Newslinks 2015-6-1

It was a big weekend for China watchers. China’s ambassador to the US accused Washington of a Cold War mentality and attempting to build an anti-China alliance. He tries to give the US a classic appeasement choice to stop pursuing policies that make Beijing believe the US is its enemy, although it seems pretty clear China has gotten bold precisely because it knows its policies will not be challenged by countries afraid of a major confrontation, including the US.

A Chinese admiral also defended the policies of entrenchment and creating new reefs, which is a good news-bad news kind of thing. Good news is China isn’t being particularly aggressive about this. Bad news is they’re not stopping. It seems the Chinese strategy is to elbow their way into the western Pacific and expand the area they consider a threat to Chinese security.

This WaPo editorial, however, shows that China is just like the rest of us. Which for Americans means they’re stupid, lazy, and greedy. We shouldn’t fall back on the bad habit of the 80s when Americans projected all kinds of good qualities on Japanese without noting the trade-offs and downsides.

This WSJ op-ed reflects the American thinking of China as a strategic rival. It doesn’t make China our enemy per se, although it is also a bad habit of many people to think in that way. China’s lack of freedoms, abuse of human rights, unwillingness to protect workers or the environment, bullying of regional neighbors, big money attitude, expanding military power, and routine stealing of foreign technology and trade secrets doesn’t help as context though. But the people are great.

Joe Biden’s son died of brain cancer on Saturday at 46.

Republican Senators called for making birth control over the counter and it faced surprising resistance from contraceptive groups. The groups say such measures will actually hurt access to birth control because insurance will stop covering them. Republicans in support of the bill fired back that they’re opposed because such measures threaten their survival since women won’t need to pay them for prescriptions. This is the kind of bill that makes so much sense that it will never pass, and it’s interesting to know that incumbent groups do oppose it in a funny “the only thing worse than never getting what you want is getting it” kind of way.

US Treasury Secretary urged the EU and Greece to make a deal quickly, reflecting that US policymakers are also nervous and frustrated with the continuing saga.

NYT covers the European labor market for fake jobs. If you’re kind, it’s simulated training. If you’re not, this is the brutal Keynesian “pay some people to dig a big hole and pay some others to fill it back in”. At worst, the NYT got a front row seat to a money laundering front for billionaires and organized crime.

Sepp Blatter, making his run as the most corrupt leader in the entire world, begins his fifth term as president of FIFA. He sounded a defiant tone regarding the corruption allegations. He’s one of these guys that makes you wonder if dirty business is worth it if it makes soccer a more popular and lucrative sport, providing entertainment and jobs to lots of people around the world.

A fantastic interview with Rachel Laudan, a food historian whose book I read a while back. I like her anti-contrarian attitude (the food version of Ronald Reagan) with regard to the trend towards “traditional foods”, the kind of attitude that responds “You mean the traditions where only 10% of people lived to see their 25th birthday?”, and how unabashed she is that the modern American supermarket is as close to the Garden of Eden as humanity has ever seen. The essential message is enjoy the wide range of food and appreciate the incredible accessibility that you have. It still isn’t that way in most of the world and it was never that way in the past.

Japan is preparing to lower the voting age from 20 to 18. It will enfranchise 2.4 million additional voters, although it probably won’t make too much difference since young voters around the world are the most indifferent and inconsistent, and the Japanese public is especially indifferent towards politics. Of course, politicians could take advantage of that by playing to identity politics and social policies, which tend to be the kinds of things that do attract the attention of young voters.

Book Review: Junkyard Planet: Travels in the Billion-Dollar Trash Trade by Adam Minter

China Airborne was the 30000 foot view of Chinese development and this book is the view from the ground floor, in the dirtiest and grimiest part of Chinese capitalism. And this isn’t the theoretical capitalism we as Americans usually love to talk about, the capitalism of skyscrapers and modern technology and even exploitation or inequality, in the same vein that we discuss Darwinian evolution as an elegant solution. No, this is the capitalism of pointy elbows and competition at its dirtiest, the ugly evolution from one miserable state to a slightly less dismal state. This is the place where Chinese workers are rationally choosing industrial pollution and toxic fumes for horribly low pay because it beats subsistence farming. And they only get that kind of work to feed America’s consumerism for Christmas tree lights that are thrown out in the millions of pounds every year. It’s where we say “greed is good” and everyone nods.

Minter is at his very best when describing the history of scrapping cars, which had hit epidemic proportions in the United States in the 70s. Buying new cars every year and having no way to dispose of old ones, Americans took to simply abandoning their cars on roads or in lakes. Until someone invented a machine that could shred cars into little bits, cleverly evolving water displacement and magnets that could separate and harvest the metals for reuse. It was so successful that the scrapping industry hit a milestone in 2007 of clearing the backlog dating back to the 20s of old cars. And true to this ugly capitalism, Minter is willing to blame Americans, Japanese, and Europeans for their endless consumerism and their cultures of throwing stuff away. Of course, he doesn’t shy away from pointing out that Chinese scrappers could buy respirators and gloves for their workers so they don’t have to barehand copper wire scrap out of sulfuric acid baths, but no, thanks, they’ll buy Rolexes and Lexuses instead.

But hope is not lost. Minter also points out that they used to do this in Taiwan too for $100 a month salaries. As the country developed to $500 a month salaries, Taiwanese workers moved to offices in big cities and given new options, categorically refused to return to the drudgery of industrial work. China’s population is large enough that they can keep this truck going for decades at least, but you do see the transition happening there too. And of course, a big part of this is incumbent on the Chinese government. If they ever decide they’re tired of the corruption and the filth and the exploitation, the rule changes to end the most abusive practices are readily available. In fact, there’s an interesting point that sometimes the Chinese government purposely isn’t cracking down on bad practices because they want to keep it confined and restrained in one place. Sure, the Guiyu e-processing plant is a monstrous polluter, but one semi-legal factory, even if it might be the dirtiest factory in the whole world, is better than lots of illegal factories littered across northern China. At least for now.

Minter’s final point is that recycling isn’t an ideal solution. Consuming less is far more important. He illustrates this point with some experiments that show the paradox that people who think they’re recycling actually consume more resources and their overuse is often greater than any possible benefits of recycling. Selling your old electronics to impoverished peoples is a better reuse than scrapping it for a new device.

My only criticism is that Minter doesn’t really get into why other countries export their recycling to China, only that it does and contributes greatly to trade imbalances. He basically ignores the history of industrial pollution problems in the US and especially Japan, which contributes to the throwaway rather than use until it dies culture. But it’s not a huge problem since the focus is mostly on Chinese scrapping culture.

Overall, the book is a smooth and quick read. I walked away feeling like I know a lot more about scrapping and trade at the low levels of the supply chain, which I consider a sign of a good book.

This book as a food is a hot dog. It’s dirty and it’s unhealthy, but damnit, it’s delicious and it’s a food that’s part of our cultural life as Americans. And you should know how it’s made. Highly recommended.

Book Review: Russian Imperialism and Naval Power: Military Strategy and the Build-Up to the Russo-Japanese War by Nicholas Papastratigakis

This book is a fantastic illustration of the point Chris made in the military thread that navies have to anticipate and predict events 15-20 years in the future to build up naval vessels, making such advice as “build more ships” so puerile as to be useless.

Russia faced huge strategic problems after their loss in the Crimean War and watching the alarming rise of new powers like Germany and Japan along with greater encroachment of Britain into strategic areas like the Near East, Central Asia, and Far East. The Russians were also becoming very ambitious about the gradual weakening of the Ottoman Empire and eager to grab what strategic spoils they could. What makes the politics of this story so interesting are the swirling alliances for Russia. They go from thinking the Germanic powers (Germany and Austria-Hungary) as their greatest threat to allying with them in case of a conflict with Britain. They in turn stay in close contact with Britain to gauge the possibility of Royal Navy intervention if Russia fights a war with the Ottomans, the Chinese, and later the Japanese.

But for the Russian navy, their primary strategic problem is the lack of viable naval bases. The Black Sea was an obvious area of contention but in any major war, it would also serve as both battlefield and bottleneck – Russia would have the tactical advantage if the Royal Navy or anyone else is foolish enough to enter for a major engagement, but the Russian navy also had a huge tactical disadvantage if they tried to exit into the Mediterranean. The North Sea or Scandinavia was not viable because they’re not only trapped, it threatens the life of the British mainland, which virtually guaranteed a direct confrontation with the Royal Navy that Russia cannot win. And even in the Far East, Vladivostok is the only viable port city, but the port freezes over half the year and the city doesn’t have the strategic value to justify a large fleet and even if it did, Russia didn’t have the resources to maintain large construction and repair facilities.

The point of all this is that Russia was almost completely unprepared for the Russo-Japanese War because they were obsessed with the possibility of a large European war and never could figure out a viable strategic situation for taking Korea. Russia controlled two ports – Port Arthur and Vladivostok. As above Vladivostok is not a good port city for a large modern fleet (it still isn’t). Port Arthur is tucked away in the Yellow Sea above Korea. The two cities are separated by 1000 miles or sailing 5x the distance by going around Korea. Controlling the two ports against Japan is a strategic nightmare, since the Japanese home islands cuts them in half by sea and nobody could justify the effort to supply both by land. The Russians constantly pressed for a naval base in Korea but even when presented with opportunities in the 1890s, the Russians were scared away by saber-rattling from Britain and Japan. The Anglo-Japanese alliance needed to be broken up but Russia couldn’t find a way through.

Even worse, the Russian navy was in a sorry state. While it had somewhat impressive numbers and it had modern battleships, Russian admirals were better known for womanizing than strategic thinking and Russian sailors spent too much time drinking and not enough practicing gunnery. A lot of it came down to being treated as secondary importance compared to the army. The Russian navy was only supposed to clear Ottoman ships and sweep out artillery to make way for Russian infantry to seize their objectives. In the Far East, the navy’s goal was to disrupt a Japanese amphibious landing in Korea and disrupt supplies, perhaps distracting the Japanese navy by bombarding coastal cities and forcing them to spread out in defense. But there was some schizophrenic thinking about whether Russia should be aggressive in swarming its enemies or fight defensively in areas that could be supported by coastal batteries, mostly because they simply weren’t sure who they might be fighting. They could be aggressive against the Japanese navy but needed to be defensive if they were joined by the Royal Navy.

Unfortunately, I was hoping for a treatment of Russian consideration during the actual Russo-Japanese War. Russia miscalculated badly and both severely underestimated the Japanese and procrastinated way too much on their own strategic considerations, and I wanted to know what Russian commanders were thinking when they started getting really bad news. They only embarked on a proper ship-building program to counter Japan in the late 1890s, a decade too late, although the Russians were aware that the Japanese had overstretched their finances and were almost desperate for another war to get more reparations and they had been well aware in the 1880s that Japan presented a medium- to long-term threat to Russian interests in Korea and northern China. The actual war gets literally a paragraph at the very end, in which it is simply noted that the Russians lost every naval battle and after the Japanese made an uncontested amphibious landing in Korea, they lost every ground battle too.

As a food, this is a salad buffet. It’s a great idea and you see all the pieces are there, but when you put it all together, it’s actually pretty disappointing. The subject matter is hugely interesting and I think there are a lot of historical lessons to be learned from the strategy and political constraints, but there’s never a punchline to get it going. Not recommended.

Newslinks 2015-5-21

A study saying gay advocates can change people’s mind has been retracted due to fraud. Facing questions of reproducibility and statistical irregularities, the grad student who collected all the data got really mealy-mouthed about it. Which has led everyone else to the conclusion that he faked all the data or at least enough of it to render the entire study worthless.

Nature looks at antibodies being responsible for poor reproducibility in biology. They may not be quite as easy to produce in identical mass quantities as everyone has been assuming.

The current trend in anti-aging is injecting young blood into older mice in the belief that it has antibodies and proteins that somehow rejuvenate or do not break down aging tissue. Other scientists say they’ve tried it and it doesn’t work, if anything it seems to accelerate the aging process. Bottom line: we still don’t know how or why we age. Note that the studies in support of this trend are backed by pharmaceutical companies who are pushing hard for FDA approval to inject these antibodies into people. It’s a business easily worth billions of dollars if it works on any level. Hell, it’s already a billion dollar business for cosmetics and crap that we can already be pretty sure does nothing and it would be a whale if it gets FDA approval whether it’s effective or not.

WSJ op-ed complains that affirmative action is discriminating against Asian Americans and holding them to higher standards than people of other races. Like Jews back in the old days, it might be counterproductive by giving the group an even higher reputation since such discriminatory acts ensures that only the most elite Asian students get into schools like Harvard. But it is deeply unfair.

WaPo covers Washington’s shadow work force, all the little people who do the unsung work that keeps Washington clean and moving along. Given the minimum wage trends and debates around inequality, Washington might do best to lead the charge by being more generous with their own workers.

ISIS taking Ramadi is shining on light on Iraq’s government. The image is that Iraq’s government is corrupt, incompetent, and disorganized. Frighteningly, ISIS seems to be none of those things.

Iran throws some cold water on nuclear negotiations by insisting there will be no inspections of Iranian sites, something that the Obama administration had included in its framework. Iranian leaders are accusing Americans of adding new demands and changing positions, which is also not a good sign of a deal.

North Korea claims it has developed the technology to make nuclear warheads small enough to fit on a missile. US intelligence officials say this is all bullshit and North Korea’s evidence is fabricated.

A state-owned Chinese bank buys a large stake in a midsized Brazilian bank, apparently part of China’s drive to create closer ties with Latin American countries. China is pouring investment money into Latin American assets. It will be hilarious when they learn the word “nationalization” and figure out why American, European, and Japanese banks are MUCH more reluctant to do this.

China also unveiled an ambitious plan to advance manufacturing to the next level. They want to be a developer of technology rather than merely a place for cheap labor. Their industry goals pretty much lay out their cyberattack targets for the next decade.

The Navy dumps IBM over fears that China-based Lenovo bought their server business. Curiously, IBM put their server business up for sale because the Chinese had stopped buying them over fears in the Snowden leaks that the NSA had installed backdoors both with and without the company’s knowledge.

Chinese solar company Hanergy gets a kick in the balls in the stock market after their CEO missed the annual meeting. The stock plunged 47% before Hong Kong pulled the plug and suspended trading. It’s apparently common for CEOs in China to miss annual meetings but the company was very vague, simply saying he “had something to do”. I’m not sure if that means “sell all his stock and move with his mistress and kids to California before authorities shoot him in the head” or “banging models because the business is totally fine”. Being China, it could mean either. Or both!

Newslinks 2015-5-20

The US has charged six Chinese nationals, including three Tianjin University professors, with espionage. Two are accused of stealing sensitive technology from their American employer, including source code, specs, recipes, presentations, and design layouts, among other documents. At least some of their research, also interestingly, was funded by DARPA.

WaPo looks at allegations of a Green Beret who might have committed war crimes by shooting prisoners and hiding the evidence with throwing them into burn pits used to dispose of garbage. Army officials maintain there is not enough evidence to bring up charges, although the man in question was denied commendations and demoted out of Special Forces and out of any substantive work.

TPP continues to be a headache in Washington as the Obama administration threatens to veto amendments that add currency enforcement. This was something Republicans wanted and they seem to have swayed Democrats that this allows the US to protect certain interests, including workers. The administration warns the Fed’s policies, primarily quantitative easing, would almost certainly be challenged with this amendment and it would make US monetary policy far less flexible, not more.

The Takata airbag recall has now become the largest consumer recall in US history, doubling with another 34 million vehicles. It beats the 1982 Tylenol recall of 31 million bottles over scares that psychos were randomly poisoning bottles and in the car industry, the 2014 GM recall of 30 million vehicles for faulty ignition switches. The problem has been pinpointed to humid weather and moisture gradually causing the propellant to burn hotter than intended when the air bag blows, rupturing the wire framing and causing the shards to explode outward. Takata says it does not have the capacity to replace tens of millions of airbags this year.

The government is also charging four cancer charities as shams that stole $187 million.

McKinsey looks at mobile retail in Korea, where smartphone penetration and consumption is much higher than in the US. Nearly 1/3 of all web-based sales in Korea are now by smartphone and 2/3 of people surveyed say they’ve done so at least once. By comparison, only 1/4 of Americans surveyed say they’ve ever bought anything by smartphone (other sites say about 1/4 of all web-based sales in the US are by smartphone). Perhaps not surprisingly, as a result of m-commerce, shoppers in Korea are turning away from stores and even abandoning online. Koreans, particularly women, seem to be starting to associate computers with work. Biggest lessons are that the most likely smartphone consumer is a young mother who cares much more about convenience and quickness than price or range, although discounts and goodies ensure loyalty and repeat shopping. You can probably anticipate American trends to turn in the same way and clever m-commerce retailers will push people in that direction.

The Guardian says the video game industry is dominated by white men wearing plaid and denim, making it both an argument against homogeneity and sort of a soft, tartan-patterned oppression.

Japanese menswear is going anti-bling, turning more simple and more understated. It perhaps contrasts with current trends in the UK and US of wearing sharper suits and more lavish accessories, but the Japanese style is steadily growing and you can never go wrong with simple and plain but good looking.

Newslinks 2015-5-19

All eyes are on the Fed and whether it will raise interest rates. Bankers are voicing their concerns that low interest rates are fueling bubble growth. Worth noting that the most vocal banks are the ones that have been rocked hardest by scandals and the ones that would be most screwed if something goes bad in the stock market.

Another day, another crisis in Greece. We are now wondering if they’ll default on June 5 because there is still no solid debt deal and thus no assured liquidity. EU ministers seem to be thinking it’s time to play hardball with Greece and give them an ultimatum.

A Duke professor is in hot water for writing an editorial criticizing black culture and contrasting it with Asians. The part where he hailed Asian assimilation in picking English names and criticized blacks for picking “strange” names really hit a nerve. The whole thing boils down to declaring blacks need to stop complaining and obsessing about racism.

The Obama administration announces new restrictions on issuing military hardware to police agencies. Good. Ironically, this might be one of those petty punishments for states that have been stoking conspiracy theories about federal takeovers, but I’m wholeheartedly in support of this nonetheless. Why a city police officer needs to ride in an armored personnel carrier with a .50 caliber machine gun that was previously bound for service in Anbar province is beyond me.

Greek yogurt company Chobani is a startup with a billion dollar in annual sales and they’re going through growing pains. But in four years, they’ve gone from a punchy young company riding a hot trend to a mature company fighting off upstarts. The company and the management team hasn’t aged well.

Honda is entering the jet business. Finally. Deliveries are already three years late and it’s pending FAA safety certification.

WaPo editorial complains about Hollywood rigging the game to be white and male. There is a kind of funny Catch-22 – Hollywood casts mostly white male roles because that’s what the market wants, but the market wants mostly white male stars because that’s what Hollywood produces.

Medium goes after social shaming, especially by social media. It’s mostly a rallying cry against the crabby and fickle self-righteousness on the internet.

This columnist wants more attention on that Seymour Hersh article raising new questions about the bin Laden raid. Um, no. Not unless he can get prominent people who are in positions to actually know to stand up as the source and reiterate their statements that contradict the official narrative. I don’t think he’s a crank or spinning a conspiracy theory, but it is definitely strange that his account contradicts not only the administration’s narrative the narrative of a few administration officials and Navy SEALs who wrote autobiographies saying they were there.

The fad in Silicon Valley of building their own little island can thankfully be put to rest. Thank you Bioshock and Ayn Rand libertarians for making it seem like the insane idea that it always was.

The eye-popping salaries of some big name CEOs. I’m not sure if I should feel relieved or angry that the pendulum is swinging away from inequality and back to envy.

Most podcasts are supported by only a few sponsors – SquareSpace,, Audible, etc. That’s just the market perception for now that podcasting is only for early adopters and tech-savvy people. Will it expand and go more mainstream? That’s certainly what all podcasters are banking on, although there is no analysis of how effective such ads are for podcast listeners.

Mad Men ended Sunday night and the best post-mortem is how it is repopularizing suits.

MIT Technology Review covers the difference between chess players’ ability with their fame. Chess is one of those things like math or physics where we assume that the top professionals are geniuses and perhaps treat them as infallible.

Vox covers the opposition to TPP. It reads as trying to knock Elizabeth Warren down a peg, as Democrats say she’s not a driving factor or a leader in their opposition.

Newslinks 2015-5-16

Japan gets its own TPP headaches as over 1000 people sue the government to keep it out, claiming TPP will infringe on their Japanese constitutional rights. Predictably, most represent agricultural interests in Japan, which will be punished badly by cheaper imports and end many practices designed to artificially increase prices. The head of this seems to have been screwed over by US protectionist policies in the 70s and never gotten over it. They’re also lodging complaints about cheap medicine, dispute resolutions, and the secrecy of negotiations.

TPM covers Instagram’s long war on porn. The startup where I worked was a social media company before I got there and they apparently had a lot of problems with this. The biggest headache is companies have to store anything that looks like child porn and hand it over to the FBI, which means you need an employee to scour every account looking for kiddie porn, and generally they end up being tasked with removing dick pics and racist screeds too. Apparently it all happens way more than you ever thought possible when you’re looking for it.

NYT covers Bernie Madoff’s CFO, the man who made all the lies possible. His big innovation was burying fake trades in a blizzard of voluminous trading data, which allowed them to spread it across many accounts and use computer automation to do it on an exponentially higher scale. He does have a different account of when Madoff’s “legitimate years” ended.

Boston Bomber is sentenced to death. The counts on which the jury voted for death pertain solely to Lingzi Lu and Martin Richard, the two victims with the most graphic testimony of their deaths. The jury did not return death verdicts on counts with Officer Sean Collier or Krystle Campbell, nor is he getting death for planning the bombing.

ISIS takes control of Ramadi in Iraq. It’s a setback after weeks of good news of Iraqi forces taking territory back.
NASA issues a stark warning about an Antarctic ice shelf. Kinda feels like an attempt to bring back the urgency of climate change debates.

Argentina continues its farcical defense at the death of a prosecutor. Does a guy shot in the back of his head on one knee in his bathtub with a pistol he didn’t own sound like suicide? The official government report has bent over backwards, apparently manufacturing facts, to make it sound more like a suicide.

Activist investor Carl Icahn takes a $100 million stake in Lyft. Uber’s revenues are 12x that of Lyft but Uber’s valuation is 16x that of Lyft. Which is a bargain for Icahn, especially if Lyft can get closer to market parity. Worst comes to worst, they sue Uber for antitrust and gain an advantage long enough for Icahn to eject with his profits.

FT has a primer on a big settlement coming down between the big banks and the DOJ for manipulation of foreign exchange markets.

FT covers Vice media’s foray into Cuba and its media business in general.

The “good but not good enough” economy has the Fed wondering – is the economy strong enough to raise interest rates? The Fed has been very cautious about repeating Japan’s big mistakes over the last 20 years of knocking the economy back into recession by prematurely taking away the helping hand. It’s starting to look like liberal economists have held sway and the Fed is favoring patience. Inflation has been a complete non-problem so they can afford to wait.

President Obama responds to recent allegations of Syria using more chemical weapons and says the US is helping to investigate. For all you other politicians and world leaders out there, THIS is how you slow walk an important issue where there’s no solution.

In their efforts to keep the sport classy, soccer fans in Canada have taken to harassing female reporters by shouting “Fuck her right in the pussy” when they are doing interviews. One reporter confronted the drunken idiots who did this, who not only showed no remorse at her indignation and genuinely upset complaints, one guy claimed it was hilarious and his mother would die laughing that he did this. Unfortunately for him, his employer wasn’t laughing because they fired him.