Month: September 2019

Peak renting season is upon us, and RentCafe is back with its annual ranking of the most expensive ZIP codes for renters in the US.

Unsurprisingly, different ZIP codes in New York City and across California snagged the most spots in the top 50, thanks to a profusion of high-paying jobs in industries like tech and finance.

NYC has 28 ZIP codes in the top 50; of those, 26 are in Manhattan and there’s one each in Brooklyn and Queens. 18 ZIP codes in Cali and 4 in Boston round out the top 50.

ZIP code 10282 in Manhattan’s Battery Park City has retained the No. 1 spot as the most expensive ZIP code in the country since last year, with apartment rents climbing above $6,000. ZIP Code 10013, which covers the neighborhoods of Tribeca and SoHo – some of the trendiest spots in the city. In third place for Manhattan renters is ZIP code 10023, which covers some of the Upper West Side, where Central Park views have driven rents north of $5,000 a month.

The most expensive ZIP codes for renters in Cali range across Los Angeles, San Francisco, Corte Madera, Redwood City, Culver City, Menlo Park, San Mateo, Mountain View, Marina Del Rey, Santa Monica, Cupertino and Sunnyvale, Cali.

Outside of NYC, the most expensive ZIP Code is LA’s Westwood 90024, ranked 4th with an average rent of $4,944. In 5th place nationwide is Los Angeles ZIP Code 90048, covering parts of West Hollywood and Beverly Grove.

Boston is the only city outside of Cali and New York to make the top 50 list, with four ZIP codes. The priciest rents are in 02210 in Boston’s Seaport District/West Broadway area, with an average apartment rent above $4,000.

Outside of the top 50, RentCafe also created a chart showing the most expensive ZIP codes for renters in each region.

To look through a searchable database of ZIP codes to see if yours made it on the most-expensive list, click here.

Authored by Steve Watson via Summit News,

Device can identify individual faces out of crowds of tens of thousands; Will take mass surveillance to a new level

A new camera with a resolution five times more detailed than the human eye, able to monitor thousands of people in real time and identify individual faces has been unveiled by Chinese scientists, prompting renewed fears about mass surveillance.

ABC News in Australia reports that the new 500 megapixel cloud camera AI system, dubbed a ‘super camera’, was revealed at China’s International Industry Fair last week.

The camera system, equipped with state of the art facial recognition utilities, was designed by Fudan University and Changchun Institute of Optics, Fine Mechanics and Physics of the Chinese Academy of Sciences.

The designers claim that the system can detect and identify thousands of human faces or other objects in real time and instantly locate specific targets in environments such as crowded stadiums.

Of course, it would work equally as well at protests.

The designers suggested that police could set up the camera system in the center of Shanghai and monitor the movement of crowds, while cross-checking the images with medical and criminal records.

Li Daguang, a professor at the National Defense University of the People’s Liberation Army in Beijing told the Global Times that the system could “very easily be applied to national defense, military and public security.”

Technology like this in the hands of Communist Chinese authorities, who already operate a citizen social credit system, does not bode well for privacy rights and freedom.

“The Party-state has massive databases of people’s images and the capability to connect them to their identity, so it isn’t inconceivable that technology like this is possible if not now then in the future,” Samantha Hoffman, an analyst at the Australian Strategic Policy Institute noted.

The social credit system, which rewards ‘good behavior’ with incentives and punishes disobedience by restricting and banning people from buying travel tickets, is currently enforced using a vast network of over 200 million surveillance cameras, as well as other tracking tools.

However, the 500 million pixel ‘super camera’ would take surveillance capabilities to a different level.

Scientists noted that the current crop of cameras are able to monitor thousands of people at once, but each face is in the wide shot can only be represented by a few pixels, meaning “you couldn’t clearly see your targeted person at all”.

The data from the video will be “fed into a pool of data that, combined with AI processing, can generate tools for social control, including tools linked to the Social Credit System” said the ASPI’s Hoffman.

Of course, this kind of thing is all fine because it’s all the way away in China, right?

Wrong.

In the US, conventional feminists talk about the ‘wage gap’ like it’s some kind of international conspiracy to short-change women. On ‘Equal Pay Day’ and other new feminist holidays, numbers like ’78 cents on the dollar’ are bandied about, supposedly representing the gulf between what women and men earn for the same job.

Of course, many women who are ‘outraged’ by the wage gap probably don’t understand how that number was produced. They would probably be offended if somebody mentioned that different studies have arrived at wildly different conclusions about the gap in pay between women and men. Amusingly, at the highest echelons of corporate America, females are routinely paid more than their male counterparts.

But in a new study published by the Journal of Marriage and Family, a team of Cornell sociologists looked at the factors behind America’s falling marriage and family-formation rates. They found that American women are struggling to find ‘suitable’ partners due to a lack of ‘financially eligible’ bachelors.

In other words: America’s men are too unemployed, broke and sad to marry.

The study’s lead author, Daniel Lichter, who has been studying marriage in the US for 30 years, gave an interview to the New York Post, where he declared that there’s a “shortage” of “economically attractive” men. He blamed the “lack of good jobs” and the gig economy for this situation.

But the roots of this problem are even deeper. Today, college graduation rates are higher for women than for men, while men have been disproportionately impacted by the opioid epidemic, representing more than 70% of all addicts. They also experience higher rates of suicide.

Not only do women hold more advanced degrees than men; they are also beginning to replace men as the prime breadwinners for families. This gap has led to more “highly educated” women “marrying down.”

One single New York City woman shared some of her “theories” about what’s going on with men with the NYP:

Single New Yorker Gina Thibodeaux has some theories of her own about the fella famine.

“I find generally that dudes these days just do less across the board,” says the nurse practitioner. “Their parents have coddled them and taken care of them, and they just don’t go out there and make more money.”

The 38-year-old Upper East Sider stresses that she’s not looking for “anything outrageous” – “safety and security, as far as finances go” – but she’s still coming up empty on dates.

She says it’s because the men she goes out with don’t feel the innate “push” to succeed that she does.

“I think for years they’ve always just taken their role in society for granted, and I think that they’re just getting lazy culturally,” she says.

Another woman from South Carolina said most men she meets are underemployed and “wildly in debt.” Often, they’re intimidated by her ‘stability’ even though she doesn’t consider herself “all that successful.”

What’s to be done about this situation? It’s difficult to say. Men really just need to get it together.

But next time feminist start citing manufactured statistics about a ‘wage gap’, men can counter with the ‘mating gap.’

Authored by Paul Craig Roberts,

US Rep. Adam Schiff, Democrat from California and chairman of the House Intelligence Committee, had no qualms about lying through his teeth in his opening statement prior to the testimony of Acting Director of National Intelligence Joseph Maguire. Everyone present had read the transcript of the telephone conversation between President Trump and Ukrainian President Zelensky, and everyone knew that what Schiff, who said he was reading from the transcript of the telephone call, was saying was not in the transcript. How can it be that the chairman of a House committee in a room full of newspersons and TV cameras has no qualms about intentionally misrepresenting the written record in order to make it conform to the lies the Democrats and their stable of corrupt presstitutes have spread about a telephone call revealed by an alleged whistleblower, a likely Democrat operative, who claimed to have heard it second hand.

When I was a member of the Congressional staff, any Representative who so dishonored a committee of the House and the House itself as Schiff has done would have been reprimanded, brought before the Ethics Committee, and forced to resign. But the Democrats have ground integrity under their heel in their fanatical determination to prevent Trump’s reelection.

In his opening statement Adam Schiff further showed his total lack of integrity in his assault on the integrity and character of Joseph Maguire and made wild and irresponsible charges probably never witnessed previously in the halls of Congress.

The transcript of the telephone call shows that what the alleged whistleblower said is false. Yet in the face of the evidence Adam Schiff speaks as if the evidence does not exist and that the alleged whistleblower’s second hand statement is true. Once again we hear the Democratic Party say, “Evidence? We don’t need no stinkin’ evidence.” They don’t need evidence because the presstitutes support their lies and control the explanations given to Americans.

The Democrats are betting their future on their lies being shielded by their media whores and that the insouciant American people will hear nothing but false allegations against Trump repeated endlessly, as was the case with Russiagate. If the people realize that the “impeachment investigation” is another hoax like Russiagate, Schiff will have destroyed the Democrats’ chances in the next election.

The extraordinary rudeness and incivility of Democrat members of the committee toward Maguire, cutting him off before he could answer their accusatory questions, thus leaving the accusation unanswered, together with Schiff’s lies demonstrate that political and social collapse in the United States is far advanced. American democracy was never very democratic, but when an entire political party disrespects truth and is determined to gain power at all cost, we know that the end is near.

The Republican ranking member of the committee, Devin Nunes, explained what the successor to the failed Russiagate witchhunt is all about.

For those with the stomach for it, the hearing can be watched here:

An Australian state has introduced special high-tech cameras to catch people using their smartphones while driving, according to the Straits Times. 

New South Wales (NWS) Roads Minister Andrew Constance announced on Monday that they would introduce 45 Mobile Phone Detection Cameras by December. Each unit contains two cameras; one which photographs what drivers are doing inside their car, while another captures the vehicle’s registration plate. 

The units use artificial intelligence (AI) to exclude drivers who are not touching their phones. Photos that show suspected illegal behaviour are referred for verification by human eyes before an infringement notice is sent to the vehicle’s registered owner along with a A$344 (S$320) fine. Some cameras will be permanently fixed along roadsides and others will be moved around the state. –Straits Times

“There is no doubt drink-driving, as far as I’m concerned, is on a par with mobile phone use, and that’s why we want everyone to be aware that you’re going to get busted doing this anytime, anywhere,” Constance told the Australian Broadcasting Corp. 

A six-month trial of two AI cameras checked 8.5 million vehicles – detecting 100,000 drivers holding their phones. Under NSW law, drivers are allowed to use hands-free cradles and Bluetooth, however touching a phone while driving except to give it to a passenger is illegal. The law applies to those sitting at red lights and stuck in traffic jams. According to Constance – NSW authorities will relax the law to allow caught drivers to pay their fines at restaurant drive-throughs. 

NSW wants to expand the program to 135 million checks per year by 2023, according to the report. 

National Roads and Motorists’ Association spokesman Peter Khoury, a leading advocate for road users, accused the government of using stealth to crack down on illegal phone use. While the association supported tougher action against drivers distracted by phones, it wanted signs warning motorists that phone detection cameras were operating in an area, as happens with speed cameras in the state.

Government modelling found that the phone detection cameras could prevent 100 fatal and serious injuries over five years. –Straits Times

So far this year, over 16,500 drivers have been fined for illegally using their phones.

 

Authored by Jake Anderson via TheMindUnleashed.com,

People generally balk at the idea of scientists experimenting with and manipulating certain pillars of physical reality, whether that be gene splicing, artificial intelligence, or nuclear fusion.

But in the last couple of decades, a new twist on this modern Island of Dr. Moreau-style narrative has surfaced in the form of scientists experimenting on high-velocity elementary particles (such as the CERN Hadron Collider) and other quantum enigmas.

Laser physicists recently chortled “hold my beer” in announcing that they are developing a laser so powerful it can shred all matter, including the very electrons and nuclei that constitute the fabric of reality itself. 

Earlier this month, the physics journal Physical Review Letters published a paper discussing how new technology could allow a high-velocity laser to pierce “through [the] fabric of the Universe.” The trick, according to a researcher at the Université Paris-Saclay, is to anchor and focus the laser using a mirror made of plasma.

In an analysis written for Ars Technica, physicist and writer Chris Lee broke down the logistical hurdles the new technique could overcome. By consolidating a 5-10 petawatt laser for around 5-5000 joules of energy for somewhere between a picosecond or femtosecond, scientists can muster an intensity of 1022W/cm2, which is when a plasma state kicks in and creates a conductive gas of excited particles whose electrons reflect light.

Other laser experiments have concentrated as much as 200 petawatts of power on a target for less than a trillionth of a second.

Using a plasma mirror, scientists can reach 1029W/cm2 and accelerate electrons to the point where they will be “generating real charges from the apparent nothingness of empty space.”

“The way the mirror oscillates also means that the light frequencies are all multiples of each other,” writes Chris Lee. “The mirror reflects all these colors together, and they add up to a pulse that is even shorter in time. In fact, the pulse goes from being 20fs in duration to 0.1fs (a femtosecond is 10-15s). This by itself increases the intensity by a factor of 100. The shorter wavelength also means that the light focuses to a smaller spot.

“The end result is a factor of 1,000 higher intensity for the same input laser and a simple mirror swap.” 

Then what happens?

“They can all stare in wonder at the hole they made,” Lee concludes.

What is the purpose of using lasers to rip a hole in space/time?

Previous laser experiments have sought to discover virtual particles, extra dimensions, and even dark matter. Last year, Chinese scientists used a 100-petawatt laser—“10,000 times more energy than there is in all the world’s electrical grids combined”—to try and produce electrons out of the quantum ether by separating them from their antimatter twins.

For now it appears we’re going to have to trust that scientists know what they’re doing with the fabric of reality.

Pix Moving, a Chinese automobile startup using artificial intelligence (A.I.) to design vehicles and convert the blueprints into instructions for 3D printers, isn’t afraid of President Trump’s trade war and has utilized technology to bypass tariffs, reported Nikkei Asian Review.

Angelo Yu, the founder of Pix Moving, has outsmarted the most powerful country in the world: the U.S., as A.I. designs vehicles, uploads the blueprints onto the cloud and sends the instructions to 3D printers that can be based anywhere in the world.

“We don’t export cars to the U.S.,” Yu said. “We export the technique that is needed to produce the cars.”

Pix has gained attention from two major automakers, Volvo and Honda motors. Yu told Nikkei that if Henry Ford was still living, he would be using A.I. and 3D printers to produce automobiles.

“If Henry Ford were still alive,” Yu said, “I believe he would have also built cars using A.I.”

Yu’s startup could be the solution for Chinese manufacturers to bypass President Trump’s tariffs.

To reduce the number of parts needed to make an automobile, Yu and his team turned to an A.I. technique known as generative design, which is a program that entirely uses A.I. to design the vehicle with some human inputs such as car size and maximum weight. Many other inputs could go into the design, but from there, Yu said the computer does all the work.

Siddharth Suhas Pawar, a mechanical engineer at Pix, told Nikkei he was often “surprised” by the A.I.’s suggestions.

“I would have never thought about making a car that way,” Pawar said. Vehicle designs by A.I and humans showed A.I
were far more detailed with revolutionary designs.

Once A.I. designs the vehicle, Yu’s team signs off on the final design. Uploads it to a cloud where it can be sent as instructions to 3D printers.

For instance, the chassis, A.I. reduced the number of parts from thousands to hundreds. A.I. can work out the clock, designing new components and reducing parts, making the design of a vehicle in only 12 months, versus 36 months for a traditional automaker.

Since Pix is data-driven, the company can quickly replicate factories that would only be exclusive to China, anywhere in the world, at a moments notice. If President Trump was targeting Chinese automobile companies with tariffs, Yu could quickly shift production lines anywhere, anytime, with literally at the flip of a switch. If he had to move production to Japan, he could do it. He could even move production to South Korea, the U.S., Vietnam, and or even South America.

“Pix has a unique and interesting approach to problem-solving,” said Matt Lemay, a specialist at Autodesk who invited the Chinese startup to join the program. “Pix’s vision of the future, on not just autonomous vehicles but also new methods of design automation and smart manufacturing, makes them a compelling partner.”

Unlike large automakers, whose production lines are for mass production, Yu said his 3D printers could handle small batches. In April, he received his first order from a Texas company who wanted a self-driving truck.

Yu said the design of the truck should be completed in the near term. He said his company had secured a factory in an abandoned warehouse in San Francisco, where A.I. computers in China are wrapping up on the final design of the vehicle. Once the design is completed, engineers will sign off on it, and upload it to the cloud, where 3D printers in San Francisco will receive the instruction to start printing the truck.

“The U.S.-China trade war will motivate more and more Chinese manufacturers to embrace smart manufacturing,” Yu predicted. “In the future, international trading will no longer run on cargo but on the cloud.”

And just like that, President Trump’s trade war is absolutely worthless — as per one Chinese company, utilizing A.I. and 3D printing to skirt around economic duties. The world will move forward, technology and the human will to adapt will outsmart dinosaur governments. It’s only a matter of time before big automakers get ahold of this technology and process.

Authored by Ryan McMaken via The Mises Institute,

On Monday, celebrity climate activist Greta Thunberg delivered a speech to the UN Climate Action summit in New York. Thunberg demanded drastic cuts in carbon emissions of more than 50 percent over the next ten years.

It is unclear to whom exactly she was directing her comments, although she also filed a legal complaint with the UN on Monday, demanding five countries (Argentina, Brazil, France, Germany and Turkey) more swiftly adopt larger cuts in carbon emissions. The complaint is legally based on a 1989 agreement, the Convention on the Rights of the Child, under which Thunberg claims the human rights of children are being violated by too-high carbon emissions.

Thunberg seems unaware, however, that in poor and developing countries, carbon emissions are more a lifeline to children than they are a threat.

Rich Countries and Poor

It’s one thing to criticize France and Germany for their carbon emissions. Those are relatively wealthy countries where few families are reduced to third-world-style grinding poverty when their governments make energy production — and thus most consumer goods and services — more expensive through carbon-reduction mandates and regulations. But even in the rich world, a drastic cut like that demanded by Thunberg would relegate many households now living on the margins to a life of greatly increased hardship.

That’s a price Thunberg is clearly willing to have first-world poor people pay.

But her inclusion of countries like Brazil and Turkey on this list is bizarre and borders on the sadistic — assuming she actually knows about the situation in those places.

While some areas of Brazil and Turkey contain some areas that approach first-world conditions, both countries are still characterized by large populations living in the sorts of poverty that European schoolgirls could scarcely comprehend.

Winning the War on Poverty with Fossil Fuels

But thanks to industrialization and economic globalization —  countries can, and do, climb  out of poverty.

In recent decades, countries like Turkey, Malaysia, Brazil, Thailand and Mexico — once poverty-stricken third-world countries — are now middle-income countries. Moreover, in these countries most of the population will in coming decades will likely achieve what we considered to be first-world standards of living in the twentieth century.

At least, that’s what will happen if people like Greta Thunberg don’t get their way.

The challenge here arises from the fact that for a middle-income or poor country, cheap energy consumption — made possibly overwhelmingly by fossil fuels — is often a proxy for economic growth.

After all, if a country wants to get richer, it has to create things of value for other countries. At the lower- and middle- income level, that usually means making things such as vehicles, computers, or other types of machinery. This has certainly been the case in Mexico, Malaysia, and Turkey.

But for countries like these, to only economical way to produce these things is by using fossil fuels.

Thus it is not a coincidence that carbon emissions growth and economic growth track together. We see this relationship in Malaysia, for example:

And in Turkey:

And also in Brazil:

Source

We no longer see this close a relationship between the two factors in wealthy countries. This is due to the fact many first-world (and post-Soviet) countries make broader use of nuclear power, and because high income countries have more heavily abandoned coal in favor of less-carbon intensive fuels like natural gas.

It is thanks to this fossil-fuel powered industrialization over the past thirty years that extreme poverty and other symptoms of economic under-development have been so reduced.

For example, according to the World Bank, worldwide extreme poverty was reduced from 35 percent to 11 percent, from 1990 to 2013. We also find that access to clean water has increased, literacy has increased , and life expectancy has increased — especially in lower-income areas that have been most rapidly industrializing in recent decades.

Just as carbon emissions track with economic growth in middle income countries, child mortality tends to fall as carbon emissions increase.

We see this throughout the developing world, including in India,

And in China:

Source

Industrialization isn’t the only factor behind reducing child mortality, of course. But it is certainly a major factor. Industrialization sustains modern health care amenities such as climate controlled hospitals, and it increases access to clean water and sanitation systems.

Greta Thunberg, ignores all of this, mocking the idea of economic growth as a “fairytale.” But for people in the developing world, money and economic growth — two things Greta Thunberg thinks are contemptible — translates into a longer and better life. In other words, economic development means happiness, since, as Ludwig von Mises pointed out, “Most mothers feel happier if their children survive, and most people feel happier without tuberculosis than with it.”

Thunberg’s blithe disregard for the benefits of economic growth is not uncommon for people from wealthy countries who are already living in an industrialized world built by the fossil fuels of yesteryear. For them, they associate additional economic growth with access to high fashion and luxury cars. But for the billions of human beings living outside these places, fossil-fuel-driven industrialization can be the difference between life and death.

And yet, Greta Thunberg has seen fit to attack countries like Brazil and Turkey for not more enthusiastically cutting off their primary means to quickly deliver a more sanitary, more well-fed, and less deadly way of life for ordinary people.

The Chinese know the benefits of economic growth especially well. A country that was literally starving to death during the 1970s, China rapidly industrialized after abandoning Mao’s communism for a system of limited and regulated market capitalism. But even this small market-based lifeline — sustained by fossil fuels — quickly and substantially pulled a billion people out of a tenuous existence previously threatened regularly by famine and economic deprivation.

Today, China is the world’s largest carbon emitter — by far — with total carbon emissions double that of the United States. And while the US and the EU has been cutting emissions, China won’t even pledge to cap its emissions any time before 2030. (And a pledge doesn’t mean it will actually happen.) India meanwhile, more than doubled its carbon emissions between 2000 and 2014, and its prime minister refuses to pledge to cut its coal-fired power generation.

Source

And who can blame these countries? First-world school children may think it’s fine to lecture Chinese factory workers about the need to cut back their standard of living, but such comments are likely to fall on deaf ears if climate policy means destroying the so-called “fairytale” of economic growth.

As one Chinese resident put it on China’s social media platform Weibo: “If the economy doesn’t grow, what do us people living in developing countries eat?”

Measuring Net Costs of Global Warming

Advocates for drastic cuts in emissions might retort: “even if our policies do make people poorer, they’d be a lot worse off with global warming!”

Would they though?

At the UN, Thunberg thundered, “People are suffering. People are dying [because of climate change.]” But that isolated assertion doesn’t tell us what we need to know when it comes to climate-change policy.

The question that does matter is his: if the world implements drastic Thunbergian climate change policies will the policies themselves do more harm than good?

The answer may very well not be in the climate activists’ favor. After all, the costs of climate change must be measured compared to the costs of climate change policy. If economic growth is stifled by climate policy — and a hundred million people lose out on clean water and safe housing as a result — that’s a pretty big cost.

After all, the benefits of cheap energy — most of provided by fossil fuels — are already apparent. Life expectancy continues to go up — and is expected to keep making the biggest gains in the developing world. Child mortality continues to go down. For the first time in history, the average Chinese peasant isn’t forced to scratch out a subsistence-level existence on a rice paddy. Thanks to cheap electricity, women in middle income countries don’t have to spend their days cleaning clothes by hand without washing machines. Children don’t have to drink cholera-tainted water.

It’s easy to sit before a group of wealthy politicians and say “how dare you” for not implementing one’s desired climate policy. It might be slightly harder to tell a Bangladeshi tee-shirt factory worker that she’s had it too good, and we need to put the brakes on economic growth. For her own good, of course.

And this has been the problem with climate-change policy all along. Although the burden of proof is on them for wanting to coerce billions into their global economic-management scheme, the climate-change activists have never convincingly made the case that the downside of climate change is worse than the downside of crippling industrializing economies.

This is why the activists so commonly rely on over-the-top claims of total global destruction. One need not waste any time on weighing the options if the only choices presented are “do what we want” or “face total global extinction.”

But even climate change activists can’t agree the armaggedon approach is accurate.  Last year, for example, Scientific American published “Should We Chill Out About Global Warming?” by John Horgan which explores the idea “that continued progress in science and other realms will help us overcome environmental problems.” 

Specifically, Horgan looks at two recent writers on the topic, Steven Pinker and Will Boisvert. Neither Pinker nor Boisvert could be said to have libertarian credentials, and neither take the position that there is no climate change. Both assume that climate change will lead to difficulties. 

Both, however, also conclude that the challenges posed by climate change do not require the presence of a global climate dictatorship. Moreover, human societies are already motivated to do the sorts of things that will be essential in overcoming climate-change challenges that may arise. 

That is, pursuing higher standards of living through technological innovation is the key to dealing with climate change.

But that innovation isn’t fostered when children shake their fingers at Brazilian laborers and tell them to forget about a family car or household appliances or travel at vacation time. 

That isn’t likely to be a winning strategy outside the world of self-hating first-world suburbanites. It appears many Indians and Brazilians and Chinese are willing to risk the global warming for a chance at experiencing even a small piece of what wealthy first-world climate activists have been enjoying all their lives.

The Los Angeles Business Journal is reporting passenger traffic at Los Angeles International Airport (LAX) stalled in August. International traffic and freight volumes show a much gloomier picture of economic trouble ahead.

LAX passenger traffic for August was 8.14 million, unchanged YoY, an ominous sign that the airline industry is about to experience below-trend growth heading into the back-half of the year.

Figures from Los Angeles World Airports, the airport authority that owns and operates LAX, shows international traffic volumes had 77,800 fewer passengers in August, a decline of about 3.1% YoY. Domestic traffic, however, increased by 77,300, or 1.4% YoY, which offset the drop in international traffic.

For the first eight months of 2019, passenger traffic grew 0.7% to 59.7 million, an increase of about 410,000 passengers compared with the same period last year. International passenger traffic for the same period was down 1.5% to 17.5 million, while domestic traffic was up 1.6% to 42.1 million.

Los Angeles World Airports said as a result of the US and China trade war. Air cargo tonnage plunged 8% in August YoY. For the first eight months of the year, air cargo volumes at LAX fell 4.7% compared with the same period last year.

With the global economy already in a manufacturing recession and expected to enter a full-blown recession in the next year, alternative data, such as LAX traffic and freight volumes, shows the US economy isn’t an economic island and will likely slow with the rest of the world into the 2020 timeframe. This is more bad news for the Trump administration who based their entire presidency on a robust economy. 

 

Authored by Ben Hunt via The Epsilon Theory,

“He had seen two main branchings along the way ahead—in one he confronted an evil old Baron and said: “Hello, Grandfather.” The thought of that path and what lay along it sickened him.

The other path held long patches of gray obscurity except for peaks of violence. He had seen a warrior religion there, a fire spreading across the universe with the Atreides green and black banner waving at the head of fanatic legions drunk on spice liquor […]

He found that he could no longer hate the Bene Gesserit or the Emperor or even the Harkonnens. They were all caught up in the need of their race to renew its scattered inheritance, to cross and mingle and infuse their bloodlines in a great new pooling of genes. And the race knew only one sure way for this—the ancient way, the tried and certain way that rolled over everything in its path: jihad.”

–Frank Herbert, Dune

Dune is easily one of the greatest works of science fiction ever written. I’d go so far as to say it’s one of the greatest works of popular fiction ever written.

That’s not to imply Dune is an easy read. Or even a pleasant one. The first couple hundred pages are incredibly taxing. But it’s all downhill from there. In fact, I’m convinced this is precisely what us Dune fans love about the book. Itsdepth rewards you for your effort. But you have to earn it. Dune is truly a book for “idea people.”

This is precisely why Dune movie adaptations inevitably disappoint. Sure, Dune has a sci-fi plot. It’s got fairly well-drawn characters. It’s got action. But the real draw are the Big Ideas—ideas about how politics, science and religion shape humanity’s evolutionary path. Ideas about how politics, science and religion are used to manipulate humanity’s evolutionary path.

At its core, Dune is all about narrative.

(Funnily enough, it seems like Jodorowsky “got it”, at least in his own loony way. But his Dune adaptation was never made)

One of the recurring images in the book is what we in finance know as a probability tree. In the world of Dune, if you are at least a little bit psychic, and you amplify that psychic ability with a generous helping of hallucinogenic “spice,” you can catch a glimpse of the branching probability tree that is the as-yet-unrealized future.

Here in the investment and financial advice businesses, we, too, seem to have reached an evolutionary crossroads. I don’t claim to know exactly what the industry will look like in ten or twenty years. But like Dune‘s protagonist, Paul Atreides, I think I can peer through the haze of a spice trance to glimpse some of the branching possibilities.

Each of these possible futures has different implications for financial markets and the financial advice business.

1. The Great Jihad

In many ways The Great Jihad is the most straightforward path. It’s just not a particularly pleasant one. Here, we as a species fail to transition from competitive games to cooperatives games. Inevitably, this leads to big wars and violent revolutions. In this future state of the world, our portfolios and advisory practices are the very least of our concerns. We’ll be much more concerned with the simple things in life. Things like not getting shot, or sent to re-education camps, or starving to death.

If you truly believe we are headed for the Great Jihad, you want to own gold, guns, crypto and seeds.

2. The Zombification of Everything

We’re pretty familiar with the playbook for this future, because it’s more or less what we’ve been living since the 2008 financial crisis. Here, growth and interest rates remain low for many, many years. Decades. What’s more, the Nudging State and the Nudging Oligarchy somehow succeed in stabilizing the social and political tensions that this state of affairs tends to create.

This is a policy controlled world of zombie companies, zombie investors and zombie civic institutions.

From an investing standpoint, cheap, beta-oriented strategies will continue to dominate the product landscape. There will, of course, be niche opportunities for traders and stock pickers to make money, but never to such a degree that the policy controlled nature of economic and market outcomes can be called into question.

As far as financial advice is concerned, this future will amplify current trends toward focusing on financial planning and even financial therapy. The role of investment selection in an advisory practice will be increasingly marginalized, and advisor compensation will increasingly be divorced from client investment portfolios. There is no need to worry about investment outcomes in a policy controlled world. Why would anyone pay a premium for investment advice in such a world?

What’s more, two “truths” will be self-evident in a zombified world:

1. Always be buying.

2. Always be long duration

This is a future without bear markets and without interest rate risk. Financial asset valuations will have “permanently” re-rated higher on the back of common knowledge that the cost of capital will always and forever remain pinned near zero, and that economic cycles have been tamed.

In this world, Ben Graham style value investors are extinct. To the extent people who consider themselves value investors still have money to manage, they will claim to adhere to “evolved” value philosophies that emphasize “quality” or GARP.

However, the Zombification of Everything does not strike me as a stable equilibrium, precisely due to the social and political tensions that must be managed to maintain it. This future isn’t so much a destination as a layover on the way to something else.

3. The Great Reset

Great Reset is a kind of middle way. It’s not quite the dystopian hellscape of the Great Jihad. But it ain’t exactly a bed of roses, either.

I see two possible paths here. The first (and more unnerving) is that of debt jubilee and MMT. Here it is common knowledge that neither debt nor deficits matter. This is a future of structurally higher inflation. It’s only a question of degree. To me, this is the highest probability future of the three examined here.

Of course, the worst possible outcome is hyperinflation and revolution (shades of The Great Jihad there). But I believe there is a “milder” way forward, too, with “merely” high single digit or low double digit inflation. After all, this kind of inflation is the most politically expedient solution to the debt burdens and unfunded liabilities borne by today’s developed market policymakers.

What does this mean for our portfolios?

Much of what we think we “know” about investing will no longer work. Stocks and bonds will be positively correlated. Conventional wisdom about asset allocation will disappoint. Long duration bets will get crushed. Equity multiples will re-rate lower as the cost of capital rises.

The differences between stocks will matter again. Why? Pricing power is why. Businesses with pricing power will survive and even thrive. Businesses without pricing power will struggle. Many will die.

Naturally, this could open the door to a renaissance in stock picking. Even a renaissance in more traditional forms of value investing.

And what of financial advisors?

We will have to get to grips with the fact that many of our investing heuristics will not be particularly effective in this regime. They may even be counterproductive.

The diversification offered by a 60/40 portfolio will disappoint. Portfolio construction and stock selection will matter again. Financial therapists whose understanding of investing is limited to the heuristic that a low cost, 60/40 portfolio is always and everywhere best portfolio will find themselves at a disadvantage versus competitors who adapt more quickly to this new economic regime.

Both the Great Reset and The Great Jihad represent explicit rejections of the Zombification of Everything. Likewise, they represent explicit rejections of the Cult of the Omnipotent Central Banker. We will probably still have central bankers after the Great Reset. But common knowledge will mark them as sorcerer’s apprentices. Everyone will know that everyone knows that policy controlled markets are a febrile delusion.

I suppose there is also a kind of Golden Path here, where the Cult of the Omnipotent Central Banker is cast down without debt jubilee or MMT. How might such a thing happen? Policymakers themselves might eventually reject the idea of policy controlled outcomes and the tired tropes that come along with it (Fed Days, forward guidance, etc.). But the Golden Path is a narrow one, and it strikes me as a low probability outcome.

I conclude with a final Dune quote worth meditating on, whenever we consider the branching possibilities in life, business or the financial markets:

“And he thought then about the Guild–the force that had specialized for so long that it had become a parasite, unable to exist independently of the life on which it fed. They had never dared grasp the sword… and now they could not grasp it. They might have taken Arrakis when they realized the error of specializing on the melange awareness-spectrum narcotic for their navigators. They could have done this, lived their glorious day and died. Instead, they’d existed from moment to moment, hoping the seas in which they swam might produce a new host when the old one died.

The Guild navigators, gifted with limited prescience, had made the fatal decision: they’d chosen always the clear, safe course that leads ever downward into stagnation.”