Science Fiction: The Harvest By Olga Werby

 (Drivebycuriosity) - Are there other intelligent beings in our universe? Many science fiction writers speculate about possible encounters with aliens and their artifacts. I just finished the novel "The Harvest" by Olga Werby ( amazon). The Plot: Dr. Varsaad Volhard, a scientist with expertise in evolution, is part of a crew who travels to the Saturn moon Mimas, where astronomer had discovered an alien artifact (this is a spoiler free blog).

"The harvest" is a very ambitious work. It`s hard science fiction in the tradition of Heinlein & Asimov, based on logic and scientific thinking. The author got her B.A. from Columbia University in Mathematics and Astrophysics, worked at NASA on the Pioneer Venus Project as a programmer and received her masters from U.C. Berkeley in Education of Math, Science, and Technology. 

The book shows Werby`s scientific background & expertise and integrates a a lot sciences, including evolution, molecular biology, genetics, quantum physics,astrophysics, into a convincing and entertaining plot. 

 I learned a lot and reading "Harvest" influenced my thinking about how a possible encounter with aliens could happen and what intentions they might have. If you are interested in this topic I recommend Liu Cixin`s amazing trilogy "The Remembrance Of Earth`s Past" (my review ). "The Tabernacle Of Legion" by Kevin Schillo is also an interesting take on this subject ( review).
 

I might read more by Olga Werby someday. 

Covid-19: How Is Great Britain`s Vaccination Gamble Going?

(Drivebycuriosity) - It seems that Great Britain is gambling. The British started to vaccinate their population against Covid-19 like many other countries. But they have a different strategy. The US, the European Union and others follow the recommendations of the pharma companies and vaccinate people twice in a short time span. Pfizer-BioNTech recommends giving everyone 2 doses - the second 21 days after the first, Moderna recommends injecting the second dose 28 days after the first and Astra Zeneca talked about 6 weeks.

Contrary to the rest of the world, the British, who use Astra-Zeneca & Pfizer-BioNTech, practice a First-Dose-First strategy (F-D-F). They are delaying the second dose some months. This way they can vaccinate twice the number of people. The tables below show that the UK already dispensed 30 doses per 100 people and 29% of the British received  the first dose. The US injected 22 doses per 100 people and 15% received already the first dose. So, the UK vaccinated more than twice people per hundred so far.

 

 

 

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New findings support the British strategy. It turned out that AstraZeneca works better when the second dose is injected after three months (not just after four weeks spiegel.de). According to AstraZeneca a longer waiting time raises the efficacy by 80% (papers ). The Covid-19 vaccine developed by Pfizer & BioNTech generates robust immunity after one dose and can be stored in ordinary freezers instead of at ultracold temperatures, according to new research and data released by the companies (marginalrevolution).  A single shot of the Pfizer/BioNTech vaccine is 85% effective in preventing symptomatic disease 15 to 28 days after being administered, according to a peer-reviewed study conducted by the Israeli government-owned Sheba Medical Center and published in the Lancet medical journal.

The British strategy of F-D-F has another advantage. New mutations challenge the original vaccines which have been developed last year. The pharma firms are already working on advanced vaccines which should protect against new Covid-19 variants. British people, who will get the second dose later in some months, will then get newer and may better vaccines.

Britain wants to have offered all adults over the age of 50, its most vulnerable people and health workers a vaccination against COVID-19 by May ( reuters). Time will tell.

 

Economics: Did Covid-19 Start A New Roaring Twenties?

 (Drivebycuriosity) - We are living in interesting times. The Covid-19 pandemic is disrupting almost everything and forcing everyone   - governments, consumers & companies - to adapt and to change their behavior. The crisis, as challenging it is, reminds me of Friedrich Nietzsche`s claim: "What doesn`t kill us, will make us stronger". I believe that the global economy will recover stronger than it was before. There is a chance that the recent changes started a new wave of innovations like in the 1920s when the Spanish Flu from 1918/19 was followed by the Roaring Twenties.

History shows that consumer and businesses are more willing to change behavior during setbacks (twitter). After the 1918/19 pandemic an economic boom began and ran from 1919 till 1929 which led let to significant changes in lifestyle and culture (yardeni).  These "roaring twenties" were turbocharged by a technological revolution which changed the whole world.  Sharply falling costs & prices led to explosive sales growth of cars & radios. A lot of other things, including telephones, refrigerators, electric washing-machines, cosmetics, rayon (a synthetic fiber used for stockings & lingery instead of silk & wool) and many more goods also became much cheaper and available for the masses. 

Alibaba`s CEO Daniel Zhang, the leader of China´s largest Internet company, claims that the pandemic - and her forces of change  - create  new opportunities ( alibaba). The current pandemic already started a wave of new businesses. In the US nearly 4.5 million business applications were filed in 2020 — the highest number on record, and an increase of 24% from the year before (cbsnews ). Germany, Europe`s largest economy, is also experiencing a rush of start-ups ( spiegel.de )

 

 

 

 

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The current pandemic is accelerating the fundamental trends that have been shaping economy & society in the recent decade. The rise of the Internet gained even more speed and turned into a great leap. Covid-19 reduced the resistance against technological progress (faz.net ). The pandemic forces many people to work, learn, shop, educate & entertain themselves from home which is fostering digitization and raising efficiency & productivity of the economy. The latest US employment report said that about one-quarter of those working were doing so from home.   

The virus is boosting the digitization process, which is fostering productivity across all industries, leading to more economic growth. Microsoft`s CEO Satya Nadella said recently "the pandemic has proven the PC’s central role in keeping people connected, productive, and secure ...What we are witnessing is the dawn of a second wave of digital transformation sweeping every company and every industry" (transcript ). Last April Nadella already reported “two years of digital transformation took place in two months” ( microsoft ). 

 

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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. Home office & remote learning will raise productivity of the whole economy because many people spend less time with commuting. One commentator wrote: "Valuable collaborations with colleagues, customers, regulators or other partner companies aren’t delayed by the vagaries of the various groups’ availability to meet in person, navigating being in different cities, flights, hotels, etc. Collaboration happens as soon as you have the idea to meet via Zoom" ( marginalrevolution). This commentator also mentioned "the wasted productivity time that work travel eats up by putting high value workers in low productivity transit mode….Uber to airport, security lines, wait for flight in the terminal, maybe grab an hour of in-flight WiFi to catch up on email, land, taxi on the airstrip for 20 minutes, Uber to hotel…" 

Not only consumers are changing their behavior, companies are forced to adapt as well. We are witnessing an accelerated shift toward digital technologies that are faster, less expensive, more productive and raise creativity. Companies are compelled to streamline operations and they are using more & more Internet & and other software applications to get more efficient, creative & productive. The pandemic forces them to get faster and make their products & services cheaper and more convenient. These changes are accelerating the ongoing digitization process, using Internet and other software applications more intensely. 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).

Companies that are specializing in online services, like e-commerce, cloud computing, online-education, payments, video-conferences and more, are experiencing a boom which is making them much stronger. They are now amassing a lot of cash which they invest in their infrastructure which will be the yeast of the economic growth.

Microsoft`s Satya Nadella expects: “The next decade, the defining secular trend will be the increasing rate of digitization of people, places, and things. This malleable power of software will drive productivity growth across all industries, leading to more inclusive economic growth far beyond the domains of consumer tech today”.

I assume that the global economy will benefit a lot from cloud computing. Cloud providers like Amazon`s AWS are giving their customers access to giant external data centers - for very low & constantly dropping costs. The cloud works like a yeast for the whole economy. Cloud computing enables startups to launch faster and more cheaply,  newcomers and established companies can use a massive & cheap computer power to introduce new products quickly without spending much for information technology (IT). Cloud computing supports companies to organize their whole business, to create new products,  to find cheap suppliers, to manage customer relations and so on. This means more choices, better products, and lower prices for consumers.

Via cloud computing everybody will be able to use Artificial Intelligence (AI), meaning software - like Amazon`s Alexa - which is capable to learn and to develop itself. Cloud companies also offer access to quantum computing which speeds up pace and capacity of calculating. These technologies help to manage highly complicated issues like weather prediction, genetic engineering and much more.

 Companies which use Internet and other software applications for money transfers and other financial services - known as digital finance or fintech - are taking off. They are reducing the costs of financial transactions and are making the world of finance more efficient & flexible. Fintech will be the yeast of the economy.

The described digitization process supports radical changes in a lot of industries. The transport sector - which has been almost stagnating since the 1930s - is starting a new revolution. Tesla cars and other electric vehicles, which use a lot computer power, are beginning to replace combustion engines, driven by falling costs and a growing environmental awareness. Electric cars are already more efficient than traditional vehicles because they have fewer mechanical parts and Tesla`s Giga factories are more productive than traditional car producers (worth). Self-driving cars, buses, trucks & trains, all steered by AIs, will reduce the number of accidents and lower the costs of transportation because they are more efficient than human drivers. Drones, controlled by sophisticated software (of course), are reducing the time & costs of deliveries. Tesla CEO Elon Musk started the "Boring Company" which builds tunnel boring machines. He wants to dig a network of cheap tunnels which are optimized for electric vehicles. Musk also plans to implement  Hyperloop - a high-speed transportation system ( reduced-pressure tubes in which pressurized capsules ride on an air cushion driven by linear induction motors and air compressors). All these trends will make transportation much cheaper & environmentally friendly - creating another tailwind for the global economy.

The power of much faster & cheaper calculations will also support progress in engineering, robotics, nanotechnology & biotech. Robots, controlled by more or less intelligent software, will make factories more productive and eventually compensate for a shrinking workforce that will be a result of an ageing population. Software controlled machines will literally "print" parts of other machines and devices by using computational power, lasers and basic powdered metals and plastics (3D printing). In some years companies & persons can produce many things exactly bespoked for individual tastes with low costs. Technological progress will also enable the creation of new material, built at the atomic level (Nanotechnology). These trends could revolutionize everything from chemistry to aeronautics, for example, by creating new medicines, new fabrics and building material. Scientists are already working on a new material which is much stronger & lighter than steel (economist).

The pandemic caused a knowledge explosion and enabled pharma companies & research institutes to create a vaccine miracle in less than 12 months. A series of new vaccines, based on mRNA technology, are already fighting the pandemic. Israel vaccinated already more then half of their population and Great Britain follows with almost 30%. One commentator wrote: "The ability to encode and deploy arbitrary mRNA in our bodies sure seems like a game changer—it allows us to essentially program our cells to make whatever proteins we want. In the case of the COVID vaccines, the vaccine payload instructs our cells to make the coronavirus spike protein, which our immune system then learns to attack" ( elidourado ).
 

And the tailwinds from the emerging markets will get stronger thanks to the ongoing catching up process in China and other emerging markets. People in Asia, Latin America & Africa have a tremendous backlog demand because income & fortune are much lower than in the Western world. There are billions of talented & diligent people who want to reach the US and European standard. Therefore there are billions of people who are working hard and who are investing to be able to expand their consumer expenditures in the decades ahead. The emerging economies don`t need to invent the wheel twice, they benefit from the experience of the Western countries, the digitization and the falling information costs. China is already cutting edge in sectors like artificial intelligence, drones and high-speed train networks. Rapid growth of the economies in China & Co. means that many more people get well educated, becoming scientists, doctors, engineers, innovators, investors & entrepreneurs - a boost for the global economy.

All these beneficial developments will work together, they will strengthen each other and might merge into a kind of Cambrian explosion, creating a benign snowball effect, which will foster a period of prosperity - the new Roaring Twenties.

Enjoy!

 

 

Books: The Wet And The Dry By Lawrence Osborne

 

 (Drivebycuriosity) - There are huge differences between the West and the Islamic world, separating common habits and cultural behavior. Alcohol - and bars & pubs - play an important social role in the West,  but Muslims are obliged to stay abstinent. In many Islamic places alcohol is forbidden - or at least hard to find.  "The Wet and the Dry. A Drinker´s Journey" by Lawrence Osborne deals with the cultural huge divide ( amazon). 

The book is written in  first person and looks like an autobiography. I don`t know if Mr. Osborne really is a drinker or if he describes just a fictional person - a Jekyll & Hyde thing. Anyway, the book is highly entertaining and very informative, an amazing blend of travel reports, history lectures & alcohol journalism.

The author describes his (alleged?)  affection for alcohol; he seems to be an aficionado for whisky, gin, vodka and other alcoholic drinks and he likes to visit pubs & bars. This is not really unusual, but he explores a lot Islamic places to find bars, wineries & beer breweries; including places where Western live style is hated and gets punished by bombs. Maybe he likes the contradiction, the risks and the adventure or he wants just to surprise and to entertain: "A Muslim alcoholic give me hope that human race can be saved"

 I learned about places I might never visit like the religious city of Surakarta (Indonesia), where the Bali Bombers came from,  about beer brewers in Egypt (where the drink was invented), vintners & whisky distillers in Lebanon and bars in Abu Dhabi & Islamabad.

I learned about the cult around Dionyso, the Greek god of wine, different kinds of vodka, new year`s celebration in Muscat, Muslim terrorism in Southern Thailand and much more.

Lawrence Osborne belongs to my favorite authors. I love his novels "Hunters in the Dark", "The Glass Kingdom"  & "The Ballad of a Small Player" and I also enjoyed his book "Bangkok Days" (my reviews: Hunters  Kingdom  Ballad  Bangkok ). "The Wet" is a nice addition to my Kindle library.

 

China: Happy Year Of The Ox!

 (Drivebycuriosity) - The Chinese are celebrating New Year, the start of the lunar Year of the Ox. This year the celebrations are subdued thanks to Covid-19. Even though Beijing had responded fast and had suppressed the numbers of infections the pandemic is still smoldering and there are some pockets of outbreaks leading to local quarantines. 

 

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The Chinese population is still behaving very cautious. The chart above shows that the growth rate of the retail sales did not fully recover yet (+ 4.6% Y-oY in December). There are no government checks and huge stimulus programs. Many people are staying at home, skipping the usual Spring Festival travels. But the ongoing roll out of vaccines should support China`s recovery.

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I think China`s exceptional success story will restart in the beginning  "Year of the Dog" and continue in the years beyond. History shows that consumer and businesses are more willing to change behavior during setbacks. Innovations typically gain traction during tumultuous times: they get cheaper, faster, more convenient, more productive, more creative.  Companies are streamlining operations and are getting more efficient & productive as they always do when they are challenged.   

Therefore I believe that the Covid-19 pandemic accelerates a long term trend. For decades China`s economy has been growing much faster than the US. China`s growth story is still driven by the secular catching-up process which is fueled by extreme income & wealth differences to the US and other Western nation standards. 

The country has a huge natural resource which is fueling the perpetual growth: A gigantic amount of human capital: There live about 1.4 billion people who are intelligent, work hard and save money to achieve a better life and to reach the living standards in the US and Europe. The Chinese save more than 40% of their income, the American just around 20% (worldbank ). High savings (capital accumulation) and a good education are the base for China`s sustainable economic growth. 

The Chinese economy benefits from an education system which is more rigorous, competitive and success focused than the American and the British (americanaffairs ). Fast expanding knowledge is driving science & innovation and fostering economic growth (washingtonpost). Chinese corporations, think tanks & administrations can employ a huge number of highly dedicated & educated people - a strong driver of economic growth (scottsumner).

China is transforming from being the work bank of the world (focused on manufacturing & exports) into a modern economy based on domestic consume & services like the US. The country is also getting more capitalistic and huge publicly noted technology companies like Alibaba, Tencent & Baidu are becoming the engines of China`s economic growth and technological progress (scmp.com). Rainier Zitelmann, a German historian and author, quotes a leader of a private Chinese think tank who is bemused that socialist ideas are experiencing a renaissance in Europe and the United States: “Here in China, hardly anyone still believes in Karl Marx’s ideas.”( fee.org). Elon Musk recently criticized the “entitled” and “complacent” character of people in the United States, and lauded the “smart” and “hard working people” of China ( cnbc ). China´s transformation  is fueled by the technological progress: Rapid advances in software & Internet (including cloud computing), AIs, robotics, 3D printing, nanotechnology, genetic engineering and other technologies are all lifting the productivity of the economy (byronwien).  

China has the big advantage that it has four times as many people as the United States. The country has the potential for about 4-times as many entrepreneurs, scientists and geniuses like Elon Musk. The high growth rates in the recent decade and the success on the Covid-19 front show that Beijing - communist or not - is doing a good job in raising the standard of living for more than a billion of people, far better than the governments in the US & Europe. China´s government has a very long-range plan for infrastructure investments, whereas western countries can't see beyond the next election. 

 

Happy New Year China!

Covid-19: Brexit Saves Lives

 (Drivebycuriosity) - The world is struggling with the Covid-19 pandemic, the numbers of known cases, hospitalizations and deaths are still climbing rapidly. Fortunately there are already some vaccines on the market, saving lives. Unfortunately the number of available doses is still very small, the majorities have to wait a long time to get vaccinated.

Israel leads the worlds with 67.4 vaccinations per 100 people,  the oil-rich United Arab Emirates (population 9.8 million) follow with 45.8 vaccinations. It is an advantage to be small and rich.

 

UK leads Europe with 19.4  vaccinations per 100, ahead of the US with 12.9 vaccinations.

 

 

 

 

 

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The European Union is far behind ( qz.com). Italy reached 4.5 vaccinations, Spain 2.8 vaccinations, Germany 2.8 & France dispensed 3.3 vaccinations.

This is the fault of the European Commission. The bureaucrats in Brussels wasted too much time to decide and they ordered the vaccines too late. To make things worse, the EU "dragged out the talks to secure better prices and product liability guarantees" ( marginalrevolution): "That meant it signed the contracts with AstraZeneca in August, three months after the UK’s contract". 

"The EU secured some of the lowest prices in the world. At what cost?" writes Politico (politico ). The magazine also refers to the European bureaucracy: "Before it could place an order, the Commission had to wait for each EU country to sign the contract". Quartz reports: "Experts say the EU’s attempts to negotiate as a bloc, meet the needs of 27 countries, and play hardball with the pharmaceutical industry led to months of delay that are costing Europeans dearly today" ( qz.com).

Apparently the EU behaved like a monopsony ( a purchasing monopoly) and forced AstraZeneca to deliver the vaccines as cheap as possible, without making profits from it, which doesn`t encourage AstraZeneca to produce as much as possible. Apparently EU`s Scrooge is now a main cause for the current delivery shortfalls.  

If you are 60 and older and you live in the EU you are f...d.  German newspapers report that people aged 80 and older were send home because their were no vaccines available for them.

UK succeeds because the British government isn`t forced to follow orders from Brussels and can go her own way, thanks to Brexit. The UK was the first country in the world to give the green light to a clinically-approved Covid-19 vaccine, on Dec. 2, while the EU approved the Pfizer/BioNTech jab a few weeks later, on Dec. 21 ( qz.com). UK also negotiated contracts which encourage production. The "pattern of Britain investing aggressively and early while the EU takes a slower, more cautious approach has been the hallmark of the vaccine race in Europe", writes AP ( apnews).

 

 

 

 

 

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Currently the UK are giving 0.64 doses per 100 people daily. London plans to offer vaccination to people above the age of 50 and to risk groups by April and to the rest of the adult population by autumn ( bbc). Brexit saves lives!

Wall Street: The Purge

(Drivebycuriosity) -  Hedge funds are in trouble, at least those who focus on the business of short selling. They had borrowed stocks of GameStock, iRobot, Nokia, AMC, GSX and many other companies and sold them immediately in the hope to buy them back later for a much lower prices. Unfortunately for them a crowd of other speculators started buying these heavy shorted stocks, driving their prices far north. 

The rally in heavy shorted stock (short squeeze) served the short sellers a net-loss (gains minus losses) of $54 billion so far (marketwatch ). The banks, which have loaned the stocks, demanded higher deposits to cover the shorts (margin calls) or forced the short sellers to pay the stocks back. In 2020 short sellers lost already $40 billion with bets against Tesla (cnn ). Hedge Fund Melvin Capital lost 53% in January and had to be saved by Citadel, a much bigger hedge fund ( cnn).  Notorious short seller Andrew Left, owner of the hedge fund Citron Research, declared that he will discontinue the short-selling-business ( businessinsider).

I think the short squeeze is a healthy purge and long overdue. Short sellers ain`t investors, they don´t invest in companies, they are not interested in success of companies, quite the opposite. Hedge funds like Muddy Waters and Citron Research usually short certain stocks and then they you use social media to spread rumors & fake news and they appear on CBNC & Bloomberg TV and try to talk prices down.

Short sellers did a lot damage in the past. In the recession of 2008  short selling was a viable business model. Hedge funds and other speculators were betting on a meltdown of the market and were shorting it. Massive shorting accelerated the fall of the stocks which intensified the pessimistic sentiment and inspired so more short selling, creating a snowball effect. It worked temporarily as self-fulfilling prophecy.

After the bankruptcy of Lehman Brothers, which brought huge gains for short sellers, groups of short sellers tried to repeat their success. They attacked everyone who seemed vulnerable, especially the banks. Federal Reserve member Richard Fisher (Dallas Fed President) described these groups as " big money" that "does organize itself somewhat like feral hogs. If they detect a weakness or a bad scent, they go after it" ( marketwatch).

These massive bets against banks and many other companies destroyed not just the trust into the attacked firms, these bets destroyed the trust into the whole economy. Bankruptcies and tumbling stock prices seemed to confirm those attacks. Thus the stock market got into a downward spiral which paralyzed the whole economy. Companies ceased investing & hiring, the recession was on the brink to turn into a disaster like the great depression of the 1930s. The destruction of trust lead to spiral of pessimism that almost sucked the whole economy into the vortex of a depression. In spring 2009 massive stimulus programs (QE) and a zero interest policy stopped finally the downward spiral.  
 

During the correction in early 2016 hedge fund manager George Soros and others inspired speculators to short the US stock market (driveby). As a consequence the short sellers aggravated this dip. But they had to buy back as stocks recovered later in 2016 and amplified the stock market fluctuation instead of smoothing it.

All short sellers benefit from falling stock prices. Thus they have a natural interest that the business of the shorted company fails. Even if short sellers do nothing illegal they can inflict a lot of harm by spreading rumors & allegations about the shorted company- a practice dubbed “short and distort”. This way they can ruin their reputation and irritate customers, creditors, investors and employees and so inflict harm onto the company.  Often short sellers appear on TV or they give interviews after shorting to "explain" their case. Sometimes they conspire to torpedo share prices in “bear raids.” With false allegations they can  destroy good companies and cause people to lose their jobs. And short sellers are not regulated the way Wall Street analysts are, so they aren’t as accountable (bloomberg ). 

 

Short sellers are often very powerful and exert a large influence on the stock market.  Bill Ackman,  a hedge fund billionaire and CEO of the hedge fund Pershing Square Capital Management, had a big against Herbalife, a producer and seller of nutritional supplements, for years. In December 2012 Ackman revealed that had massively shorted stocks of Herbalife and then started bad-mouthing the company.  "To bring the stock down Ackman did not just use his huge reputation as a billionaire hedge fund manager and media star. Ackman´s team has organized protests, news conferences and letter-writing campaigns in California, Nevada, Connecticut, New York and Illinois, against his victim " wrote the New York Times (nytimes). He also pulled the political puppet strings and got support from leading politicians including a senator. 

Short sellers are scavengers who want to benefit from the misfortune of others or even cause it. They punish companies who´s management thinks long term and invests into the future (which often reduces gains in the short term or even causes losses). Short seller can discourage CEOs to invest and to create new jobs because the implied costs could provoke attacks by short sellers. Short sellers could slow down economic growth  - and they make any crisis worse.

Unfortunately the Security and Exchange Commission (SEC) has a blind eye for short sellers and has been ignoring their manipulations over decades. No wonder, that Tesla CEO Elon Musk calls them Short-Seller-Enrichment-Commission.

 Maybe the recent short squeeze delivers the short sellers the attention they deserve.