Wednesday, September 30, 2020

Economics: Why China Will Pull The Global Economy Out Of Recession


(Drivebycuriosity) -  The world is still fighting the COVID-19 Pandemic. Rising numbers of new corona cases in Europe & the US  challenge the recovery of the global economy. Fortunately the situation in China is much better. The huge country reports daily just about 20 new cases (worldometers)!

 




source

 

China´s success on the corona-front allows the economy to recover faster than in the Western countries. Last night we learned that the Manufacturing PMI for China, which represents China´s industrial production, rose to 51.5 in September 2020 from 51 in the previous month and above market expectations of 51.2. "The latest reading pointed to the seventh straight month of growth in factory activity and the strongest since March as the economy recovered further from the COVID-19 shock" (tradingeconomics ).

 

The Non-Manufacturing PMI for China, which represents the service sector, increased to 55.9 in September 2020 from 55.2 a month earlier. "This marked the fastest growth in the service sector since November 2013 as the economy recovers further from the COVID-19 crisis" ( tradingeconomics).

 

 China NBS Manufacturing PMI
 




 

China Non Manufacturing PMI

 


(  source )

 

 China`s economic growth is accelerating because the negative influences from the pandemic are further abating - sooner than in the US & Europe.  China`s growth story is still intact, thanks to the secular catching-up process which is fueled by the still extreme income & wealth differences from the US and other Western nation standards, an ambitious & well educated population and ongoing economic reforms & huge investment into infrastructure ( driveby).

China`s economy is not yet big and strong enough to compensate fully the weaknesses in the rest of the world, but the recovery mitigates the global damage already and the country is getting stronger. I suppose that in the coming months China`s economy will gain more speed, helping the global economy even more.





Tuesday, September 29, 2020

Books: What I Have Learned From A 700 Page Biography About Queen Elizabeth I


(Drivebycuriosity) - Queen Elizabeth I belongs to the best known persons in history.  How did she become so famous? The biography "Elizabeth I" by Anne Somerset (674 pages  amazon) gives an impression.

Elizabeth suffered a traumatic childhood. She was 3 years old when her mother, Anne Boleyn, the second wife of Henry VIII,  got divorced and executed, what turned Elizabeth into a bastard, an illegitimate child. As she reached adulthood her life became endangered by her half-sister Queen Mary. The fundamentalist Catholic, known as "Bloody Mary", who had for a short time been been married with a Spanish prince, imported the Spanish inquisition to England and tried to burn all heretics, all people who weren´t fanatic Catholics like her.  Elizabeth, who was a member of the Protestant Church, founded by her father, was for some days thrown into the tower, which functioned as a prison, but Mary´s early death saved her finally. 

In the year 1958 Elizabeth succeeded her half-sister and became Queen of England in the age of 25. She inherited a messed up country caused by her half-sister`s religious fanaticism and an expensive war against France. Elizabeth struggled during her whole reign with military conflicts in or with Ireland, Netherlands, Scotland, France &  Spain. 

Elizabeth was immense popular and she returned the love of her subjects. Maybe her popularity was based on a pleasant personality. The Queen enjoyed the "bath in the crowd" and  liked to tease and to flirt. She indulged into elegant word plays, dancing, fashion & music and she promoted theater (including William Shakespeare). But the Queen also had her dark sides. She enjoyed bear-baiting (the animals got torn apart by packs of dogs) and other kinds of animal cruelty. The Queen responded extremely harsh to a rebellion in the year 1569. After the rebels' defeat, over 750 of them were executed on her orders. She executed even more people than Henry VIII or her half-sister Mary did after similar rebellions. Many rebels who escaped the execution were only pardoned after paying heavy fines. As a result of forfeitures, or the execution of breadwinners, many families have been rendered destute, and to wander about the countryside begging.

Elizabeth wasn`t a great politician. She often was irresolute & driven by emotions. She seemed to be obsessed with some of her favorites who got away with almost anything, including the Earl of Essex, who later in his career led a rebellion against her (for which he got eventually executed). The Queen frustrated her secretaries, advisers & councillors like William Cecil, 1st Baron Burghley, and Walsingham, by ignoring their advises or procrastinating her decisions sheer endlessly and often she changed her mind and canceled decisions. It seemed that she felt more enmity towards her councillors than she did against her arch enemy Philip of Spain. Walsingham noted that her displeasure with her leading advisers "hindered the necessary consiltation  that were to be desired for the preventing of the manifest perils that hang over this realm". Elizabeth´s indecision was partly caused by her frugality. She aimed to avoid high expenses - for example for military actions - which would have caused higher taxes (which in turn might  have supported her popularity).  

Her indecision influenced also her treatments of the sheer endless row of suitors and Elizabeth played games of invitation & refusal with a long list of princes, dukes & kings (including King Phillip King of Spain), almost like a teenage girl. But over the years she groomed more and more her reputation of being a virgin.

Elizabeth also was irresolute treating her cousin Mary Stuart, Queen of Scotland, who was a thorn in her flesh for many years by claiming to be the righteous Queen of England. The ambitious person had inherited genes of the Guises, a predatory and hyper-catholic French family, who was responsible for the bloodbath on the Huguenots ( a French group of Protestants). Mary had been for a short time also Queen of France by marriage with a French king, who died early. Later she was accused to be involved in a conspiracy to murder her second husband. She married an alleged accomplice in this murder case who has abducted and allegedly raped her. The mess she had created in Scotland forced her to flee to England where she stayed years in custody of Elizabeth. Mary continued there to conspire against Elizabeth, using her connections to the kings of France & Spain. For a long time Elizabeth hesitated and treated her cousin as an equal monarch but because of the growing dangers - caused by Maria´s continuous conspiracies - she reluctantly ordered her execution. 

Elizabeth`s regency - and England - benefited  of course form many others. Sir Francis Drake, who turned from being a pirate into an admiral, was most remarkable. He weakened the arch enemy Spain with his frequent raids on Spanish colonies like Panama and later on the Spanish coast. Drake sank many Spanish ships and extracted a lot Spanish possessions of gold, silver and other valuable which filled the war chests of England and her queen. Drake `s exploits helped boost the nation´s morale, and promoted a spirits of national self-confidence and pride in the skill and daring of English seaman that would do much to sustain the country in the coming struggle with Spain.

England was well prepared for the attack of the Spanish Armada.  Over years King Phillip had been bragging about conquering England and bringing the "heretic bastard" out of business. The formation of the huge fleet was not unnoticed and caused a lot preparations in England. The British developed ships which could move more flexible than the Spanish boats and the English canons had a longer reach so they could damage the Spanish fleet without being hit themselves. Thanks to these technological innovations the English fleet could harm the Armada considerably and just a small part of ships & soldiers could return to Spain. 

It is an open question of Elizabeth was either a lover of peace & harmony or weak & incompetent. She possessed certainly intelligence, charm and willpower and she had a lot luck by having a long life, strong health, support of competent people and being able to avoid to be assassinated or executed.

 


 

 

Sunday, September 27, 2020

Photography: Masks Are Cool





(Drivebycuriosity) - New York City is still fighting the Coronavirus pandemic. Fortunately a majority is wearing face masks to protect themselves and others. I think masks are not only a weapon against corona they also look cool. 

 



Suddenly appeared a new kind of street fashion which gives New York City an almost Asian look.





Most masks are white or bright blue but I also could spot black, red and other colors.

 






The masks turn the dire situation almost into something fancy & funny. 

 

Masks fit even with powerful heavy metal shirts, Yeah!

 




 

 Enjoy! 

Saturday, September 19, 2020

Media: Did Netflix Come Up To The Expectations?



(Drivebycuriosity) - The rise of Netflix was greeted with much enthusiasm. Economists tried to explain the business model of Netflix and other online companies. They believed that Netflix, Amazon & Co. will make a lot of money by selling a huge variety of movies, books and other items. Theoretically e-commerce companies can offer their products & services worldwide which gives them a huge advantage. If for instance there are worldwide just 1,000 potential buyers for a specific DVD, book or other item than it doesn`t make sense for a traditional shop to store this item. But Netflix and other global operating companies can reach the full demand. Therefore online companies can make a lot money by selling rarities which have just a few potential buyers. This phenomena is described by the Long-Tail chart below.

 



 (  source)

 

On the left side of the chart are the bestseller & blockbuster items, moving farther to the right side are items which have a much lesser demand. Traditional shops focus on the items on the left side which have a high chance to be sold. Netflix & Co. can sell items on the far right side, the Long Tail. These items can add up to a huge revenue & profit (the space below the curve) even each item has a very low demand. Customers (consumers) also benefit from Netflix & Co. because the online companies give them a huge variety and they cater for almost any taste.

Did Netflix come up to the expectations? Nope!

Today Netflix´s catalog is disappointingly small, there are not many movies from the Long Tail. Many important films are not available. I miss cult classics like Bertolucci´s "The Dreamers" (starring Eva Green) and the British new wave film "Long Good Friday" (with Helen Mirren). There is a very long list of not available films on my Netflix queue ( a kind of Long Tail) including "The Man who fell to Earth" (with David Bowie), "Bad Lieutenant: Port of Call New Orleans" (directed by Werner Herzog), "The Tenant" (directed by Roman Polanski), "Copycat" (Sigorney Weaver & Holly Hunter), "Ran" (directed by Akira Kurosawa), "The Lady from Shanghai" (directed by Orson Wells), "We own the night" (with Joaquin Phoenix, Mark Wahlberg & Robert Duvall) and many more. The expected Long Tail effect did not realize on Netflix.

Apparently the management lost the interest in movies which are not blockbusters. Netflix spends $ millions on deals with "The Obamas" and "Harry & Meghan", but less on rare movies. I think this is caused by the attention effect. Those who worship the Obamas or Harry & Megan don´t care about rare movies and they might never have heard of Orson Wells, Kurosawa or Roman Polanski. What a shame!

PS On the top you can see Helen Mirren in "The Long Good Friday"


Wednesday, September 16, 2020

New York City: The Architecture Of Outdoor Dining



 (Drivebycuriosity) -  New York City is still fighting the Covid-19 pandemic.  Restaurants, cafes & pubs are not permitted to offer indoor services, but the administration permits outdoor dining. The city closed some streets - or segments of them - for car traffic and  reserves a lot of space for tables & seats, at least on weekends. 

 



Those innkeepers who are fortunate enough to have access to enough outdoor space can replace a lot of their lost indoor business. The dives in my Lower East Side neighborhood seem to be booming, apparently fueled by the generous government checks.

 


In the recent months restaurant and pub owners have been busy and ingenious to use their outdoor capacities. Many created new outdoor facilities which changed the face of the city. Many streets look very different and remind me of South Europe. I collected a lot images in Manhattan neighborhoods the Lower East Side, East Village & Soho which I represent here. 

 







Some used a lot of plants and created kinds of mini gardens.








I also like the colorful umbrellas. Looking on them raises my mood.


 

This one engaged some artwork.

 



Others displayed some patriotism.

 





 

Enjoy!




 

Friday, September 11, 2020

Books: Spring Into SciFi 2019 Edition


(Drivebycuriosity) - I like science fiction. Unfortunately most science fiction novels disappoint. Often a writer has an interesting idea which carries a story about maybe 100 pages or less, but when she stretches the plot the story gets thinner and thinner and the text has too many fillers.  Just a minority of authors is capable to keep the tension over hundreds of pages. Therefore I usually skim collections of science fiction short stories in order to find some gems.

I just finished reading the anthology "Spring into SciFi" 2019 edition ( amazon). The collection contains 13 short stories by different authors. There are 4 gems at least:

 

"Pause" by Sam Fletcher. A family has a device which can pause time, but it can be used once in lifetime. The user can move freely around over 24 hours her personal time, while everything else is frozen. There are almost infinite ways to use this device and sometimes it can be extremely valuable. Do the protagonists waste this chance? A thrilling little fairy tale about a fascinating philosophical topic.

"Agents of Evolution" by Elizabeth Hosang. An intelligent software program, which works as an autonomous search agent on the Internet, got the order to find another intelligent program, a military logistics agent, which got lost on the World Wide Web. The story is told in first person by the AI, who painstakingly explains all the barriers it had to cross. A fascinating glance into how an AI might think and shows what hard science fiction can deliver these days.

"The Candle In the Window"  by Andrew Sweetapple. The plot begins as a kind of old fashioned adventure story but turns suddenly in something very futuristic. Amazing!

"The Price of Genetic Potential" by Alex Minns. Another piece of hard science fiction. Here a young woman has a fascinating but disturbing ability. 


I also liked "Sea Change" by Terry Sanville. A man who lives on the beach has an interesting encounter. I had problems with the ending, but Sanville can write and kept me a while on the edge. Good enough for a short story.

"Black Eyes, Luminous Monsters" by Joanna Maciejewska, a tough piece of military scifi where humans fight slimy alien monsters. Not my favorite plot idea again, but well described.

The rest of the stories may cater different tastes. In the moment of writing the Kindle version costs just $3.99 - a bargain.



Tuesday, September 8, 2020

Stock Market: No, Whales, Dolphins Or Mermaids Did Not Cause The Tech Rally - An Economic Explanation


(Drivebycuriosity) - 
Technology stocks are suffering another sudden meltdown, one of so many in their history. The media found a culprit for the rout - a "whale". The journalists of the Wall Street Journal and other media outlets refer to Softbank, a giant Japanese investment conglomerate (cnn). According to the media the Japanese "whale" caused the recent rally in tech stocks by purchasing options on tech stocks in the value of $50 billion dollar. If we believe the journalists the immense mass of options pushed tech stocks to record highs and these push is now tapering off. Apparently some big players used the huge gains since March as an invitation to take some money from the table. As usual many fund managers and others followed. Professional portfolio managers, including administrators of large funds, usually act as a herd. When their bros are selling they are selling too which amplifies the stock market movements.

The big whale theory is unfounded. The recent tech rally is based on fundamental factors. Tech stocks have been climbing since 2008 driven by a phenomena known as "software is eating the world" (a16z). Marc Andreessen described the rapid advance of information technology, meaning combinations of computers, smartphones, Internet and other digital systems which have been making businesses and our daily life more efficient, productive and convenient. 

The fundamental drivers for the tech rally accelerated since March this year because of the corona crisis. Internet - and other software applications - are helping everyone to deal with lockdowns and social distancing. Microsoft`s CEO Satya Nadella said that “two years of digital transformation took place in two months” ( microsoft ). The Ceo of Bill.com, an online service, said: "We believe the ongoing pandemic has accelerated the need for businesses to focus on digital transformation” (seekingalpha).   

The Covid Pandemic changed many habits. The crisis forces many people to work, learn, shop, educate & entertain from home which is fostering digitization and raising efficiency & productivity of the economy ( driveby ). Online sales worldwide are surging, more people are working from home, they are binge watching Netflix & Amazon Prime, listening via Spotify, reading Kindle books, surfing Facebook & Twitter and businesses are running more & more on cloud computing. Not only consumers are changing, corporations adapt as well. We are witnessing an accelerated shift toward digital technologies that are faster, less expensive, more productive and raise creativity. Many Internet companies reported jumping earnings & revenues and Amazon`s sales growth accelerated to 40% and Zoom, an Internet video company, is growing about 200% annually.  

It is unlikely that corporations & consumers will return to their old behavior when the corona crisis is over. The advantages of the information sector are too big and they are growing fast, eating more of the world. People love e-commerce, Internet entertainment & communication and companies need more & more information technology to be competitive in a swiftly changing world.  These fundamentals were - and will be - reflected in the rally. I am convinced that the tech rally will resume soon and the players will come back - wale or not.