Month: May 2015
Yes, it is a good idea to patronize the small restaurants on the outskirts of the hutong, but here is another tip. Go to the very fanciest restaurant possible, in a fancy five-star hotel. Then order the cheapest items on the menu. That likely will involve some vegetables (pumpkin in egg, anyone?), tofu, and fried rice. It will be an amazing meal, quite possibly better, at least to a Western palate, than if you had ordered the most expensive delicacies of that restaurant. Many of these courses will not exceed $10 per shot, which is still about at American prices or even slightly below, and that’s not adjusting for massive differences in quality. If you feel you can afford more than that, fine, but the low budget constraint actually directs your attention to some pretty fine items, and to items which are never truly good in American Chinese restaurants.
I’ve had good street food in Beijing, but in my view it is neither your first nor even your second preferred option.
Truckmaker Freightliner’s newest commercial big rig can steer and drive itself, while the driver relaxes and enjoys the ride. No, I’m not talking about Autobot Ultra Magnus. It’s the Freightliner Inspiration Truck, the first ever self-driving commercial truck to receive a road license plate for autonomous operation on public highways.
The system, called Highway Pilot, operates like the autopilot on a commercial airliner. Once set and underway the system can maintain a cruise without the driver’s intervention. Highway Pilot uses stereoscopic cameras located at the front end of the truck that watch the road ahead for roadside signage, lane markers and other vehicles.
This 3D imagery is fed into the Inspiration Truck’s electronic brain, which then affects the electric steering rack, the drive-by-wire throttle and the automated manual transmission to keep the truck between the lines and a safe distance behind a leading vehicle.
It is not yet a fully autonomous vehicle:
Speaking of the human element, the Inspiration Truck still requires that a driver be in its driver’s seat. A person needs to get the truck moving from a stop, handle complex low-speed maneuvers and to monitor autonomous drive.
Freightliner tells us that the system will notify the driver with visual and audible cues in the event that conditions won’t allow confident autonomy (such as snow, rain or on roads with poorly defined lane markers) and a human is needed to take over. When driving conditions are optimal, however, and the road stretches out ahead, the Inspiration Truck’s driver can set the Highway Pilot and tend to other parts of the business of logistics.
There is more here.
3. “Austerity evidently killed GDP, but not the labor market. That’s a very interesting hypothesis, but I’m wondering which textbook theory is consistent with it?” That’s the UK, folks.
5. Not a surprise, but a clarification: the U.S. won’t give up what is in effect its IMF veto.
6. Olivier Blanchard is leaving the IMF for the Peterson Institute. And Piketty will be joining LSE, it seems.
7. UberCopter, pretty cheap, considering…
What if, circa 2007, the Fed had figured out what was going on and wanted to take some concentrated steps to save the day? Well, that is the position China is in today, and they are acting fairly decisively:
China is imposing a $160bn municipal bonds for debt swap on banks in an effort to shift some of the financing costs of cash-strapped local governments back to lenders…
Banks are supposed to swap out higher-yielding business loans in return for more municipal bonds, noting that banks owned about 63 percent of the outstanding municipal bonds to begin with. As a form of compensation, the central bank will accept these municipal securities as collateral for some of its special lending facilities. The policy is a mix of jawboning and inducement, in which exact proportions we shall see; there is further coverage here.
You can think of it as “we may expect you banks to share in some of the losses on this paper, but if push comes to shove we’ll just monetize the municipal debt and bail you out too.”
Rating agency Standard & Poor’s late last year estimated that half of all Chinese provinces would merit junk ratings…
These (non-transparent) municipal debts may exceed $3 trillion. And Christopher Balding, in his excellent post on all this, makes a very good point:
Especially with land revenue falling by more than 30% annually when it typically constitutes more than 50% of government revenue, the provinces’ ability to repay is highly suspect.
Some goals of the bailout are to keep the local governments up and running, and also building infrastructure, so that urbanization does not slow down. This is all being done in conjunction with a series of interest rate cuts, and there is likely yet more to come.
Balding adds this as well:
…the banks, after getting cash for the bonds as collateral from the PBOC, are being encouraged to lend out this cash to firms in favored industries. Given the drop in risk weighted capital from holding government as an additional benefit, this means that banks will have significant new capital to lend. The rapid rise in Chinese debt, which has even officially surpassed most developed countries, seems bound to rise even more. I can’t [help but] think that this seems like trying to sober up an alcoholic by buying him a beer.
…Here is hoping that deposit insurance will never be needed.
It will be very interesting to see how this goes, and so far these events remain a dramatically undercovered story. My net takeaway, to date, is that the finances of the provincial governments must be worse than most observers had thought.
My research convinced me that bounty hunters were an effective part of the American justice system so I have long favored using large bounties to find international terrorists. In 2008 the Washington Post argued that Bounties were a Bust in Hunt for Al-Qaeda:
So far, however, Rewards for Justice has failed to put a dent in al-Qaeda’s central command. Offers of $25 million each for al-Qaeda founders Osama bin Laden and Ayman al-Zawahiri have attracted hundreds of anonymous calls but no reliable leads, officials familiar with the program say. For a time, the program was generating so little useful information that in Pakistan, where most al-Qaeda chiefs are believed to be hiding, it was largely abandoned.
“It’s certainly been ineffective,” said Robert L. Grenier, a former CIA station chief in Pakistan and former director of the agency’s counterterrorism center. “It hasn’t produced results, and it hasn’t particularly produced leads.”
…the CIA did not learn of bin Laden’s whereabouts by tracking his couriers, as the White House has claimed since May 2011, but from a former senior Pakistani intelligence officer who betrayed the secret in return for much of the $25 million reward offered by the US…
I can’t evaluate Hersh’s larger claims but I find this part of the story plausible.
Addendum: The time I went bounty hunting in Baltimore.
Kyle York came up with a few, here is one of them:
There’s an out of control trolley speeding towards Immanuel Kant. You have the ability to pull a lever and change the trolley’s path so it hits Jeremy Bentham instead. Jeremy Bentham clutches the only existing copy of Kant’s Groundwork of the Metaphysic of Morals. Kant holds the only existing copy of Bentham’s The Principles of Morals and Legislation. Both of them are shouting at you that they have recently started to reconsider their ethical stances.
For the pointer I thank Dennis Boyle.
That is the new and very interesting piece by Tori Telfer, here is one bit:
The multiplicity community insists on being seen as healthy—even normal. This is our reality, they argue. Why are you imposing your reality onto us? Dissociative Identity Disorder (DID)—and its controversial precursor, Multiple Personality Disorder—are terms roundly rejected by the community, and most of them don’t feel that they belong in the Diagnostic and Statistical Manual (DSM) at all. It’s not that they don’t believe people can suffer from DID (or, more broadly, Dissociative Disorder Not Otherwise Specified [DDNOS]). They just don’t accept that they suffer from it. To them, all those with DID/DDNOS are multiple, but not all multiples are DID/DDNOS. Contrary to what a DID/DDNOS diagnosis implies, multiples want everyone in their system to be seen as people. Not fragments, alters, or personalities, but distinct individuals who happen to be inhabiting the same physical body.
About a year ago, Falah and Lark were joined by Steven and Rain; a few months later, Marcus, Santria, and Alyenor came along. “We are not openly multiple,” she says. “All of us disguise our behavior under one mask, one public persona, in essence appearing non-multiple to the outside eye and to most people we interact with. We’re able to share memories and communicate among ourselves internally, so it’s easy for us. We wear the mask well and look like your standard non-multiple STEM student, but it can be tiring to wear the mask.”
The piece is interesting throughout. “Hey, Buddy — are you trying to nudge all of us?”
Via Jasper Plan, Jonathan K. Pedde has a new paper on this:
Standard zero-lower-bound New Keynesian models generate large fiscal multipliers and expansionary negative supply shocks. Thus, according to these models, a political party that implements fiscal contraction coupled with policies to increase aggregate supply should unambiguously cause economic contraction, compared to a party that implements the opposite policies. I test this prediction using high-frequency prediction- and financial-market data from the night of the 2015 U.K. election, which featured two such parties. By analysing financial-market movements caused by clearly exogenous changes in expectations about the election winner, I find that market participants expected higher equity prices and a stronger exchange rate under a Conservative Prime Minister than under a Labour P.M. There were little to no partisan differences in interest rates, expected inflation, or commodity prices. These results cast doubt on the empirical validity of zero-lower-bound New Keynesian models.
And here is Noah on the UK, he is right, and I call this one pretty much settled.
The classical sales situation in the US has hit the pits. Aside from Andrea Bocelli, who trundles on at around 400 a week – cds and downloads combined – the best performer on Nielsen Soundscan was the Anonymous 4, chirping sweetly on a farewell tour with just 189 registered sales.
Sales are so bad that Hilary Hahn, at number 10, failed to clear 100.
There is more here, and for the pointer I thank Samir Varma.
NYTimes: While everyone welcomes Crispr-Cas9 as a strategy to treat disease, many scientists are worried that it could also be used to alter genes in human embryos, sperm or eggs in ways that can be passed from generation to generation. The prospect raises fears of a dystopian future in which scientists create an elite population of designer babies with enhanced intelligence, beauty or other traits.
Does the author really think that smart, beautiful people are a bad thing? Should we shoot the ones we have now? (It seems unlikely that we are at a local maximum).
Sometimes my fellow humans depress me. But I hope for better ones in the future.
For just a while? Keep in mind that an aging population still can be moving more people into prime working age:
Changes in demographics are an important determinant of economic growth, and although most people focus on the aging of the “baby boomer” generation, the movement of younger cohorts into the prime working age is another key story in coming years…
The prime working age population peaked in 2007, and appears to have bottomed at the end of 2012. The good news is the prime working age group has started to grow again, and should be growing solidly by 2020 – and this should boost economic activity in the years ahead.
On Sunday the Chinese central bank cut interest rates for the third time since November. I have read a number of pieces on this move, but overall am a little disquieted at how quickly people are comparing China to the Keynesian vision of the United States or for that matter Japan. I would stress a few points:
1. Many of China’s municipal governments are broke or close to broke, and in the meantime too heavily dependent on land sales and land leases for revenue. Lower rates are intended to help them refinance themselves. That is not opposed to a Keynesian or AD framework, but it is distinct from it.
2. The Chinese government is at the same time relaxing controls over deposit interest rates, so some interest rates in the economy will be going up. In other words, part of the problem is figuring out the optimal speed for removing financial repression, and in the process allowing to “shadow banking bubble” to deflate at an appropriate speed, all the while trying to keep deposits in the formal banking system.
2b. A lot of borrowers are paying effective nominal rates of six to seven percent — don’t you wish we had a better understanding of the true rate of price inflation in China? One policy goal is to get more loans to these businesses, but there the very real jawboning of the Chinese government may prove more effective than the interest rate cuts. But should those businesses get more loans?
3. In an Austro-Chinese, excess capacity model of the business cycle, there is a gain and a loss from cutting interest rates when an economy is well into the over-expansion phase. The gain is that you may mitigate the costs of the “secondary deflation,” as the Austrians call it. The cost is that you may overextend the excess capacity even further. That is a call the central bank must make, noting that the excess capacity model applies only with some probability.
4. “China’s imports also plunged 16.2 percent in April from a year earlier, a fall that economists attributed partly to low commodity prices and partly to weak demand within China’s economy.” I doubt if they are growing at a true seven percent, or even a “slightly below seven percent” figure.
5. For well over thirty years, the Chinese economy has lived in a world where both the AD and AS curves swing rather wildly (in a good way) outwards and to the right. Some of this is driven by migration to the cities, some of it is driven by trickle-down growth and the adoption of foreign technologies. Some of it may be driven by China’s own TFP, and for sure some of it is driven by policy reform. In any case, as long as that process continues, China is semi-immune to the standard Keynesian dilemmas — who needs to lower nominal wages when worker productivity and customer demand are rising so quickly? But does that ongoing outward real expansion it render them immune to Austro-Chinese business cycle theory as well? Sadly, Hayek never seems to have considered that problem, but it’s very much on my mind out here in Shaanxi.
1. Truly practical ethics. I love this piece.
6. The facts of economic growth (NBER).