Thursday, August 22, 2019
[ed. The local grocery store was packed today with young people, all stocking up for a 4-day EDM festival at The Gorge. I told the checkout guy something like that would probably kill me... 4 days. Of EDM.]
It’s Official: Parts of California Are Too Wildfire-Prone to Insure
California is facing yet another real estate-related crisis, but we’re not talking about its sky-high home prices. According to newly released data, it’s simply become too risky to insure houses in big swaths of the wildfire-prone state.
Last winter when we wrote about home insurance rates possibly going up in the wake of California’s massive, deadly fires, the insurance industry representatives we interviewed were skeptical. They noted that the stories circulating in the media about people in forested areas losing their homeowners’ insurance was based on anecdotes, not data. But now, the data is in and it’s really happening: Insurance companies aren’t renewing policies areas climate scientists say are likely to burn in giant wildfires in coming years.
Insurance companies dropped more than 340,000 homeowners from wildfire areas in just four years. Between 2015 and 2018, the 10 California counties with the most homes in flammable forests saw a 177 percent increase in homeowners turning to an expensive state-backed insurance program because they could not find private insurance.
In some ways, this news is not surprising. According to a recent survey of insurance actuaries (the people who calculate insurance risks and premiums based on available data), the industry ranked climate change as the top risk for 2019, beating out concerns over cyber damages, financial instability, and terrorism. While having insurance companies on board with climate science is a good thing for, say, requiring cities to invest in more sustainable infrastructure, it’s bad news for homeowners who can’t simply pick up their lodgings and move elsewhere.
“We are seeing an increasing trend across California where people at risk of wildfires are being non-renewed by their insurer,” said California Insurance Commissioner Ricardo Lara in a statement. “This data should be a wake-up call for state and local policymakers that without action to reduce the risk from extreme wildfires and preserve the insurance market we could see communities unraveling.”
A similar dynamic is likely unfolding across many other Western states, according to reporting from the New York Times.
by Nathanael Johnson, Grist | Read more:
Image: AP/Marcio Jose Sanchez
[ed. Might want to re-think buying that coastal or riverfront property, too.]
Last winter when we wrote about home insurance rates possibly going up in the wake of California’s massive, deadly fires, the insurance industry representatives we interviewed were skeptical. They noted that the stories circulating in the media about people in forested areas losing their homeowners’ insurance was based on anecdotes, not data. But now, the data is in and it’s really happening: Insurance companies aren’t renewing policies areas climate scientists say are likely to burn in giant wildfires in coming years.
Insurance companies dropped more than 340,000 homeowners from wildfire areas in just four years. Between 2015 and 2018, the 10 California counties with the most homes in flammable forests saw a 177 percent increase in homeowners turning to an expensive state-backed insurance program because they could not find private insurance.In some ways, this news is not surprising. According to a recent survey of insurance actuaries (the people who calculate insurance risks and premiums based on available data), the industry ranked climate change as the top risk for 2019, beating out concerns over cyber damages, financial instability, and terrorism. While having insurance companies on board with climate science is a good thing for, say, requiring cities to invest in more sustainable infrastructure, it’s bad news for homeowners who can’t simply pick up their lodgings and move elsewhere.
“We are seeing an increasing trend across California where people at risk of wildfires are being non-renewed by their insurer,” said California Insurance Commissioner Ricardo Lara in a statement. “This data should be a wake-up call for state and local policymakers that without action to reduce the risk from extreme wildfires and preserve the insurance market we could see communities unraveling.”
A similar dynamic is likely unfolding across many other Western states, according to reporting from the New York Times.
Image: AP/Marcio Jose Sanchez
[ed. Might want to re-think buying that coastal or riverfront property, too.]
St. Vincent
St. Vincent (Annie Clark)
via: here and here (from the ifuckinglovestvincent Tumblr blog).
[ed. Talent to burn. See also: Los Ageless. St. Vincent's Life in 6+ Riffs, and Being a Guitar God (YouTube)]
Real Estate for Dummies
The aborted Greenland purchase, however, was not necessarily the response many geopolitical strategists had in mind and comes at a time when Mr. Trump has seemed particularly erratic. In recent days, he proudly quoted a radio host declaring that Israeli Jews love him as if he were the “King of Israel” and “the second coming of God,” while Mr. Trump himself accused Jews who vote for Democrats of “great disloyalty.”
Speaking with reporters on the South Lawn on Wednesday, he suggested that God had tapped him to lead a trade war with China. “I am the chosen one,” he said, glancing heavenward. In the Oval Office on Tuesday, he exhibited his universal suspicion. “In my world, in this world, I think nobody can be trusted,” he said.
Trump’s Interest in Buying Greenland Seemed Like a Joke. Then It Got Ugly (NY Times).
[ed. No worries! I hear Britain will be coming on the market soon. See also: Trump Goes Godly (NY Times). Maybe this post should be titled 'Dementia for Dummies - How to Recognize It, What to do About It'.]
What Does It Even Mean to be a Tech Company in 2019?
The coworking company WeWork’s newly unveiled public filings raise a question: What does it even mean to be a tech company these days?
WeWork, which leases office space to people and businesses, is valued at a whopping $47 billion — more than 10 times its bigger rival IWG, which is considered a real estate company but does the same thing. A “tech company” like WeWork, the rationale goes, is more valuable because it is bigger, faster, stronger, and will bring in more future profits for shareholders.
“If you’re going to raise capital, it’s an easier way to get your foot in the door by saying you’re some new kind of disruptive tech company,” Paul Condra, lead emerging technology analyst at research firm PitchBook, told Recode.
That’s why WeWork went to great lengths in its filings to point out all the things that make it a tech company and, by extension, validate its price tag. It has purchased lots of other tech companies and brings that technology to bear on its regular operations by “scanning technologies and software to automate the design and construction layout of any given space,” applying “data science to compare new buildings with similar proven locations,” and using machine learning to “forecast demand for each building to set the opening day price and optimize on a real-time basis.”
It also boasts 1,000 tech employees out of 12,500 total employees.
But does that make it a tech company?
Ultimately, WeWork’s main business involves leasing buildings on a long-term basis, remodeling and styling them so they feel like trendy places to be, and then subleasing space in those buildings to people and companies on a short-term basis. It looks a lot like a real estate company.
But it’s certainly not alone in having tech aspirations. Startups of every stripe are touting their tech bona fides.
Are direct-to-consumer brands like Glossier (makeup) and Away (luggage), where you purchase goods online but otherwise don’t interact with technology, tech companies? Amazon and Etsy, which primarily function as online marketplaces — are they tech? What is it that makes Tesla a tech company but not General Motors? GM uses plenty of technology and is even making competing, autonomous electric cars.
Airbnb? DoorDash? Blue Apron? Uber? Lyft? Sweetgreen? The list goes on, as does the justification. As many have noted before me, every company is a tech company — or at least thinks it is. Katrina Lake, the CEO of clothing recommendation company StitchFix told Recode’s Kara Swisher, “if you want to be relevant 10 years from now, every company is going to be a tech company.”
“The first question is, ‘Does the company sell tech?’ That’s easy. If yes, that’s a tech company,” Condra said. “If they don’t, then you have to ask yourself, ‘Is there some kind of modern technology core to its customer acquisition or customer retention?’”
But as technology becomes increasingly central to companies’ businesses, that line becomes harder to draw.
“Twenty years ago, if the internet was an important part of a business — I’d say, ‘yes, that’s a tech company,’” Jay Ritter, a finance professor at the University of Florida who tracks IPOs, told Recode. “But today, what company has a business where the internet isn’t an important part of it?”
He added, referring to other IPO researchers he’s talked with over the years, “We all agree that companies like WeWork or Etsy, whether you classify them as a technology company or not is definitely a judgment issue.”
For plucky entrepreneurs aspiring to found tech companies, that leaves many ways in. You don’t necessarily need to sell or develop technology as your main line of business. Simply using technology does the trick, and the more buzzwords you can fit in a pitch deck — AI, machine learning, data mining, blockchain — the better. Hiring engineers and software developers helps, too.
Or perhaps being a tech company is more of a mindset: We are new and we use the internet, therefore we are tech. It’s certainly a branding tool. But the distinction can feel mind-numbing.
In 2011, prominent tech venture capitalist Marc Andreessen penned a widely read Wall Street Journal article, “Software Is Eating the World” that made the prescient point that software companies would take over a large portion of the economy. These days, it feels like it’s eating our brains.
by Rani Molla, Recode | Read more:
Image: Jonathan Brady/PA Images via Getty Images
[ed. See also: WeWork: Is There Any There There? (NY Times)]
WeWork, which leases office space to people and businesses, is valued at a whopping $47 billion — more than 10 times its bigger rival IWG, which is considered a real estate company but does the same thing. A “tech company” like WeWork, the rationale goes, is more valuable because it is bigger, faster, stronger, and will bring in more future profits for shareholders.“If you’re going to raise capital, it’s an easier way to get your foot in the door by saying you’re some new kind of disruptive tech company,” Paul Condra, lead emerging technology analyst at research firm PitchBook, told Recode.
That’s why WeWork went to great lengths in its filings to point out all the things that make it a tech company and, by extension, validate its price tag. It has purchased lots of other tech companies and brings that technology to bear on its regular operations by “scanning technologies and software to automate the design and construction layout of any given space,” applying “data science to compare new buildings with similar proven locations,” and using machine learning to “forecast demand for each building to set the opening day price and optimize on a real-time basis.”
It also boasts 1,000 tech employees out of 12,500 total employees.
But does that make it a tech company?
Ultimately, WeWork’s main business involves leasing buildings on a long-term basis, remodeling and styling them so they feel like trendy places to be, and then subleasing space in those buildings to people and companies on a short-term basis. It looks a lot like a real estate company.
But it’s certainly not alone in having tech aspirations. Startups of every stripe are touting their tech bona fides.
Are direct-to-consumer brands like Glossier (makeup) and Away (luggage), where you purchase goods online but otherwise don’t interact with technology, tech companies? Amazon and Etsy, which primarily function as online marketplaces — are they tech? What is it that makes Tesla a tech company but not General Motors? GM uses plenty of technology and is even making competing, autonomous electric cars.
Airbnb? DoorDash? Blue Apron? Uber? Lyft? Sweetgreen? The list goes on, as does the justification. As many have noted before me, every company is a tech company — or at least thinks it is. Katrina Lake, the CEO of clothing recommendation company StitchFix told Recode’s Kara Swisher, “if you want to be relevant 10 years from now, every company is going to be a tech company.”
“The first question is, ‘Does the company sell tech?’ That’s easy. If yes, that’s a tech company,” Condra said. “If they don’t, then you have to ask yourself, ‘Is there some kind of modern technology core to its customer acquisition or customer retention?’”
But as technology becomes increasingly central to companies’ businesses, that line becomes harder to draw.
“Twenty years ago, if the internet was an important part of a business — I’d say, ‘yes, that’s a tech company,’” Jay Ritter, a finance professor at the University of Florida who tracks IPOs, told Recode. “But today, what company has a business where the internet isn’t an important part of it?”
He added, referring to other IPO researchers he’s talked with over the years, “We all agree that companies like WeWork or Etsy, whether you classify them as a technology company or not is definitely a judgment issue.”
For plucky entrepreneurs aspiring to found tech companies, that leaves many ways in. You don’t necessarily need to sell or develop technology as your main line of business. Simply using technology does the trick, and the more buzzwords you can fit in a pitch deck — AI, machine learning, data mining, blockchain — the better. Hiring engineers and software developers helps, too.
Or perhaps being a tech company is more of a mindset: We are new and we use the internet, therefore we are tech. It’s certainly a branding tool. But the distinction can feel mind-numbing.
In 2011, prominent tech venture capitalist Marc Andreessen penned a widely read Wall Street Journal article, “Software Is Eating the World” that made the prescient point that software companies would take over a large portion of the economy. These days, it feels like it’s eating our brains.
by Rani Molla, Recode | Read more:
Image: Jonathan Brady/PA Images via Getty Images
[ed. See also: WeWork: Is There Any There There? (NY Times)]
Wednesday, August 21, 2019
Maybe Your Zoloft Stopped Working Because a Liver Fluke Tried to Turn Your Nth-Great-Grandmother Into a Zombie
Or at least this is the theory proposed in Brain Evolution Through The Lens Of Parasite Manipulation by Marco del Giudice.
The paper starts with an overview of parasite manipulation of host behavior. These are the stories you hear about toxoplasma-infected rats seeking out cats instead of running away from them, or zombie ants climbing stalks of grass so predators will eat them. The parasite secretes chemicals that alter host neurochemistry in ways that make the host get eaten, helping the parasite transfer itself to a new organism.
Along with rats and ants, there is a dizzying variety of other parasite manipulation cases. They include parasitic wasps who hack spiders into forming protective webs for their pupae, parasitic flies that cause bees to journey far from their hive in order to spread fly larva more widely, and parasitic microorganisms that cause mosquitoes to draw less blood from each victim (since that forces the mosquitoes to feed on more victims, and so spread the parasite more widely). Parasitic nematodes make their ant hosts turn red, which causes (extremely stupid?) birds to mistake them for fruit and eat them. Parasitic worms make crickets seek water; as the cricket drowns, the worms escape into the pond and begin the next stage of their life cycle. Even mere viruses can alter behavior; the most famous example is rabies, which hacks dogs, bats, and other mammals into hyperaggressive moods that usually result in them biting someone and transmitting the rabies virus.
Even our friendly gut microbes might be manipulating us. People talk a lot about the “gut-brain axis” and the effect of gut microbes on behavior, as if this is some sort of beautiful symbiotic circle-of-life style thing. But scientists have found that gut microbes trying to colonize fruit flies will hack the flies’ food preferences to get a leg up – for example, a carb-metabolizing microbe will secrete hormones that make the fly want to eat more carbs than fat in order to outcompete its fat-metabolizing rivals for gut real estate; there are already papers speculating that the same processes might affect humans. Read Alcock 2014 and you will never look at food cravings the same way again.
But del Giudice thinks this is just the tip of the iceberg. Throughout evolutionary history, parasites have been trying to manipulate host behavior and hosts have been trying to avoid manipulation, resulting in an eons-long arms race. The equilibrium is what we see today: parasite manipulation is common in insects, rare in higher animals, and overall of limited importance. But in arms race dynamics, the current size of the problem tells you nothing about the amount of resources invested in preventing the problem. There is zero problem with war between Iran and Saudi Arabia right now, but both sides have invested billions of dollars in military supplies to keep their opponent from getting a leg up. In the same way, just because mammals usually avoid parasite behavior manipulation nowdoesn’t mean they aren’t on a constant evolutionary war footing.
So if you’re an animal at constant risk of having your behavior hijacked by parasites, what do you do?
First, you make your biological signaling cascades more complicated. You have multiple redundant systems controlling every part of behavior, and have them interact in ways too complicated for any attacker to figure out. You have them sometimes do the opposite of what it looks like they should do, just to keep enemies on their toes. This situation should sound very familiar to anyone who’s ever studied biology.
Del Giudice compares the neurosignaling of the shrimp-like gammarids (small, simple, frequently hijacked by parasites) to rats (large, complex, hard to hijack). Gammarids have very simple signaling: high serotonin means “slow down”, low serotonin means “speed up”. The helminths that parasitize gammarids secrete serotonin, and the gammarids slow down and get eaten, transferring the parasite to a new host. Biologists can replicate this process; if they inject serotonin into a gammarid, the gammarid will slow down in the same way.
Toxoplasma hijacks rats and makes them fearless enough to approach cats. Dopamine seems to be involved somehow. But researchers injecting dopamine into rats don’t get the same result; in fact, this seems to make rats avoid cats more. Maybe toxoplasma started by increasing dopamine, rats evolved a more complicated signaling code, and toxoplasma cracked the code and now increases dopamine plus other things we don’t understand yet.
Aside from the brain, the immune system is the most important target to secure, so this theory should predict that immune signaling will also be unusually inscrutable. Again, this situation should sound very familiar to anyone who’s ever studied biology.
Second, you have a bunch of feedback loops and flexibility ready to deploy at any kind of trouble. If something makes dopamine levels go up, you decrease the number of dopamine receptors, so that overall dopaminergic neurotransmission is the same as always. If something is making you calmer than normal, you have some other system ready to react by making you more anxious again.
Del Giudice makes the obvious connection to psychopharmacology. Many psychoactive drugs build tolerance quickly: for example, heroin addicts constantly need higher and higher doses to get their “hit”. Further, tolerance builds in a pattern weirdly similar to antibody response – it takes a while to build up a cocaine tolerance, and you lose it over time if you don’t use cocaine, but the body “remembers” the process and a single hit of cocaine years later is sufficient to bring you back up to the highest tolerance level you’ve ever had.
The standard explanation for tolerance is that it’s an attempt to maintain homeostasis against the sort of conditions that can cause natural variation in neurotransmitter levels. I never questioned this before. But why is the body prepared to suddenly have all its serotonin reuptake transporters inhibited? Is that something that frequently happens, out in nature? I guess maybe plant toxins could do that, but then how come the body is prepared to deal with this for months or years?
While not denying the value of these standard explanations, Del Giudice thinks defense against parasite behavior manipulation may also play a role. Remember, gammarids absolutely have parasites that try to increase their serotonin levels as a prelude to getting them killed. Is it that surprising that a lot of different animal lineages would develop a reaction of “If something other than normal cognition has started increasing your serotonin levels, it’s a trap and you need to get them back down again”? Does that explain why SSRIs don’t work for some people, or randomly stop working, or need frequent dose escalation?
The paper starts with an overview of parasite manipulation of host behavior. These are the stories you hear about toxoplasma-infected rats seeking out cats instead of running away from them, or zombie ants climbing stalks of grass so predators will eat them. The parasite secretes chemicals that alter host neurochemistry in ways that make the host get eaten, helping the parasite transfer itself to a new organism.
Along with rats and ants, there is a dizzying variety of other parasite manipulation cases. They include parasitic wasps who hack spiders into forming protective webs for their pupae, parasitic flies that cause bees to journey far from their hive in order to spread fly larva more widely, and parasitic microorganisms that cause mosquitoes to draw less blood from each victim (since that forces the mosquitoes to feed on more victims, and so spread the parasite more widely). Parasitic nematodes make their ant hosts turn red, which causes (extremely stupid?) birds to mistake them for fruit and eat them. Parasitic worms make crickets seek water; as the cricket drowns, the worms escape into the pond and begin the next stage of their life cycle. Even mere viruses can alter behavior; the most famous example is rabies, which hacks dogs, bats, and other mammals into hyperaggressive moods that usually result in them biting someone and transmitting the rabies virus.
Even our friendly gut microbes might be manipulating us. People talk a lot about the “gut-brain axis” and the effect of gut microbes on behavior, as if this is some sort of beautiful symbiotic circle-of-life style thing. But scientists have found that gut microbes trying to colonize fruit flies will hack the flies’ food preferences to get a leg up – for example, a carb-metabolizing microbe will secrete hormones that make the fly want to eat more carbs than fat in order to outcompete its fat-metabolizing rivals for gut real estate; there are already papers speculating that the same processes might affect humans. Read Alcock 2014 and you will never look at food cravings the same way again.
But del Giudice thinks this is just the tip of the iceberg. Throughout evolutionary history, parasites have been trying to manipulate host behavior and hosts have been trying to avoid manipulation, resulting in an eons-long arms race. The equilibrium is what we see today: parasite manipulation is common in insects, rare in higher animals, and overall of limited importance. But in arms race dynamics, the current size of the problem tells you nothing about the amount of resources invested in preventing the problem. There is zero problem with war between Iran and Saudi Arabia right now, but both sides have invested billions of dollars in military supplies to keep their opponent from getting a leg up. In the same way, just because mammals usually avoid parasite behavior manipulation nowdoesn’t mean they aren’t on a constant evolutionary war footing.
So if you’re an animal at constant risk of having your behavior hijacked by parasites, what do you do?
First, you make your biological signaling cascades more complicated. You have multiple redundant systems controlling every part of behavior, and have them interact in ways too complicated for any attacker to figure out. You have them sometimes do the opposite of what it looks like they should do, just to keep enemies on their toes. This situation should sound very familiar to anyone who’s ever studied biology.
Del Giudice compares the neurosignaling of the shrimp-like gammarids (small, simple, frequently hijacked by parasites) to rats (large, complex, hard to hijack). Gammarids have very simple signaling: high serotonin means “slow down”, low serotonin means “speed up”. The helminths that parasitize gammarids secrete serotonin, and the gammarids slow down and get eaten, transferring the parasite to a new host. Biologists can replicate this process; if they inject serotonin into a gammarid, the gammarid will slow down in the same way.
Toxoplasma hijacks rats and makes them fearless enough to approach cats. Dopamine seems to be involved somehow. But researchers injecting dopamine into rats don’t get the same result; in fact, this seems to make rats avoid cats more. Maybe toxoplasma started by increasing dopamine, rats evolved a more complicated signaling code, and toxoplasma cracked the code and now increases dopamine plus other things we don’t understand yet.
Aside from the brain, the immune system is the most important target to secure, so this theory should predict that immune signaling will also be unusually inscrutable. Again, this situation should sound very familiar to anyone who’s ever studied biology.
Second, you have a bunch of feedback loops and flexibility ready to deploy at any kind of trouble. If something makes dopamine levels go up, you decrease the number of dopamine receptors, so that overall dopaminergic neurotransmission is the same as always. If something is making you calmer than normal, you have some other system ready to react by making you more anxious again.
Del Giudice makes the obvious connection to psychopharmacology. Many psychoactive drugs build tolerance quickly: for example, heroin addicts constantly need higher and higher doses to get their “hit”. Further, tolerance builds in a pattern weirdly similar to antibody response – it takes a while to build up a cocaine tolerance, and you lose it over time if you don’t use cocaine, but the body “remembers” the process and a single hit of cocaine years later is sufficient to bring you back up to the highest tolerance level you’ve ever had.
The standard explanation for tolerance is that it’s an attempt to maintain homeostasis against the sort of conditions that can cause natural variation in neurotransmitter levels. I never questioned this before. But why is the body prepared to suddenly have all its serotonin reuptake transporters inhibited? Is that something that frequently happens, out in nature? I guess maybe plant toxins could do that, but then how come the body is prepared to deal with this for months or years?
While not denying the value of these standard explanations, Del Giudice thinks defense against parasite behavior manipulation may also play a role. Remember, gammarids absolutely have parasites that try to increase their serotonin levels as a prelude to getting them killed. Is it that surprising that a lot of different animal lineages would develop a reaction of “If something other than normal cognition has started increasing your serotonin levels, it’s a trap and you need to get them back down again”? Does that explain why SSRIs don’t work for some people, or randomly stop working, or need frequent dose escalation?
by Scott Alexander, Slate Star Codex | Read more:
Despite Devastating Crashes, Boeing Stocks Fly High
In a turbulent world, some things remain stable, even to an irrational degree. One example is the price of Boeing stock, which, at $329 a share as of midday August 16, has barely moved—down just 1.6 percent—from a year ago.
As all the world knows, in the intervening 12 months, two Boeing 737 Max jets have crashed, killing a total of 346 people. We also know that the crashes were entirely thanks to corporate management rushing through a Rube Goldberg adaptation of a half century-old design, suborning the FAA to approve untested and incompetently programmed software control features along with other irresponsible shortcuts (such as cutting the company’s own test pilots out of MAX development planning and avoiding mention of the new control features in the airline pilots’ manuals).
Nevertheless, neither the slaughter of passengers nor the subsequent deluge of shocking revelations have had any long-term impact on the stock price. There have indeed been short-term fluctuations in the interim, notably a sharp climb in the months following the first MAX disaster in Indonesia last October, when management’s disgraceful PR spin ascribing blame to incompetent foreign pilots achieved some traction in the press. (...)
Even so, Wall Street appears unworried. Analysts still rate the stock a “strong buy” by a wide margin, with a consensus estimate that it will climb some 90 points from its currently stable position in the high $320s over the next 12 months. The $2.3 billion Boeing spent buying its own stock in the first three months of this year no doubt encouraged such bullish sentiment, part of the $43 billion splurged on price-propping buybacks since 2013.
In addition, other powerful forces are hard at work to save the corporate behemoth from going into a terminal stall. Boeing, for example, is a component of the Dow Jones Industrial Average, the 30-stock index generally if misleadingly cited as a bellwether of the market as a whole, and even the entire U.S. economy. Because the Dow is weighted by price, an upward or downward move in Boeing has a significant effect on the index, which makes it a particular object of interest for the trading desks at major Wall Street players. Hence the stock is traded very actively in the “dark pools,” otherwise known as “alternative trading systems,” with opaque names such as JP Morgan’s JPMX, operated by the big banks and major institutions as unregulated stock exchanges, courtesy of a toothless SEC.
These are ideal instruments for manipulating the market, since they don’t have to show their bids and offers to the general market place as is required on regulated exchanges. As analogy, think of carpet dealers in a bazaar negotiating prices privately among themselves behind the backs of ordinary customers.
The tender regard being exhibited by big players on Wall Street is not, of course, solely for the sake of propping up the Dow. There is a lot of money directly at stake, not least in the 67 percent of the Boeing stock owned by just five giant funds, including Vanguard ($5.3 trillion in total assets) and Blackstone ($6.8 trillion). It’s a sign that Boeing must keep borrowing money to stay afloat. Fortunately, thanks to low interest rates and the river of cash generated by the Federal Reserve since 2008, supplies are ready to hand. Thus on July 31, for example, Boeing borrowed a total of $5.5 billion via notes of varying maturities and interest rates taken up by major banks, including JP Morgan, Morgan Stanley, Wells Fargo, and Goldman Sachs—and that was on top of $3.5 billion borrowed in late April.
Given that it may be quite a while before money starts to flow again from airlines shopping for 737s, there is undoubtedly a lot of Wall Street interest in the alternative source for emergency Boeing cash flow: a giant taxpayer bailout in the form of a Pentagon contract of suitable proportions. Fortunately, there is a vehicle for delivering the cash: the Ground Based Strategic Deterrent, the Minuteman-replacement ICBM authorized by President Obama as part of his $1 trillion nuclear modernization program. It carries a price tag, gratifying to investors, of up to $100 billion—a sum that will quite certainly be exceeded down the road.
by Andrew Cockburn, The American Conservative | Read more:
Image: pjs2005/creativecommons
[ed. Too big to fail.]
As all the world knows, in the intervening 12 months, two Boeing 737 Max jets have crashed, killing a total of 346 people. We also know that the crashes were entirely thanks to corporate management rushing through a Rube Goldberg adaptation of a half century-old design, suborning the FAA to approve untested and incompetently programmed software control features along with other irresponsible shortcuts (such as cutting the company’s own test pilots out of MAX development planning and avoiding mention of the new control features in the airline pilots’ manuals).
Nevertheless, neither the slaughter of passengers nor the subsequent deluge of shocking revelations have had any long-term impact on the stock price. There have indeed been short-term fluctuations in the interim, notably a sharp climb in the months following the first MAX disaster in Indonesia last October, when management’s disgraceful PR spin ascribing blame to incompetent foreign pilots achieved some traction in the press. (...)Even so, Wall Street appears unworried. Analysts still rate the stock a “strong buy” by a wide margin, with a consensus estimate that it will climb some 90 points from its currently stable position in the high $320s over the next 12 months. The $2.3 billion Boeing spent buying its own stock in the first three months of this year no doubt encouraged such bullish sentiment, part of the $43 billion splurged on price-propping buybacks since 2013.
In addition, other powerful forces are hard at work to save the corporate behemoth from going into a terminal stall. Boeing, for example, is a component of the Dow Jones Industrial Average, the 30-stock index generally if misleadingly cited as a bellwether of the market as a whole, and even the entire U.S. economy. Because the Dow is weighted by price, an upward or downward move in Boeing has a significant effect on the index, which makes it a particular object of interest for the trading desks at major Wall Street players. Hence the stock is traded very actively in the “dark pools,” otherwise known as “alternative trading systems,” with opaque names such as JP Morgan’s JPMX, operated by the big banks and major institutions as unregulated stock exchanges, courtesy of a toothless SEC.
These are ideal instruments for manipulating the market, since they don’t have to show their bids and offers to the general market place as is required on regulated exchanges. As analogy, think of carpet dealers in a bazaar negotiating prices privately among themselves behind the backs of ordinary customers.
The tender regard being exhibited by big players on Wall Street is not, of course, solely for the sake of propping up the Dow. There is a lot of money directly at stake, not least in the 67 percent of the Boeing stock owned by just five giant funds, including Vanguard ($5.3 trillion in total assets) and Blackstone ($6.8 trillion). It’s a sign that Boeing must keep borrowing money to stay afloat. Fortunately, thanks to low interest rates and the river of cash generated by the Federal Reserve since 2008, supplies are ready to hand. Thus on July 31, for example, Boeing borrowed a total of $5.5 billion via notes of varying maturities and interest rates taken up by major banks, including JP Morgan, Morgan Stanley, Wells Fargo, and Goldman Sachs—and that was on top of $3.5 billion borrowed in late April.
Given that it may be quite a while before money starts to flow again from airlines shopping for 737s, there is undoubtedly a lot of Wall Street interest in the alternative source for emergency Boeing cash flow: a giant taxpayer bailout in the form of a Pentagon contract of suitable proportions. Fortunately, there is a vehicle for delivering the cash: the Ground Based Strategic Deterrent, the Minuteman-replacement ICBM authorized by President Obama as part of his $1 trillion nuclear modernization program. It carries a price tag, gratifying to investors, of up to $100 billion—a sum that will quite certainly be exceeded down the road.
by Andrew Cockburn, The American Conservative | Read more:
Image: pjs2005/creativecommons
[ed. Too big to fail.]
Tuesday, August 20, 2019
Doxology
It was a bit uncanny to read Nell Zink’s new novel, “Doxology,” in the wake of the suicide this month of David Berman, the beloved singer and songwriter best known for his work with Silver Jews, his indie-rock band.
A similar type of outside-the-box musician, named Joe Harris, dies too young (heroin) in “Doxology.” Berman and Harris are different in many ways. But they share a surreal sense of humor. Zink shows us Harris onstage at one point, “rocking out to his own conception of beauty, alone and weird.” Berman and Harris also share a restless sort of talent that can lead artists to become more influential dead than alive.
“Doxology” isn’t fundamentally a music novel. It has many other things on its mind, including a subversive history of American politics from Operation Desert Shield through the start of the Trump presidency, and it’s superb. In terms of its author’s ability to throw dart after dart after dart into the center of your media-warped mind and soul, it’s the novel of the summer and possibly the year. It’s a ragged chunk of ecstatic cerebral-satirical intellection. It’s bliss.
“Doxology” displays two generations of an American family. Pamela and Daniel are semi-clueless young people who move individually to New York City in the late 1980s. They might have dropped sideways, like bookmarks, out of a Jonathan Lethem novel. He is fleeing college life after graduation; she is just fleeing. They meet, marry, struggle financially and play in small anti-bands, sometimes with Harris before he becomes famous. Pamela’s musical motto is: “If you gotta suck, suck loud.”
They’re ’80s hipsters, in other words, a genus with which Zink is intimate. Here’s a sample of this writer’s sociological acumen — her ability, like Tom Wolfe by way of Lorrie Moore, to cram observation into a tight space:
“The ’80s hipster bore no resemblance to the bearded and effeminate cottage industrialist who came to prominence as the ‘hipster’ in the new century. He wasn’t a ’50s hipster either. He knew nothing of heroin or the willful appropriation of black culture,” she writes. “Having spent four years at the foot of the ivory tower, picking up crumbs of obsolete theory, he descended to face once again the world of open-wheel motor sports and Jell-O salads from whence he sprang.”
Zink adds, as a flourish: “An ’80s hipster couldn’t gentrify a neighborhood.” She writes: “His presence drove rents down.” Also: “The ’80s hipster could get served a beer in the Ozarks.”
If you care about this sort of thing, Zink writes about music as if she were a cluster of the best American rock critics (Ellen Willis, Ann Powers, Jessica Hopper and Amanda Petrusich, let’s say) crushed together under a single byline. This novel is replete with erudite signifiers that drop all over the place, like a toddler eating a pint of blueberries: Robert Christgau jokes, nods to the “Casio-core” sound, paeans to the righteous punk glory of Ian MacKaye of Minor Threat and Fugazi.
One band sounds “like lawn mowers ridden by nymphets playing banjos.” When Pamela plays guitar, “her fingers move like it’s freezing out and she lost her mittens.” (...)
Post-sensitive is not a bad description of Zink’s Weltanschauung. Her women tend to be the sort of people for whom, as the old joke has it, there was no Santa at 6, no stork at 9 and no God at 12. (...)
Her previous novels include “The Wallcreeper,” “Mislaid” and “Nicotine,” and I’ve admired many aspects of each of them. “Doxology” puts her on a new level as a novelist, however. This book is more ambitious and expansive and sensitive than her earlier work. She lays her heart on the line in a way she hasn’t before.
by Dwight Garner, NY Times | Read more:
A similar type of outside-the-box musician, named Joe Harris, dies too young (heroin) in “Doxology.” Berman and Harris are different in many ways. But they share a surreal sense of humor. Zink shows us Harris onstage at one point, “rocking out to his own conception of beauty, alone and weird.” Berman and Harris also share a restless sort of talent that can lead artists to become more influential dead than alive.
“Doxology” isn’t fundamentally a music novel. It has many other things on its mind, including a subversive history of American politics from Operation Desert Shield through the start of the Trump presidency, and it’s superb. In terms of its author’s ability to throw dart after dart after dart into the center of your media-warped mind and soul, it’s the novel of the summer and possibly the year. It’s a ragged chunk of ecstatic cerebral-satirical intellection. It’s bliss.“Doxology” displays two generations of an American family. Pamela and Daniel are semi-clueless young people who move individually to New York City in the late 1980s. They might have dropped sideways, like bookmarks, out of a Jonathan Lethem novel. He is fleeing college life after graduation; she is just fleeing. They meet, marry, struggle financially and play in small anti-bands, sometimes with Harris before he becomes famous. Pamela’s musical motto is: “If you gotta suck, suck loud.”
They’re ’80s hipsters, in other words, a genus with which Zink is intimate. Here’s a sample of this writer’s sociological acumen — her ability, like Tom Wolfe by way of Lorrie Moore, to cram observation into a tight space:
“The ’80s hipster bore no resemblance to the bearded and effeminate cottage industrialist who came to prominence as the ‘hipster’ in the new century. He wasn’t a ’50s hipster either. He knew nothing of heroin or the willful appropriation of black culture,” she writes. “Having spent four years at the foot of the ivory tower, picking up crumbs of obsolete theory, he descended to face once again the world of open-wheel motor sports and Jell-O salads from whence he sprang.”
Zink adds, as a flourish: “An ’80s hipster couldn’t gentrify a neighborhood.” She writes: “His presence drove rents down.” Also: “The ’80s hipster could get served a beer in the Ozarks.”
If you care about this sort of thing, Zink writes about music as if she were a cluster of the best American rock critics (Ellen Willis, Ann Powers, Jessica Hopper and Amanda Petrusich, let’s say) crushed together under a single byline. This novel is replete with erudite signifiers that drop all over the place, like a toddler eating a pint of blueberries: Robert Christgau jokes, nods to the “Casio-core” sound, paeans to the righteous punk glory of Ian MacKaye of Minor Threat and Fugazi.
One band sounds “like lawn mowers ridden by nymphets playing banjos.” When Pamela plays guitar, “her fingers move like it’s freezing out and she lost her mittens.” (...)
Post-sensitive is not a bad description of Zink’s Weltanschauung. Her women tend to be the sort of people for whom, as the old joke has it, there was no Santa at 6, no stork at 9 and no God at 12. (...)
Her previous novels include “The Wallcreeper,” “Mislaid” and “Nicotine,” and I’ve admired many aspects of each of them. “Doxology” puts her on a new level as a novelist, however. This book is more ambitious and expansive and sensitive than her earlier work. She lays her heart on the line in a way she hasn’t before.
by Dwight Garner, NY Times | Read more:
Image: Sonny Figueroa
How Shareholder Democracy Failed the People
Democracy is a messy thing. Shareholder democracy may be even messier.
For nearly a half-century, corporate America has prioritized, almost maniacally, profits for its shareholders. That single-minded devotion overran nearly every other constituent, pushing aside the interests of customers, employees and communities.
That philosophy was rooted in an idea that has an air of nobility about it. Shareholder democracy was the name given to investors asserting themselves in corporate governance. The idea was that investors would wrest control of companies from entrenched managers, letting the actual owners set their corporate priorities. But what we really got was something else: an era of shareholder primacy.
That may have a chance — a chance — of changing now that 181 chief executives have lent their signatures to a new “Statement on the Purpose of a Corporation” that was published by the Business Roundtable on Monday. The statement from the leaders of companies including JPMorgan Chase, Apple, Amazon and Walmart affirms that the nation’s largest companies have a “fundamental commitment” to all their stakeholders: putting employees, suppliers and communities on a pedestal that once belonged only to shareholders.
The companies’ statement is a significant shift and a welcome one. For years, businesses have resisted calls — including from this column — to rethink their responsibility to society. In response, corporations typically dismissed hot-button topics like income inequality, climate change, gun violence and more as political issues unrelated to them.
Some will doubt the sincerity of these business leaders’ words, and it remains an open question whether their companies will be held accountable — and by whom. But what we may be at the start of is less a new era and more a return to the past.
For nearly 50 years — following the publication of a seminal academic treatise in 1932 called “The Modern Corporation and Private Property” by Adolf A. Berle Jr. and Gardiner C. Means — corporations, for the most part, were run for all stakeholders. It was a time defined by organized labor, corporate pension programs, gold-watch retirements and charitable gifts from companies that invested heavily in their communities and the kind of research that promised future growth.
It is a period often referred to — sometimes derisively — as “managerialism.”
But by the 1970s, managerialism became synonymous in investment circles with immovable executives who were running bloated businesses more for their own benefit than for their shareholders.
It also coincided with the ascent of Milton Friedman, the University of Chicago economist who preached a gospel of profits-as-purpose and mocked anyone who thought that businesses should do anything else.
“What does it mean to say that ‘business’ has responsibilities?” Mr. Friedman wrote in this newspaper in 1970. “Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”
That began the rise of shareholder democracy, an idea that the public and news media embraced. Shareholders and, in turn, a new class of investors known as corporate raiders convinced executives to slash any and all fat from their budgets or risk being taken over or voted out. Layoffs increased, research and development budgets were cut, and pension programs were traded for 401(k)s. There was a rush of mergers driven by “cost savings” that grabbed headlines while profits soared and dividends increased.
And here we are. Americans mistrust companies to such an extent that the very idea of capitalism is now being debated on the political stage. Populism has been embraced on both ends of the political spectrum, whether in the trade protectionism of President Trump or the social-net supremacy of Senator Bernie Sanders.
It is against that backdrop that the Business Roundtable released its statement on Monday. The group should be commended for coming around — and no one wants to criticize progress — but it is undeniably late.
Make no mistake, it wasn’t shareholder democracy that created this new enlightened moment. Public outrage pushed this forward. So did anger in Washington and regulatory scrutiny that is finally coming to bear.
Shareholders — with some exceptions — did not come around until they had no choice but to realize that these forces could have an impact on their investments.
by Andrew Ross Sorkin, NY Times | Read more:
Image: Rick T. Wilking/Getty Images
For nearly a half-century, corporate America has prioritized, almost maniacally, profits for its shareholders. That single-minded devotion overran nearly every other constituent, pushing aside the interests of customers, employees and communities.
That philosophy was rooted in an idea that has an air of nobility about it. Shareholder democracy was the name given to investors asserting themselves in corporate governance. The idea was that investors would wrest control of companies from entrenched managers, letting the actual owners set their corporate priorities. But what we really got was something else: an era of shareholder primacy.That may have a chance — a chance — of changing now that 181 chief executives have lent their signatures to a new “Statement on the Purpose of a Corporation” that was published by the Business Roundtable on Monday. The statement from the leaders of companies including JPMorgan Chase, Apple, Amazon and Walmart affirms that the nation’s largest companies have a “fundamental commitment” to all their stakeholders: putting employees, suppliers and communities on a pedestal that once belonged only to shareholders.
The companies’ statement is a significant shift and a welcome one. For years, businesses have resisted calls — including from this column — to rethink their responsibility to society. In response, corporations typically dismissed hot-button topics like income inequality, climate change, gun violence and more as political issues unrelated to them.
Some will doubt the sincerity of these business leaders’ words, and it remains an open question whether their companies will be held accountable — and by whom. But what we may be at the start of is less a new era and more a return to the past.
For nearly 50 years — following the publication of a seminal academic treatise in 1932 called “The Modern Corporation and Private Property” by Adolf A. Berle Jr. and Gardiner C. Means — corporations, for the most part, were run for all stakeholders. It was a time defined by organized labor, corporate pension programs, gold-watch retirements and charitable gifts from companies that invested heavily in their communities and the kind of research that promised future growth.
It is a period often referred to — sometimes derisively — as “managerialism.”
But by the 1970s, managerialism became synonymous in investment circles with immovable executives who were running bloated businesses more for their own benefit than for their shareholders.
It also coincided with the ascent of Milton Friedman, the University of Chicago economist who preached a gospel of profits-as-purpose and mocked anyone who thought that businesses should do anything else.
“What does it mean to say that ‘business’ has responsibilities?” Mr. Friedman wrote in this newspaper in 1970. “Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”
That began the rise of shareholder democracy, an idea that the public and news media embraced. Shareholders and, in turn, a new class of investors known as corporate raiders convinced executives to slash any and all fat from their budgets or risk being taken over or voted out. Layoffs increased, research and development budgets were cut, and pension programs were traded for 401(k)s. There was a rush of mergers driven by “cost savings” that grabbed headlines while profits soared and dividends increased.
And here we are. Americans mistrust companies to such an extent that the very idea of capitalism is now being debated on the political stage. Populism has been embraced on both ends of the political spectrum, whether in the trade protectionism of President Trump or the social-net supremacy of Senator Bernie Sanders.
It is against that backdrop that the Business Roundtable released its statement on Monday. The group should be commended for coming around — and no one wants to criticize progress — but it is undeniably late.
Make no mistake, it wasn’t shareholder democracy that created this new enlightened moment. Public outrage pushed this forward. So did anger in Washington and regulatory scrutiny that is finally coming to bear.
Shareholders — with some exceptions — did not come around until they had no choice but to realize that these forces could have an impact on their investments.
Image: Rick T. Wilking/Getty Images
Monday, August 19, 2019
The Economics of Bubbles
Last year, Ross Gerber, a corporate investment manager, Tweeted a warning about Tesla. Gerber wanted investors to know that Tesla’s success would put other industries ‘at risk’. Which ones? Just oil, internal combustion engine automobiles, car dealers, railroads, auto parts, automobile services, and gas stations. ‘Did I forget some?’ he asked, implying yes, he did. Gerber included hashtags referencing Uber and Netflix as comparable ‘disruptors’. This is why, Gerber implied, there was so much ‘FUD’ (fear, uncertainty and doubt) in the media about Tesla. Gerber suggests a compelling storyline: the underdog hero, Tesla, is up against the evil incumbent forces that will play dirty to defeat it, but Tesla will overcome – just as Netflix and, presumptively, Uber have done.
The Tweet does not substantiate any of this. It doesn’t say why Tesla’s business case is like Netflix’s or Uber’s. It doesn’t say why all the purportedly threatened industries share the same interests here. It doesn’t have to – the human brain does that on its own without any help. As the US literary scholar Jonathan Gottschall has shown in his book The Storytelling Animal (2012), even the faintest sketch of a plotline is enough to prompt our minds to fill in the details. Gerber’s story outline is a familiar enough sketch of David taking on not just one but several Goliaths. It’s a good story outline. But it also ignores many important parts that do not fit with the plucky underdog narrative. It implies that all these alleged Goliaths have the same interest. It’s fiction, fantastically so.
The space between fiction and reality is where economic bubbles take shape. Froth fills that space. Gerber’s vaguely imagined world – one without oil companies, internal combustion engines, rail transportation, auto-service shops, parts makers, car dealers and gas stations – implies a radically different transportation infrastructure. But this future is just one of many possible ones, and storytellers have considered other potentially disruptive forces such as autonomous vehicles, new and different battery technology, or the micro-mobility revolution. How these potentialities play out, and Tesla’s role in them, is not just unknown but unknowable. As the late economic historian Nathan Rosenberg said to one of us: ‘The only thing certain about the future is that it is uncertain.’ Gerber’s Tesla story is fiction – and it is a fiction that relies on many unpredictable and uncontrollable convergent technological forces. To the extent that Tesla’s stock price reflects Gerber’s story, Tesla is a bubble.
As the Dutch Tulipmania of the 17th century and the South Sea Bubble of the 18th century attest, speculative bubbles have been with us since the early days of corporations and market capitalism. Instant mass communication, in the form of the radio, was an amazing invention of the 1920s. Almost 700 new radio stations – the United States’ entire current AM broadcast infrastructure – were established in 1922. But nobody had identified a successful business model for radio broadcast. That March, a small investor, Mrs W C B, sent a letter to the market columnist of the New-York Tribune seeking stock advice:
Indeed, so uncertain was the radio business that the industry journal Radio Broadcast sponsored an essay competition in 1924 to answer the fundamental question: ‘Who is to pay for radio broadcasting and how?’ More than 800 essays were submitted seeking the $500 prize (more than $7,000 in today’s money). Each essay was its own narrative, a more or less sticky story that an entrepreneur could use to raise money. The US businessman David Sarnoff, who co-founded the Radio Corporation of America (RCA) in 1919, didn’t enter the contest. But he believed that RCA would be able to charge a subscription, just like the telephone company AT&T, despite the fact that it was impossible to know who was tuning in on a radio. There were many possible radio stories available to Mrs W C B, but she wanted to have her story about the future of radio endorsed by the Tribune’s columnist.
Radio common stock was in for quite a ride: in January 1926, RCA shares were trading for $43 on the New York Stock Exchange. Investors were excited to get a piece of the technology that was broadcasting the Roaring 1920s, and join hundreds of entrepreneurs hoping to profit when manufacturers began producing radio sets and related broadcast equipment. They invested in RCA along with the 18 radio-related IPOs that were floated between 1923 and 1926. Three years later, in September 1929, RCA shares cost a bit more, $568. Three years after that, RCA shares had lost 97 per cent of their value and were trading for a mere $15. RCA’s dividend-adjusted price did not recover to 1929 levels for decades. RCA stock – indeed the entire radio sector in 1929 – was not a good investment. If Mrs W C B followed the outline of her own investment thesis and invested in RCA in 1922, we certainly hope she had the good sense to sell well before 1929.
Often the opportunity for a bubble arrives on the back of a new technology. And some technologies make for fantastic stories – indeed, sci-fi is a whole fictional genre based on this premise. Bubbles form whenever a new story is not only told, but can also be sold. However, not every new story leads to a bubble. Sometimes stories can be told, but not sold.
by Brent Goldfarb, Aeon | Read more:
Image: August 1926 edition of Radio Broadcast magazine, three years before the 1929 crash. Scan courtesy of Americanradiohistory.com
The Tweet does not substantiate any of this. It doesn’t say why Tesla’s business case is like Netflix’s or Uber’s. It doesn’t say why all the purportedly threatened industries share the same interests here. It doesn’t have to – the human brain does that on its own without any help. As the US literary scholar Jonathan Gottschall has shown in his book The Storytelling Animal (2012), even the faintest sketch of a plotline is enough to prompt our minds to fill in the details. Gerber’s story outline is a familiar enough sketch of David taking on not just one but several Goliaths. It’s a good story outline. But it also ignores many important parts that do not fit with the plucky underdog narrative. It implies that all these alleged Goliaths have the same interest. It’s fiction, fantastically so.
The space between fiction and reality is where economic bubbles take shape. Froth fills that space. Gerber’s vaguely imagined world – one without oil companies, internal combustion engines, rail transportation, auto-service shops, parts makers, car dealers and gas stations – implies a radically different transportation infrastructure. But this future is just one of many possible ones, and storytellers have considered other potentially disruptive forces such as autonomous vehicles, new and different battery technology, or the micro-mobility revolution. How these potentialities play out, and Tesla’s role in them, is not just unknown but unknowable. As the late economic historian Nathan Rosenberg said to one of us: ‘The only thing certain about the future is that it is uncertain.’ Gerber’s Tesla story is fiction – and it is a fiction that relies on many unpredictable and uncontrollable convergent technological forces. To the extent that Tesla’s stock price reflects Gerber’s story, Tesla is a bubble.As the Dutch Tulipmania of the 17th century and the South Sea Bubble of the 18th century attest, speculative bubbles have been with us since the early days of corporations and market capitalism. Instant mass communication, in the form of the radio, was an amazing invention of the 1920s. Almost 700 new radio stations – the United States’ entire current AM broadcast infrastructure – were established in 1922. But nobody had identified a successful business model for radio broadcast. That March, a small investor, Mrs W C B, sent a letter to the market columnist of the New-York Tribune seeking stock advice:
Question: I am a daily reader of your valued column in the Tribune, and your knowledge on investments has commended itself to me. The great impulse given to wireless telegraphy by the wireless concerts given daily at Newark and elsewhere suggest to me the advisability of making a modest investment in some wireless equipment stock that has potentialities. Could you name a few such stocks that I might invest in with reasonable assurance of large returns later on? What do you think of Radio common?Mrs W C B had constructed her ‘radio story’ (the term ‘radio’ had yet to completely displace earlier alternatives such as ‘wireless telegraphy’). She correctly understood that the new medium was a powerful means of communication – just as Gerber understands that electric motors are a powerful alternative to internal combustion engines. Mrs W C B’s mind connected the dots from wireless concerts to ‘reasonable assurance of large returns later on’ and manufacturers of ‘wireless equipment’. But this was only one possible future.
Indeed, so uncertain was the radio business that the industry journal Radio Broadcast sponsored an essay competition in 1924 to answer the fundamental question: ‘Who is to pay for radio broadcasting and how?’ More than 800 essays were submitted seeking the $500 prize (more than $7,000 in today’s money). Each essay was its own narrative, a more or less sticky story that an entrepreneur could use to raise money. The US businessman David Sarnoff, who co-founded the Radio Corporation of America (RCA) in 1919, didn’t enter the contest. But he believed that RCA would be able to charge a subscription, just like the telephone company AT&T, despite the fact that it was impossible to know who was tuning in on a radio. There were many possible radio stories available to Mrs W C B, but she wanted to have her story about the future of radio endorsed by the Tribune’s columnist.
Radio common stock was in for quite a ride: in January 1926, RCA shares were trading for $43 on the New York Stock Exchange. Investors were excited to get a piece of the technology that was broadcasting the Roaring 1920s, and join hundreds of entrepreneurs hoping to profit when manufacturers began producing radio sets and related broadcast equipment. They invested in RCA along with the 18 radio-related IPOs that were floated between 1923 and 1926. Three years later, in September 1929, RCA shares cost a bit more, $568. Three years after that, RCA shares had lost 97 per cent of their value and were trading for a mere $15. RCA’s dividend-adjusted price did not recover to 1929 levels for decades. RCA stock – indeed the entire radio sector in 1929 – was not a good investment. If Mrs W C B followed the outline of her own investment thesis and invested in RCA in 1922, we certainly hope she had the good sense to sell well before 1929.
Often the opportunity for a bubble arrives on the back of a new technology. And some technologies make for fantastic stories – indeed, sci-fi is a whole fictional genre based on this premise. Bubbles form whenever a new story is not only told, but can also be sold. However, not every new story leads to a bubble. Sometimes stories can be told, but not sold.
by Brent Goldfarb, Aeon | Read more:
Image: August 1926 edition of Radio Broadcast magazine, three years before the 1929 crash. Scan courtesy of Americanradiohistory.com
'A New Hawaiian Renaissance': How a Telescope Protest Became a Movement
On Hawaii’s Big Island, a protest against a $1.4bn observatory on Mauna Kea, a mountain considered sacred by many Native Hawaiians, is entering a second month. In that time, the protest site has swelled from a few hundred to several thousands, attracted celebrity visitors, and built a community of Native Hawaiians who see it as a pivotal moment.
The protest site sits at an elevation of 6,632ft, where the cold wind whips across hardened lava fields. But amid this inhospitable environment, weeks of demonstration have given rise to a sense of permanence.
The site stretches across a two-lane highway, where trucks flying a Native Hawaiian flag and the upside-down state flag line both sides of the road. A “Kūpuna tent”, where the elders of the community gather, is strategically placed to block an access road up the mountain in order to stop construction vehicles from reaching the summit.
The protest site sits at an elevation of 6,632ft, where the cold wind whips across hardened lava fields. But amid this inhospitable environment, weeks of demonstration have given rise to a sense of permanence.
The site stretches across a two-lane highway, where trucks flying a Native Hawaiian flag and the upside-down state flag line both sides of the road. A “Kūpuna tent”, where the elders of the community gather, is strategically placed to block an access road up the mountain in order to stop construction vehicles from reaching the summit.
New arrivals are encouraged to sign in at an orientation station. There is a tented cafeteria providing free meals, and a community-run medic station, daycare and school. Along the barren roadside, tropical flowers have been casually stuck in traffic cones. People pound taro, a Hawaiian crop, in the traditional way on wooden boards to make poi, a local dish.
The protest stems from controversy over the fate of Mauna Kea, the tallest peak in Hawaii and the proposed site of an enormous observatory known as the Thirty Meter Telescope (TMT). The summit, 13,796ft above sea level, is said to be an ideal location to look into deep space. TMT is expected to capture images ‘that look back to the beginning of the universe. Protesters, who call themselves kia‘i, or “protectors”, argue the construction will further desecrate Mauna Kea, which is already home to about a dozen telescopes.
Kealoha Pisciotta, one of the protest leaders and a spokesperson for Mauna Kea Anaina Hou, a Native Hawaiian group, says the movement is “pushing back on corporate culture” through Hawaiian concepts of “Kapu Aloha”, which emphasizes compassionate responses, especially towards opponents, and “Aloha ʻĀina”, a saying that translates to “love of the land”.
“We are just joining the world’s indigenous movements,” Pisciotta says. “We need Kapu Aloha ... to bring back the balance from the insanity and destruction of our earth.”
Pisciotta said that the protesters were showing the world a way “to really live differently” while protecting the land.
“For Native Hawaiians, there is a question of our right to self-determination as defined by international law, but I think it’s so much bigger than that,” said Pisciotta. “It’s about us learning to live and be interdependent.”
Hawaiians consider Mauna Kea sacred for numerous reasons. The mountain is known as the home to Wākea, the sky god, who partnered with Papahānaumoku, the earth goddess. Protesters hope to protect and help restore the native ecosystem on Mauna Kea.
But the protests are also part of a legacy for Native Hawaiians that goes back to 1893, when the Hawaiian Kingdom was overthrown. Hawaiians lost their land as well as their culture, as the latter was suppressed through law and religion. It wasn’t until the 1970s, during a period of cultural flourishing known as the Hawaiian Renaissance, that the Hawaiian language was allowed to be spoken in school and that the hula was revived.
The period was defined by its own resistance movement, as activists focused on stopping the US military from using Kahoʻolawe, one of the eight main Hawaiian Islands, as a target for bombing practice. After more than a decade of peaceful protests and occupations of the island, the US government ended the live-fire training in the 1990s.
Some see the latest protest action as a new Hawaiian Renaissance. Days are punctuated by the blowing of the conch shell to announce ceremonies that include chanting, hula, and hoʻokupu (offerings). Several celebrities with Hawaii ties have travelled here to participate, including Dwayne “The Rock” Johnson, Jason Momoa, and Jack Johnson.
by Michelle Broder Van Dyke, The Guardian | Read more:
Image:Caleb Jones/AP
[ed. I'm not too sympathetic. It feels like some grinding out of old resentments (and reaffirming cultural connections). Where were all these deep feelings when the other 13 existing telescopes were built? What if the project had been re-framed from a different perspective, ie., the natural evolution of Wākea, the sky god? A sacred place where the eyes of the world gaze deeply into the universe?]
The protest stems from controversy over the fate of Mauna Kea, the tallest peak in Hawaii and the proposed site of an enormous observatory known as the Thirty Meter Telescope (TMT). The summit, 13,796ft above sea level, is said to be an ideal location to look into deep space. TMT is expected to capture images ‘that look back to the beginning of the universe. Protesters, who call themselves kia‘i, or “protectors”, argue the construction will further desecrate Mauna Kea, which is already home to about a dozen telescopes.
Kealoha Pisciotta, one of the protest leaders and a spokesperson for Mauna Kea Anaina Hou, a Native Hawaiian group, says the movement is “pushing back on corporate culture” through Hawaiian concepts of “Kapu Aloha”, which emphasizes compassionate responses, especially towards opponents, and “Aloha ʻĀina”, a saying that translates to “love of the land”.
“We are just joining the world’s indigenous movements,” Pisciotta says. “We need Kapu Aloha ... to bring back the balance from the insanity and destruction of our earth.”
Pisciotta said that the protesters were showing the world a way “to really live differently” while protecting the land.
“For Native Hawaiians, there is a question of our right to self-determination as defined by international law, but I think it’s so much bigger than that,” said Pisciotta. “It’s about us learning to live and be interdependent.”
Hawaiians consider Mauna Kea sacred for numerous reasons. The mountain is known as the home to Wākea, the sky god, who partnered with Papahānaumoku, the earth goddess. Protesters hope to protect and help restore the native ecosystem on Mauna Kea.
But the protests are also part of a legacy for Native Hawaiians that goes back to 1893, when the Hawaiian Kingdom was overthrown. Hawaiians lost their land as well as their culture, as the latter was suppressed through law and religion. It wasn’t until the 1970s, during a period of cultural flourishing known as the Hawaiian Renaissance, that the Hawaiian language was allowed to be spoken in school and that the hula was revived.
The period was defined by its own resistance movement, as activists focused on stopping the US military from using Kahoʻolawe, one of the eight main Hawaiian Islands, as a target for bombing practice. After more than a decade of peaceful protests and occupations of the island, the US government ended the live-fire training in the 1990s.
Some see the latest protest action as a new Hawaiian Renaissance. Days are punctuated by the blowing of the conch shell to announce ceremonies that include chanting, hula, and hoʻokupu (offerings). Several celebrities with Hawaii ties have travelled here to participate, including Dwayne “The Rock” Johnson, Jason Momoa, and Jack Johnson.
by Michelle Broder Van Dyke, The Guardian | Read more:
Image:Caleb Jones/AP
[ed. I'm not too sympathetic. It feels like some grinding out of old resentments (and reaffirming cultural connections). Where were all these deep feelings when the other 13 existing telescopes were built? What if the project had been re-framed from a different perspective, ie., the natural evolution of Wākea, the sky god? A sacred place where the eyes of the world gaze deeply into the universe?]
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