Weekend edition—Trust at the UN, chess on Wall Street, mastiff mania

Good morning, Quartz readers!

You might laugh at the notion that the UN general assembly has anything to teach the business world. The “world’s biggest meeting” can also, with its fetish for arcane procedures, interminable declarations, and impenetrable jargon, seem like the world’s most dysfunctional one.

But what businesses sometimes miss about meetings is that they are not just tools for getting things done. Meetings signal status (who gets to go, who doesn’t). They create shared language and culture. They let people feel heard, so they can then go along with decisions they disagree with. They create shared responsibility—if you were at the meeting, you can’t claim you didn’t know.

Most of all, though, meetings create a commodity no organization can function without: Trust.

It’s a modern paradox that, while we can now transmit megabytes of information in an eyeblink, our brains still absorb it at the glacial baud rate set by evolution. Unless (or until) we invent the neurological equivalent of broadband, you’ll still need other people to do much of the knowing for you, and so you must be able to trust them to get it right.

Trust relies, ironically, on the one type of information our technology doesn’t handle well. It’s the information encoded in smiles, frowns, gestures, postures, verbal tics, facial micro-expressions, even smells—all the friend-or-foe signals our big brains evolved aeons ago to send and receive, often without our even knowing it. Even in video calls, most of that data gets lost in transit.

So that’s what meetings are, above all: not decision-making bodies, but ancient data-transfer protocols for trust creation. And it’s why meetings at the UN, a body created specifically to try to forge trust out of distrust, are so important. Perhaps the way it holds them can even teach a thing or two to anyone who needs to bring warring tribes together. —Gideon Lichfield


How scientists write about sex. For a new perspective on the US’sevolving spectrum of sexual norms and shifting gender politics, look at the language scientists use to talk about sex. Katherine Ellen Foley, Youyou Zhou, and Christopher Groskopf teamed up to parse the vocabulary of five decades of scientific literature, and built an interactive tool that lets you investigate the trends yourself.

Who is Angela Merkel? Frequently hailed as the current leader of the free world, German chancellor Angela Merkel is a quietly ruthless politician, with a long list of position reversals behind her. Ahead of Germany’s Sunday election, Jill Petzinger profiles the woman known as “mutti” (mother), with insight into how she’s hung on to power for so long.

The rise and cruel fall of China’s mastiff mania. Ten years ago, Tibetan mastiffs briefly became a prized accessory for wealthy Chinese. When the trend ended, thousands of the huge dogs were abandoned by breeders and owners to roam the Tibetan plateau. Echo Huang offers a disturbing look at what happens when a bubble bursts in the luxury pet business.

Ethics in AI research. Ostensibly to prove the danger of AI in the wrong hands, a Stanford scientist used facial recognition to try to identify people as straight or gay. Dave Gershgorn spoke with sociologists, data scientists, and the embattled researcher himself about the debate over ethics in AI research that resulted instead.

Dispelling dystopian visions of China. A Chinese student at a US university publicly condemned China’s smog and lack of freedom, and was labeled a traitor by peers in China—prompting soul-searching among fellow Chinese expatriates in the West. Siyi Chen explores the tension between admitting China’s problems and defending it against clichés.


Wall Street has a chess guru. Soviet defector and chess grandmaster Lev Alburt has been training Wall Street traders and other powerful individuals in strategy and high-pressure decision-making for 25 years. For Bloomberg Businessweek, James Tarmey spoke to Eliot Spitzer, Carl Icahn, and other students of Alburt aboutthe advantages of a chess-trained brain.

Imagining a more flexible world map. Spain’s Catalonia and Iraqi Kurdistan will call a little more loudly for independence next week, but the US—despite its own revolutionary history—will surely oppose their efforts in favor of the status quo. In the New York Times, Joshua Keating invites readers to envision a world with borders that are a little more plastic.

The crippling cost of college. California Sunday Magazine’s Ashley Powers follows the lives of two students who worked, scrounged, and slept on friends’ couches in order to afford college, to answer the question: Is the degree worth the price?

When a small town in Sweden stopped feeling safe. Once a tranquil Swedish town, Trollhättan’s transformation by economic upheaval and immigration suddenly drew attention in 2015, when a racist attack on a local school left four dead. For Granta, Andrew Brown explores the anxiety and alienation of the town’s emerging neo-Nazi movement.

Robots, sourdough bread, and creativity at work. In Robin Sloan’s latest novel Sourdough, a roboticist is wheedled away from her job by a crock of pseudo-sentient sourdough starter. In a sci-fi twist on the challenges of the modern workplace, it’s only outside the lab and immersed in the sourdough’s world that the hero makes her creative breakthrough.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, puppies, and chess strategies tohi@qz.com. You can follow us on Twitter here for updates throughout the day, or download our apps for iPhone and Android.


Germany and NZ vote, Rocket Man vs. dotard, Persian poetry trolling

Good morning, Quartz readers!


North Korea’s foreign minister delivers a keynote to the UN general assembly. Ri Yong-ho, considered a go-to expert on the US and disarmament issues in his country, called Donald Trump’s incendiary maiden speech at the UN earlier in the week a “dog’s bark.”

Angela Merkel looks for a fourth term as German chancellor.With her party enjoying a healthy lead over nearest rival the Social Democrats, Merkel is almost guaranteed to win Sunday’s election. The real contest might be among the smaller parties, which are almost neck-and-neck—whoever comes third gets to take part in the Christian Democrats-led coalition.

New Zealand elects a new prime minister. Rising star Jacinda Ardern, the newly anointed leader of the opposition Labour party, faces off against current leader Bill English’s Nationals in elections on Saturday. Key issues include immigration, house prices, and the environment.

Controversial French labor reforms are introduced. President Emmanuel Macron’s attempt to improve the country’s competitiveness and lower unemployment is expected to soon become law after he introduces them to the cabinet today. Unions protested across France yesterday against the measures, though theturnout has been weakening.

Theresa May gives a big Brexit speech in Florence, Italy.Ahead of the fourth round of UK-EU talks on Monday, the UK prime minister is expected to offer a €20 billion ($24 billion) payment to the EU in exchange for access to the bloc’s single market.


Digital disruption is changing the rules of business. It also represents an opportunity for those ready to embrace it. Organizations that leverage an Enterprise Information Management (EIM) strategy are better positioned to transform, grow and compete.


“Rocket Man” hit back at Trump. North Korean leader Kim Jong-un called the US president a “mentally deranged U.S. dotard,” though “old beast lunatic” is another translation for the Korean term he used. Name-calling aside, hostility between the two countries escalated further after Trump slapped new sanctions on Pyongyang, and North Korea said an H-bomb test in the Pacific was a possibility.

Steve Bannon made a secret trip to Beijing last week. The former White House advisor met with Wang Qishan, the Communist Party’s second-most powerful official, after a trip to Hong Kong, theFinancial Times reported (paywall). The meeting was reportedly instigated by Beijing, which wanted to hear more about Bannon’s views on economic nationalism and populism.

China said S&P’s downgrade of its credit rating was a “wrong decision.” The Chinese finance ministry said that Thursday’s credit downgrade failed to properly understand the country’s economic fundamentals, and that China can appropriately control its credit growth. S&P cut China’s long-term sovereign rating a notch from AA- to A+, and today also cut Hong Kong’s from AAA to A+, citing spillover risks to the city as China deleverages its debt.

Hewlett Packard Enterprise plans to cut about 10% of its staff.The job cuts, amounting to about 5,000 people, will take place before the end of the year, Bloomberg reported. CEO Meg Whitman flagged earlier that she wanted to make the company “simpler, nimbler, and faster.”


Echo Huang on the abandoned Tibetan mastiffs roaming China. “The craze for the furry dogs rose and fell with the Chinese economy’s trajectory. Around a decade ago, when China’s economy was rapidly growing, owning a Tibetan mastiff was a symbol of stature and wealth… In 2009, a woman in Xian bought a Tibetan mastiff for 4 million yuan, and welcomed the dog’s delivery with a 30-car motorcade at the airport.” Read more here.


Apple sell-off scare / after all-time market highs. / Tech leads the tumble


America needs Amazon more than vice versa. The competition is fierce to woo the company’s second HQ.

2017 is full of jerks. A Stanford professor points to technology and fatigue as primary factors—and he uses a much stronger word than “jerks.”

Academic arguments backing colonialism are making a comeback. The thinking is that, on balance, colonialism seems like a fairly benevolent part of human history.


For its 47th year, the IFRA World Publishing and Digital Content Expo will return to Berlin from Oct. 10-12. Hear from leading industry voices and discuss content, distribution, and trends with the global publishing community. Find out more.


A prestigious French chef asked Michelin to strip his restaurant of its three stars. Sébastien Bras of Le Suquet said he’s weary of the constant pressure to perform.

Only 2% of power in Puerto Rico comes from renewable sources. After hurricanes Irma and Maria hit, the island is now totally in the dark.

Spiders have adorable paws with claws. The furry appendages are also capable of detecting wind currents and odors.

Iran’s president trolled Trump with poetry. To refute the US president’s accusations, Hassan Rouhani cited Persian literary masters from the 12th and 13th centuries.

A prehistoric frog may have eaten dinosaurs. Madagascar’sBeelzebufo ampinga (aka the “devil frog”) weighed up to 10 lbs (4.5 kg) and may have also chomped on crocodiles.

Our best wishes for a productive day. Please send any news, comments, devil frogs, and unwanted Michelin stars to hi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

CWS Market Review – September 22, 2017

CWS Market Review

September 22, 2017

“The expectation of an event creates a much deeper impression on
the exchange than the event itself.” – Jose de la Vega, 1688

First, the good news. The stock market continues its winning ways. The Dow just set nine straight daily records, and the S&P 500 is over 2,500. Not only that, but it’s been one of the calmest markets in history. Ryan Detrick notes that the Dow rose by less than 0.3% for seven straight sessions. That’s only the second time that’s happened in the Dow’s 121-year history. Volatility is low, and markets are happy.

Now the bad news. The Federal Reserve made it clear this week that they intend to keep on raising interest rates. Not just once more in December, but a few more times after that in 2018 and 2019. In my opinion, this is a big mistake.

The evidence (to me) is clear that the need for higher rates has faded. After all, inflation has cooled off. We’ve just gone through two big hurricanes. Plus, there’s been some weak economic news lately. I’m not alone in this opinion. Not too long ago, the futures market started to believe that we might not get a rate hike for the next year. But the Fed wants higher rates, and in these matters, they always get their way.

Unfortunately, as investors, we don’t get to choose the environment. We have to deal with reality as it is. In this week’s CWS Market Review, I’ll explain what the Fed said this week and what it means for us. We also got two dividend hikes from our Buy List stocks. Microsoft hiked its payout by 7.6%, and Ingredion boosted its payout by 20%. I love seeing nice dividend increases from our stocks. I’ll have more to say on these in a bit, but first, let’s look why the Fed is on the wrong course.

The Federal Reserve Holds Firm

Lately, I had been telling you that the Federal Reserve won’t be raising interest rates any time soon. Silly me. I was assuming the Fed was going off the evidence. Big mistake.

We had five very soft inflation reports in a row. Only the last one was anything close to the Fed’s target of 2%. Let’s look at some the recent data. Last Friday, the Fed said that industrial production fell by 0.9% last month, and Hurricane Harvey was responsible for 0.75% of that. We also learned that retail sales fell 0.4% in August. Take out gasoline, and retail sales still fell 0.2%. That’s not good.

The Atlanta Fed’s GDP model now sees Q3 coming in at 2.2%. The New York Fed’s model is down to 1.3%. Sure, Harvey bears some of the blame, but not all. The economy is growing, but at a tepid pace.

But the Fed is having none of this. On Wednesday, the central bank released its policy statement, along with its revised economic forecasts. I should warn you that the Fed’s track record isn’t merely bad—it’s bad for economists.

Let’s dig into the policy statement. Not surprisingly, the Fed decided against raising interest rates at this meeting. That means the target for Fed funds remains between 1% and 1.25%. In the statement, they acknowledged the damaged caused by the hurricanes, but added that “the storms are unlikely to materially alter the course of the national economy over the medium term.” This is probably true. Plus, a lot or rebuilding news to be done. Note that Continental Building Products (CBPX) had another big gap up this week while shares of Danaher (DHR) touched a new high.

The Fed also said the economy is growing moderately and the jobs market continues to get better. They also said that core inflation is low, and will probably remain so. I agree.

Now let’s turn to the Fed’s economic projections. This is often referred to as the “blue dots,” due to the dot plot in the report. The Fed now sees core inflation rising to 1.9% next year, and 2% in 2019. Mind you, the Fed has consistently overestimated future inflation. Not only that, but if anything, core inflation was been trending downward. It’ll probably something like 1.5% this year. Don’t get me wrong: I’m all for the Fed battling inflation. But I’m not wild about fighting inflation that doesn’t appear to exist.

Of the 16 members on the FOMC (not all of whom vote at policy meetings), 12 see another rate increase in December. Prior to the meeting, the futures market thought there was a 37% chance of a December hike. Now that’s up to 78%.

For 2018, the median forecast calls for three more rate hikes. That would bring the Fed funds target range to 2% to 2.25%. On a side note, if the Fed’s inflation forecast is correct, that would mean the real (or inflation-adjusted) range would finally be positive. It’s been negative for nearly a decade. In other words, you could borrow money from the Fed for free, after adjusting for inflation.

The median Fed forecast calls for one more hike in 2019, plus another one in 2020. The Fed also projects inflation and interest rates for the “long run.” (“But this long run is a misleading guide to current affairs. In the long run we are all dead.” – JM Keynes.)

Here’s an interesting nugget. The Fed members see long-run interest rates at 2.75%. Combined with the long-run inflation forecast of 2%, this implies the Fed believes the “equilibrium rate” is 0.75%. That’s the interest rate at which (theoretically) everything should come into balance (again, theoretically). I’d guess that if you polled economists on the equilibrium rate prior to the financial crisis, they probably would have pegged it around 2%. So as long as the Fed is below 0.75% in real terms, they view themselves as pumping up the economy.

Remember that for much of 2017, long-term interest rates have been falling. Lots of other people were betting that the Fed would take a breather. But in the last two weeks, a lot has changed. The yield on the 10-year bounced from 1.88% on September 7, to 2.11% on Thursday.

That’s not all. The yield on the two-year Treasury is now up to 1.45%. That’s the highest in nearly nine years. The two-year is a good maturity to watch, because it’s usually very sensitive to interest-rate expectations. For some context, six years ago, the two-year was yielding as low as 0.16%.

What does all this mean? A December rate hike from the Fed won’t be a disaster. The problem is that it gives the Fed less room to operate if and when things get bad. There’s also no reason to worry about the stock market. The market can rally along with higher rates. That’s what happened from 2004 to 2006.

In last week’s issue, I talked about the impact of the weak dollar on the stock market. If the dollar gains strength, this means that the nature of what’s rallying could change. For example, bank stocks tend to perform when short-term rates rise. That’s how they make their money. On our Buy List, I still like Signature Bank (SBNY), especially below $125.

This is a boring market, and boring markets are usually good markets.
Investors should continue to focus on high-quality names. In addition to Signature, two other Buy List stocks I particularly like are Ross Stores (ROST) and Intercontinental Exchange (ICE). As always, please watch my Buy Below prices. There’s no need to chase after good stocks.

Dividend Hikes from Microsoft and Ingredion

We recently got two dividend increases for our Buy List stocks. Last Friday, Ingredion (INGR) announced a 20% dividend increase. INGR’s payout will rise from 50 to 60 cents per share. Business has been good. Last month, Ingredion reported earnings above expectations.

“We are proud of our record of delivering consistent shareholder value. From dividends and share repurchases to capital investments and acquisitions, we are committed to a balanced deployment of cash consistent with our strategic blueprint,” said Ilene Gordon, chairman, president and CEO.

The new dividend is payable on October 25 to stockholders of record at the close of business on October 2. Based on Thursday’s close, INGR yields 2%.

Then on Tuesday, Microsoft (MSFT) announced a 7.6% increase to its dividend. The quarterly payout will rise from 39 to 42 cents per share. In last week’s CWS Market Review, I said, “I’m expecting 42 cents, maybe 43 cents per share.” Close enough.

The dividend is payable December 14 to shareholders of record on November 16. The ex-dividend date will be November 15. By the way, too many investors ignore the importance of dividends. Remember that those dividend increases can add up. Microsoft is now yielding 11.3% based on its 2009 low. Even in today’s terms, MSFT yields 2.26%. That’s only two basis points below a 10-year Treasury. I like Microsoft a lot.

That’s all for now. We’re going to get some key economic reports next week. On Tuesday, we’ll get reports on consumer confidence and new-home sales. Then on Wednesday, the durable-goods report comes out. On Thursday, the government will have its second revision of Q2 GDP growth. Last month, the estimate for Q2 growth was revised to 3.0% from the initial estimate of 2.8%. Friday will be the last trading day of the third quarter. We’re also get the income and spending reports for August. Be sure to keep checking the blog for daily updates. I’ll have more market analysis for you in the next issue of CWS Market Review!

– Eddy

Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 eight times in the last ten years. This email was sent by Eddy Elfenbein through Crossing Wall Street.

#HTC-#Google deal, Puerto Rico destruction, Bill #Gates’s regret

Good morning, Quartz readers!


Donald Trump, Moon Jae-in, and Shinzo Abe meet. The US, South Korean, and Japanese leaders will convene on the sidelines of the United Nations general assembly to discuss North Korea’s nuclear program (paywall). The trilateral meeting comes on the heels of Trump’s bombastic remarks yesterday; Abe has adopted a similar tone, while Moon has ruled out military action.

The Bank of Japan makes its policy decision. Japan’s central bank is to expected leave policy unchanged, as inflation remains below its 2% target even as the economy shows continuing signs of growth. Japan’s economy has expanded for six consecutive quarters, the longest streak since 2006.

The South African Reserve Bank could cut rates again.Analysts expect South Africa’s central bank to slash interest rates for the second time this year to stimulate the economy, which, in addition to just exiting a recession in the second-quarter, is suffering fromplummeting foreign investment and political turmoil.


Bill and Melinda Gates: A 10% cut in funding for HIV treatment could cost the lives of 5.6 million people. The world’s response to the AIDS epidemic in the early 2000’s should be counted among our greatest successes. But the progress we made is at risk—leaders everywhere need to reaffirm the commitments they made just two years ago to conquer extreme poverty and disease.


Hurricane Maria devastated Puerto Rico. The entire Caribbean island lost power after the category 4 storm made landfall with sustained winds of 155 mph (250 kph). It is the strongest hurricane to hit the US territory since 1928. Maria is now tracking towards the Turks & Caicos and the Bahamas.

HTC and Google struck a deal. The Alphabet unit said that it would pay $1.1 billion to acquire the people who worked on HTC’s flagship Pixel smartphone and enter a non-exclusive licensing agreement for HTC’s intellectual property. The agreement allows the Taiwanese company, whose smartphone sales have long fallen by the wayside, to focus on its VR business, while acquiring hardware can help Google push its software offerings.

The US and Iran held tense talks at the UN. US secretary of state Rex Tillerson and Iran’s foreign minister Javad Zarif met with member nations of the 2015 Iran nuclear deal. The EU said it is committed to upholding the deal, but Tillerson said that Iran still poses a “serious threat” to the region, and that Trump hasn’t shared his decision on the Iran deal yet with anyone.

Nicaragua agreed to join the Paris climate agreement. With the decision, the US and Syria are the only countries left in the world that haven’t signed up to the pact. Nicaragua president Daniel Ortega rejected the deal before because he didn’t think that it went far enough.


Lila MacLellan on the science behind the 15 common smart drugs. “Not all drug users are searching for a chemical escape hatch. A newer and increasingly normalized drug culture is all about heightening one’s current relationship to reality—whether at work or school—by boosting the brain’s ability to think under stress, stay alert and productive for long hours, and keep track of large amounts of information.” Read more here.


One mundane sentence / Spells the end of an era / Buh-bye bond stockpile


India lacks the guts to face its economic crisis. The government has a history of denying the numbers until it’s too late.

Toymakers will ensure that Toys ‘R’ Us survives. Mattel and Hasbro desperately need the company and its 1,600 stores as a counterweight to Amazon.

Companies should get involved in politics. “People should have values,” said Apple CEO Tim Cook, and “companies are nothing more than a collection of people.”


We want to make better ads. Could you help us by taking this short survey about cars? It only takes five minutes. Thanks!


A baggage handler in Singapore swapped hundreds of baggage tags. Tay Boon Keh has been charged with 286 counts of mischief for the infuriating prank.

North Korea owes New York City $156,000 in parking tickets.The country’s diplomatic mission to the United Nations has beenracking up those fines since 1990s, but a North Korean diplomat denied it.

The most popular boys’ name in England is Muhammad. If you include various spelling variants, it far surpasses the country’s 6,623 Olivers.

Bill Gates regrets Ctrl+Alt+Delete. The Microsoft founder wishes it took just one button to reboot a Windows PC.

You can buy furniture made of fungus. The designers grow chairs and lamps by blending wood chips with mycelium.

Our best wishes for a productive day. Please send any news, comments, North Korean parking tickets, and my luggage tohi@qz.com. You can follow us on Twitter for updates throughout the day or download our apps for iPhone and Android.

Bespoke Brunch Reads: 9/17/17

Good Morning!

Below is our “Bespoke Brunch Reads” linkfest featuring some of our favorite articles over the past week.

Legal Proceedings

Lords of Misrule by Matt Stoller (The Baffler)

A comprehensive account of why so few white collar criminals – especially those on Wall Street – face the full fury of the American legal system. [Link]

A Judge, a Clerk and Secret Recordings: Drama Engulfs a Staten Island Court by Alan Feuer (NYT)

This story reads like something out of a poorly written farce: a judge who won’t let go of control over her criminal court despite her husband serving as DA in the same jurisdiction. [Link; soft paywall]


‘False Peace’ for Markets? A Trader Is Betting Millions on It by Landon Thomas Jr (NYT)

A profile of Christopher Cole, whose Artemis Capital is making big bets on a significant uptick in volatility in the US equity market. [Link; soft paywall]

Bridgewater’s Ray Dalio Spreads His Gospel of ‘Radical Transparency’ by Alexandra Stevenson and Matthew Goldstein (NYT)

Every preacher needs a fundamental text, and in the case of the world’s largest hedge fund that text is “The Principals”, a quasi-philosophical approach to how he sees the world. [Link; soft paywall]


Italian banks’ bad loans fall sharply as economy rebounds by Valentina Romei and Thomas Hale (FT)

Banks in Italy have sold billions of bad debt off in portfolios to third party investors, reducing the aggregate stock of non-performing loans on their balance sheets by about 15%. [Link; paywall]


How the Potato Changed the World by Charles C. Mann (Smithsonian)

The fifth-most important crop worldwide is the humble potato, brought to Europe, Asia, and Africa from the Americas almost half a millennia ago, fundamentally disrupting how humans eat. [Link]


Harrison Ford on Star Wars, Blade Runner, and Punching Ryan Gosling in the Face by Chris Heath (GQ)

Call us corny, but we’ve always thought Harrison Ford was just…cool. There’s really no other way to put it, and we don’t think you’ll walk away from this interview thinking otherwise. [Link]

A Most American Terrorist: The Making of Dylann Roof by Rachel Kaadzi Ghansah (GQ)

Gut-wrenching, horrifying, and deeply disturbing: dive into the world of Dylann Roof, the white supremacist terrorist who murdered 10 people while they were attending bible study at their church in Charleston, South Carolina. [Link]

“Real” Estate

A 58-story skyscraper in San Francisco is tilting and sinking — and residents say their multimillion-dollar condos are ‘nearly worthless’ by Melia Robinson (Business Insider)

Since completion in 2008, a rise in San Francisco has sunk 17 inches and tilted 14 inches, built on packed sand instead of bedrock and surrounded by other construction. [Link]

Economic Musings

A Few Words on the Dollar by Brad Setser (Council on Foreign Relations)

Setser is being modest with his “few words”: this is a very dense but digestible piece on the value of the dollar and its impacts on the economy both to the upside and the downside. [Link]

The Rise and Fall of Mexican Migration by Adam Ozimek (Moody’s)

Contrary to every popular narrative in politics and culture, immigration from Mexico to the US has fallen to zero net flow; what’s more, shifting demographics mean that a return to inflows from Mexico to the US is almost certainly not going to happen. [Link]

Who Owns The Wealth In Tax Havens? Macro Evidence And Implications For Global Inequality by Annette Alstadsæter, Niels Johannesen, and Gabriel Zucman (NBER Working Papers)

Using new data, the authors estimate the share of global wealth by country held in tax havens, with some incredible results including wealth equivalent to more than half of GDP in some countries held in tax havens. [Link; 34 page PDF]


China Fossil Fuel Deadline Shifts Focus to Electric Car Race (Bloomberg)

The world’s largest auto market has decided to do away with the internal combustion engine and join developed countries like the UK and France in pursuing that goal. [Link; auto-playing video]

Have a great Sunday!

Trading Diary |It’s a bull market

It’s a bull market

By Colin Twiggs
September 15, 2017 9:00 p.m. EDT (11:00 a.m. AEST)

Please note changes to the Disclaimer
Colin Twiggs is a director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

Everything contained in this web site, related newsletters, training videos and training courses (collectively referred to as the “Material”) has been written for the purpose of teaching analysis, trading and investment techniques. The Material neither purports to be, nor is it intended to be, advice to trade or to invest in any financial instrument, or class of financial instruments, or to use any particular methods of trading or investing.

Advice in the Material is provided for the general information of readers and viewers (collectively referred to as “Readers”) and does not have regard to any particular person’s investment objectives, financial situation or needs. Accordingly, no Reader should act on the basis of any information in the Material without properly considering its applicability to their financial circumstances. If not properly qualified to do this for themselves, Readers should seek professional advice.

Investing and trading involves risk of loss. Past results are not necessarily indicative of future results.

The decision to invest or trade is for the Reader alone. We expressly disclaim all and any liability to any person, with respect of anything, and of the consequences of anything, done or omitted to be done by any such person in reliance upon the whole or any part of the Material.


US hourly wages continue to grow at a subdued 2.5% per year. The Fed will normally only move to tighten monetary policy when annual growth exceeds 3.0%.

Hourly Wage Growth

Currency in circulation, growing at a healthy annual rate of 7.3%, shows the Fed stance remains supportive.

Currency in Circulation

Turning to corporations (excluding the financial sector), employee compensation remains low relative to net value added (below 70%), while corporate profits remain high at 12%. Economic contractions are normally preceded by rising employee compensation and falling profits as in 1999/2000.

Employee Compensation & Corporate Profits Relative to Net Value Added

The rising Freight Services Index indicates that economic activity is strong.

Freight Services Index

While a low corporate bond spread — lowest investment-grade (Baa) minus the equivalent Treasury yield — indicates the absence of stress in financial markets.

Corporate Bond Spread

What more can I say: It’s a bull market.


Low corporate bond spreads (BBB-Treasury) indicate the absence of financial stress.

Corporate Bond Spread

Australian wage growth is also low, but declining.

Wage Index

And shrinking currency growth suggests the economy needs even more support than the large recent spend on public infrastructure.

Currency Growth

The four most expensive words in the English language are “this time it’s different.”

~ Sir John Templeton


Weekend edition—#Hillary’s trolls, #Israel’s nukes, #America’s porn

Good morning, Quartz readers!

This weekend many in the US—politicians, citizens, and noncitizens alike—will still be recovering from president Donald Trump’s dizzying roller-coaster ride on immigration policy.

It started last week, when after months of back-and-forth on a widely popular policy that shields some 800,000 young immigrants from being deported, the president abruptly decided to end it. But a few days later, on Thursday, the Trump ride was off again on news that he had hammered out a deal with Democrats to revive it.

In the following hours, he zigzagged on the issue, saying there wasno deal, then asserting its terms. What’s the verdict on the agreement to protect Dreamers—as the beneficiaries of the program are called—and more importantly, on Trump’s positions on immigration? Who knows?

His declarations on the program, Deferred Action for Childhood Arrivals (DACA), were just a compressed version of his flip-flopping on immigration since he took office. For months, pundits have been delving into each contradicting tweet and pronouncement to search for deeper meaning. In their analysis, Trump has gone fromdraconian enforcer, to the long-lost hope of legalizing the status of millions of undocumented immigrants in the US, to the biggest obstacle to achieve immigration reform, and back again. His positions swing so quickly, that they can sometimes render an analysis obsolete before it’s even published (as has happened with a couple at Quartz).

More than tracking presidential policy, following Trump’s statements is like watching the opposing sides in the US’s contentious immigration debate duke it out in the mind of a single individual. And perhaps that’s how we should read it. Trump is just channeling the competing factions that have been fighting for decades over how the US should treat immigrants. To be sure, as president, he has great influence over that debate. But, regardless of what he tweets, the issue is far from settled.

Remembering that the most recent thing Trump said on immigration is unlikely to be his final word, or matter much at all, would bring a dose of sanity to presidential tea-leaf reading—and perhaps some comfort to shell-shocked Dreamers. —Ana Campoy


We’re offering free international shipping on the first edition of our book, but that won’t last much longer. There are only a few copies left that will qualify, so if you’ve been procrastinating, we recommend you order while it’s still on us.


Good news—Tesla intentionally makes some of its cars worse.During Irma, Tesla revealed a secret: the batteries in its cheaper, 60-kilowatt cars could be remotely updated to perform like what they actually are: the same hardware that’s in the more expensive, 75-kilowatt cars. Some cheered the company’s preemptive generosity, while others were confused and angered. Dan Kopf explains whyartificially curbing the battery power of otherwise identical cars actually make Teslas more accessible, and environmentally friendly, for everyone.

What happened to the trolls. Earlier this week Hillary Clinton released her book on the 2016 US presidential election. Immediately, trolls flocked to her page on Amazon, deluging the book with one-star reviews. Then, within a day, 900 such reviews disappeared. Thu-Huong Ha looks at what happened, and analyzes the trail left behind by the trolls.

A cultural history of graph paper. The soothing squares of a gridhave an enduring psychological appeal. Ancient Egyptians used the grid to sketch out hieroglyphs; Thomas Jefferson used commercial graph paper to draw plans for the Virginia Capitol; and today, stressed-out consumers are seeking refuge from chaotic reality in the simplicity of luxury notebooks. After all, as Meg Miller writes, “In times of anxiety, our impulse is to find a way to break down an overwhelming situation into simpler, more solvable parts.”

A seven-word motto can help you overcome your fear of failure. A lot of people shy away from trying new things—from fitness regimens to new careers—unless they know they’ll succeed. During a session with a personal trainer who goes by the nickname The General, Kira Bindrim discovered a simple phrase that helps ease insecurity: “I want to see if you can…” In a world that tends to emphasize achievement, Bindrim writes, it’s liberating to be reminded “that there’s honestly no harm in taking a stab at something.”

A gritty new show about porn is also about what makes America great. The Deuce’s portrayal of New York City’s 1970s underworld of sex work and pornography is, “a critique of capitalism and an understated ode to multiculturalism,” writes Adam Epstein. He lays out a compelling thesis about the worldview that creator David Simon has expressed throughout his TV career.


Everybody deserves a second chance—until they don’t.Michelle Jones is an accomplished historian who produced an award-winning academic paper behind the bars of an Indiana prison, where she was serving time for murder. She’s recently been released after two decades of incarceration, and soon after started a Ph.D program. It was supposed to be at Harvard—who initially accepted her application, but then rescinded the offer. Eli Hager at The Marshall Project explores the complicated tale of the redemption of an unusual scholar.

A mathematician unearths an agricultural crisis in progress.Iraki Loladze’s first love is numbers, but in 1998, when he helped biologists at Arizona State University suss out a weird problem they couldn’t explain without his expertise, he found a new passion. In an approachable piece outlining a complex subject, Politico’s Helena Bottemiller explains how this mathematician came to posit that global warming may be slowly sapping crops of most of their nutrients—and why he’s struggling to get people to listen.

No one wants to work in unfriendly skies. A career in air travel used to be a glamorous and desired gig. Sharp uniforms, free trips to exotic destinations, great benefits, and even better wages brought troves flocking to the industry. No longer. Jeff Friedrich, a former flight attendant himself, now an associate editor for Slate, explains how 9/11, globalization, consolidation, shockingly low entry-level wages, and ever-increasing costs to entry are all contributing to an industry-wide problem: Millennials would rather work at the Gap then on an airplane.

How Israel got its nukes. Israel never thought its’ pursuit of nuclear energy would succeed, but former prime minister Shimon Peres shows just how it did. With spy novel élan, Peres recounts the clandestine effort to ask France for what no other nation had ever given before—the material and expertise to build a nuclear reactor—even as he constantly walked the line of abject failure. Tablet magazine has this exclusive excerpt from Peres’ posthumous autobiography.

Luxembourg has big plans for outer space. The tiny European nation has no national space agency and limited research capabilities, but it has big plans to become an international (galactic?) hub for mining minerals, metals, and other resources on celestial bodies. In the Guardian, Atossa Abrahamian explores the tiny tax haven’s enormous ambitions, and explains why Luxembourg just might be perfectly suited to realize them.

Our best wishes for a relaxing but thought-filled weekend. Please send any news, comments, up-ranged Teslas, and airplane snack packs to hi@qz.com. You can follow us on Twitter here for updates throughout the day, or download our apps for iPhone and Android.