Monday, August 19, 2019

The Canary in the Bookstore

The NY Times has a piece on problems arising in Amazon. They note:

Over the last few weeks I got a close-up view of this process when I bought a dozen fake and illegitimate Orwell books from Amazon. Some of them were printed in India, where the writer is in the public domain, and sold to me in the United States, where he is under copyright.Others were straightforward counterfeits, like the edition of his memoir “Down and Out in Paris and London” that was edited for high school students. The author’s estate said it did not give permission for the book, printed by Amazon’s self-publishing subsidiary. Some counterfeiters are going as far as to claim Orwell’s classics as their own property, copyrighting them with their own names.Catch up and prep for the week ahead with this newsletter of the most important business insights, delivered Sundays. What unites all these books is that none of them paid the author anything, which means they could compete with legal Orwell titles as a lower-cost alternative. After all, if you need a copy of “Animal Farm” or “1984” for school, you’re not going to think too much about who published it. Because all editions of “1984” are the same, right? Not always, not on Amazon.

In my recent experience this is but the tip of a massive iceberg, or a large canary shouting at the top of its lungs before it perishes.

Having been an avid a trusting Amazon user for well over two decades I have found it often indispensable, until now. What is happening? Third Party vendors. Originally Amazon sold the product and stood behind it. In the past year in my experience almost half the third party vendors I tried to use were a near disaster. They say they have something, collect your money, and never deliver. Then you read the fine print on Amazon and they disavow any and all responsibility. That is, the one great Amazon reputation is being despoiled by the third party vendors whose reps and warranties are worthless in my opinion.

It is not only fake books, it is also medical supplies that should not have been sold through the channel. For example is you were to purchase glucose test strips you get ones to be sold only through a Medicare channel and not Amazon. But Amazon third party players sell these in unauthorized channels. Batteries from China, with knock off labels, Knock off books, not to be sold in the US. Multiple types of defective merchandise.

Perhaps this is profitable for the time for Amazon but then there is the FTC which if it gets enough complaints could become a costly strategy. Trust is a very valuable asset. Loss of trust can destroy a business. Hopefully someone at Amazon is listening.

My only short term solution is to buy only what Amazon sells, any other seller is a risk in my opinion and in my experience.

Communicating Science

Science can at times be exceedingly complex. At others somewhat simple. Take lung cancer as an example. It took decades to have people know that smoking caused lung cancer. Why? Well in my opinion having lived through the period and never having smoked, it was twofold. The media promoted the habit as something that made one "cool". Second, medical scientists used complex statistical analyses which no one could understand. One could scare people but that did not work. Frankly it required a ready acceptance of DNA and the impact of genetic mutations that allowed many, not all obviously, to see that they got it. Not that they really got it but the paradigm had shifted and once you knew about DNA you had a new paradigm, independent of statistics, to grab hold of.

Needless to say, this also applied to various cancers, almost to an extreme. Patients come in armed with their DNA demanding pre-emptive care. You then have to tell them that germ line DNA and the DNA in a tumor are different but if you have a BRCA mutation your risk is indeed higher. However there may be no reason to look for a BRAF V600 in the excised mole after the pathologist deemed it benign. Yet this current state of affairs demonstrates the taking hold of a real paradigm shift, the double helix, even if the patient understands nothing more than its existence.

The same holds with X rays and excessive use. Likewise, for HIV and its transmission. However if one were to take measles, and other communicable disease preventable by vaccines, one can see a dual paradigm, namely believe they work or believe they are harmful. In this case I suggest the paradigm of immunology and the antibodies is lacking. Most individuals have no clue. Yet perhaps as we see immunotherapy in cancers, we may expect a shift there also.

Now to climate change or whatever the current term is. Carbon dioxide and methane can be shown to retain solar heat as it strikes the earth. That may be a fact but the paradigm for it is lacking. The promulgators tried to use the term "greenhouse gasses" but as a paradigm it has not caught fire.

Let us consider some early work on this topic[1]. The authors note:

Methane (CH4) is the most abundant organic gas in Earth’s atmosphere. .. Since the early 1970s a variety of roles of methane in atmospheric chemistry and climate have been identified. For example, methane affects tropospheric ozone, hydroxyl radicals and carbon monoxide concentrations, stratospheric chlorine and ozone chemistry and, through its infrared properties, Earth’s energy balance…

They continue:

Atmospheric methane exerts influence over Earth’s climate in several different ways, both direct and indirect. The more direct roles involve interaction with planetary infrared radiation, warming Earth’s surface and near-surface atmosphere and cooling the stratosphere, i.e., the roles of an effective greenhouse gas. The most important infrared spectral feature of methane molecules is their 7.66-μm absorption band; quantitative models of the impact of methane’s role in Earth’s energy budget focus on this band. …calculated that the presence of 1.5 ppm of CH4 in the atmosphere causes the globally averaged surface temperature to be about 1.3 K higher than it would be with zero methane and that larger effects would apply to polar latitudes.

…have computed the global heating due to an increase of CH4 concentrations from various deduced preindustrial levels to contemporary values and the future heating effects of several methane scenarios. For example, the infrared radiative heating effect of a methane increase from 0.7 ppm (preindustrial revolution) to 1.7 ppm (1988 concentration) is about half as large as the comparable effect of simultaneously increasing C02 from 275 ppm to 345 ppm. Future growth in atmospheric methane concentrations, while not clearly predictable, is likely to contribute more to future climatic change than any other gas except C02. …

In the paleoatmosphere of 4.25 billion years ago when the Sun was perhaps 30% less luminous, relatively high concentrations of atmospheric gases such as C02 and CH4 could have served to maintain Earth temperatures above freezing (evidence suggests that Earth was not frozen over) …. Methane concentrations of about 100 ppm could have decreased the amount of C02 required for maintenance of a warm Earth by about a factor of 2 … The direct radiative effect of atmospheric methane also extends into the stratosphere; at altitudes above about 20 km, CH4 molecules act to cool the atmosphere through radiative losses to space.

There are also several interesting and potentially important indirect ways that methane can affect climate. One that has not received much attention is that the atmospheric oxidation of CH4 produces CO which is converted further to C02. Methane oxidation produces about 8 x

1014 g CO/yr …. CO molecules survive two to three months on average before conversion to C02 by (R16). In this way, about 0.34 x 1015 g C/yr as C02 is produced globally. By comparison, total human release of C02 due to combustion and cement use is about 5.3 x

1015 g C/yr. Thus, we calculate that the atmospheric production of C02 from atmospheric CH4 is about 6% as much as the direct annual release of C02 from anthropogenic sources.

Other indirect effects of increasing atmospheric CH4 Eire the chemical production of tropospheric O3 (a greenhouse gas) and increases in tropospheric water vapor. The latter effect is not proven, but it is a common and plausible assumption in climate model sensitivity and a result of some general circulation models that as temperature rises, atmospheric relative humidity will remain rather constant. Accordingly, absolute H20 amounts would increase. In this way the effect of a greenhouse warming from CH4 or other causes leads to an amplification of perhaps 50% due to increased H20 vapor concentrations … Tropospheric O3 increases that can result from CH4 increases in the presence of NO2 … are also able to affect climate, especially if ozone concentrations should increase in the upper troposphere where O3 is a particularly effective greenhouse gas.

Needless to say this is not a paradigm. Furthermore, this is one of the better non-paradigms. The issue is simple. The sun sends radiation to the earth, the CO2 and CH4 absorb it and the outer electron levels jump with the increase in energy and they decay converting it to heat, most of which falls down to the earth. Thus these gasses are energy converters, taking one level and turning it into another thus increasing temperature. Secondly when the heat is reradiated outward it is reduced again by these molecules which absorb and reflect back in a somewhat endless process. There is a little quantum mechanics here but at high school  level.

Now along come the teenagers. As Nature notes[2]:

As each of the UN conventions faces continuing challenges, the IPCC can at least be assured of support from the next generation. It has garnered a following among the growing international youth climate movement. Members keenly absorb every new report, including participants in the school strike for climate, led by Swedish teenage activist Greta Thunberg. Thunberg makes a point of namechecking the IPCC and quoting paragraph and page numbers in speeches, as she did in an address to the French parliament at the end of last month. As government delegates get ready for Delhi, Nairobi and New York, they must prepare to answer why, if children can understand the meaning of the IPCC assessments, adults cannot do the same? The youth climate movement’s members are brave, and they are right. It has been almost three decades since the three UN conventions — on biodiversity, climate and desertification — were agreed at the Earth Summit in Rio de Janeiro. And it has been 31 years since the IPCC was created to advise decision makers. Yet environmental promises have not been matched by meaningful action. Younger generations know, perhaps better than the adults, that the world might not have another three decades to prevent climate impacts that will be even more serious than those we face now. Politicians must act now.

Politically, when one has a group of uneducated children evoking politically pontificated pronouncements the masses will rebel. If, however, you had a simple and understandable paradigm you can win. The paradigm; why ae roses red? Simple, the white light is reflected off the leaf and everything but red is absorbed so what we see reflected is red. Why is the earth getting warmer? Simple, we have CO2 and CH4 absorbing light from the sun and converting it to infrared for warming and then blocking it from leaving.

If one can get the simple paradigm across then most people can understand and respond. The solution then is the reduction of these gasses via technology not politics. Unlike Nature, younger generations really do not "know" since it is most likely they have not been taught.

The challenge is for Scientists to explain simply and correctly, give people paradigms to hold on to. People like good paradigms. Scientists should not try to explain as if we must understand every detail. Furthermore, Government reports all too often miss everything trying to be totally inclusive of every "good" idea. To paraphrase Amadeus, "too many words".

[1] BIO GEO CHEMICAL ASPECTS OF ATMOSPHERIC METHANE, R. J. Cicerone, National Center for Atmospheric Research, Boulder, Colorado and R. S. Oremland, U.S. Geological Survey, Menlo Park, California. Global Biogeochemical Cycles, Vol. 2, No. 4, Pages 299-327, December 1988

Saturday, August 17, 2019

Yield Curve

Here we go:

Here are a few yield curves over the past which we have been following. There is a clear inversion. In a sense if you borrowed money say at 3 years you paid 1.5% but if then turned around and loaned it at 90 days you got 2% and thus with no real money you got 0.5% interest. Since theoretically if there were no limit on what you borrowed you could get rich quick. Except you do not know what the rate will be in say six months. But if you are a bank who cares.

Second point, most of the Treasury debt is short term, really in the 3 year range so this should be good. Our interest payments should be deceasing, but not as low as when we had the bank collapse.
Above is the actual spread of 10 years vs 90 days. It is negative and almost at the 0.5% level we just discussed. The long term rate reflects anticipated growth and the short term rate uncertainty on what is next. One question we should ask, is this all being manipulated and by whom? You can manipulate short term very easily, you go in and out of the market and have the FED complicit in the process. Are we seeing pre 2020 election manipulation but done domestically?
Just look at the short term rates. They have taken off after the 2016 election, some reduction but not much. The FEDs balance sheet is still a mess, a lot of useless paper resulting from the incompetence of the great recession of 2008.

The questions we should be asking are: (i) do we have any major systemic internal financial collapse issues?, (ii) can a recession be driven domestically for political gains?, (iii) if so one must ask by whom and who can solve the problem, or it just a political move?

Tuesday, August 13, 2019

Who is the seller?

As Amazon progresses there is I believe in my opinion a growing fatal flaw. namely one becomes accustomed to buying from Amazon and having a standard return policy. Now that they front third parties with little or no return policy you get slammed with much less than what you anticipated. The return is de minimis and you pay through the nose! There is no warning that you are being sent to a third party and it is not until you get the notice of no recourse that you are stuck.

I suspect in my opinion and in my experience there will be several FTC law suits coming up on this issue. It is a shame because trust was a key element in buying from Amazon. Getting the third party presented as if it were Amazon then sets in motion a series of costly and frustrating events in my opinion.

Amazon should be aware of this because sooner or later it will come, in my opinion, to be regretted.

Sunday, August 11, 2019


Bagehot lived an interesting life during the mid-19th century. He was a banker and commentator on political affairs and wrote three significant books; Lombard Street, Physics and Politics and The English Constitution. These three range from banking to political philosophy to why England is better than any other country due to its constitution. The funny thing is if you ask anyone where they keep this constitution you will find not a single answer. It is a cultural process developed since the Magna Carta, a ways-and-means to govern, while retain the sovereign.

The book by Grant is a biographical study of this man, who lived just a bit over 50 years and half of which was dedicated to his work. His father in law headed the Economist which he took over upon the man's passing, allowing him to have a platform to comment on a variety of things. Many economists view him as an important figure, a predecessor to Keynes with a focus on money and banking. He provided a set of insights to the banking changes during this period which saw banks go from small depositories to growing mega institutions.

The book is a somewhat chronological tale of the man and his times. There is the back and forth between Bagehot and the events and in my opinion it is a rather bumpy road to follow. There is a limited amount on the understanding of banking and what changes he sought and why.

Bagehot wrote about other governments and he was a strong admirer of the English system and for the United States he was initially a supporter of the South and its attempts to set themselves on a different path. He disliked Lincoln and the issue of slavery did not seem to affect him greatly. He saw the US approach as chaotic, having a President separate from the Legislature and having conflicting houses of the Legislature. One suspects he would have been equally negative if he had seen a more mature Supreme Court. His commentary is important because Woodrow Wilson adopted it as the basis for his first book taking the position that England was better than the US.

The book has a great deal of detail but in my opinion is a cumbersome read. Bagehot is a significant player in both his time and even now and that does not seem to come through as well as it should.

Arendt Redux

Arendt is a complex writer. The Cambridge Companion by Villa is an excellent summary of insights to her work. The work discusses her political thought, he views on totalitarianism, her work on the Eichmann Trial, her views of revolution, constitutionalism, equality and the like. Each chapter is well written and explores in some details a different facet of Arendt.

In my opinion to understand Arendt it is necessary to understand German philosophy. From that also comes her view of politics, nationalism, political philosophy, and her interactions with society. Also, one must understand her relationship with Heidegger, the Nazi philosopher who was also her lover. The dissonance in that relationship in many ways colors her overall views.

The discussion on Totalitarianism is quite well done. Her position is that the Hitler/Stalin totalitarian world was unique and had no true prior examples (pp 27-28). Perhaps true in the large but then again humanity has always had rulers who were ruthless and blood thirsty. There is a collection of Roman Emperors whose blood spilt does compare relatively to those in the 20th century and who exude the elements of pure evil. Giver that her doctoral thesis was on Augustine; one perhaps could ask if her views of evil in any way were related to or in contrast with Augustine.

Nationalism was a driving issue to her as well. In her writings on Rosa Luxemburg she details Luxemburg's views of nationalism and one should compare those to the writings of Stalin who was in stark contrast. One could ask of Arendt was a believer and supporter of Luxemburg, as she seems to indicate in her writings. Unfortunately, this work does not examine this element.

Her views on constitutionalism is complex and in many ways if of a Germanic base. What is typical of Germanic writers of this ilk are their total lack of insight to the Medieval philosophers. If one reads the Wiles Lectures by Tierney one sees the development of constitutionalism devoid of the Greeks and Romans and in fact in stark contrast. The works of Marsilius of Padua and Ockham stand tall in the steps of this developmental stage and allowed later writers to expand and send them to what we see today. The Germanic writers, Kant, Heidegger, Arendt included somehow see the Greeks and a few Romans and then a vacuum in thought for almost two thousand years.  

The authors discuss the Eichmann Trial and its aftermath. Her use of the term "banality" opened her up for mass amounts of criticism. The discussion here in the book is excellent and that alone is worth the reading. Her critique of certain Jews who allegedly assisted the Nazis was problematic and led to many severe and warranted attacks. Perhaps one wonders what she could have done if she had not written them for the press but had written them as a book with extensive reflection.

As to writing style, William Barrett in his book The Truants talks of his work helping Arendt translate from German to English. This is an interesting discussion of how this German refugee attempts to enter the New York Intellectual Elite. She also befriended Mary McCarthy, an extreme left-wing writer at the time and they had a close friendship which may very well have influenced her writing style. She is not as turgid as Heidegger, after all she wrote in English and the complexity of German was left behind. Also, her writings were for a broader audience.

Overall this is an excellent summary of Arendt and her thought and worth the read. The Editor has done a superb job and each chapter stand well on its own.