One of my goals for the remainder of 2020 – and beyond – is to become truly fluent in Mandarin. I’d say I’m somewhere between an HSK5 to HSK6, which is to say, I can chat conversationally just fine, and read at around a middle school level, but put a business presentation or bestselling novel in front of me and I’ll break into a sweat – both literally and figuratively. It would be nice to finally get rid of all that Mandarin anxiety :-)
So for starters, here are some inspirational Chinese quotes from Weibo that I’ve translated for fun:
如果你认识从前的我，那么你就会原谅现在的我。—— 张爱玲
Translation 1: If you understood me then, you would forgive me now.
Translation 2: If you understood who I’ve been, then you’d forgive who I’ve become
无论什么困难的事，只要硬着头皮去做，就闯过去了。—— 林海音
No matter the task, just lower your head and rush right through it.
一个人出生了，人们并不知道他的未来，却说：恭喜恭喜。一个人死去了，人们并不知道死去后的世界却说：可惜可惜。—— 三毛
When a child is born, no one knows his future, yet we say: What good fortune! When a man dies, no one knows where his soul goes, yet we say: What a pity.
你在乎谁，你说了算。谁在乎你，你说了不算，时间说了算。—— 郑执
Translation 1: You control who you care about. Fate controls who cares about you.
Translation 2: Who you care about is up to you. Who cares about you is left to fate.
I’ll try to share a post like this every week, it’s an opportunity for me to organize and review my notes from what I’ve watched/read/listened to over the past week. Here is the first installment from last week.
My favorite information mediums right now are podcasts and online articles (queued in Pocket), followed by ebooks (Kindle) and YouTube.
First, some art:
The piece is called Sunshine, by Hiroshi Nagai.
—
Ark’s new paper on “Bitcoin as novel economic institution” [download here]
During the last 10 to 15 years, countries have been increasing capital controls rather than decreasing them. Since 2007, the share of countries increasing capital controls has soared 300% to 15%, while the share of countries reducing them has dropped 60% to 5%,
In the last century, three monetary policy changes cascaded, cutting the purchasing power of almost half of the world’s currencies by 50%: the creation of the Federal Reserve in 1913 and Europe’s decision to abandon the gold standard in 1918, the US shift from the gold standard to the gold-exchange standard in 1933, and US abandonment of the gold exchange standard in 1971.,
Moreover, in the US today the minimum reserve requirement for deposit institutions is zero. Indeed, since 1995 the average bank reserve requirement globally has dropped by nearly 80%,
Lowercase ‘b’ bitcoin, the asset, is a standardized unit of value embedded in the network. Its value acts as the signaling mechanism that aligns network stakeholders. In some ways, we believe it is the purest form of money ever created:
Since its creation, Bitcoin has settled more than $2.5 trillion in transactions, as shown in Figure 8, the average size of which has been $2,000.
…eagerly awaiting Ark’s part 2.
If you want a better understanding of the global economy and how it relates to your own investment decisions, you can’t do better than Lyn Alden. I’ve been binging her newsletter and writings and podcast appearances. Here are some excerpts:
here is how the Bank of England defines QE on their website, in case we want to hear what the Brits would call it: “Money is either physical, like banknotes, or digital, like the money in your bank account. Quantitative easing involves us creating digital money. We then use it to buy things like government debt in the form of bonds. You may also hear it called ‘QE’ or ‘asset purchase’ – these are the same thing.”
Currently, the U.S. has about $1.8 trillion in currency in circulation and $16 trillion in broad money supply (which also includes checking accounts, savings accounts, CDs, all sorts of digital cash and cash-like assets).
Russia, for example, is buying massive amounts of gold year after year, including buying straight through their 2015/2016 recession. They’ve increased their gold reserves by 5x over the past decade, from 400 tons to 2,000 tons
Historically, the bond market has been the “smart money” because it is largely driven by institutional investors rather than retail investors. It tends to be more focused on near-term math than on emotion or long-term projections, and as such tends to front-run the equity market, at least in terms of major transitions.
There was a nearly four-decade period from the mid-1930’s to the mid-1970’s where buying and holding Treasuries was a fool’s errand, because they mostly lost purchasing power by failing to keep up with inflation. This was during a period of major long-term debt deleveraging and currency devaluation.
People in the middle of the global income distribution, whose incomes grew substantially, overwhelmingly lived in Asia, many of them in China. People farther to the right, who were richer than the Asians but experienced much lower income growth rates, mainly lived in the advanced economies of Japan, the United States, and the countries of western Europe. Finally, people at the far right end of the graph, the richest one percent, enjoyed high income growth rates much like those in the middle of the global income distribution.
As measured by the Gini coefficient, which ranges from zero (a hypothetical situation in which every person has the same income) to one (a hypothetical situation in which one person receives all income), global inequality fell from 0.70 in 1988 to 0.67 in 2008 and then further to 0.62 in 2013
High growth in China, in global terms, is ceasing to be an equalizing force. Soon, it will contribute to rising global inequality. But India, with a population that may soon surpass China’s and is still relatively poor, now plays an important role in making the world more equal. In the last 20 years, China and India have driven the reduction in global inequality. From now on, only Indian growth will perform that same function
If China’s growth continues to exceed Western countries’ growth by two to three percentage points annually, within the next decade many middle-class Chinese will become wealthier than their middle-class counterparts in the West. For the first time in two centuries, Westerners with middling incomes within their own nations will no longer be part of the global elite—that is, in the top quintile (20 percent) of global incomes. This will be a truly remarkable development. From the 1820s onward—when national economic data of this kind were first collected—the West has consistently been wealthier than any other part of the world
Thought provoking tweet from Brian Roemmele (his account drops similar thought-provokers on a daily basis):
Consider one Venus day is longer then one Venus year.
One year on Venus is equal to 224 Earth days. And one day on Venus is equal to 243 Earth days.
Venus is also the only planet in our solar system that rotates backwards thus the sun rises in the west and sets in the east. pic.twitter.com/RSxrgVC463
Apparently, negative emotions can be useful if we believe they’re useful:
The team found that the link between negative mental states and poor emotional and physical health was weaker in individuals who considered negative moods as useful. Indeed, negative moods correlated with low life satisfaction only in people who did not perceive adverse feelings as helpful or pleasant.
Their best performing pieces are explainer-y pieces eg how to structure a cap table; insane shelf life but also a lot of planning and work
Really important to write about current events because that’s what gets attention and gets shared.
If you have a broader point, connect it to a news story that’s happening right now
It’s about the “newshook” – the key news event that happened (eg, Tesla shares soared 20% after stock split; father of three killed in 4-way crash)
Are we presently in a fourth turning? Howe and Strauss observe that American history shows a new era, or “turning” about every 20 years. In simplest terms, the “First Turning” is an upbeat era of strengthening institutions. The “Second Turning” is an awakening, a passionate era of spiritual upheaval, when the old order comes under attack. The “Third Turning” is an unraveling — a time when individualism is strengthened and institutions are weakened. The “Fourth Turning” is a crisis, a decisive era of secular upheaval — the old order is toppled and a new one put in its place.
The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined
“That’s a kind of ugly secret of the American labor market,” David Autor, an economist at MIT, told me. “Part of the reason our unemployment rates have been low, until recently, is that a lot of people who would have trouble finding jobs are on a different program.”
Real estate investor with large YouTube following believes a housing crash is coming in 2021. Here are my notes on his reasons why:
1. There was a temporary supply decline during the pandemic, but a lot of supply is coming back now
2. Interest rates can’t get lower
3. There are millions with no or reduced jobs
Lastly, he believes property taxes will increase in most metros
Deep nonfiction takes longer to absorb, and math books take years. I love the act of turning pages when I’m reading a novel; when I’m studying a math book I might need to spend several weeks on one paragraph.
It’s easier to “bridge” science and art when you don’t really think there’s a gap between them in the first place, as I don’t. The boundaries between subjects are really artificial constructs by humans, like the boundaries between colors in a rainbow.
Improve your posture, improve your teeth? from the NYT If you’re wondering why a dentist cares about ergonomics, the simple truth is that nerves in your neck and shoulder muscles lead into the temporomandibular joint, or TMJ, which connects the jawbone to the skull. Poor posture during the day can translate into a grinding problem at night
From The Confessions of an Economic Hit Man, which I am enjoying in spite of its depressing revelations: Creating an easy-to-learn language had been President Sukarno’s highest priority after Indonesia won its independence from the Netherlands. More than 350 languages and dialects are spoken throughout the archipelago, and Sukarno realized that his country needed a common vocabulary in order to unite people from the many islands and cultures. He recruited an international team of linguists, and Bahasa Indonesia was the highly successful result. Based on Malay, it avoids many of the tense changes, irregular verbs, and other complications that characterize most languages.
“Capital is teleological, it has goals, and it’s goal is to increase capital”
Humans are really good at enslaving others, which is why we also fear AI will enslave us (in other words, we are projecting)
After watching, I immediately queued several of his YT talks.
Reed Hastings interviewed on The Economist podcast:
Netflix key metric is the ratio of total-time-watched-to-cost
Has $15B in debts
Added 30M subscribers in 1H2020
Question he likes to ask: Is the internet going to grow or shrink in next 20 years?
Admire and fear Disney, it’s streaming service grew to 60M subscribers in first year, it took Netflix 12 years
—
That’s it folks. All typos and misrepresentations are 100% mine! Here’s the first random notes post if you like informational potpourri. Til the next one!
The book is This Time Is Different by Carmen Reinhart and Kenneth Rogoff [Amazon link].
Couldn’t help but share some passages that sound like they could have been written about our present situation.
—
Highlights (taken verbatim)
It is notable that the nondefaulters, by and large, are all hugely successful growth stories. This begs the question “Do high growth rates help avert default, or does averting default beget high growth rates?” Certainly we see many examples in world history in which very rapidly growing countries ran into trouble when their growth slowed.
If old people hold most of a country’s debt, for example, why don’t young voters periodically rise up and vote to renege on the debt, starting anew with a lower tax for the young at the cost of less wealth for the elderly?
Although many now-advanced economies have graduated from a history of serial default on sovereign debt or very high inflation, so far graduation from banking crises has proven elusive. In effect, for the advanced economies during 1800–2008, the picture that emerges is one of serial banking crises.
…equity prices typically peak before the year of a banking crisis and decline for two to three years as the crisis approaches and, in the case of emerging markets, in the year following the crisis. The recovery is complete in the sense that three years after the crisis, real equity prices are on average higher than at the precrisis peak. However, postcrisis Japan offers a sobering counterexample to this pattern, because in that country equity prices only marginally recovered to a much lower peak than the precrisis level and have subsequently continued to drift lower.
What is perhaps surprising is how dramatic the rise in debt is. If the stock of debt is indexed to equal 100 at the time of the crisis (t), the average experience is one in which the real stock of debt rises to 186 three years after the crisis. That is to say, the real stock of debt nearly doubles. Such increases in government indebtedness are evident in emerging and advanced economies alike, and extremely high in both. Arguably, the true legacy of banking crises is greater public indebtedness—far over and beyond the direct headline costs of big bailout packages.
When a country experiences an adverse shock—due, say, to a sudden drop in productivity, a war, or political or social upheaval—naturally banks suffer. The rate of loan default goes up dramatically. Banks become vulnerable to large losses of confidence and withdrawals, and the rates of bank failure rise. Bank failures, in turn, lead to a decrease in credit creation. Healthy banks cannot easily cover the loan portfolios of failed banks, because lending, especially to small and medium-sized businesses, often involves specialized knowledge and relationships. Bank failures and loan pullbacks, in turn, deepen the recession, causing more loan defaults and bank failures, and so on.
First, inflation has long been the weapon of choice in sovereign defaults on domestic debt and, where possible, on international debt. Second, governments can be extremely creative in engineering defaults. Third, sovereigns have coercive power over their subjects that helps them orchestrate defaults on domestic debt “smoothly” that are not generally possible with international debt. Even in modern times, many countries have enforced severe penalties on those violating restrictions on capital accounts and currency. Fourth, governments engage in massive money expansion, in part because they can thereby gain a seignorage tax on real money balances (by inflating down the value of citizens’ currency and issuing more to meet demand).
(The reader will recall that fiat money is currency that has no intrinsic value and is demanded by the public in large part because the government has decreed that no other currency may be used in transactions.)
Here are notes in no particular order and with no particular focus, just random things I’ve learned and wanted to share, from all the content I’ve recently consumed.
—
David Perell with the mind bombs:
There's a 2-month gap between Election Day and Inauguration, and it started because before there were trains, the new President needed that time to travel to Washington D.C.
Property taxes will rise; low hanging fruit and much needed revenue for cash-strapped governments
Plenty of opportunities during this recession: Airbnb and Uber were started in the last one
Believes campus real estate will be a great investment once universities begin to shutter or reduce their footprint
From the book Nature’s Mutiny: The improvisational, free form of the essay, which Montaigne invented for himself, was the ideal vehicle for observations not only of the world around him but also of himself and his own thoughts, without pressing them into a fixed system or any grand thesis. For Montaigne, good questions were more important than good answers, and he was mainly interested in describing and understanding the fabric of his own life. “It is many years ago,” he wrote, “that I set myself as the only goal of my thinking and that I am not looking at anything or investigating anything but myself.”
I started using Quad9 as my primary DNS after reading this article: The total winner of this test is Quad9. Blocking 96% of everything I tested in this review. All 12 phishing domains where block and only one malware domain did it let go through. Very impressive results!
Largest organism in world is mycelial network in E Oregon, 200 acres, 1 cell layer thick
Fungi generate soil
Stoned Apes theory: pre Homo sapiens 200k-2m years ago wandered plains hunting, found psychedelic mushrooms in poop of large mammals / prey, ate them, and stimulated neurogenesis
Takes psychedelic mushrooms 1-2x each year
Lions mane – stops / slows dementia, promotes neurogenesis
Interestingly low dose psilocybin led to faster behavior change in mice than high dose (the behavior change was to dissociate bells from shocks, to remove a learned fear response
From the BBC on why and how people disappear in Japan and start new lives:
In Japan, these people are sometimes referred to as “jouhatsu”. That’s the Japanese word for “evaporation”, but it also refers to people who vanish on purpose into thin air, and continue to conceal their whereabouts – potentially for years, even decades.
Lately I have been trying to share interesting lists / frameworks that are like training wheels for fast learning. Here is a Ray Dalio example. I refer to these lists often in my anki practice.
Dieter’s 10 design principles are taken from a speech he gave in New York in 1976. You can tell he reduced and reduced his decades of learning until what remained were truly the concentrated principles of an incredible career designing for iconic brands (like Braun, which later influenced Apple and in particular, Jony Ive) and contributing to famous movements (like Bauhaus and the Ulm School).
—
Dieter Ram – 10 principles for good design
1. Good design is innovative
2. Good design makes a product useful
3. Good design is aesthetic
4. Good design makes a product understandable
5. Good design is unobtrusive
6. Good design is honest
7. Good design is long-lasting
8. Good design is thorough down to the last detail
9. Good design is environmentally friendly
10. Good design is as little design as possible
—
You could go through and replace every [Good design] with a [Good work] or a [Good thinking] and the principles remain powerful. I love the repetitive structure too.
The book is This Time Is Different by Carmen Reinhart and Kenneth Rogoff [