A celebration of all things wax

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We’ll get to the solar storm alert and its implications, in a minute. But first… the devastation wrought by Hurricane Harvey tears open our hearts in empathy for our fellow humans and citizens in Texas. (See a list of ways you can help.)

By Daniel Dockery  Published: October 17th, 2017 

We know you remember Azuki, the tiny Japanese hedgehog who goes on big adventures. His perky ears, button nose, and delightful roundness is just impossible to forget. Well, Azuki recently traded his cozy dream house in for a set of miniature Coleman camping gear and took a trip to the great outdoors.

Many Americans have debated whether the country would be better off with [Vice President] Pence as President. From a purely partisan viewpoint, Harold Ickes, a longtime Democratic operative, argues that — putting aside the fear that Trump might start a nuclear war— ‘Democrats should hope Trump stays in office,’ because he makes a better foil, and because Pence might work more effectively with Congress and be more successful at advancing the far right’s agenda." — Jane Mayer, the New Yorker, October 23, 2017 issue

As demons in 2017, it’s important to recognize that Satan has been a less than ideal Prime Evil overlord to maintain dominion over the worlds of man. But it would behoove us as intellectual observers to reckon with a fate that holds the potential for even greater eternal suffering in a torture chamber of our own construction: A President Lucifer would be disastrous for all Nine Circles of Hell.

At first glance, this may appear to be a somewhat radical position; after all, despite the anguishing screams of the damned echoing from every chamber of the underworld, Satan has done a remarkable job shaking up the millenia-old status quo God had instituted from Paradise to diminishing returns. Say what you will about the Fallen Angel, but his no-nonsense, down-to-Hell, widely relatable loathing of all of the Lord’s creatures has resonated intensely with large segments of Hell that wanted a more transparent, accountable form of corruption and evil without interference from unnecessary bureaucracy or the donor class. There are many aspects of Satan’s rule that one could quibble with, but his slashing of the corporate tax rate has stimulated the economy of human suffering like never before. Furthermore, while Satan’s reign has been less than perfect at times, we have to consider the ambitious, unrelenting nature of Lucifer’s desire for power before we happily request that our supernatural chains of fire and blood be reassigned to the Lesser Evil.

Where Satan is, at times, unorthodox and uncouth in his quest to imprison humanity for all of eternity, Lucifer is a known bigot with tight connections to all of the most important demigods and avatars of hatred that tempt man to fall. He is driven, motivated, and on message, and many pundits and scholars believe him to be the more dangerous and wily general when the war to bring Heaven crashing down on the constellations finally erupts.

Hell’s history has been full of difficult political choices, and now is no different. We find ourselves at a turning point, where we can trust our fates in the unrelenting oppression of an endless torment of stupidity and irrationality, or oust a less predictable form of evil for a leaner, meaner, more mother-loving well of darkness and despair. Search deep into your souls, and find it in yourselves with the last grasp of your humanity to consider working with Satan, and attempting to negotiate a path forward into the aeons of horror that await us all.

Sheryl Sandberg and her peers in Silicon Valley may not want to admit this, but Big Tech has become Big Media. 

And with that change comes major responsibilities — ones that the tech giants are currently shirking. 

Sandberg, the chief operating officer of Facebook, made news this week when she steadfastly refused to acknowledge in an interview with Axios editor Mike Allen that her company is in the media business.

She may be the most prominent denier of Big Tech’s new role, but she’s not the only one. Sandberg’s colleague, Andrew Bosworth, Facebook’s head of consumer hardware, echoed her position on Twitter this week.

Their argument goes like this: because tech companies generally don’t employ journalists who report and write the news, they can’t be media companies.

But that position ignores the facts of how the media business has changed and how people today consume news, information and entertainment.

Facebook’s news feed has become what the front page of the newspaper was for older generations of people; at least 66% of the social network’s 2 billion users rely on it as a news source, according to a 2016 Pew study. Meanwhile, consumers turn to Twitter for breaking news, and they search Google for news updates. 

But consumers didn’t just change their media habits on their own. The tech companies argument also conveniently disregards how the big tech companies themselves have purposefully and intentionally tried to become go-to news destinations.   

Facebook purposely designed its algorithms to customize users’ news feeds to show them the stories and other information they’re mostly likely to engage with, whether by clicking on a headline or typing in a comment. Google not only operates Google News and touts live news events on YouTube, but it’s even altered its core search feature to show links to relevant articles above search results when users search for newsworthy items. And Twitter has launched numerous features, including a "What’s Happening Now" page and a "Moments," to highlight news stories and information. 

Perhaps most damning to Big Tech’s line of argument is the impact those companies, particularly Facebook and Google, have had on the rest of the media business. Advertising is the lifeblood of media companies. And with ads increasingly shifting away from traditional media such as newspapers and television to digital ones such as the web and mobile devices, old media companies have been trying to move in that direction too.

But they’re failing, thanks to Big Tech. Last year, Facebook and Google accounted for 99% of all the growth in digital advertising, according to the Interactive Advertising Bureau, leaving peanuts for the rest of online media platforms. That dynamic will almost certainly repeat itself this year. 

And that’s not to mention Big Tech’s broader effort to become Big Media. Facebook, Google and Twitter, as well as Apple and Amazon, are all all aiming at Hollywood by investing in originally produced entertainment videos, television shows and movies. 

In a very real way, Facebook and the other companies are deciding what news millions of people see. There’s just no disputing the fact that Big Tech has massive influence over the way people consume media.

But it’s also become increasingly clear that the big tech companies aren’t shouldering the responsibility that comes hand in hand with that influence. 

The denials from Sandberg and others about even being in the media business are just a piece of that. A bigger, more important example is how the companies have reacted to the growing pile of evidence that propagandists linked to Russia manipulated their sites and systems in an effort to influence last year’s election. 

In the days after the election, Facebook CEO Mark Zuckerberg gave his infamous "pretty crazy" comment about the notion that his company influenced the result by distributing propagandistic fake news. (He recently took those comments back.) While Google CEO Sundar Pichai acknowledged that such fake news could possibly have swayed voters and said the company needed to crack down it, his company and the other members of Big Tech, have done little to solve it 11 months later.

And it’s not clear if the tech companies will ever fix the fake news and propaganda problem on their own, despite the public outcry. In recent months, executives at Google and other companies have argued — privately — that the problem was just too big to solve. Much of the value these companies believe they have comes from allowing users to post pretty much whatever they want to their sites. If the companies were to more thoroughly police what users post, they worry they would lose that openness and undermine their sites’ appeal. 

But Big Tech will likely only be able to duck from its duties for so long. If it won’t accept the responsibility that comes from it’s transformation into Big Media on its own, it may be forced to. 

Already there are rumblings among different governments that they may step in. A pair of senators concerned that Russian-backed groups surreptitiously tried to influence last year’s election are working on a bill that would force companies like Facebook to track and, in some cases, publicly disclose the purchasers of political ads. Meanwhile, the UK is considering formally reclassifying Facebook and Google as media companies, which would subject them to new legal responsibilities.  

So whatever Sandberg might say, it’s clear that tech has taken over media. And Big Tech is running out of excuses for why it should see the benefits that go along with that change — but not bear the burdens.

SEE ALSO: Sheryl Sandberg got everything wrong about Facebook’s role as a media company

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NOW WATCH: Meet the three women who married Donald Trump

Authored by John Curran via Barrons,

The petrodollar system is being undermined by exponential growth in technology and shifting geopolitics. What comes next is a paradigm shift…

In the summer of 1974, Treasury Secretary William Simon traveled to Saudi Arabia and secretly struck a momentous deal with the kingdom. The U.S. agreed to purchase oil from Saudi Arabia, provide weapons, and in essence guarantee the preservation of Saudi oil wells, the monarchy, and the sovereignty of the kingdom. In return, the kingdom agreed to invest the dollar proceeds of its oil sales in U.S. Treasuries, basically financing America’s future federal expenditures.

Soon, other members of the Organization of Petroleum Exporting Countries followed suit, and the U.S. dollar became the standard by which oil was to be traded internationally. For Saudi Arabia, the deal made perfect sense, not only by protecting the regime but also by providing a safe, liquid market in which to invest its enormous oil-sale proceeds, known as petrodollars. The U.S. benefited, as well, by neutralizing oil as an economic weapon. The agreement enabled the U.S. to print dollars with little adverse effect on interest rates, thereby facilitating consistent U.S. economic growth over the subsequent decades.

An important consequence was that oil-importing nations would be required to hold large amounts of U.S. dollars in reserve in order to purchase oil, underpinning dollar demand. This essentially guaranteed a strong dollar and low U.S. interest rates for a generation.

[ZH: Still, the underlying concept of how Petrodollar recycling, or as some call it, petrocurrency mercantilism works, leaves some confusion. So in order to alleviate that, here courtesy of Cult State, is a quick and simple primer that should hopefully answer all questions. From CultState:

 

So what is petrocurrency mercantilism?

 

It’s when a national bank and an energy producer collude to generate artificial demand for a currency at the expense of the purchasing power of other currencies.

 

The flowchart below shows how it all works.

 

Given this backdrop, one can better understand many subsequent U.S. foreign-policy moves involving the Middle East and other oil-producing regions.

Recent developments in technology and geopolitics, however, have already ignited a process to bring an end to the financial system predicated on petrodollars, which will have a profound impact on global financial markets. The 40-year equilibrium of this system is being dismantled by the exponential growth of technology, which will have a bearish impact on both supply and demand of petroleum. Moreover, the system no longer is in the best interest of key participants in the global oil trade. These developments have begun to exert influence on financial markets and will only grow over time. The upheaval of the petrodollar recycling system will trigger a resurgence of volatility and new price trends, which will lead to a renaissance in macro investing.

Let’s examine these developments in more detail.

First, TECHNOLOGY is affecting the energy markets dramatically, and this impact is growing exponentially. The pattern-seeking human mind is built for an observable linear universe, but has cognitive difficulty recognizing and understanding the impact of exponential growth.

Paralleling Moore’s Law, the current growth rate of new technologies roughly doubles every two years. In the transportation sector, the global penetration rate of electric vehicles, or EVs, was 1% at the end of 2016 and is now probably about 1.5%. However, a doubling every two years of this level of usage should lead to an automobile market that primarily consists of EVs in approximately 12 years, reducing gasoline demand and international oil revenue to a degree that today would seem unfathomable to the linear-thinking mind. Yes, the world is changing—rapidly.

Alternative energy sources (solar power, wind, and such) also are well into their exponential growth curves, and are even ahead of EVs in this regard. Based on growth curves of other recent technologies, and due to similar growth rates in battery technology and pricing, it is likely that solar power will supplant petroleum in a vast portion of nontransportation sectors in about a decade. Albert Einstein is rumored to have described compound interest (another form of exponential growth) as the most powerful force in the universe. This is real change.

The growth of U.S. oil production due to new technologies such as hydraulic fracturing and horizontal drilling has both reduced the U.S. need for foreign sources of oil and led to lower global oil prices. With the U.S. economy more self-reliant for its oil consumption, reduced purchases of foreign oil have led to a drop in the revenues of oil-producing nations and by extension, lower international demand for Treasuries and U.S. dollars.

ANOTHER MAJOR SECULAR CHANGE that is under way in the oil market comes from the geopolitical arena. China, now the world’s largest importer of oil, is no longer comfortable purchasing oil in a currency over which it has no control, and has taken the following steps that allow it to circumvent the use of the U.S. dollar:

• China has agreed with Russia to purchase Russian oil and natural gas in yuan.
• As an example of China’s newfound power to influence oil exporters, China has persuaded Angola (the world’s second-largest oil exporter to China) to accept the yuan as legal tender, evidence of efforts made by Beijing to speed up internationalization of the yuan. The incredible growth rates of the Chinese economy and its thirst for oil have endowed it with tremendous negotiating strength that has led, and will lead, other countries to cater to China’s needs at the expense of their historical client, the U.S.
• China is set to launch an oil exchange by the end of the year that is to be settled in yuan. Note that in conjunction with the existing Shanghai Gold Exchange, also denominated in yuan, any country will now be able to trade and hedge oil, circumventing U.S. dollar transactions, with the flexibility to take payment in yuan or gold, or exchange gold into any global currency.
• As China further forges relationships through its One Belt, One Road initiative, it will surely pull other exporters into its orbit to secure a reliable flow of supplies from multiple sources, while pressuring the terms of the trade to exclude the U.S. dollar.

The world’s second-largest oil exporter, Russia, is currently under sanctions imposed by the U.S. and European Union, and has made clear moves toward circumventing the dollar in oil and international trade. In addition to agreeing to sell oil and natural gas to China in exchange for yuan, Russia recently announced that all financial transactions conducted in Russian seaports will now be made in rubles, replacing dollars, according to Russian state news outlet RT. Clearly, there is a concerted effort from the East to reset the economic world order.

ALL OF THESE DEVELOPMENTS leave global financial markets vulnerable to a paradigm shift that has recently begun. In meetings with fund managers, asset allocators, and analysts, I have found a virtually universal view that macro investing—investing based on global macroeconomic and political, not security-specific trends—is dead, fueled by investor money exiting the space due to poor returns and historically high fees in relation to performance. This is what traders refer to as capitulation. It occurs when most market participants can’t take advantage of a promising opportunity due to losses, lack of dry powder, or a psychological inability to proceed because of recency bias.

A current generational low in volatility across a wide spectrum of asset classes is another indicator that the market doesn’t see a paradigm shift coming. This suggests that current volatility is expressing a full discounting of stale fundamental inputs and not adequately pricing in the potential of likely disruptive events.

THE FEDERAL RESERVE is now in the beginning stages of a shift toward “normalization,” which will lead to diminished support for the U.S. Treasury market. The Fed’s total assets stand at approximately $4.5 trillion, or five times what they were prior to the financial crisis of 2008-09. The goal of the Fed is to “unwind” this enormous balance sheet with minimal market disruption. This is a high-wire act a thousand feet in the air without a safety net or prior practice. Additionally, at some not-so-distant future date, the U.S. will need to finance enormous and growing entitlement programs, and our historical international sources for that financing will no longer be willing to support us in that endeavor.

The market participants with whom I met theoretically could have the ability to accept cognitively the points made in this article. But the accumulation of many small losses in a low-volatility and generally trendless market has robbed them of confidence and the psychological balance to embrace any new paradigm proactively. They are frozen with fear that the lower- return profile of recent years is permanent—ironic in an industry that is paid to capture price changes in a cyclical world.

One market legend with whom I spoke suggested he wouldn’t have had the success he enjoyed in his career had he begun in the past decade. Whether or not this might be true, it doesn’t mean that recent lower returns are to be extrapolated into the future, especially when these subpar returns occurred during the quantitative-easing era, a period that is an anomaly.

I have been fortunate to ride substantial bets on big trends, earning high risk-adjusted returns using time-tested techniques for exploiting these trends. Additionally, I have had the luxury of not participating actively full-time in macro investing during this difficult period. Both factors might give me perspective. I regard this as an extraordinarily opportune moment for those able to shed timeworn, archaic assumptions of market behavior and boldly return to the roots of macro investing.

The opportunity is reminiscent of the story told by Stanley Druckenmiller, who was promoted early in his investment career to head equity research at a time when his co-workers had vastly more experience than he did. His director of investments informed him that his promotion owed to the same reason they send 18-year-olds to war; they are too dumb to know not to charge. The “winners” under the paradigm now unfolding will be market participants able to disregard stale, anomalous concepts, and charge.

RELATEDLY, THERE IS a running debate as to whether trend-following is a dying strategy. There is plenty of anecdotal evidence that short-term and mean-reversion trading is more in vogue in today’s markets (think quant funds and “prop” shops). Additionally, the popularity of passive investing signals an unwillingness to invest in “idea generation,” or alpha. These developments represent a full capitulation of trend following and macro trading.

Ironically, many market players who wrongly anticipated a turn in recent years to a more positive environment for macro and trend-following are throwing in the towel. The key difference is that now there is a clear catalyst to trigger the start of the pendulum swinging back to a fertile macro/trend-following trading environment.

As my mentor, Bruce Kovner [the founder of Caxton Associates] used to say, “Nobody rings a bell at key turning points.” The ability to properly anticipate change is predicated upon detached analysis of fundamental information, applying that information to imagine a plausible world different from today’s, understanding how new data points fit (or don’t fit) into that world, and adjusting accordingly. Ideally, this process leads to an “aha!” moment, and the idea crystallizes into a clear vision. The thesis proposed here is one such vision.

From commercial packaging to artistic creations fused with geometry, paper designer Peter Dahmen is a true master of the pop-up. This new video titled Most Satisfying Video of Pop-Up Cards is a portfolio of sorts spanning the last several years of his work engineering elaborate objects that unfold from the pages of books or the confines of tiny boxes. You can go behind the scenes a bit more in this 2014 film on Dahmen from Christopher Helkey, and you can also try building some of his original designs with these free online tutorials. More

Interview with Sabek:

https://globalstreetart.files.wordpress.com/2017/10/street-art-sabek-woman-and-birds.jpg?w=662&h=496