Economist 8/20/15

  1. THE slogan of Ashley Madison, a website that arranges extramarital liaisons, is “Life is short. Have an affair.” Its home page shows a woman holding a finger to her lips. So much for promising to keep secrets. Last month a group of hackers called Impact Team stole the site’s user database and transaction history going back to 2007, and this week they released it online: more than 30m users’ names, addresses and personal details, along with GPS co-ordinates and sexual preferences.The truth is that the internet is bad at keeping secrets. The theft of personal information from large companies and government agencies has become so routine that most such breaches are quickly forgotten.
  2. JAPAN’s centenarians are no longer to depart this life with a silver dish in their mouths. This month the health ministry said it would stop giving commemorative silver cups for drinking sake as 100th birthday gifts, because Japan’s super-ageing population has made the tradition too expensive for the state. Each silver sakazuki dish costs around ¥8,000 ($64).n 1963, when the practice began, the government sent out just 153 of the little dishes, which are officially from the Prime Minister, and are engraved with the Japanese kanji for celebrating longevity. The cups are sent every year on Senior’s Day on September 15th to thank the aged for their achievements in society. Most go to elderly women, for whom life expectancy is highest of all. It startled the government that over 29,000 were called for last year, costing ¥260m ($2.1m).There are now more than 55,000 living centenarians in Japan, up from just a few hundred for most of the 20th century.
  3. ON MOST measures Britain is doing well: last year its economy grew faster than any other G7 country, while overall unemployment is 5.6%, compared with 10% in France. But according to the OECD, a club of mostly rich countries, on one measure Britain still lags behind. The rate of those who are not in education, employment or training (NEET) is, at 12%, around the OECD average. But British youngsters who leave school early are the most likely to be unemployed in the rich world.Britain has the third-highest share of youngsters with poor literacy and numeracy skills, and the fourth-highest share who are bad with technology. British NEETS are the most illiterate and innumerate in the rich world.This may reflect high levels of immigration into the country.But it also points to a more worrying trend among British youths. In a trend not seen anywhere else in the European Union, children of native-born Britons are more likely to be unemployed than the offspring of immigrants.
  4. The real curse for commodities producers is over-supply in almost all raw materials. Yet they continue to act as if they are blithely unaware of it. Capital is still pouring into holes in the ground, creating a hangover that may last at least a decade. So far this year, almost all major commodities—energy, industrial metals and agriculture—have fallen in a 10-20% range, a fairly homogenous performance. What’s more, the supply glut is being fed by three common factors. Cost-cutting has led producers to think they can bear the pain of falling prices for longer. Heavy hitters, whether OPEC princes or global miners, still yearn to increase market share. And funding is still available.
  5. A new technology promises to make it possible to edit genetic information quickly and cheaply.The technology is known as CRISPR-Cas9, or just CRISPR. It involves a piece of RNA, a chemical messenger, designed to target a section of DNA; and an enzyme, called a nuclease, that can snip unwanted genes out and paste new ones in.That is a Rubicon some will not want to cross. Many scientists, including one of CRISPR’s inventors, want a moratorium on editing “germ line” cells—those that give rise to subsequent generations. America’s National Academy of Sciences plans a conference to delve into CRISPR’s ethics. The debate is sorely needed.A harder question is whether it is ever right to edit human germ-line cells, to make changes that are inherited. This is banned in 40 countries and restricted in many others. There is no reason for a ban on research or therapeutic use

Economist 8/19/15

  1. The anonymisation of a data record typically means the removal from it of personally identifiable information. Names, obviously. But also phone numbers, addresses and various intimate details like dates of birth. Such a record is then deemed safe for release to researchers, and even to the public.But the ability to compare databases threatens to make a mockery of such protections.Reporters sifting through a public database of web searches were able to correlate them in order to track down one, rather embarrassed, woman who had been idly searching for single men.People want both perfect privacy and all the benefits of openness. But they cannot have both. The stripping of a few details as the only means of assuring anonymity, in a world choked with data exhaust, cannot work. Poorly anonymised data are only part of the problem. What may be worse is that there is no standard for anonymisation.
  2. UKRAINE’S economy, racked by war, is in free fall. In the second quarter of this year its GDP shrunk at an annualised rate of 15%, after shrinking by 18% in the first. Its public debt is probably worth 100% of its GDP.For months, no one—not even Ukraine’s finance minister, Natalie Jaresko—was entirely sure who owned Ukraine’s debt. It is now known to include Franklin Templeton, a big asset manager, which owns about $9 billion of Ukraine’s bonds, and BTG Pactual, a Brazilian firm.he IMF has kept Ukraine alive with a series of loans, worth about $7 billion in total since last year. The IMF provided the money under the assumption that the government in Kiev will write off $15.3 billion of debt and interest by 2018, and that it will have reduced its public-debt-to-GDP ratio to about 70% of GDP by 2020. The goal is to reduce debt repayments in any given year to no more than 10% of GDP.
  3. One creditor has not taken part in any negotiations—and that creditor owns a $3 billion bond that matures in December. There is a bizarre clause in that particular bond, which allows its holder to force Ukraine to default at any time after its public debt load has passed 60% of GDP. That creditor, unfortunately, is Russia. 
  4. So are travellers tiring of the budget model? The short answer seems to be no. Neither Frontier or Spirit are suffering as a result of complaints. Frontier is profitable, after a long time of not being so, and Spirit’s revenue grew 13% in the second quarter of 2015 compared with a year earlier. In fact the airline industry is enjoying a period of relative prosperity, as falling oil prices and industry consolidation have boosted profitability. Escalating complaints don’t translate into falling passenger numbers. This writer has many times vowed never to travel on Ryanair again after a bad flight, only to return to the fold, seduced by cheap airfares. It seems that, when booking a flight, convenience and price remain the two main considerations.
  5. So it is that virtually every Muslim-majority country has taken some form of ideological countermeasure against IS, from pressing traditional religious authorities to excommunicate the group to encouraging comics to satirise it. A growing number of Western countries, including Britain and America, have joined the propaganda war, too. Some have hired digital scribes to undermine the IS message online, for instance by highlighting its atrocities against fellow MuslimsOne reason may be that since its declaration of a caliphate in Iraq and Syria last year, IS has stood out from terrorist predecessors for the quality of its propaganda. Its video productions are “a generation ahead” of other groups, reckon Cori Dauber and Mark Robinson, media experts at the University of North CarolinaBuilding on well-worn grievances of political Islam, it does not just talk about creating a caliphate but actually does so (sort of). It doesn’t merely speak of eradicating colonial borders but physically bulldozes them.

Economist 8/18/15

  1. When the University of British Columbia (UBC) resumes classes in September it will for the first time offer a course for credit in Cantonese. That seems an unremarkable decision by a Chinese-language department that claims to be the largest in North America.Cantonese was widely taught at Canadian and American universities 30 years ago, says Ross King, head of UBC’s Asian-studies programme. That is because most Chinese immigrants came from Hong Kong and southern China, where it is the main language. But the economic rise of mainland China, whose official language is Mandarin Chinese (or putonghua), is pushing Cantonese off the streets and out of the academy.Cantonese is not about to die out. About 62m people speak it, as many as speak Italian.
  2. NORTH KOREA will go back in time on August 15th, turning back its clocks by half an hour to establish its own time zone. It seems appropriate for a country that venerates its past: the hermit kingdom already has its own calendar, with years counted from 1912, the birth year of its founder and “eternal president”, Kim Il Sung.Not all such changes stand the test of time: think of France’s failed attempt to introduce a ten-hour clock and an entirely new calendar after the revolution of 1789, to emphasise the break with its monarchist past.By order of the Roman Senate, the month of July was so named in honour of Julius Caesar, when he reorganised the calendar starting in 45BC (709AUC, in the Roman calendar); August was later named after Augustus Caesar, which required the lengths of several months to be adjusted to ensure August was no shorter than July.
  3. Hugo Chávez turned the clocks back by half an hour in 2007 to move Venezuela into its own time zone—supposedly to allow a “fairer distribution of the sunrise” but also ensuring that the socialist republic did not have to share a time zone with the United States.Perhaps the strangest example is that of Turkmenistan under President Saparmurat Niyazov, who renamed all the months and most of the days of the week in 2002, even renaming April after his mother. The changes were reversed only in 2008, two years after Niyazov’s death. For its part, North Korea is shifting its time zone this week to reverse the imposition of Tokyo time by “wicked Japanese imperialists” in 1912.
  4. WHILE residents of Melbourne enjoy another year in the world’s most liveable city, according to the 2015 Global Liveability Ranking. The ranking, which considers 30 factors related to things like safety, healthcare, educational resources, infrastructure and environment in 140 cities, shows that since 2010 average liveability across the world has fallen by 1%, led by a 2.2% fall in the score for stability and safety. The most liveable places, notes the EIU, tend to be “mid-sized cities in wealthier countries with a relatively low population density”, which explains the low ranking of near-megacities like London and New York and goes some way to explaining Melbourne’s continued place in the sun. Melbourne, Vienna, Vancouver, Toronto, Calgary, Adelaide, Sydney, Perth, Auckland, Helsinki, Zurich are the most liveable cities of 2015.
  5. On August 15th two of bitcoin’s five main developers released a competing version, or “fork”, of the software that powers the currency—a move, some fear, that may split bitcoin. The bone of contention is the size of a “block”, a batch of bitcoin transactions into which these are assembled before they are processed. Satoshi Nakamoto, the elusive creator of bitcoin who went offline in 2011, limited their size to 1Mb. That is enough to handle about 300,000 transactions per day—suitable for a currency used mainly by crypto-geeks, as bitcoin once was, but nowhere near enough to rival conventional payment systems. The likes of Visa and MasterCard can process tens of thousands of payments per second if needed.By how much and when to increase this limit has long been a matter of a heated debate within the bitcoin community. One camp wants to set the number much higher and do it soon.The other side, led by the other three main bitcoin developers, frets that increasing the block size hastily would lead to centralisation and turn bitcoin into more of a conventional payment system. This matters to bitcoin purists, who laud the currency’s decentralised approach of running a currency. Mr Hearn and Gavin Andresen, one of the dissenting developers, decided to press the issue by organising a referendum of sorts: they have called on “miners”, specialised nodes that assemble the blocks and mint new bitcoin, to install their new version, called “Bitcoin XT”.

Economist 8/17/15

  1. DESPITE two catastrophic air crashes (the disappearance of MH370 over the Indian ocean, and the shooting down of MH17 over Ukraine), 2014 was the safest year on record for civil aviation—with only one accident for every 4.4m flights. Even among commercial airlines, carelessness, fatigue and lack of experience by flight crew account for around 60% of fatal air crashes. For private planes, pilot error is responsible for a greater proportion still. The most dangerous phases of flight are take-off and initial climb (which account for 20% of fatalities, despite amounting to just 2% of the duration of a typical flight), and final approach and landing (36% of fatalities during 4% of flight duration).
  2. More than 40% of pilot fatalities are the result of a stall that turns into a spin. If this happens at low altitude, there is little room for recovery. And low altitude is just where it does tend to happen. Some 80% of stall-spins occur within 1,000 feet (300 metres) of the ground.In level flight, this “angle of attack” is 3° or 4°. Increasing it increases the lift generated, but only up to a maximum of between 15° and 20°., eddies start to form in the airsteam flowing over the wing, causing that flow to separate from the wing’s surface. When this happens, the amount of lift starts to fall off dramatically. Clearly, if planes could be designed so they would not stall, they would be unable to spin in this way.One reason is cost. Fabricating a spin-resistant airframe with leading-edge “cuffs” and other lift-generating devices is not cheap. It is less expensive to endow a plane (at least small ones) with a parachute all of its own, to lower it down gently in case of an emergency. Another reason is weight.
  3. AMERICAN companies are on the move. On August 6th CF Industries, a fertiliser manufacturer, and Coca-Cola Enterprises, a drinks bottler, bothFor more than 30 years companies, especially American ones, have been merging with foreign firms or acquiring them outright in order to shift their tax bases abroad. said they would move their domiciles to Britain after concluding mergers with non-American firms.Ever since, this kind of move, called a “corporate inversion”, has been an attractive way for American companies with overseas earnings to reduce their tax bills.When company A (based in America, say) acquires company B (based in Ireland) the managers of the combined A+B entity get to choose a domicile. If they choose the United States, they are in effect choosing to pay relatively high American corporate rates—up to 39%—on all the overseas profits they repatriate. If they choose Ireland instead, they will have to pay a much lower tax rate (12.5%) on profits generated in Ireland, but the crucial bit is that they will pay only the local rate on whatever profits are generated in foreign subsidiaries—because Ireland, like most other countries, taxes on a strictly territorial basis.
  4. New York City needs the housing. The population has swollen to 8.4m, up nearly 3% since 2010, but the housing stock has not kept up. A tight market with few vacancies (a 3.45% rate in 2014) has been pushing up prices. The median rent paid in the city grew by 12% between 2005 and 2013, after adjusting for inflation. One factor is a flood of money coming in from overseas. Developers are benefiting from investors from China, Russia, Brazil and other countries where wealthy people are looking for a relatively safe place to park their money. New York city’s steadily rising property prices are still seen as a relative bargain when compared with London and Hong Kong.
  5. The sudden spike is largely attributable to a clause in the city’s complicated property-tax code, which taxes different types of abode at different rates, and favours homeowners at the expense of renters. In order to reduce taxes on the construction of new multi-family high-rises—which tend to be taxed at especially high rates—developers rely on something called the 421-a programme, which exempts new construction from property taxes for decades on the condition that they also build some more affordable units, and is yet to be renewed by the state legislature.The 421-a scheme costs the city an estimated $1.1 billion in lost tax revenue every year, making it a pricey way to build new housing.

Economist 8/14/15

  1. ALTHOUGH Britain and America can feel smug about their unemployment rates of 5.6% and 5.3%, other countries are still fire-fighting. The authors compare results from hundreds of different studies to find out what works best to boost employment prospects, who it works for, and when. Their results show that in the short-term, the more immediate policies—such as kicking people off benefits—get more impressive results. But the effects quickly fade. In contrast, cuddlier programmes that offer training are disappointing in the short-term, but blossom over time. This fits with other research, which has found that the returns to experience in low-skilled jobs is very low, so there is little benefit from pushing people into the first shelf-stacking job they find. On the other hand, the study implies that building their skills yields long-term rewards. The authors then compare effects on different groups and find that women and the long-term unemployed are most responsive to the investment programmes, but that young people are slightly less responsive than average.
  2. THE majestic tranquillity of the National Mall in Washington, DC, has become frazzled in recent years.The Mall is known as America’s “front yard”.From the steps of the Capitol to the Lincoln Memorial on the Potomac stretch two miles (3.2km) of grass and trees.Congress has approved costly new buildings but is stingy about maintenance. The turf is finally being upgraded and last year the restored Washington Monument reopened. At the edge of the Washington Monument, Weiss/Manfredi, an architecture firm, and Philadelphia-based OLIN, landscape architects, will warp the lawn sensuously upwards to form a grassy amphitheatre facing a stage that will have the great obelisk as its backdrop.
  3. Angst about automation typically focuses on the substitution effect, whereby jobs once done by people are taken over by machines—the fate of the Luddites. The current fear is that ever more versatile robots will substitute for labour on a scale never seen before. Between 1980 and 2010, Mr Autor points out, the number of bank clerks in America actually increased despite the rapid spread of the cashpoint. That was because the IT revolution not only enabled machines to dispense cash; it also allowed clerks to work out what extra financial products customers might be interested in and process applications for them. One way to think about the impact of technology is by categorising the tasks involved in any job between cognitive and manual on the one hand, and routine and non-routine on the other hand.This explains a pattern that has become common in the labour markets of advanced economies in recent decades, whereby there has been growth in employment at both the top and the bottom of the spectrum but a hollowing-out in the middle.
  4. MANY of us have found ourselves trying to explain to friends and colleagues that, no, business travel isn’t as fun and glamorous as it seems.The study, which synthesises existing research on the effects of frequent travel, finds three types of consequence: physiological, psychological and emotional, and social. The physiological ones are the most obvious. Jet lag is the affliction travellers know best.Then there’s the danger of deep-vein thrombosis, exposure to germs and radiation—people who fly more than 85,000 miles a year.Frequent flyers experience “travel disorientation” from changing places and time zones so often. They also suffer mounting stress, given that “time spent travelling will rarely be offset through a reduced workload.Finally, there are the social effects. Marriages suffer from the time apart, as does children’s behaviour.

Economist 8/12/15

  1. Australia’s Liberal-National coalition, in power since 2013, has slashed renewable energy targets and repealed carbon and mining taxes. . Mr Abbott, a proud climate-change sceptic, believes coal is “good for humanity”—convenient given how much of the stuff Australia has as the world’s fifth-largest producer.  But the country is already suffering thanks to climate change from manmade emissions: seven of the hottest ten years there have occurred since 1988. Australians emit more carbon per person than do residents of Saudi Arabia, Canada and America.
  2. RICO Racketeer Influenced and Corrupt Organisations Act can be used against anyone alleged to have been part of a criminal enterprise—defined as anything from a small, loosely connected group of individuals to a huge firm—that commits a “pattern” of racketeering activity. The list of “predicate” (underlying) crimes that count towards a pattern is long, and includes mail and wire fraud—potentially ensnaring anyone who sent an e-mail or made a phone call linked to the alleged activity.RICO’s attractions are that it is broad and powerful. It carries prison terms of up to 20 years and offers a way around statutes of limitations: as long as prosecutors can show that at least two people committed one of the many predicate offences, no matter how minor, the statute of limitations for all other offences connected to it, stretching back years, is in effect waived.The flow of criminal RICO cases has been slow and steady. These mostly focus on drugs, gangs and public corruption.
  3. Narendra Modi’s government in India signed an agreement on August 3rd with the main Naga insurgent group, the National Socialist Council of Nagaland (NSCN) to end a bloody ethnic insurgency in the remote north-east of the country.Most of the serious fighting in Nagaland, a state of about 2m people, ended in 1997, when guitar-strumming rebels agreed to a ceasefire and quit guerrilla life in the forest for comforts in town, where many are lauded like rock stars To clinch a deal the ageing and frail NSCN leaders, many in their 80s, have presumably softened long-held demands and been rewarded with promises of political positions inside Nagaland itself, along with plenty of central-government cash. Whether the rumbling conflict is really over now depends on reactions from smaller insurgent outfits, especially a breakaway Naga faction, the NSCN-Khaplang. It draws much of its support from Nagas living across the border in Myanmar and has good relations with the government there. India’s intelligence agencies previously backed it, to weaken the main insurgency, but in March it broke the ceasefire and in June ambushed an army convoy near the Myanmar border, killing 18 soldiers.
  4. FAME, glory, and a modest academic salary can all be yours if you write a major study. It is crucial to understand the process of discovering an important result. Humans have a useful but unreliable tendency to find patterns amid meaningless noise.As one guard against researchers making a mountain out of a molehill, each of the statistical relationships that scientists publish in their papers comes with a “p-value” attached. This is the probability of a false-positive finding—the likelihood, if the scientist were to run their chosen statistical test on random data with no underlying pattern, that the test would turn up positive regardless. A lower p-value is better, as this makes it less likely the pattern came about for no reason. A simple way of debunking any paper is to recalculate the results of the original tests (a “strict replication”), hoping to spot an error in either the original calculation of a correlation or the p-value. The “power”, or sensitivity, of a test is the likelihood that it sniffs out a positive relationship when one is actually there. Higher power is better. One method the medical researchers used in their replication was to cut a large two-year sample of test subjects into two one-year samples. This reduces the sample size, which gives the test less information to go on. This, in turn, reduces the power of the test, meaning that a greater number of positive relationships can sneak by undetected.

Economist 8/11/15

  1. There is ample circumstantial evidence of the damage Uber has wrought on New York’s yellow-cab industry. The average price of one of the city’s 13,771 medallions (licenses to drive taxis) has fallen from an average of $1m during the summer of 2014 to $690,000 over the past three months, an aggregate loss of some $4 billion of value.The best news for the Uber camp is that the advent of its service has coincided with a significant increase in the total number of rides in New York. Although Uber has not shared statistics for 2013, a leak to Business Insider last year revealed an average of 140,000 Uber trips per week in the city during December 2013. Assuming a steady compound growth rate during the past two years, that suggests that there were 333,000 Uber rides in June 2013. Adding that to the 14.4m yellow-cab trips that month yields a total of 14.7m. In contrast, by the same month of this year, the combined sum for Uber plus traditional taxis was 15.8m. This 7.5% increase in two years makes clear that the market is not zero-sum.However, the figures also suggest that the majority of Uber’s growth has come from substituting for taxis rather than from complementing them. While Uber expanded approximately tenfold over the past two years, from a bit over an estimated 300,000 rides in June 2013 to 3.5m in June 2015, yellow cabs’ hail volume has fallen by 2.1m during the same period.
  2. A recent spike in the number of migrants in Calais attempting to clamber onto trains or lorries bound for Britain has spooked politicians on both sides of the water. Fences have been erected and extra police dispatched. The estimated 3,000 people in the camp amount to between 1% and 2% of the illegal immigrants who have reached the European Union by sea this year alone. The few hundred that try (and usually fail) to sneak across the Channel each night pale next to the numbers of illegal immigrants in Britain who have overstayed their visas. But the dramatic images suggest that politicians are not in control of their own borders, a message toxic enough to force changes in government policy.many migrants will take big risks to reach one European country over another.As they slipped through rich countries with an obligation to consider asylum claims, refugees in effect became economic migrants.
  3. THE civil war in Yemen, in which a Saudi-backed coalition has been battling Iranian-supported Houthi rebels, took a new twist this week. On August 2nd the coalition landed at least one armoured brigade at the southern port of Aden.Two days later, bombarded from the air and heavily outgunned, the Houthis had fled into the surrounding hills and pro-government forces were back in charge of the strategically important base.Despite official claims that the Saudi and UAE forces are only there to help train local anti-Houthi fighters, there is little doubt that the high-tech weaponry is being operated by professionals. They are being helped by tribal fighters who support the internationally-backed government that the Houthis drove out.
  4. DO FRIENDS of the opposite gender distract teenagers, hampering their academic performance? It may seem obvious, at least to paranoid parents, and yet it is hard to prove. Simple analysis of a survey of American schoolchildren conducted in 1995, for example, suggests no link between the proportion of a girl’s friends who were boys and her grades. Boys with lots of female friends actually achieved better results than those with fewer.A new paper* by Andrew Hill of the University of South Carolina, however, digs deeper into the data, and comes to a different result.He finds that for every 10% more children of the opposite sex among a student’s friends, his or her grade-point average (GPA) declines by 0.1 (GPAs range from 0 to 4).Below the age of 16, the effects are restricted to science and maths, but beyond 16 they spill over to English and history as well. Girls seem to be more prone to distraction, though Mr Hill cannot muster the statistical power to be certain. This tentative result is consistent with other studies that find that girls gain more from moving to single-sex schools.