Global Mitch

Editor's Note

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America’s broken prison system: John Oliver has been knocking it out of the park recently, and has arguably begun to surpass Stewart and Colbert. Not sure if the latter are just getting lazy, or if it’s just the fact that Oliver has a whole week to prepare for each episode, but he’s skewering some truly worthy subjects in a way that makes you feel genuinely uncomfortable about what you’re laughing at.

Filed under John Oliver prison prison rape satire comedy news

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If We Can Make Daylight Savings Work, Why Not a 4-day 40 Hour Work Week?

Permanent three day weekends. Imagine it. Every week you get to look forward to a holiday weekend.

It’s not like you can do anything with the “spare” time outside of work you have Monday to Friday at the moment anyway - and in today’s economy, how many people actually work a straight up 40 hour week, rather than 50, 60 or more hours?

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Working 8-6 Monday to Thursday would mean everyone would have more time to travel. More time to exercise. More time with family. You’d be more motivated to work during the week because you’d be more relaxed. Splitting up your week so that you only spend one day more at work than at leisure would instantly create the better work life balance that literally everyone in the modern world says they want, but so vanishingly few of us actually say we have.

Obviously this would be difficult to achieve. People working in service industries would have to renegotiate how overtime works. It would require a fundamental retooling of the global financial system. But surely it’s worth us undertaking some significant cost benefit analysis and publicly debating?

Filed under work life balance holidays weekend 9-5 40 hour work week

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ralphewig:

Pure Energy - hybrid may make you think of a green thumb Prius, but 100+ mpg and 1000+ hp are no longer the polar opposites once thought. Not only has hybrid technology shown up in hypercars like the McLaren P1 (image above) or Porsche 918, but motorsports have made a seismic shift away from pure petrol engines this year. Formula 1 racing for example rewrote the rule book for 2014, equipping cars with energy recovery systems scavenging power from both braking (MGU-K / Kinetic) and turbine waste heat (MGU-H / Heat), resulting in a 160 hp power boost. This has shrunk engine size and fuel consumption (now capped to 100kg per race), even while making cars more powerful than in previous years.

Gone are the 18,000 rpm, 2.4L normally aspirated V8 engines we’ve been used to hearing since 2006. In their place are turbocharged 1.6L V6s. […] The MGU-H is connected to the engine’s turbocharger and generates electricity as the turbo’s shaft spins, allowing it to capture another 2 MJ each lap. The MGU-H can also draw some of that power back from the batteries, using it to help spin the turbo (instead of the rear wheels like the MGU-K) to reduce turbo lag. 

All this new tech results in cars with the neck snapping instant torque of an electric motor, combined with the insane high-rpm power density of a massive turbo strapped to relatively small engines, and all of that at a fraction of the fuel consumption of previous models. Even better, F1’s relentless technology development competition will rapidly push this tech to other applications, from consumer cars to hybrid rocket engines.

ralphewig:

Pure Energy - hybrid may make you think of a green thumb Prius, but 100+ mpg and 1000+ hp are no longer the polar opposites once thought. Not only has hybrid technology shown up in hypercars like the McLaren P1 (image above) or Porsche 918, but motorsports have made a seismic shift away from pure petrol engines this year. Formula 1 racing for example rewrote the rule book for 2014, equipping cars with energy recovery systems scavenging power from both braking (MGU-K / Kinetic) and turbine waste heat (MGU-H / Heat), resulting in a 160 hp power boost. This has shrunk engine size and fuel consumption (now capped to 100kg per race), even while making cars more powerful than in previous years.

Gone are the 18,000 rpm, 2.4L normally aspirated V8 engines we’ve been used to hearing since 2006. In their place are turbocharged 1.6L V6s. […] The MGU-H is connected to the engine’s turbocharger and generates electricity as the turbo’s shaft spins, allowing it to capture another 2 MJ each lap. The MGU-H can also draw some of that power back from the batteries, using it to help spin the turbo (instead of the rear wheels like the MGU-K) to reduce turbo lag. 

All this new tech results in cars with the neck snapping instant torque of an electric motor, combined with the insane high-rpm power density of a massive turbo strapped to relatively small engines, and all of that at a fraction of the fuel consumption of previous models. Even better, F1’s relentless technology development competition will rapidly push this tech to other applications, from consumer cars to hybrid rocket engines.

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High Frequency Trading Isn’t Going Anywhere, Ever

Just like reality TV. But there’s reason for optimism regardless.

High frequency trading (HFT) is where traders use a combination of hardware and software to see how much someone else is willing to buy or sell a given security for, fractions of a second before the competition does. It’s a bit like being able to bet on a horse race from the future—you already know who’s crossed the finish line first.

Yes it’s dodgy: using computer algorithms traders are technically able to trade in ways that would be illegal if they committed the trade manually. Despite proponents’ claims that it aids in price discovery and market liquidity, HFT has the ultimate effect of skimming profits from the rest of the market. And yes, the rest of the market in all likelihood does include you, even if you’re not an investor, because it includes the pension funds and mutual funds that 401(k)s invest in. The practice has been going on for something like a decade, but because of slow-moving, under-resourced regulators, it’s managed to largely fly under the radar.

That’s changed this year. One reason for the flurry of attention is author Michael Lewis – a Vanity Fair contributing editor famous for his books MoneyBall, The Blind Side (which became Hollywood movies), Liar’s Poker, and The Big Short – has just released a new book, Flash Boys, about HFT. Given his high profile and critical acclaim (the New York Times said “[n]o one writes with more narrative panache about money and finance”), Lewis’s book is refocusing a lot of critical attention on an industry the public didn’t exactly have high regard for to start with.

High frequency traders have also come to the attention of New York Attorney General Eric Schneiderman, who sent subpoenas to more than a half dozen high frequency trading firms within the last two weeks according to the Wall Street Journal:

The attorney general is seeking details about whether the trading firms have secret arrangements with stock exchanges or other trading venues, such as dark pools, that give them the ability to trade ahead of other investors.

Some of the things Schneiderman appears to be focusing on are probably not worth the effort. The practice of colocation for instance, where trading entities place their data centers inside stock exchanges is a hard thing to address and change. Other things like data feeds however, and receiving data before others, are probably not nearly as hard.

The U.S. Securities and Exchange Commission (SEC) also appears to moving towards some kind of a crackdown on HFT, even as the FBI has also opened an investigation into the practice.

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Image: Tomas Fano

Bringing a knife to a gunfight?

Given what we know of the culture on Wall St, it’s a given there are bad actors involved in high frequency trading, so it’s disappointing the SEC has made little effort to find them until recent media attention directed its focus. It’s arguable whether the FBI investigators have the resources to do a better job than the SEC, which means it’s hard to know whether the FBI investigation is just for show. Given how specialized this sector of the industry is, it will depend on what kind of hiring or staffing they’ve done. But then again, there are certainly whistle-blowers out there, who are hopefully helping to drive any investigation. And the threat of jail time can be a wonderful motivator for people with highly specialized knowledge who would otherwise be reluctant to share it.

One exchange where HFT is not welcome

One of the stars of Lewis’s book is a Canadian trader called Brad Katsuyama, formerly Global Head of Electronic Sales and Trading at RBC Capital Markets, and arguably the first whistleblower to discover what was going on with HFT. Fed up with what he discovered about the way markets were being gamed, Katsuyama ultimately left RBC to set up a new, more transparent trading exchange called IEX, which allows all traders to compete on a more even footing. A former high frequency trader with a conscience named Dave Lauer was a consultant for the nascent exchange, helping to design the technology systems there.

Lauer had previously worked as a hardware engineer building low-latency equipment for high frequency trading, as a quantitative research analyst for high-frequency traders, and as a contract worker in Goldman Sachs’ tech group. He’s written high-frequency trading algorithms and done mathematical modeling, and arguably knows more than anyone else on the planet about high frequency trading.

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Dave Lauer

The main difference with IEX is really “a focus on transparency,” says Lauer. “You can go to the website and you can see how many shares are trading every day. There’s no other dark pool that does that. And then they give a lot of other statistics in terms of what the makeup is of the order sizes, the fill sizes, on the pool. In March they averaged almost 19 million shares a day, and in April they’ve been between 25 and 30 million a day, so they’re growing really quickly.”

It’s unsurprising there has been pent up demand for an exchange like IEX, but what was surprising was how much the buy side has been a huge supporter: “even Goldman came out and supported IEX,” Lauer reveals. “That was surprising.”

(Matt Taibbi might note however, that the great vampire squid is well known for relentlessly jamming its blood funnel into anything that smells like money.)

What should a healthy market look like anyway?

With partner Chris Nagy, Lauer has launched a new company called Kor which focuses on market structure and lobbying Washington on behalf of all the market participants who aren’t big high frequency traders. As part of this push they’ve launched the Healthy Markets Initiative where they’re trying to push a platform of changes that Lauer says the SEC, along with a pretty broad cross section of the industry, are open to. “There are a lot of technology reforms in there around market data feeds and latency that we’re also pushing,” says Lauer.

For instance, KOR is pushing for the SEC to open up access to data to provide a better understanding of markets, and encourage objective and quantitative research on markets. KOR wants to open up access to MIDAS or Market Information Data Analytics System, and to enhance MIDAS with hidden orders, dark pool orders, and IOCs. “The MIDAS data center is very incomplete,” argues Lauer, “and it’s closed off to everyone, so from an open data and open source perspective, that’s not the way to go.”

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Photo: thetaxhaven

Lobbying against the lobbyists

But given that a majority of SEC staff earn a pittance compared to the people they are meant to be regulating—until they inevitably leave and end up working for Wall St—is it really possible to have good regulation of markets?

“Ah… no!” laughs Lauer.

Instead, Lauer and Nagy want to fight fire with fire. They aim to take on the lobbyists of “bulge bracket” firms – companies which are primary dealers in U.S. treasury securities, and which comprise the world’s largest and most profitable multinational investment banks whose clients are large corporations, institutions, and governments. When it comes to market regulation these sorts of firms are currently the only people who have a real voice in D.C.; a major problem as Lauer sees it.

“And so that’s why with Healthy Markets we’re looking to work with exchanges, high frequency firms, buy-side firms, and a few brokers, smaller brokers. All of those firms, they feel drowned out. If we bring them all together, then at least we have a voice that’s as large as the other side.”

Who ate all the pie?

It’s interesting that in the face of all other American industries that have undergone a digital transformation towards greater automation, finance seems to stand alone as having grown its share of the economy. This could mean that Wall St’s share of the economy is overdue for downsizing, given how much of it is now algorithmically driven.

“I think that when you look at GDP and you see that from 1929 to 1988, Wall St and financial services averaged 1.2% and peaked at 1.7%, versus after 1988 where it peaked at 3.3% in 2005,” says Lauer. “To me that’s a dramatic problem, and I think that you would expect the benefits of automation and technology to reduce that or at least maintain in line with historical norms, so I think that’s a big flashing red light.”

Ain’t going nowhere, baby

This does not mean however, that the days of high frequency trading are numbered. On the contrary, “I don’t think it’s going anywhere, ever,” argues Lauer. “I think it’s the new… this is what markets are now.  I think that profitability will probably continue to drop, but again it’s questionable how much it’s dropped so far. It’s a very secretive and closed system. But I think that even despite reforms, and the reforms that we’re pushing would change some of the aspects of high frequency trading and change what is profitability in the market, but we have the support of high frequency firms, because a lot of them want to see a more transparent market, they want to see democratization of order flow instead of payment for order flow, and competition over order flow. So I don’t see it going anywhere. I think it will be more highly regulated, that’s inevitable, and that’s been inevitable for a while. What that means is hard to say.”

Filed under high frequency trading hft Michael Lewis SEC Wall St

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Just How Violent is American Culture?

Like all humans, Americans like to think of themselves as a peace-loving nation: the good guys on the side of freedom and justice. And don’t get me wrong - this country has done a lot of wonderful things for humanity; it’s rhetoric and highest ideals are certainly what other nations aspire to. But despite its ideals, America is also one of the most militarily bristling, savage purveyors of death in history. This is something to bear in mind when listening to the pundits and politicians urging Obama to stop “exhibiting weakness” on Crimea, and start leading from the front in a more forceful manner.

Perhaps you disagree that America is a savage, violent country. Well let’s examine how many people have died violent deaths at the hands of Americans.

Start with annual deaths from firearms in America, of which there are now roughly as many guns as there are people, even if the amount of households with guns in them is declining. Approximately 31,000 people every year die from firearms in America, with the annual rise eerily in tandem with the easing of gun ownership laws.

imageThe family that kills together, stays together

Then there’s the African American slave trade. The most conservative estimate for those killed in the trans-Atlantic slave trade starts at 6 million; however, the likeliest number of deaths falls somewhere between 15 to 20 million (the high end would be 60 million). Hitler of course, one of history’s greatest monsters, killed 6 million Jews. It’s not a comfortable comparison to think about.

imageSouvenir Portrait of the Lynching of Abram Smith and Thomas Shipp, August 7, 1930

Now let’s examine America’s wars. In all its existence America has only fought two defensive wars that actually threatened its sovereignty. The first was the Revolutionary War of Independence from Britain, in which 8,000 Americans died in battle, (and 17,000 from disease) with about 1,240 British killed in battle (about 18,500 from disease), 1,200 Germans killed, (and over 6,000 killed by disease or accident).

The second was the War of 1812, also with Great Britain, which, among other things, prevented the U.S. from annexing Canada from the British Empire. Roughly 20,000 Americans died. Incredibly, somehow Canada managed to throw off the yoke of British oppression without a shot being fired, although it did take a little longer.

Then there’s America’s Civil War, in which somewhere over 200,000 American soldiers died in combat, with another 400,000+ dying from disease, along with somewhere between 50,000 and 75,000 civilians killed.

imageConfederate dead at Fredericksburg, Virginia, 1863

In fact, if you add up American military deaths alone over two centuries of its history, the number is somewhere around 1.3 million. You can add in another 500,000 Iraqi civilian deaths to that tally, and I can’t even imagine how many more civilian deaths you’d get up to if you included the Korean War, Vietnam War, Afghanistan War, the Philippine-American War, the Spanish-American War, the Mexican-American War, The War of 1812, World War I and II (a special mention for the 150,000-246,000 Japanese civilians slaughtered at Hiroshima and Nagasaki alone) or all the rest of America’s combat adventures. 

imageThe exact moment of detonation at Nagasaki (11:01am, August 9, 1945). 

And finally, let’s not forget the the untold numbers of military personnel - and civilians - killed around the world every year thanks to U.S. sales of small arms, mines, tanks, missiles, aircraft, and every other weapon modern industry can conceive of - such as the biological weapons Donald Rumsfeld and the Reagan administration sold to Saddam Hussein in the 80’s, which he then used to massacre Iraqi Kurds with. Now despite not facing a single remotely credible threat of invasion since the Cold War ended (America enjoys allies to its north and south, with vast oceans protecting its east and west flanks), the U.S. spends more on its military than the next thirteen countries combined - all bar one of which are ostensibly our allies - and remains the world’s largest arms exporter

I don’t think it’s improbable that being one the world’s greatest purveyors of death is having a substantially toxic effect on America, not just in lives lost, maimed, and ruined in America and around the globe, but also in the political functioning of the Republic. The Republican President and former five-star general Dwight Eisenhower famously warned of the dangers of the military-industrial complex at the end of his term in 1961. Yet the world he warned against seems to uncannily match the very world we live in today.

There remains a loud rump of the American electorate to whom possessing the world’s greatest military means every problem or conflict must have a military solution. They are forcefully represented in public debate by the likes of Arizona Senator John McCain, but there are plenty of neocons and chickenhawks in both parties for whom military adventurism is a first, rather than a last resort. It’s hard to overstate the American cultural fetishization of guns and military force.

But we are now living through “the disastrous rise of misplaced power” accumulated by the various defense bureaucracies Eisenhower specifically warned against (the CIA and NSA leap to mind). We have “let the weight of this combination endanger our liberties [and] democratic processes.” We have “taken these developments for granted”. And if “only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together,” well, we have failed in being alert and knowledgeable too.

Disarmament, with mutual honor and confidence,” Ike pleaded, “is a continuing imperative. Together we must learn how to compose differences, not with arms, but with intellect and decent purpose.” 

America has a military that’s the best in world at breaking things and fcking shit up. But the anomalous cases of Germany and Japan aside, America hasn’t shown the same skill in “nation building.” Any time you go to war, both sides lose, because people - and invariably innocent people - die. So can we please stop constantly trying to rush to war with anyone who isn’t actually directly threatening America’s citizens or territory?

Filed under military-industrial complex Eisenhower genocide US Military freedom defense Crimea Ukraine Putin

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Why and How We Were Lied Into the Iraq War

MSNBC host Rachel Maddow has made two documentaries that are worth your viewing time, because they respectively detail how America was lied into the Iraq war, and then answer why we were lied to. Long story short, as was obvious to many people throughout, yes, it actually was all about the oil - although not in the way most people think.

Hubris, below, documents the selling of the Iraq war to the American people, i.e. how it happened:

Why We Did It on the other hand, explains why the Bush administration was so determined to march to war with Saddam Hussein, regardless of any mythical weapons of mass destruction. The neocon Bush/Cheney/Rumsfeld/Wolfowitz/Feith focus on invading Iraq was envisioned as a way to increase the supply (and thus lower the cost) of oil, thereby enhancing energy security for world markets and economic growth. None of which was mentioned publicly, obviously.

Three trillion dollars later, oil prices now entrenched at around $100 per barrel, hundreds of thousands of people maimed and killed, millions displaced and turned into refugees, the strategic influence of America’s greatest enemy in the region - Iran - massively enhanced, and a Sunni vs Shia schism unleashed that threatens to turn into a conflagration throughout the entire Middle East… Well, it’s hard not to get angry watching - even after all these years. 

It’s worth remembering that Iraq is not an isolated incident. The United States has been invading countries that pose no threat to its own borders for hundreds of years. Given the amount America has been spending on “defense” in the post WWII-era, not to mention what its own citizens spend on guns, let alone the arms America exports, is this country up there with history’s greatest ever purveyors of death?

Filed under Iraq War George W Bush Dick Cheney Paul Wolfowitz Doug Feith Energy Policy Middle East big oil Donald Rumsfeld propaganda war of choice

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Even without smoking it, some Conservatives get really confused by pot

Case in point: Conservative columnist S.E. Cupp in the New York Daily News. Sarah Elizabeth believes that “enthusiasm for marijuana legalization runs against liberal orthodoxies on other big issues,” such as gun control. 

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The same argument used against guns is used for pot: that legalizing pot and making it more available will reduce crime. No good liberal would say the same of guns, though there is substantial evidence to prove more guns equal less crime. [Emphasis added]

Actually, the evidence shows there is a strong correlation between having more guns and having more injuries and homicides from gunshot wounds, as borne out by the gun violence statistics in the U.S. (or any war zone) compared to other modern industrialized countries, while the only evidence that more guns make crime rates go down is from a single academic, and is both ambiguous and disputed.

She appears to not realize that no liberals argue for the banning of all guns; they argue for better regulation of them to reduce gun violence - just like every other modern industrialized country in the world has managed to do, and just like they’re arguing for marijuana. 

There is zero evidence that an increase in marijuana consumption increases violent crime - other than that caused by its criminalization. On the contrary, the available data strongly suggests that legalizing and regulating marijuana would actually place restrictions on marijuana’s availability (such as to school children), and deprive violent criminal gangs, such as Mexico’s notorious cartels, of a significant source of the cashflow that underpins their power and capacity to inflict harm.

If S.E. would take the time to talk to almost any random teenager, she would discover that it is currently much harder for teenagers to procure alcohol than marijuana. Marijuana can have lasting cognitive effects on adolescent brain development, so this ease of availability should concern everyone, Conservatives included. 

Here’s something to think about: legalizing pot smoking actually means society has a greater ability to regulate the supply and consumption of it than when pot is criminalized.

Cupp then scoffs that,

We’re told pot users will “responsibly” use marijuana in the privacy of their own homes. But what barometer are they using to determine that persistent recreational drug users, who have presumably broken the law before by possessing marijuana, are responsible people? And why aren’t lawful gun owners afforded the same level of trust?

This is just fatuous. Lawyers, accountants, scientists, and Presidents smoke marijuana - in fact people of every age, profession, ethnicity, sex, income bracket, and religion smoke marijuana, the vast majority of which are happy, functioning, productive, responsible members of society. Cupp would no doubt be surprised to learn just how many of her fellow conservatives smoke pot on a regular basis and yet are somehow not dragging the rest of society down an apocalyptic wormhole in the process.

A new father getting fatally shot in a movie theater for texting during the previews is just one obvious example of why lawful gun owners aren’t afforded the “same level of trust” as marijuana smokers: because unlike a gun, you can’t kill someone with a joint. But, 

If progressives want to keep gun control in the crosshairs - and many have said they do - they’ll have to reconcile this intellectual incongruity.

There is no incongruity here; just an evidence-based harm-minimization approach, rather than an ideological approach. 

Cupp continues:

But for other Democrats who, like [Bloomberg], promote an expansion of the health nut state, but want to also support legal marijuana use, does it really work to rail against trans fats and restrict the smoking of cigarettes but allow pot smoking (and the sloth and munchy-induced snacking that comes with it)?

Firstly, despite some socially liberal tendencies, Bloomberg is a self-professed Conservative, and he’s not in favor of marijuana legalization. Secondly, “sloth and munchy-induced snacking” indicates Cupp’s source for marijuana information is That 70’s Show. Thirdly, we have the same situation with pot as the “noble experiment” of Prohibition. Except unlike alcohol you can’t die from consuming pot, it doesn’t cause people to become violent risk takers, and it has significant benefits in treating a wide range of medical ailments, from glaucoma to mitigating the suffering of cancer patients.

Pot is far less harmful than alcohol (and tobacco), and the data suggests that as marijuana use goes up, alcohol use declines. So on a health basis, you could argue that its net effects are neutral to beneficial. (The effects are definitely negative for the young and mentally ill however.)

Moving on to taxes, Cupp asserts that:

there are already complaints in Colorado that pot is over-regulated and over-taxed. There’s a 15% excise tax levied on “average market rate” marijuana, a special 10% sales tax and the state’s general 2.9% sales tax will also apply. Yikes.

Economists suggest this could make Colorado’s pot industry too costly for the state and the consumer, in which case users rely on an inevitable black market to pop back up, making Colorado a tourism-only pot state. Will progressives really admit, in that case, that their own high taxes and burdensome regulations crippled an industry with so much potential?

Now you might think with such prohibitively high taxes and burdensome regulations, demand for weed would be disappointing. Except demand in Colorado is far outstripping supply. You might also think that conservatives with a focus on aligning government revenues with expenditures would be happy that revenue generated from an activity they wouldn’t even participate in (ahem) is helping to reduce budget deficits. And you’d probably also conclude that if the taxes were shown to be high enough to inhibit demand and create a black market - then taxes would be lowered. 

It’s hard to tell if these arguments stem from a simple lack of familiarity with the facts, or from a selective reading of them due to ideological blinkers. Either way, the confusion is real. 

Filed under legalization pot marijuana drug law se cupp conservatives