Etc: Links for 9th August, 2019

  1. “The laborious and inefficient production process adds to the costs. As it turns out, the jumbo baristas take a long time and a lot of raw material to produce one kilogram of elephant poop coffee; it ‘takes 33 kilograms (72 pounds) of raw coffee cherries to produce 1 kilogram (2 pounds) of Black Ivory coffee.’ A big portion of the beans gets chewed up, broken, or get lost in tall grass after being excreted.”
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    I couldn’t resist, in spite of the obviousness, and I beg forgiveness, but: that’s some expensive shit!
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  2. “Big companies dominate consumption. This is not a bad thing in itself. Companies get big by winning customers, and they win customers by providing a good product and/or service, which is the whole point of consumer markets. Different divisions of large companies may compete against each other; consumers are often unaware that they are choosing between two products owned by the same company. The problem comes if success leads to incumbency, with large, powerful companies able to use their power to shape regulations to suit them, rather than assist their competitors. Being market-friendly is not the same thing as being business-friendly, a confusion common to politicians. Big is neither beautiful nor bad, so long as regulators remain faithful to consumers, rather than the companies serving them.”
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    An interesting read from the Guardian about consumer choice over the day – or rather the lack if it.
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  3. “Thefirm invests $60 million of a $112 million fundraising round for home-sharing site Airbnb, which is already in some 186 countries and more than 16,000 cities.Airbnb embodies the idea of “software eating a traditional business,” a trend Andreessen expounds on a month later in his now-famous manifesto. In his “Why Software is Eating the World” article, he writes that software firms will become “highly valuable cornerstone companies in the global economy, eating markets far larger than the technology industry has historically been able to pursue.””
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    A useful timeline of A16Z, and how it evolved over time. If you have not read the article mentioned in this excerpt, please do so! Ritholz’s newsletter is worth subscribing to.
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  4. “Looking out across the City of Light—the new Place du Carrousel, the theaters around Châtelet, the boulevards stretching their long arms across the city from the Arc de Triomphe—filled one Parisian with disgust. “We weep with our eyes full of tears for the old Paris,” wrote nineteenth-century journalist-turned-politician Jules Ferry. “We see the grand and intolerable new buildings, the costly confusion, the triumphant vulgarity, the awful materialism that we are going to pass on to our descendants.””
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    The Paris that I loved so much last year was nothing more than ‘awful materialism’ about a century or so ago.
    …in the eye of the beholder…
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  5. “The Speedmaster—a “mechanical” watch, meaning it is powered by a mechanism—remains one of the most popular Swiss watches around. Besides telling time, it has a chronograph, which basically means it can also work as a stopwatch, and a tachymeter, which measures speed. It also looks remarkably, to use a technical term, cool.”
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    I don’t collect watches, but I did enjoy reading about this story about the Speedmaster.
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Links for 12th April, 2019

  1. “Due to these challenges, the Belt and Road has provoked growing international resistance, most acutely in the Indo-Pacific. This rising backlash has not gone unnoticed in Beijing.3 Yet it is unlikely that China’s approach will fundamentally change in the years ahead. The sheer size of ongoing Belt and Road projects limits China’s ability to refocus on smaller and less controversial efforts. Moreover, the Belt and Road is ultimately a vehicle for China’s geopolitical ambitions. Liabilities for host countries – loss of control, opacity, debt, dual-use potential, and corruption – are often strategic assets for Beijing. ”
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    Worth reading in its entirety, both for how well they have framed it (10 issues, 7 challenges) and for understanding the scope, the scale of OBOR – as well as why China wants something like this to happen.
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  2. “Krugman’s assertion that capacity keeps on rising might be correct – but that probably depends on one of the following conditions:The recession is short enough not to significantly affect innovation and investment
    Growth depends on factors that are not (negatively) affected by recessions
    Underlying capacity growth will accelerate beyond trend as the recession endsThe first we can yet hope for, but it’s looking less likely every month.”
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    This was written ten years ago. It is a great way to understand the following: business cycles, trend stationarity, unit root hypothesis, innovation, capacity building, endogenous growth theory. It is simply written, engaging, understandable – and because it was written ten years ago, can be validated. Worth it!
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  3. “Whereas Liverpool’s pursuit of the league title has been characterised by anxiety, drama and late winners, since the turn of the year City have been gracefully efficient at tearing into opponents, getting an early goal and so being able to control a game. Gabriel Jesus’s header against Brighton in the FA Cup semi-final on Saturday was the sixth goal City have scored this season inside five minutes, the 12th before the 10th minute and the 26th before the 20th. That is clearly part of a policy: rip into opponents, prevent them settling and have the game won before any doubts can begin to creep in. It may be that in a two-leg tie there’s less impetus to do that – but then an away goal can make a huge difference.”
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    You might find this choice weird, especially if you don’t like football, but this resonated with me as a way to do more than just play football. Think about it!
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  4. “Mumbai is the engine of the prosperous western state of Maharashtra, India’s largest regional economy with a GDP somewhere between $350-400 billion; the city contributes well over half the total. For Maharashtra to become a $1 trillion economy, Mumbai would need to double or triple the size of its economy, on the back of its preeminent role in service industries, especially finance. That means competing with the likes of Singapore and Shanghai to attract global banks and other world-class financial institutions to the humid, traffic-choked city.”
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    Rueben Abraham and Shashi Verma in Bloomberg on how the port near Mumbai has the potential to change Mumbai into a truly global financial hub. The cynic in me wonders if it will be possible, but the nascent urbanization enthusiast hopes that this, at least, gets off the ground!
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  5. “Amsterdam transit commissioner Sharon Dijksma announced Thursday that starting this summer, the city plans to reduce the number of people permitted to park in the city core by around 1,500 per year. These people already require a permit to access a specific space (and the cost for that permit will also rise), and so by reducing these permits steadily in number, the city will also remove up to 11,200 parking spaces from its streets by the end of 2025.”
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    Speaking of urbanization done just right, here’s Amsterdam with a plan to reduce parking spaces in the city centre – and beyond.

Links for 15th March, 2019

  1. “Nellie’s tree is said to be the most romantic in the UK. Nearly a century ago, Vic Stead would walk to a nearby village to visit a woman he was courting, called Nellie. One day, he came across three beech saplings and grafted one between the other two to form the letter ‘N’ in an attempt to woo her. They went on to marry and have children, and the tree is a popular site for proposals today”
    The Guardian comes up with  a lovely photo essay about the ‘European Tree of the Year’. Do not miss the tree that stands in the middle of a highway that connects the Netherlands to Belgium as well.
  2. “At the moment, global CO₂ emissions are about 37 billion metric tons per year, and we’re on track to raise temperatures by 3 degrees Celsius by 2100. To have a shot at maintaining a climate suitable for humans, the world’s nations most likely have to reduce CO₂ emissions drastically from the current level — to perhaps 15 billion or 20 billion metric tons per year by 2030; then, through some kind of unprecedented political and industrial effort, we need to bring carbon emissions to zero by around 2050. In this context, Climeworks’s effort to collect 1,000 metric tons of CO₂ on a rooftop near Zurich might seem like bailing out the ocean one bucket at a time.”
    Direct air capture of carbon, which is what the article is about, isn’t really going to ‘solve’ climate change anytime soon. But the article is worth reading because it speaks about a variety of economic issues, including climate change – there’s public goods, pricing, subsidies, micro-payments, the creation of markets, and much else.
  3. “Many of the dominant policy ideas of the last few decades are supported neither by sound economics nor by good evidence. Neoliberalism – or market fundamentalism, market fetishism, etc. — is a perversion of mainstream economics, rather than an application thereof. And contemporary economics research is rife with new ideas for creating a more inclusive society. But it is up to us economists to convince their audience about the merits of these claims.”
    Dani Rodrik, and ten others aim to recast economics as being for ‘inclusive prosperity‘. Ten policy briefs to begin with, and more to come later. The idea isn’t to form another think tank, as the post mentions, but to promote more academic research along these ten briefs.
  4. “This Letter quantitatively evaluates the beneficial impact a negative Fed policy rate could have had during the recovery from the Great Recession. While it’s difficult to capture all the complexities of the economy in a model, this analysis suggests that negative rates could have mitigated the depth of the recession and sped up the recovery, though they would have had little effect on economic activity beyond 2014. The analysis also shows that the interest rate does not have to fall too deeply into negative territory to accomplish meaningful economic improvements.”
    Would negative interest rates have helped generate a quicker recovery in the United States? This letter suggests that this may well have been the case. Forget the model that was used – that’s a rabbit hole in its own right – but take a look at this article for a very readable introduction to the world of negative interest rates.
  5. “‘NIRC’ – it’s a uniquely Singaporean economic abbreviation that stands for net investment returns contribution.
    It’s a mouthful, but in the coming weeks the term is likely to be on the lips of many of the Lion City’s lawmakers as they debate the national budget Finance Minister Heng Swee Keat will unveil on Monday. The NIRC is the amount of Singapore government revenue that comes from interest earned on its outsize reserves.”
    Everything about Singapore is worth reading, and I really do mean that. Reading this article will introduce you to one of Singapore’s lesser known features – Singapore’s government runs a pretty large fund, it is pretty profitable (presumably), and there’s debate about what to do with the proceeds.