Links for 13th February, 2019

  1. “The trick in a busy trauma bay is to look at a patient, decide whether he or she is dying in front of you. The way you make that decision is basically trauma poker: You’re looking for the tells that their body, the remarkable machine of the human body, is compensating to keep them alive, or refusing: heart rate, respiratory rate, blood pressure, the color of the skin. The body, if you listen, will tell you what’s going on.”
    A harrowing read on life as a trauma surgeon in Chicago. Lessons on opportunity cost, development, conflict, retaliation, game theory and much more. Great read.
  2. “Bundled pricing is one reason why subscription models like Spotify should ultimately win out over à la carte models like iTunes. Subscription commerce can also be thought of as a form of bundling.”
    Or put another way, in the age of the internet, why does Netflix exist? There are many textbooks that do a better job of explaining this, but for a good primer on bundling, this is a good place to start. Note that this was written in 2012!
  3. “Mature fiscal systems create checks-and-balances which reduce the extent to which debt or off-balance-sheet liabilities can surge. Perhaps less developed countries have weak institutions, and then the political leadership sees a different optimisation. Short bursts of GDP growth can then be achieved in many bad ways, such as a surge in debt, piling up off-balance-sheet liabilities, etc. But this is not sustained growth: We get a spurt of high growth, and then things go wrong.”
    What do I think of this year’s budget? is a question I often get in classes – every year. This blog post is a good way to think about budgets – every year, and irrespective of who is in power.
  4. “The data means that the five warmest years in recorded history have been the last five, and that 18 of the 19 warmest years have occurred since 2001.”
    I’ve said it before, I’ll say it again, and I’ll reiterate it repeatedly. We do not worry anywhere near enough about climate change.
  5. “What is more interesting, though, is the story of Windows’ decline in Redmond, culminating with last week’s reorganization that, for the first time since 1980, left the company without a division devoted to personal computer operating systems (Windows was split, with the core engineering group placed under Azure, and the rest of the organization effectively under Office 365; there will still be Windows releases, but it is no longer a standalone business).”
    Ben Thompson on something that I while growing up would have considered absolutely impossible – the end of Windows.
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Links for 5th February, 2019

  1. “If there is one number that can make the edifice of budgetary arithmetic collapse and impair the growth prospects, it is the movement of crude oil prices. If for nothing else, but simply reduce the vulnerability of the fisc, this should be done. For, it is the “resource deficit” of the country which is the single biggest threat to sustained growth of 9%”
    How might a new age budget look like? Haseeb Drabu takes a look at the ways – five of them. You’ll be reading this by the time the budget has come out, of course, but it still makes sense to read this in order to think about how the budget needs to be structured.
  2. “The 0.9 per cent year-on-year (YoY) growth in the adjusted net profit of 385 companies, which have released their results for the third quarter (Q3) of the current financial year so far, does not inspire much confidence. If financials and energy companies are removed from the sample, net profit has grown 6.4 per cent in Q3 — the worst performance in five quarters.”
    I’d recommend that you read this article to either get a sense of how to judge the macroeconomic environment (partially!) on the basis of stock market performance, or even better, if you are new to finance, read this with an Investopedia tab open alongside.
  3. “Passenger vehicle sales in China fell for the first time last year since the early 1990s due to a cut to government tax breaks and wider economic sluggishness. Hyundai, which was once the third-largest automaker in China together with Kia, is now sorting out overcapacity as its sales in China have not picked up much since being hit by the anti-Korean consumer backlash in 2017.”
    The FT provides additional information on the slowdown in China – and the link on the anti-Korean backlash is also worth reading.
  4. “From the start of 2012 to the end of 2016, China produced nearly three times as much cement as the US did in the entire 20th century.Much of that investment has gone to waste. A recent study by China’s Southwestern University of Finance and Economics estimates that more than one in five Chinese homes in urban areas, or about 65m apartments, are empty. And if demography is destiny, China’s prospects are bleak. Between 1980 and 2012, China added about 380m people to its working-age population. But that number has been shrinking for the past five years and is expected to fall by a third, or about 220m people, in the next three decades.”
    More grist to the China recession mill, from the FT. The numbers are truly breathtaking – especially that quote about cement!
  5. “China’s fertility rate has officially fallen to 1.6 children per woman, but even that number is disputed. Yi Fuxian, a professor at the University of Wisconsin-Madison, has written that China’s government has obscured the actual fertility rate to disguise the disastrous ramifications of the “one child” policy. According to his calculations, the fertility rate averaged 1.18 between 2010 and 2018.”
    The NYT picks up from where the FT left off, and tells us about the impending population crisis in China – that there may soon be too few  people in China, not too many.