once you know the charges levelled against Weinstein, you can’t simply carry on watching his films as you did before. The same, I fear, will be true of Adams’s music if it turns out that he is as bad as they say. Many people are currently experiencing precisely such anxiety regarding the music of Michael Jackson, given the latest and most distressing of the allegations made against him. (...)

The fact that good things can come from bad people is a separate issue from the fact that knowledge of somebody – or something – having done a bad thing can deeply affect how we view the status of the thing itself. Take a simple but effective example, borrowed from the philosopher Simon Blackburn’s recent paper on this topic. Imagine I invite you over to dinner and, while carving the roast, I casually mention that this is the very knife that the assassin used to murder my wife and children. Would you still be comfortable eating the slice of beef I’ve just plopped on to your plate? And it can work in the other direction, too. Imagine I have a room filled with 20 Fender guitars. I tell you that you can have any of them you like – but one of them was the very guitar that Jimi Hendrix used during his last performance! I bet I know which one you’ll pick, whether you want to keep it for yourself or quickly take it to auction. (...)

Yet, when you think about it, this is rather strange. After all, it is simply a matter of luck that these particular objects have these particular histories. The assassin could well have used her own knife, or picked a different knife from the drawer. But she picked this knife – and so this knife is now the one that disturbs us. Hendrix (let us suppose) could have picked any of the available Fenders in the shop that day, he just happened to favour that one – and so now that one is special. The examples of Adams, Spacey and Weinstein fit the pattern, too. How come we extend our discomfort backwards, to cover artistic products associated with them from a time when they themselves were not (let us suppose) morally compromised? Weinstein is only one producer among many in Hollywood. Why is his financing of a film once upon a time – when it could easily have been someone else – enough to make us dislike that film today? (...)

Why does bare luck make such a difference to how we feel? Are we simply irrational when it comes to such matters? Perhaps not – and perhaps because asking about whether it is rational for us to have these luck-dependent aversions and attractions is not the right way to think about what is going on.

The best discussion of why we react in these varying – and perplexing – ways comes from the 18th-century Scottish Enlightenment thinker Adam Smith. Nowadays much more likely to be known (somewhat misleadingly) as the ‘father of economics’, Smith was employed as professor of moral philosophy at the University of Glasgow for around 12 years, and hence spent much of his time teaching and writing on such matters. Indeed, his first book – The Theory of Moral Sentiments (1759) – puts forward not just the earliest sustained discussion of the issue of what philosophers now call ‘moral luck’, but one of its most compelling evaluations.

Smith’s discussion didn’t just cover objects or people, and the taint that can be associated with them because of their good or bad histories. It also covered the irregularity of our responses to outcomes that are heavily affected by luck. Imagine the following case: I carelessly throw a brick off the top of a building, but fortunately it doesn’t hit anybody, and shatters harmlessly on the pavement below. You’re likely to think that I’m a bad and irresponsible person, and deserve to be admonished accordingly. But you’ll probably also think that the matter should end there. Now vary the scenario: imagine that the brick does hit somebody, and kills them. The likelihood is that you will now think that I deserve much more in the way of blame, and indeed of punishment. (Prison seems a perhaps not unreasonable response.)

Let us suppose that my motivations – eg, sheer indifference to the safety of others – and my actions – chucking a brick without looking – are identical in both cases. Why, Smith asked, do we feel that the latter is so much worse than the former? It was, after all, simply a matter of luck that somebody walked along at that precise moment, got hit by the brick, and died. (It works in the other direction, too: we would surely feel it too harsh to send a person to prison simply because the brick might have hit a passerby, when in fact it didn’t.)

Yet this kind of scenario led to a puzzle. Smith thought it undeniable that we assess the morality of actions not by their actual consequences, but by the intentions of the agent who brings them about. To see that this is indeed true, consider the following example. Imagine that you see me rescue a cat from a tree. When I get to the ground, the cat wriggles free and scurries away. Assuming that my intention was to save the cat, you’ll likely think that I did a good thing. But what if you now find out that my intention was to barbeque the cat for dinner? In both cases, the consequences are the same – the cat is brought down from the tree, wriggles free, and runs away. Yet your evaluation of the morality of the act will shift markedly once you learn of my culinary intentions. Try any example you like, and you’ll get the same result: it’s the underlying intention that determines whether or not we approve of an act, not the consequences of the act alone.

For Smith, it is a truism that we assign different moral weight to intentions, not to consequences, and one that nobody will deny, at least when it comes to philosophical theory. Nonetheless, in practice, we often find ourselves heavily swayed by consequences even when, on the face of it, those consequences shouldn’t matter. Take the brick-throwing example again. In both cases, my intention was bad, because in throwing the brick I showed callous disregard for the safety of others. In theory, then, I am equally culpable whatever the outcome, at least if intentions are supposed to be what counts. But, in practice, we feel far more strongly in the case where the brick does hit somebody. So consequences do matter after all – even though moral philosophers tend to think that it’s only intentions that should matter.

by Paul Sagar, Aeon |  Read more:

Image: Detail from Nelkenstrauss (1910), by Adolf Hitler. Photo by Christof Stache/AFP/Getty

Whole 60

When I was in high school, I would walk to the Waldenbooks in the mall near my home and read novels while standing up. This was the 1970s, long before bookstores became places that encouraged people to sit, hang, browse. There were no armchairs in that narrow store on the second floor of Columbia Mall in Howard County, Maryland.

Reading while standing up felt like stealing, a pathetic thrill for this straight-A goody-goody. I had money — I babysat, I eventually worked at the Swiss Colony in the same mall. I could buy any volume I truly desired. But my stand-up reads were books too embarrassing to bring home. I remember only two.

One was The Greengage Summer by Rumer Godden, a British novelist perhaps best known today for inspiring the name of Bruce Willis’s and Demi Moore’s oldest daughter. It now strikes me as a perfectly respectable book; I could have forked over $1.25 for it.

The other one was — I couldn’t begin to tell you the title. It was a slick psycho serial killer tale that began with a young couple parked on Lovers Lane, where they were attacked by a man with, if I recall correctly, a metal hook for one of his hands. He used his hook to slash the roof of the convertible, or maybe it was a knife, and as the metal blade (or the hook) pierced through the canvas, the beautiful, vain sorority girl — it was implicit that she deserved to die if only for her smugness — thought: “I should have had that slice of cheesecake at dinner.”

It has taken me more than 40 years, but the singular achievement of my life may be that if I am attacked by a serial killer on a deserted Lovers Lane, I almost certainly will have had dessert. Not cheesecake, because I don’t like cheesecake. Possibly some dark chocolate, preferably with nuts or caramel, or a scoop of Taharka ice cream, an outstanding Baltimore brand, or one of my own homemade blondies, from the Smitten Kitchen recipe.

Maybe a shot of tequila, an excellent digestif. Maybe tequila and a blondie.

But only if I want those things. Many nights, I’m not in the mood for anything sweet after dinner. Every day, one day at a time, one meal at a time, one hunger pang at a time, I ask myself what I really want. I then eat whatever it is.

It is the hardest thing I have ever done in my life.

Every girl remembers her first diet. Usually, it’s her mother’s.

My mother was (and continues to be, at the age of 88) slender and fit. As a child, she was part of a group of underweight campers “ordered” to drink daily milk shakes. On her wedding day, she weighed 102 pounds. Why do I know these facts? I know only that I know them. Her wedding dress hung in the hall closet outside my bedroom, sealed in a plastic bag, but I was never going to wear it. When I was little, that dress — a lovely knee-length shift — was too plain to fit into my future wedding fantasies. And by the time I was 10 or 11, it was clear that I was never going to fit into a dress made for someone who weighed 102 pounds.

In her mid-30s, my mother gained some weight and decided to go on a diet. This seemed like an adult rite of passage to me, a journey that I would inevitably undertake one day, heading out on the bounding billows of Tab. My mother’s diet was a topic of much discussion in our family — and much teasing by my father. My father also was rail thin; at the age of 12, I managed to shimmy into his old Navy uniform for the 4th of July parade. My older sister was thin as well. Many, many, many years later, a good friend saw me with my family at my stepson’s bar mitzvah and asked: “Did you get all the nutrients?” This was the first time that anyone had ever suggested there was anything attractive about my size relative to my family’s.

In case it’s not clear, I was never thin. I am tall, big-boned, with a belly that tends toward protrusion. I was maybe 10 or 11, close to the age my own daughter is now, when my mother cupped her hand over my convex midsection and said, “Look at your little pot belly.” Because I was a weird kid who sneaked into the adult side of the library to read adult books — you may sense a theme emerging — I had read Max Shulman’s Barefoot Boy with Cheek. In that comic college novel, a girl goes to a party where guests are instructed to dress as song titles. She chooses “Smoke Gets in Your Eyes” and wears a gown with a bare midriff, a smudge pot “cunningly hinged” to her navel. This is how I saw my pot belly — a literal pot, a growth, a foreign object hinged, not so cunningly, to my navel.

By the time I was 14 — 14! — I was plotting furiously in my diary: How To Get a Man. Step 1, of course, was to get a flat stomach. At the age of 15, about the same time I was reading books standing up at the mall, I signed up for a dance class, God knows why. The dance teacher, the mother of a close friend, screamed at me: “LAURA LIPPMAN YOU HAVE A POT BELLY YOU ARE TOO YOUNG TO HAVE A POT BELLY I AM ALLOWED TO HAVE A POT BELLY BUT YOU ARE NOT!”

My first summer home from college I worked as a lifeguard at a small apartment complex where no one knew me, which gave me license to wear a two-piece bathing suit. An older man kept asking me out. After my third or fourth turndown, he guessed my weight almost to the decimal point, then assured me: “If you lost 20 pounds, you would be a knock-out.”

Then there was the man I loved so much and he loved me, too, until he fell in love with someone else. “It’s funny,” he mused. “You’re not really my type. I like petite women.” And off he went with a waif.

Every woman on the planet knows the rest of this story. Diet blah blah blah body dysmorphia yadda yadda yadda Atkins Scarsdale etc etc. We can all write list poems of the eating plans we have undertaken, the measurements on which we obsessed, the various low-carb sects to which we converted. I have nothing new to say about any of this.

What is new is that I have decided, at the age of 60, that I am a goddamn knockout. Like Dorothy at the end of the film version of The Wizard of Oz, I had the power I sought all along. I rub my thighs together — sorry, couldn’t resist — and tell myself over and over that I am beautiful and, what do you know, suddenly I am. Then I cup my hand over my 9-year-old daughter’s gorgeous, solid abdomen and tell her she is beautiful, too.

She’s not sure. She asks: “Is there a way to eat that makes a person lose weight?”

No, I tell her. Eat what you want when you want it and your body will figure out what it wants to be. Trust your body.

And then I leave the room and cry a little. I helped to do this. Although I never said the word “diet” in front of my daughter, never spoke about anyone’s weight, I did this to her. Kids don’t miss a trick and my daughter saw how I used to dress in the morning, how I turned to examine my profile, standing tall, sucking in my gut, smoothing the front of my pants or skirt. She noticed when I stopped eating bread the year she was 3. Yes, I tried Whole30 six years ago and yes it worked for a while, how could it not? You try not to lose weight while abstaining from alcohol, grains, dairy and legumes.

Now try deciding what you actually want and tell me which is harder.

Thanks to our modern world, I can pinpoint almost to the minute when I decided to give up dieting. As a former Weight Watchers customer — of course I am a former Weight Watchers customer — I received an email when the company announced it was rebranding itself as WW — “wellness that works.” Suddenly, the whole con was clear to me. On Sept. 24, 2018, at 11:42 a.m. I DM’ed a screenshot of the email to a friend and added: “fuck it NO MORE DIETING. EVER.”

I continued:

“I have been worried about my weight for 45 years, I can’t do this anymore. I can’t do this to my kid. I’m almost 60 years old and some part of me is still worried that not enough men find me fuckable. People talk about the White House distracting us, nothing has distracted me as much as this stupid battle with my weight and my looks, both which are fine, almost everybody’s weight and face is [sic] fine, and way too many benefit from getting us to think otherwise.

What would happen to the global economy if all the women on the planet suddenly decided: I don’t care if you think I’m fuckable.”

by Laura Lippman, Longreads | Read more:
Image: Evgeny Buzov / Getty

The $60 Gadget That’s Changing Electronic Music

Derrick Estrada, an electronic musician who performs under the stage name Baseck, had just showered and was nursing a cup of yerba mate in the back room of the Los Angeles home that a musician friend dubbed the “synth flophouse.” It was 10 a.m. on a recent Thursday; very early, he explained, for a house full of musicians.

Estrada had promised a demonstration of a remarkable new instrument, one that had changed the whole way he made music. Two walls of the room were dedicated to racks of synthesizers — row after row of buttons and knobs and unwieldy wiring, a veritable museum of advanced technology spanning decades and costing thousands of dollars. Estrada ignored all of it. Instead, he plucked a small device from the spot where it was hanging from a hook. It looked like the exploded innards of a calculator, with a splat of knobs and buttons. There was no keyboard. Estrada plugged it into a set of speakers, held it in both hands and hunched over it slightly, as if handling a phone while texting, and began to play.

He punched the buttons, and a rapid-fire sequence of clicks began to repeat. Then he twisted one of the knobs, and the clicks deepened into a more hollow sound, like that of a kick drum. More button punches, more knob twists, more sounds: a spacey high-hat, a background static roar, a tonal burst that altered slightly and quickly became a repeated phrase. Suddenly there was more than a beat; there was a little song.

And just as suddenly — more punches, more twists — the sounds changed, and the song evolved. This went on for about 10 minutes, with Estrada nodding slightly, in a concentrated semi-trance over the device, coaxing out new sounds every few seconds. This was all in real time, and it sounded fantastic — ready for radio.

Estrada was playing a Pocket Operator, a device released four years ago by a Swedish company called Teenage Engineering. To date, the company has made nine different models of the same basic design, and it has sold more than 350,000 of them worldwide, making the Pocket Operator one of the most popular synthesizers in history. The Korg M1 — famous for producing the sound of Seinfeld’s slap bass and Madonna’s “Vogue,” and one of the best-selling and most influential synths of all time — is estimated to have sold 100,000 fewer units over nearly twice as much time. The “portable” version of one of the Pocket Operator’s earliest forebears — the telharmonium, constructed more than a hundred years ago — cost more than $5 million to build in today’s dollars, weighed 200 tons and required a team of specialists to achieve peak performance. A Pocket Operator costs about $60 and fits in the palm of your hand.

Because it is mass-produced, cheap and easy to use, the Pocket Operator is closer to an acoustic guitar or a harmonica than it is to the telharmonium — a new kind of instrument for popular music, with new kinds of possibilities. Just as folk and rock musicians took the humble guitar and harmonica onstage and played music that was exciting and modern for thousands of people, electronic musicians can now do the same.

After he finished playing, Estrada told a story that illustrated the kind of range the device had. He recently traveled to Tokyo for a synth festival with his kit of bulky synths, but when he plugged them into the big sound systems in some venues, they sounded muddier than he might have liked. One night, nearing the end of a set, he thought, What the hell? He plugged in his Pocket Operator.

“The sound just, like, punched through,” he said. “People poured onto the dance floor. Afterward, everyone was like: What was going on at the end? It was the Pocket Operator.”

The four founders of Teenage Engineering started the company in 2007, with a more traditional keyboard synthesizer, the highly regarded OP-1. But they quickly became involved in a wide variety of modish design-oriented projects. They updated and reintroduced a ’70s-era speaker designed by another Swedish engineer, Stig Carlsson. They also did some outside work — for Ikea, it was a cardboard camera and forthcoming Bluetooth speakers; for the Chinese search-engine giant Baidu, a colorful smart speaker. The Pocket Operator was more of a lark. A friend at a clothing company called Cheap Monday told them the company had some extra cash on hand, because it had been bought by the fast-fashion giant H&M. Maybe Teenage Engineering could develop something for Cheap Monday to sell? The first three Pocket Operator models worked as drum, bass or “lead” sequencers, and they could all be synced up to play together as — in the promotional language of Teenage Engineering — a “pocket band.” Later models introduced new sounds (“noise percussion”) and capabilities (sampling).

Nearly all of Teenage Engineering’s 45 employees are in fact engineers (audio, computer, mechanical), and the style of the company’s products — playful, a little rebellious, definitely strange — does indeed evoke the slouchy insouciance of teenagers, but it draws as well from an even more youthful gestalt. “Everything must be simple, primary colors and shapes,” says Jesper Kouthoofd, the company’s chief executive and one of its founders. “If we cannot draw it quickly on a pad of paper, it is too complicated.”

by Ryan Bradley, NY Times Magazine |  Read more:

Image: Lernert and Sander for The New York Times

via:

‘Once Upon a Time … in Hollywood’ Review: We Lost It at the Movies

There is a lot of love in “Once Upon a Time … in Hollywood,” and quite a bit to enjoy. The screen is crowded with signs of Quentin Tarantino’s well-established ardor — for the movies and television shows of the decades after World War II; for the vernacular architecture, commercial signage and famous restaurants of Los Angeles; for the female foot and the male jawline; for vintage clothes and cars and cigarettes. But the mood in this, his ninth feature, is for the most part affectionate rather than obsessive.

Don’t get me wrong. Tarantino is still practicing a cinema of saturation, demanding the audience’s total attention and bombarding us with allusions, visual jokes, flights of profane eloquence, daubs of throwaway beauty and gobs of premeditated gore. And yet “Once Upon a Time … in Hollywood,” whose title evokes bedtime stories as well as a pair of Sergio Leone masterpieces, is Tarantino’s most relaxed movie by far, both because of its ambling, shaggy-dog structure and the easygoing rhythm of its scenes.

Though trouble percolates on the horizon and mayhem arrives in the final act, this is fundamentally a hangout movie, a bad-guys-come-to-town western more like “Rio Bravo” than “High Noon.”Above all, it’s a buddy picture about two middle-level entertainment industry workers doing their jobs and making the scene over a few hectic, sunny days in 1969.

The friendship between Rick Dalton (Leonardo DiCaprio) and Cliff Booth (Brad Pitt) functions for Tarantino as both keystone and key. It’s an organizing principle and a source of meaning, and a major reason that “Once Upon a Time” is more than a baby-boomer edition of Trivial Pursuit brought to life.

Unlike many of the people they share the screen with — the period-specific A-list characters include Sharon Tate (Margot Robbie), Steve McQueen (Damian Lewis) and Bruce Lee (Mike Moh) — Rick and Cliff are made-up. Rick is an actor on the downward slope of a moderately successful career. A star in a handful of westerns and combat pictures, and of a popular TV western series, he is now mostly cast as a one-episode villain on other people’s shows. He’s considering an offer to make spaghetti westerns in Italy. (Tarantino supplies perfect fake clips to annotate Rick’s filmography.) Not a has-been, exactly, but not quite what he used to be or might have been.

Cliff is his longtime stunt double, but as Rick’s roles have shifted, his role has changed too. His duties include driving Rick (whose license has been suspended) to and from auditions and sets, performing minor household repairs and generally being available as a sounding board and drinking partner. You can’t really call Cliff a sidekick — we’re talking about Brad Pitt — and he’s not really a servant, either, even though Rick pays him for his time. An older vocabulary is needed: Cliff is a gentleman’s gentleman, a man Friday, a dogsbody, a squire. “More than a brother but less than a wife” is how the movie puts it.

The relationship isn’t defined by money or sex, but by a difference in rank accepted without comment or complaint by both parties. The inequality between the men — Rick lives in a spacious ranch house up in the hills, Cliff in a cluttered trailer down in the valley — is what dignifies their bond, just as the contrast of their temperaments sustain it.

Rick, a sloppy drinker and a furious smoker, wears his feelings close to the surface. He weeps aloud over the state of his career, throws an epic tantrum in his trailer when he messes up a scene and is moved to tears by the exquisiteness of his own acting. Cliff is a different kind of cat — lean, taciturn, self-effacing, slow to anger but capable of serious violence. Some say he’s a murderer; he himself occasionally alludes to a criminal past. Better not to ask. Apart from Rick, his main attachment is to his dog, Brandy, whose loyalty is the mirror of his own. (DiCaprio’s baroque, exuberant emotionalism perfectly complements Pitt’s down-to-the-bone minimalism. They’re both terrific.)

If the guys aren’t quite Don Quixote and Sancho Panza, their companionship nonetheless takes shape within a fundamentally aristocratic social order. Joan Didion, in an essay first published in 1973, described the Hollywood of that era as “the last extant stable society,” and Tarantino’s tableau confirms this view. Life isn’t perfect, but it is coherent. People know their place. They respect the rules and hierarchies. Rick’s neighbors, Sharon Tate and her husband, Roman Polanski (Rafal Zawierucha), live higher up in the canyon (at the end of a gated driveway) and also on the status pyramid. They are regarded not with envy or resentment, but with awe.

The governing virtue in this world is courtesy. The things produced within it are ridiculous, but also beautiful. Residents take seriously things that are objectively silly, which lends a measure of charm to otherwise pedestrian moments. A series of on-set interactions between Rick and two other actors — a leading man played by Timothy Olyphant and a juvenile played by the phenomenal Julia Butters — demonstrate the workings of this code. What they’re collaborating on might look like disposable commercial trash, but making it involves craft and tradition, folk wisdom and spiritual discipline, trust and integrity. (...)

Alongside the knight and his squire, there is a princess — Tate — who lives in something like a castle and is married to a man who looks a little like a frog. Tarantino has never been much interested in sex or romance — violence and vengeance are what makes his stories run — but he has a sentimental investment in marriage and a thing about wives.

by A.O. Scott, NY Times | Read more:
Image: Andrew Cooper/Sony Pictures

via:

via:

Mother Earth Mother Board

For one thing, it’s 42,535 words long. This lets you know that you’re into Serious Business right there, before you even get started. Then comes the opening, torn straight from a 19th-century adventure novel and refracted through a cyberpunk prism: “In which the hacker tourist ventures forth across the wide and wondrous meatspace of three continents…”

This is no accident. In “Mother Earth Mother Board,” Neal Stephenson aims to reveal the very physical underpinnings of the virtual world. He’s going to tell you the tale of how the postmodern world was wired together. This requires reaching back to Victorian England, and forward, just a little bit, into the future. Accordingly, the form mirrors the content. A bit of travelogue, a bit of pulp adventure novel, a bit of technothriller, a bit of postcyberpunk sci-fi.

Wired published “Mother Earth Mother Board” in December 1996. Yahoo! was 2 years old. Google did not yet exist. We were coming to the end of year two of the five-year dot-com boom. The Internet was called “cyberspace” and “the information superhighway.” eCommerce ruled the future to the point that we developed a derisive term of art for regular old (actually profitable) retail operations; they were “brick and mortar” stores (first use, 1992). The implication being that these were dangerously dated operations, tied as they were to the mundane world of atoms. The future lay in the exuberant exchange of weightless virtual wealth.

The dot-com world’s dangerously myopic narcissism was visible to those with the right kind of eyes, and “Mother Earth Mother Board” is 42,535 words of emergency optical surgery. Stephenson wants to show you that everything’s been done before, only crazier.

by Tim Maly, Nieman Storyboard |  Read more:

Mother Earth Mother Board

In which the hacker tourist ventures forth across the wide and wondrous meatspace of three continents, acquainting himself with the customs and dialects of the exotic Manhole Villagers of Thailand, the U-Turn Tunnelers of the Nile Delta, the Cable Nomads of Lan tao Island, the Slack Control Wizards of Chelmsford, the Subterranean Ex-Telegraphers of Cornwall, and other previously unknown and unchronicled folk; also, biographical sketches of the two long-dead Supreme Ninja Hacker Mage Lords of global telecommunications, and other material pertaining to the business and technology of Undersea Fiber-Optic Cables, as well as an account of the laying of the longest wire on Earth, which should not be without interest to the readers of Wired. 

Information moves, or we move to it. Moving to it has rarely been popular and is growing unfashionable; nowadays we demand that the information come to us. This can be accomplished in three basic ways: moving physical media around, broadcasting radiation through space, and sending signals through wires. This article is about what will, for a short time anyway, be the biggest and best wire ever made. 

Wires warp cyberspace in the same way wormholes warp physical space: the two points at opposite ends of a wire are, for informational purposes, the same point, even if they are on opposite sides of the planet. The cyberspace-warping power of wires, therefore, changes the geometry of the world of commerce and politics and ideas that we live in. The financial districts of New York, London, and Tokyo, linked by thousands of wires, are much closer to each other than, say, the Bronx is to Manhattan. 

Today this is all quite familiar, but in the 19th century, when the first feeble bits struggled down the first undersea cable joining the Old World to the New, it must have made people's hair stand up on end in more than just the purely electrical sense - it must have seemed supernatural. Perhaps this sort of feeling explains why when Samuel Morse stretched a wire between Washington and Baltimore in 1844, the first message he sent with his code was "What hath God wrought!" - almost as if he needed to reassure himself and others that God, and not the Devil, was behind it. 

During the decades after Morse's "What hath God wrought!" a plethora of different codes, signalling techniques, and sending and receiving machines were patented. A web of wires was spun across every modern city on the globe, and longer wires were strung between cities. Some of the early technologies were, in retrospect, flaky: one early inventor wanted to use 26-wire cables, one wire for each letter of the alphabet. But it quickly became evident that it was best to keep the number of individual wires as low as possible and find clever ways to fit more information onto them. 

This requires more ingenuity than you might think - wires have never been perfectly transparent carriers of data; they have always degraded the information put into them. In general, this gets worse as the wire gets longer, and so as the early telegraph networks spanned greater distances, the people building them had to edge away from the seat-of-the-pants engineering practices that, applied in another field, gave us so many boiler explosions, and toward the more scientific approach that is the standard of practice today. 

Still, telegraphy, like many other forms of engineering, retained a certain barnyard, improvised quality until the Year of Our Lord 1858, when the terrifyingly high financial stakes and shockingly formidable technical challenges of the first transatlantic submarine cable brought certain long-simmering conflicts to a rolling boil, incarnated the old and new approaches in the persons of Dr. Wildman Whitehouse and Professor William Thomson, respectively, and brought the conflict between them into the highest possible relief in the form of an inquiry and a scandal that rocked the Victorian world. Thomson came out on top, with a new title and name - Lord Kelvin. 

Everything that has occurred in Silicon Valley in the last couple of decades also occurred in the 1850s. Anyone who thinks that wild-ass high tech venture capitalism is a late-20th-century California phenomenon needs to read about the maniacs who built the first transatlantic cable projects (I recommend Arthur C. Clarke's book How the World Was One). The only things that have changed since then are that the stakes have gotten smaller, the process more bureaucratized, and the personalities less interesting. 

Those early cables were eventually made to work, albeit not without founding whole new fields of scientific inquiry and generating many lucrative patents. Undersea cables, and long-distance communications in general, became the highest of high tech, with many of the same connotations as rocket science or nuclear physics or brain surgery would acquire in later decades. Some countries and companies (the distinction between countries and companies is hazy in the telco world) became very good at it, and some didn't. AT&T acquired a dominance of the field that largely continues to this day and is only now being seriously challenged by a project called FLAG: the Fiberoptic Link Around the Globe. 

In which the Hacker Tourist encounters: Penang, a microcosm of the Internet. Rubber, Penang's chief commodity, and its many uses: protecting wires from the elements and concupiscent wanderers from harmful DNA. Advantages of chastity, both for hacker tourists and for cable layers. Bizarre Spectacles in the jungles of southern Thailand. FLAG, its origins and its enemies. 5° 241 24.932' N, 100° 241 19.748' E City of George Town, Island of Penang, Malaysia 

FLAG, a fiber-optic cable now being built from England to Japan, is a skinny little cuss (about an inch in diameter), but it is 28,000 kilometers long, which is long even compared to really big things like the planet Earth. When it is finished in September 1997, it arguably will be the longest engineering project in history. Writing about it necessitates a lot of banging around through meatspace. Over the course of two months, photographer Alex Tehrani and I hit six countries and four continents trying to get a grip on this longest, fastest, mother of all wires. I took a GPS receiver with me so that I could have at least a general idea of where the hell we were. It gave me the above reading in front of a Chinese temple around the corner from the Shangri-La Hotel in Penang, Malaysia, which was only one of 100 peculiar spots around the globe where I suddenly pulled up short and asked myself, "What the hell am I doing here?" 

You might well ask yourself the same question before diving into an article as long as this one. The answer is that we all depend heavily on wires, but we hardly ever think about them. Before learning about FLAG, I knew that data packets could get from America to Asia or the Middle East, but I had no idea how. I knew that it had something to do with wires across the bottom of the ocean, but I didn't know how many of those wires existed, how they got there, who controlled them, or how many bits they could carry. 

According to legend, in 1876 the first sounds transmitted down a wire were Alexander Graham Bell saying "Mr. Watson, come here. I want you." Compared with Morse's "What hath God wrought!'' this is disappointingly banal - as if Neil Armstrong, setting foot on the moon, had uttered the words: "Buzz, could you toss me that rock hammer?'' It's as though during the 32 years following Morse's message, people had become inured to the amazing powers of wire. 

Today, another 120 years later, we take wires completely for granted. This is most unwise. People who use the Internet (or for that matter, who make long-distance phone calls) but who don't know about wires are just like the millions of complacent motorists who pump gasoline into their cars without ever considering where it came from or how it found its way to the corner gas station. That works only until the political situation in the Middle East gets all screwed up, or an oil tanker runs aground on a wildlife refuge. In the same way, it behooves wired people to know a few things about wires - how they work, where they lie, who owns them, and what sorts of business deals and political machinations bring them into being. 

In the hopes of learning more about the modern business of really, really long wires, we spent much of the summer of 1996 in pursuits such as: being arrested by toothless, shotgun-toting Egyptian cops; getting pushed around by a drunken smuggler queen on a Thai train; vaulting over rustic gates to take emergency shits in isolated fields; being kept awake by groovy Eurotrash backpackers singing songs; blowing Saharan dust out of cameras; scraping equatorial mold out of fountain pens; stuffing faded banknotes into the palms of Egyptian service-industry professionals; trying to persuade non-Englishspeaking taxi drivers that we really did want to visit the beach even though it was pouring rain; and laundering clothes by showering in them. We still missed more than half the countries FLAG touches. 

Our method was not exactly journalism nor tourism in the normal sense but what might be thought of as a new field of human endeavor called hacker tourism: travel to exotic locations in search of sights and sensations that only would be of interest to a geek. 

I will introduce sections with readings from my trusty GPS in case other hacker tourists would like to leap over the same rustic gates or get rained on at the same beaches.

by Neal Stephenson, Wired |  Read more (pdf):

Image: Alain Bousquet via

[ed. If you haven't hit the Wired paywall yet (hint: incognito) the original (non-pdf) article is available here.]

Living Intimately With Thoughts of Death

Since my cancer diagnosis, I have lived intimately with thoughts of death. Cancer patients of all ages and stages, as well as people with other ruinous conditions, often experience “a double frame of mind,” as the polemicist Christopher Hitchens once put it. Laboring to survive in the present, we simultaneously imagine our future demise. Of course, feelings and beliefs about mortality range widely. But a number of thinkers have set out to help those who suspect that introspection about this state of mind may be the most important work we can undertake.

If you want to evaluate your own perspective on death, try filling in the Death Attitude Profile — Revised questionnaire developed by the psychologists Paul T.P. Wong, Gary T. Reker and Gina Gesser. A series of 32 propositions, the survey measures death anxiety: worries about self-loss, , missed opportunities, stolen moments, the prospect of your or your survivors’ suffering, the unknown. It also gauges death acceptance: satisfaction at having led a good life, at acknowledging a natural ending, at escaping physical pain or gaining a desirable afterlife or merging with the cosmos.

When my husband and I compared our responses to this test, what struck me was how complicated we all are. The prospect of my own death arouses more fright in me than his does in him, but he is more convinced than I that death is a grim experience. What, then, do the psychologists really tell us? After taking the quiz, the palliative care nurse Sallie Tisdale found her score was “all over the place, internally contradictory.”

To encourage people to ponder their own extinction, Ms. Tisdale, the author of “Advice for Future Corpses (and Those Who Love Them),” recommends the Japanese film “After Life.” In a posthumous state, the dead in this movie pick a single memory in which to live forever. With delicacy, its director, Hirokazu Kore-eda, implicitly asks, what memory would you choose?

This is a difficult assignment for me. Should I choose a joyous holiday get-together with the extended family? Well, those events often disintegrated into mayhem. Maybe I should select the occasion of a professional success. Unfortunately, those moments were often fraught with tension. Besides, do I believe in an afterlife?

Yet watching the movie and considering its premise — or reading Ms. Tisdale’s book or taking the questionnaire — equip the mind with the doubled frames through which many imperiled patients view the world. Not unlike the double consciousness W.E.B. DuBois ascribed to African-Americans, the double consciousness that I experience can devolve into debilitating self-division. However, it can also evolve into an intoxicating clarification of the human condition.

The drawbacks of living in the present with corrosive dread about a diminished or canceled future seem abundantly clear. When the substance of the everyday is drained of reality, leached by visions of impending debilitation and disappearance, double consciousness leads to depression.

As fatigue or nausea take over, I am torn asunder by the morbid conviction that this might very well be the last time I travel, that soon I won’t have the strength to prepare the meal that I am cooking or rise from the bed I am making. Will I survive long enough to finish the next project? Worse, why start the next project, if it cannot be completed? Riven by contrary impulses, I want to live today, but trepidations about tomorrow render the present flimsy or vacuous. Intimations of mortality rob us of confidence in our autonomy before the dying process finishes that job.

by Susan Gubar, NY Times |  Read more:

Image: Jaime Jacob

[ed. I've been trying to remember the name of that Japanese film: After Life. I imagine for some it's not so much the fear of death but the process itself. Like Woody Allen said, I just don't want to be there when it happens. Strange isn't it? All our lives we're taught to be in control of our physical and emotional impulses, but when we want to avoid end of life suffering control is taken away (another issue).]

Ultra-Low Mortgage Rates No Relief for Home Sales

The relentlessness of falling home sales is starting to baffle the real estate industry that had expected plunging mortgage rates to fire up sales: Across the US, sales of “existing homes” (previously owned single-family houses, townhouses, condos, and co-ops) in June dropped 2.2% from June last year, to a seasonally adjusted annual rate of 5.27 million homes, according to the National Association of Realtors. It was the 16th month in a row of year-over-year declines (data via YCharts):

“Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country,” lamented NAR’s report.

And the plunge in mortgage rates from the November high has been spectacular. The Fed has hiked rates one more time in December and so far has not cut rates. But yields across the curve have been dropping in anticipation of a veritable Niagara Falls of rate cuts and whatnot.

In June, the Freddie Mac average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 3.80%. This is over a full percentage point lower than the average rate in November of 4.87%:

Sales of existing homes in June, at 5.27 million seasonally adjusted annual rate, are now back in the range where they’d been in 2015. The chart below shows how home sales topped out late 2017 and early 2018 at a pace above 5.5 million, as mortgage rates were already rising. When mortgage rates began ascending at a steeper slope, sales fell sharply, as you would expect, hitting the low point in December and January for deals signed in November and December.

But given the plunge in mortgage rates since then, expectations were that sales would resurge. While sales have ticked up from those lows, the move was, for the industry, confusingly feeble (data via YCharts):

The astonishment of the industry with these falling home sales despite ultra-low mortgage rates emerges in the report’s comment, as the industry is grappling with potential answers:

Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure. It’s too soon to know how much of a pullback is related to the reduction in the homeowner tax incentive.

By home category: Sales of single-family houses in June fell 1.7% year-over-year to a rate of 4.76 million, and sales of condos and co-ops fell 6.5% year-over-year to a rate of 580,000.

Sales by region in June show the steepest year-over-year declines in the West and the Northeast:

Northeast: -4.2%, to an annual rate of 680,000
Midwest: -1.6%, to an annual rate of 1.25 million
South: -0.4%, to an annual rate of 2.25 million
West: -5.2%, to an annual rate of 1.09 million.

Inventory for sale in June was about flat compared to June last year. Given slower sales, supply at the current rate of sales ticked up to 4.3 months (from 4.0 months a year ago). This is plenty of supply. But it’s the wrong supply.

After years of price increases, home prices together have moved up the ladder, including the lower end that is now priced where mid-range used to be a few years ago, and there is no more “low end” in many markets, and the new low end has moved out of range for many buyers. High prices kill demand. And low mortgage rates, after years of low mortgage rates, are having only a limited effect on sales volume.

But the median price of existing homes sold in June across the US – median means half sold for more and half sold for less – rose 4.3% from a year ago to a record $285,700.

So here is the visual definition of a “demand killer”: Since June 2012, so in seven years, the median price has surged 52%. And mortgage rates in 2012 were in about the same range as now. No one in the industry should be surprised that sales are slow:

by Wolf Richter, Wolf Street |  Read more:

Images: Wolfstreet

The Case of Al Franken

Last month, in Minneapolis, I climbed the stairs of a row house to find Al Franken, Minnesota’s disgraced former senator, wandering around in jeans and stocking feet. It was a sunny day, but the shades were mostly drawn. Takeout containers of hummus and carrot sticks were set out on the kitchen table. His wife, Franni Bryson, was stuck in their apartment in Washington, D.C., with a cold, and he had evidently done the best he could to be hospitable. But the place felt like the kind of man cave where someone hides out from the world, which is more or less what Franken has been doing since he resigned, in December, 2017, amid accusations of sexual impropriety.

There had been occasional sightings of him: in Washington, people mentioned having glimpsed him riding the Metro or browsing alone in a bookstore; there was gossip that he had fallen into a depression, and had been seen in a fetal position on a friend’s couch. But Franken had experienced one of the most abrupt downfalls in recent political memory. He had been perhaps the most recognizable figure in the Senate, in part because he’d entered it as a celebrity: a best-selling author and a former writer and performer on “Saturday Night Live.” Now Franken was just one more face in a gallery of previously powerful men who had been brought down by the #MeToo movement, and whom no one wanted to hear from again. America had ghosted him.

Only two years ago, Franken was being talked up as a possible challenger to President Donald Trump in 2020. In Senate hearings, Franken had proved himself to be one of the most effective critics of the Trump Administration. His tough questioning of Jeff Sessions, Trump’s nominee for Attorney General, had led Sessions to recuse himself from the investigation into Russian influence in the 2016 election, and prompted the appointment of Robert Mueller as special counsel.

As it turns out, Franken’s only role in the 2020 Presidential campaign has been as a figure of controversy. On June 4th, Pete Buttigieg was widely criticized on social media for saying that he would not have pressured Franken to resign—as had virtually all his Democratic rivals who were then in the Senate—without first learning more about the alleged incidents. At the same time, the Presidential candidacy of Senator Kirsten Gillibrand has been plagued by questions about her role as the first of three dozen Democratic senators to demand Franken’s resignation. Gillibrand has cast herself as a feminist champion of “zero tolerance” toward sexual impropriety, but Democratic donors sympathetic to Franken have stunted her fund-raising and, Gillibrand says, tried to “intimidate” her “into silence.”

Franken’s fall was stunningly swift: he resigned only three weeks after Leeann Tweeden, a conservative talk-radio host, accused him of having forced an unwanted kiss on her during a 2006 U.S.O. tour. Seven more women followed with accusations against Franken; all of them centered on inappropriate touches or kisses. Half the accusers’ names have still not become public. Although both Franken and Tweeden called for an independent investigation into her charges, none took place. This reticence reflects the cultural moment: in an era when women’s accusations of sexual discrimination and harassment are finally being taken seriously, after years of belittlement and dismissal, some see it as offensive to subject accusers to scrutiny. “Believe Women” has become a credo of the #MeToo movement.

At his house, Franken said he understood that, in such an atmosphere, the public might not be eager to hear his grievances. Holding his head in his hands, he said, “I don’t think people who have been sexually assaulted, and those kinds of things, want to hear from people who have been #MeToo’d that they’re victims.” Yet, he added, being on the losing side of the #MeToo movement, which he fervently supports, has led him to spend time thinking about such matters as due process, proportionality of punishment, and the consequences of Internet-fuelled outrage. He told me that his therapist had likened his experience to “what happens when primates are shunned and humiliated by the rest of the other primates.” Their reaction, Franken said, with a mirthless laugh, “is ‘I’m going to die alone in the jungle.’”

Now sixty-eight, Franken is short and sturdily built, with bristly gray hair, tortoiseshell glasses, and a wide, froglike mouth from which he tends to talk out of one corner. Despite his current isolation, Franken is recognized nearly everywhere he goes, and he often gets stopped on the street. “I can’t go anywhere without people reminding me of this, usually with some version of ‘You shouldn’t have resigned,’ ” Franken said. He appreciates the support, but such comments torment him about his departure from the Senate. He tends to respond curtly, “Yup.”

When I asked him if he truly regretted his decision to resign, he said, “Oh, yeah. Absolutely.” He wishes that he had appeared before a Senate Ethics Committee hearing, as he had requested, allowing him to marshal facts that countered the narrative aired in the press. It is extremely rare for a senator to resign under pressure. No senator has been expelled since the Civil War, and in modern times only three have resigned under the threat of expulsion: Harrison Williams, in 1982, Bob Packwood, in 1995, and John Ensign, in 2011. Williams resigned after he was convicted of bribery and conspiracy; Packwood faced numerous sexual-assault accusations; Ensign was accused of making illegal payoffs to hide an affair.

A remarkable number of Franken’s Senate colleagues have regrets about their own roles in his fall. Seven current and former U.S. senators who demanded Franken’s resignation in 2017 told me that they’d been wrong to do so. Such admissions are unusual in an institution whose members rarely concede mistakes. Patrick Leahy, the veteran Democrat from Vermont, said that his decision to seek Franken’s resignation without first getting all the facts was “one of the biggest mistakes I’ve made” in forty-five years in the Senate. Heidi Heitkamp, the former senator from North Dakota, told me, “If there’s one decision I’ve made that I would take back, it’s the decision to call for his resignation. It was made in the heat of the moment, without concern for exactly what this was.” Tammy Duckworth, the junior Democratic senator from Illinois, told me that the Senate Ethics Committee “should have been allowed to move forward.” She said it was important to acknowledge the trauma that Franken’s accusers had gone through, but added, “We needed more facts. That due process didn’t happen is not good for our democracy.” Angus King, the Independent senator from Maine, said that he’d “regretted it ever since” he joined the call for Franken’s resignation. “There’s no excuse for sexual assault,” he said. “But Al deserved more of a process. I don’t denigrate the allegations, but this was the political equivalent of capital punishment.” Senator Jeff Merkley, of Oregon, told me, “This was a rush to judgment that didn’t allow any of us to fully explore what this was about. I took the judgment of my peers rather than independently examining the circumstances. In my heart, I’ve not felt right about it.” Bill Nelson, the former Florida senator, said, “I realized almost right away I’d made a mistake. I felt terrible. I should have stood up for due process to render what it’s supposed to—the truth.” Tom Udall, the senior Democratic senator from New Mexico, said, “I made a mistake. I started having second thoughts shortly after he stepped down. He had the right to be heard by an independent investigative body. I’ve heard from people around my state, and around the country, saying that they think he got railroaded. It doesn’t seem fair. I’m a lawyer. I really believe in due process.”

Former Senate Minority Leader Harry Reid, who watched the drama unfold from retirement, told me, “It’s terrible what happened to him. It was unfair. It took the legs out from under him. He was a very fine senator.” Many voters have also protested Franken’s decision. A Change.org petition urging Franken to retract his resignation received more than seventy-five thousand signatures. It declared, “There’s a difference between abuse and a mistake.”

by Jane Mayer, New Yorker |  Read more:

Image: Geordie Wood

[ed. I have zero patience for people who use the term "who could have known?" after making stupid, irresponsible decisions, despite ample arguments against them at the time (Iraq?). See also: The reason there’s no #MeToo for domestic violence (Penelope Trunk).]

A Decade of Low Interest Rates Is Changing Everything

It’s hard to wrap your head around just how low U.S. interest and bond yields are—still are—a decade after the Great Recession ended. Year after year, prognosticators said that rates were bound to go back up soon: Just be ready. That exercise has proved to be like waiting for Godot.

In 2018, Jamie Dimon, chief executive officer of JPMorgan Chase & Co., put Americans on alert to the likelihood of higher interest rates. He said the global benchmark for longer-term rates, the yield on a 10-year Treasury bond, could go above 5%. Right now it’s just a hair above 2%. Thirty-year mortgage rates are a fraction of long-run averages, and companies too are paying very little to borrow. All that cheap money has been helping the economy along. On the other side of the ledger, bank depositors are getting paid only a fraction of 1% on their savings.

The longevity of low rates has upended long-standing assumptions about money and reshaped a generation of investors, traders, savers, and policymakers. The Federal Reserve has tried to push the U.S. into a higher-rate regime, raising rates nine times since 2015, when the key short-term rate was near zero. But now the central bank appears ready to reverse course and start cutting again when it meets at the end of July. “This is the new abnormal,” says David Kelly, chief global strategist at JPMorgan Asset Management, which oversees $1.8 trillion. “Normally when you are in this phase of an expansion, you have a rising inflation problem, a Federal Reserve overtightening to slow the economy, and businesses that can’t afford to borrow. None of that is true right now.”

Investors are betting that a quarter-percentage-point rate cut is all but certain, according to prices in the futures market. Fed Chair Jerome Powell reinforced those views with remarks to Congress on July 10 and 11. He cited rising global risks, low inflation, and weakening business investment and manufacturing. Depressed U.S. rates come as other central banks, including the European Central Bank, have turned more dovish—even with their rates already set below zero. (...)

For banks, the squeeze in long-term rates isn’t ideal. That’s because they tend to fund long-term investments with short-term debt, so they prosper when long-run rates are significantly higher than short ones. In the U.S., banks have still been able to profit, with the top five firms cracking $30 billion in quarterly earnings for the first time. But some big commercial banks have warned that lower interest rates are weighing on their outlooks for revenues from lending.

Individuals have had to get used to earning paltry rates. The national average rate on savings accounts is 0.10%, little changed from four years ago and down from 0.30% in 2009, according to data from Bankrate.com. In 2000, well before the financial crisis, the rate was 1.73%. “We never got to the would-be promised land with respect to higher rates,” says Mark Hamrick, senior economic analyst at Bankrate.com. “This has been the difference for savers between having more money and not.”

The problem is the same for institutions that manage savings on behalf of others. Pension funds, overseeing trillions in retirees’ future cash, have been ratcheting down return expectations. The 30-year Treasury bond, a favored debt security, yields about 2.5%—compared with an average 6.5% since the 1970s. Even a record rise in stock prices hasn’t solved the low-return problem for pension funds, because many of them cut their allocations to equities after the financial crisis. Ben Meng, chief investment officer of the California Public Employees’ Retirement System, said in June that the expected return for his pension portfolio over the next 10 years would be 6.1%, down from a previous target of 7%.

Where low rates really bite isn’t in current returns but in the future gains investors can reasonably expect. Interest rates set a kind of baseline for the return on all assets. As they fall, bond values rise and stocks often do, too. But once rates have settled at or near rock bottom, there’s less room for that kind of price appreciation.

by Liz McCormick, Bloomberg |  Read more:
Image: Daphne Geisler

photo: markk

From #TelegramGate to #RickyLeaks: Puerto Rico is on 🔥!

Two weeks ago, Puerto Rico's Center for Investigative Journalism published one of the most consequential investigative stories in the island's history: a trove of leaked private Telegram chats between Governor Ricardo Rossello and his most senior advisors and officials, in which the group use crude, homophobic and misogynist labels to mock and degrade opposition figures, Puerto Rican celebrities, and the people of Puerto Rico as they struggled with the aftermath of hurricanes Maria and Irma, left to swelter and die by a local and national government that had abandoned them.

Since then, Puerto Rico has been roiled by mass demonstrations, initially calling for Rossello's resignation, but now for deep, structural reforms to an island whose long history has been one of colonial occupation, oppression, and looting.

The protests have been led by feminists and queer activists, supported by the likes of Ricky Martin, a beloved, gay Puerto Rican pop star who was targeted for homophobic slurs in the leaks. As they've gained strength, the protests have drawn out more and more people from all walks of life -- with the vanguard still made up by political radicals who will not accept cosmetic compromises.

The Puerto Rican government has responded with riot squads and violent suppression, in a spectacular miscalculation that has only brought out more people. To make things worse, the police appear to have manufactured a casus belli by setting off fireworks behind their lines, a fraud so transparent that it has robbed them of any credibility they had left.

There's no sign that the protests are losing steam. Instead, they're gaining momentum, thanks in part to a second blockbuster from the Center for Investigative Journalism, detailing a high-stakes web of corruption with millions in looted public funds and bribes that goes straight to the top.

A small, densely populated island with a shameful colonial past up in arms demanding self-rule and an end to autocracy and corruption? If it's not Hong Kong, it must be Puerto Rico.

by Cory Doctorow, Boing Boing |  Read more:

Image: Joe Raedle/Getty Images via

[ed. Puerto Rico's been treated like the U.S.'s bastard stepchild for decades (some people still without electricity, nine months after Hurricane Maria).]