Archive for year: 2018

A Youthful Look at Aging, Robots are Coming and Visualizing the Wealthy

Perhaps you read this week about the discovery of Soviet jokes declassified by the CIA after 30 years which only confirms our already ensconced bias that when everything is classified nothing is secret. Maybe it is witnessing the last few hours of summer warmth washed away by the rains of autumn, but this revelation along with two others helped us bake some long undercooked ruminations. At a dinner event this week, a former U.S. official who would certainly know such things, noted that Americans don’t understand just how powerful U.S. government cyber capabilities are and what destruction America could wreak on other countries if it chose. But, he said, other countries do, which constrains their worst cyber terrorist tendencies. The next day at a lunch on the state of international trade, the speaker recounted talking to a U.S. Congressman who was complaining he could no longer talk recklessly anti-trade because the current U.S. president’s recklessness makes that impossible.  The Congressman was very happy to spout radical talk when there were no consequences. But now he has to speak the truth. Of course, all this occurs as computer technology is increasingly able to decipher what people are thinking or feeling regardless of whether they speak the thought or emotion. And, of course, many use Twitter to say things about others—athletes, politicians, ordinary people caught in the temporary winds of fame—that previously they only spoke to the person sitting next to them on a barstool. In other words, we can’t handle the truth but the truth can handle us. And so as we tell the one about perestroika and the seven kittens, we very seriously present three interconnected stories this week. Your homework is to determine how they are connected. It’s this week’s Memento version of International Need to Know.

Without further ado, here’s what you need to know.

A Youthful Look at Aging

The world, as we’ve noted in this space previously, is getting old. *Other than India and Africa, most countries face aging demographics. So which countries are best dealing with their demographic fate? The Global Aging Index, launched by researchers from Columbia University and the University of Southern California, aims to quantify this question. As you see in the chart below, of the 30 advanced countries tracked in the index, Norway, Sweden and the U.S. come out on top, with the Netherlands and Japan rounding out the top five. Given Japan is one of the oldest societies in the world, it is good their society is doing well at dealing with the situation. The index analyzes across five metrices: a) productivity and engagement, i.e. connectedness within and outside the workforce; b) health; c) equity; d) cohesion, social connectedness being one cohesion measurement; and e) security, both retirement support and physical safety. In the second chart below, you’ll note the U.S. is tops in productivity and engagement but low in equity. We’re always glad for a helpful index but notwithstanding we are getting older every day, we’d be interested in a youth index—they’re the ones most adversely affected since the Great Recession.

The Robots are Coming, The Robots are Coming!

Or so fret lots of people around the world, according to a new Pew Global survey of 10 advanced and emerging countries. “In all 10 advanced and emerging economies polled, large majorities say that in the next 50 years robots and computers will probably or definitely do much of the work currently done by humans.” Greece tops the list of technological worriers with 52 percent of Greeks definitely believing it will happen and 39 percent believing it will probably happen. Greeks are also most likely to believe people will have a hard time finding a job due to automation. Given the last decade of economic problems perhaps Greece is projecting a bit from current and past circumstances. In fact, those countries whose economies are performing better express less of a fear of automation in the survey.  In Brazil and Japan, it is the young who are most worried about the robots. This could be factored into a youth index. We live at a time of great anxiety, over refugees, robots and more. Whether we should be this scared is another matter.

Visualizing the Wealthy

We have a vague memory that Oprah once promoted an author whose book claimed one could become wealthy by visualizing it. We visualize that at least that author got wealthy, but the Visual Capitalist provides a great graphic of where the wealthy are located in our world (besides in very nice houses with great views). “The visualization breaks down the world’s 129,730 people that have fortunes of US$50 million and above. It’s a much narrower measure, representing just the upper echelon (top 1%) of the world’s millionaire population.” Unsurprisingly, North America is home to the most ultra-wealthy followed by Asia and Europe. But you might be surprised to learn that the two fastest growing locations for the ultra-wealthy are Russia followed by Latin America. Still, they have a long way to go to catch up to the United States which is home to nearly 30 percent of the world’s ultra-wealthy, with Japan a distant second at 7.7% and China third at 6.8 percent.

China Meets Joseph Conrad, Going Up, and Here, Worry about This

Context is everything. On Sunday we attended the Trombone Shorty Voodoo Threauxdown, a concert on the grounds of the zoo in Seattle. Five New Orleans bands played throughout the evening with a variety of Crescent City legends sitting in, including Kermit Ruffins, who once recognized us in the New Orleans Airport (we’ve attended many of his shows), which is perhaps the fifth-proudest moment of our lifetime. Any one who knows New Orleans, and its music, understands it is not a chamber concerto where one sits quietly and nods their heads in slight motion to the cello. This, however, did not stop the woman sitting behind us from complaining about our standing and dancing, which is perhaps the most stereotypical Seattle concert goer thing to do. Meanwhile the woman in front of us, decked out in a Clay Matthews Green Bay Packer replica jersey and hair dyed green and gold, was watching the Green Bay Packer football game on her smart phone, so engrossed in the contest that she merely flung a coat to her husband when their young son got cold, her eyes firmly on the glowing screen. Ordinarily one might have concerns about someone watching their cell phone during a concert but a) this was a bustling outdoor show and just about anything goes in New Orleans (even when in Seattle), b) the woman’s devotion to her team was very endearing and c) we too are a Green Bay Packer fan. When the sainted Aaron Rodgers threw the game winning touchdown to cap off a stunning comeback, the woman dropped to the muddy ground (it was raining through much of the concert) and raised her hands like Andy Dufrense emerging from the tunnel in the Shawshank Redemption. It was a beautiful moment as Trombone Shorty–the headliner–blew his horn and the whole crowd was on its feet swaying and dancing–save for the woman in front of us and the woman in back. So this week we give context to China’s Africa activities, Japan’s space elevator and yet another thing the world is worried about. It’s this week’s International Need to Know, neither assessing penalty points nor abusing our racket though occasionally calling “let” on the world.

Sweet and Sour Mysteries of China

China’s reemergence as a global power brings with it a more assertive role on the world stage and resistance to these moves, all enveloped in the continuing mystery that is the world’s largest country. Forthwith we bring to your attention the The Strange Case of the Stolen Chinese Art and the Mysterious Unmasking of Chinese Hackers. First we point you to a fascinating article in GQ of all places about Chinese art heisted from museums around the world. The article’s author suspects the Chinese government is behind the thefts in an attempt to retrieve art the western world took from China during its down years: “In each case, the robbers focused their efforts on art and antiquities from China, especially items that had been looted by foreign armies. Many of these objects are well documented and publicly known, making them very hard to sell and difficult to display. In most cases the pieces have not been recovered; they seem to simply vanish.” Paging the Chinese equivalents of George Clooney and Sandra Bullock. Second, the online tech publication Motherboard describes a mysterious group revealing the names of Chinese hackers: “Since April last year, a group calling itself ‘Intrusion Truth’ has trickled out the real names of hackers working for Chinese intelligence. Recently the group has ramped up its efforts against a Chinese operation targeting governments and businesses.” In recent years, Russia has received the lion’s (bear’s?) share of attention for cyber shenanigans, but China also has a robust cyber espionage machine, especially and including industrial cyber espionage. Now somebody is fighting back, in the form of Intrusion Truth. The golden BRIC road to the Chinese Century will be littered with such stories, mysteries and wizards. Enjoy them.

It Depends on What the Meaning of “is” is

There has been much talk of socialism in recent months with U.S. congressional candidates proudly claiming the moniker and others attacking them vociferously for doing so. Of course, much of this is due to a confusion of terms. Most of the candidates are not arguing for nationalizing companies but rather to adopt “social democracy” along the lines of a variety of northern European countries. And this is where we enter INTN territory. Many on the right decry these northern European countries as un-free. And yet, as Will Wilkerson points out, the Heritage Foundation’s Economic Freedom Index ranks most of these countries ahead of the United States. Denmark, Sweden and Iceland are all more economically free, according to Heritage—a conservative organization, whatever that means in this day and age—than the United States. As Wilkerson notes, they “outscore the United States in the security of property rights, ease of starting a business, openness to trade, and monetary freedom (a measure of inflation and price controls).” So which countries are “socialist” and which are “capitalist” and which are more free or less? In our estimation, 37 percent of policy misunderstandings are due to inaccurate use of labels.

The Missing European Unicorn

We are not a fan of the term “unicorn.” We strive to excise it wherever we find it, whether in sports, business or even Harry Potter books. But it is interesting that the EU continues to lag far behind the U.S. and China in the number of companies valued at $1 billion or more. In 2017, the U.S. had 109 such companies, China was home to 59 and Europe only 26. And Europe lags behind in companies valued at $100 million or more as well. Why? A Bloomberg article notes that the EU is still a compilation of nation-states rather than a unified whole. One grows a company in Germany but it is still difficult to expand it into France, Italy and Poland. Whereas a Chinese or U.S. company starts with a large market to begin with, no matter which province or state where it is headquartered*, and then can expand overseas. In addition, EU companies still receive less venture capital, “Last year, 3,500 European companies received a combined $19 billion in venture investment. Although that pales next to China’s $40 billion and America’s $67 billion, it’s a record for Europe and four times greater than the figure from five years ago.”  Whatever the reasons (and, of course, it is plural–don’t be seduced by the tyranny of narrative**–there are almost always multiple factors for something, not one overarching narrative), these reasons are why China and the U.S. (and perhaps some day, India) will be the drivers of global business whatever their own challenges.***

*Well, maybe not Mississippi

**We hope one day to write a book about The Tyranny of Narrative, we hope you will buy it when we do

***They are many

Iran’s Basic Universal Income, the Graying of China and Wage Stagnation is Worldwide

In reading up on a topic in Science Direct, which we report on in the first story below, we stumbled upon this paper that claims children who are taught to lie increase their reasoning abilities. Or as the paper states, “There is some evidence that deception and cognitive skills may be linked during childhood. A number of correlational studies have shown that young children who have relatively strong executive function and theory of mind skills are more likely to tell lies and are better at maintaining the lies they have been told…” This is one of the more disturbing and depressing notions we have learned in 2018 so far. And yet, perhaps it explains much of what happens in Washington, D.C., and all of what happens in Hollywood. Or, are we lying to you about this study? While we await your answer we announce that this is income week here at International Need to Know. Our three stories below focus on income, or in some cases, the lack of it, for the young, middle-aged and the old. We turn our truthful eyes to the surprising place where a universal basic income has been instituted, gaze upon a method China is using to deal with an aging population and put a magnifying glass to wage stagnation in the developed world. It’s this week’s International Need to Know, displaying a child-like interest in the world.

But first, with deepest, deepest, respect–the incomparable Aretha Franklin. RIP Trombone Shorty at Deluna Fest 2011 – “In Bloom” (Nirvana Cover)

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Last Week’s Survey Results: Nearly two-thirds of you think Aretha will be remembered with only 10 percent believing McCain will and 20 percent think neither will be remembered 200 years from now. Tough times for McCain fans.

Without further ado, here’s what you need to know.

China Meets Joseph Conrad

China has moved upriver in the world of international investments and aid. It famously is a big player in Africa, building infrastructure and providing other sorts of aid. In fact, China’s level of aid and loans is as large as the United States. But the composition is very different as you see in the chart below from AIDDATA (a project of William and Mary—William gets all the credit but Mary does all the work). While most of U.S. expenditures in Africa take the form of aid, much of China’s is in the form of loans. The bulk of China’s efforts are in the energy sector, followed by transportation. Some  criticize China for a mercenary approach. On the other hand, just how effective has U.S. aid been over the years?* But, there are reasons to be concerned about China’s commercial activities in Africa. Case in point, a big investor in a South African newspaper is China International Television Corporation (CITVC). After the investment, a columnist wrote an article for the newspaper about the Chinese government holding more than one million Muslim Uighur’s in internment camps. He no longer has a column,  or as Joseph Conrad wrote, “It was written I should be loyal to the nightmare of my choice.”

*This is an honest question. Some of the aid was certainly effective, some not. Perhaps self-interested loans may have a better overall outcome?

Going Up

We first read about the concept of a space elevator over a decade ago. It excited our imagination but since then very little progress has been made. However, Japan is now trying to change that. Wait, what the hell is a space elevator you may ask? Well, it is a means of transporting goods back and forth via a cable tethered to the earth and reaching all the way into space. The catch is for this to work the cable needs to be very strong. Unfortunately,  progress on developing new materials for such a cable have been very slow. But according to Electronics Weekly (the world’s 352nd most exciting periodical), “Shizuoka University and contractor Obayashi aim to launch two small (10 sq cm) satellites connected by a 10m steel cable from the International Space Station.” They plan to use carbon nanotube for the cable’s material. Therein may be the catch—can they create such a material that is strong enough for these purposes? If so, the cable would transport vehicles capable of holding 30 people (though more likely they would be transporting materials). The cable would start from a platform on the sea and reach up 36,000 kilometers above earth. One assumes like more pedestrian elevators here on earth, the “open door” button won’t actually work.

Here, Worry About This

Because people don’t have enough anxiety as it is, Nomura Holdings has created a Damocles Index that assesses the risk of currency exchange crisis for 30 emerging markets. Their index finds that of the 30 emerging markets, seven are at risk of exchange rate crises, meaning there is doubt they have enough foreign reserves to maintain their exchange rates (those with sharp memories may remember the Asian financial crisis of 1997 when the Thai baht could no longer be pegged to the U.S. dollar). The Index gauges factors such as foreign exchange reserves, debt levels, interest rates and import cover. Any market with a score over 100 is at risk. Sri Lanka tops the riskiest markets with a score of 175 followed by South Africa, Argentina, Pakistan, Egypt, Turkey and Ukraine. Perhaps surprisingly of the 30 emerging markets, Brazil has the least risk. Of course, that means that’s where the crisis will start.

Chinese/Korean Bakeries, Forget the Fish Eat the Tourists, and Education Levels

We watched, either live or later online, some of both of the memorials for John McCain and Aretha Franklin. Pop quiz: which one will be more widely remembered 200 years from now? Extra credit: Which one should be more widely remembered?

Which one will be more widely remembered 200 years from now?
Aretha Franklin
John McCain
Both will be forgotten

Which one should more widely remembered?
Aretha Franklin
John McCain

Feel free to email us with more thoughts on this all important matter and we may provide answers in a future INTN edition. But more important we need to discuss our love and admiration for Jennifer Hudson. We’ve noted before in this space that she had the greatest clutch performance in music history, though Aretha’s death reminded us of a worthy contender.  But, if you did not catch Jennifer Hudson’s remarkable performance of Amazing Grace near the end of the Queen of Soul’s memorial (given it was a seven-hour service, you could easily have missed it), do yourself a favor and watch it. We are not a religious person, but it is moments like that when we feel most closely tied to humanity. As we fight off restraining orders for repeatedly watching Jennifer Hudson iconic music moments, we smell the aroma of Chinese and Korean Innovation Bakeries, advocate skipping fish and eating the tourists, and cook up some education numbers. It’s this week’s International Need to Know, hoping to arrange seating arrangements for the next icons’ memorials while dishing up international data and information.

Jennifer Hudson Sings ‘Amazing Grace’ at Aretha Franklin’s Memorial

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Without further ado, here’s what you need to know.Chinese and Korean Innovation BakeriesFor decades, only a few countries brewed most of the world’s innovations. Or, as a new study by the IMF quantifies it, “From 1995 to 2014, three-quarters of the world’s patented innovations originated in the Group of 5 (G5) technology leaders—namely the United States, Japan, Germany, France, and the United Kingdom.” But the IMF study also notes that this is changing. It finds that China and Korea have joined the traditional R&D powers. The IMF cites two metrics illustrating this change. First is overall R&D spending: “China’s R&D spending is now second only to that of the United States ($460 billion) and is much larger than Japan’s ($150 billion). Korea, at $70 billion a year, spends close to the average of large European countries such as France, Germany, and the United Kingdom.” Second, the IMF looks at the number of patents (a metric we are not fond of) and the number of times new patents cite older patents, and from where. It turns out that a lot of today’s citations are increasingly citing patents from China and Korea (see second graph below). Some are worried by the rise of Asian innovation. We are not (and neither is the IMF study). Remember the world economy is not a pie with finite slices, it is a bakery. China and Korea are adding to the number of treats.Forget the Fish, Eat the TouristsMaybe a decade ago we were chatting with our Uncle in New York City, while eating a bialy, about all the tourists then inundating the city. Our Uncle, very much a wise-cracking New Yorker, turned serious and noted how all these tourists were degrading life for those living there. It was impossible to get around and markets, museums and other areas were overrun with people walking slowly, cameras at the ready. As the traditional summer tourism season closes out, we were reminded of this conversation by a column in the New York Times on Europe’s “overtourism” problems. Farhad Manjoo noted, “…the world’s most popular destinations cannot expand to accommodate an infinite flood of visitors. Advocates of curbing tourism say too many visitors are altering the character of historic cities, and making travel terrible, too.” Indeed the World Tourism Organization (UNWTO–is there an overorganization problem too?) reports that tourism in 2018 is well above forecasts, something that has been true for a number of years. In the larger picture Manjoo notes, “when the jet age began, around 25 million international trips were taken. Last year, the number was 1.3 billion.” When we were in Venice a few years ago, we noted both that it was a fabulous place to be but also that almost no one actually lives there anymore. It is no longer a city, it is a museum. Not everyone can do so but try to travel offseason and off the beaten path too. But eventually those paths will also be beaten. It is a trade-off of the world becoming wealthy.The Most Educated SocietiesWhich countries are most educated, or at least have the highest percentage of their population with a tertiary (college or above) education? It turns out Canada is number one, followed by Japan, Israel, South Korea and the U.K. The U.S. comes in number six, just ahead of Australia and Finland. All of these countries are above the OECD average of 35.7 percent. Italy, Tukey and Mexico bring up the rear among OECD countries. Note the correlation, or lack thereof, to today’s first story.


Mighty Maya, Russia’s Rodney Dangerfield, China’s Data Problem and Japan’s Flying Cars

You may remember well over a year ago our young six-year-old friend, Maya (now 9???!!!), was battling cancer. Due to her resilient spirit and the good people of Seattle Children’s Hospital, Maya is cancer-free. You may also remember that the musician, Amos Lee, visited and became friends with Maya through the Melodic Caring Project, a wonderful nonprofit that “teams up with local and nationally touring artists to bring love and encouragement to children and families by streaming the healing power of music to kids in their hospital room or homes.” Last year at a sold out Benaroya Hall show, Amos debuted a song he had written for Maya called Little Light. We are happy to inform you that Amos’ new album, New Moon, drops tomorrow. On that album is the song, Little Light. It’s a ripping, inspiring, toe-tapping number that, of course, has special meaning here at the INTN worldwide headquarters. Give it a listen, clap your hands and consider buying the album and donating to the magnificent Melodic Caring Project. And as you do, we shine a little light on Russia’s Rodney Dangerfield, the real problem with Chinese data and Japan’s flying cars. It’s this week’s International Need to Know, the uplifting source of all the healthy news of our world.

Amos tells the wonderful story of meeting Maya, song begins at 2:53
Amos Lee, Jefferson Center, Roanoke VA 11-1-17

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Without further ado, here’s what you need to know.

Russia’s Rodney Dangerfield Effect

Our American readers undoubtedly have strong opinions on whether Russia interfered in the 2016 presidential election. But what do Russians think? As it turns out, an overwhelming majority of Russians—71 percent—“think Russia did not interfere in the American election,” according to a Pew Global survey. Russians 59 years old and older, are even more likely to think Russia is innocent of such interference (77%). Apparently Russians, especially older ones, like the current U.S. President, do not believe U.S. intelligence reports. The Pew survey is chock full of interesting data, including that 80 percent of Russians “see NATO as a military threat, with 45 percent stating it is a major threat.” Russians have also succumbed to the musical charms of Aretha Franklin with nearly two-thirds saying Russia does not get enough respect around the world. Russians are also concerned about inflation with two-thirds worried about it despite inflation rates returning to lower levels almost two years ago. High inflation, more than many economic maladies, appears to have a longer shelf-life for ETSD (Economic Traumatic Stress Syndrome).What Russians think and what is accurate are often not the same thing, but understanding what Russians believe is important, so read the whole survey.

The Real Problem with China Data

We originally joined Twitter to more easily follow our beloved Seattle Mariners (an unrequited love given they are on the verge of missing the playoffs for the 17th straight year). Since then we also follow a number of other Tweeters on other subjects, including China watchers. But we rarely post and even more rarely comment on others’ post. But last weekend we clicked on a link in a post to an article by Nicholas Lardy explaining worries that China’s economy is cooling because investments are down are not true.  As Lardy explains it, the methodology China has used for counting fixed asset investment has changed this year. Previously the Chinese government’s method “involved considerable double counting, which the authorities are paring back.” All well and good and a helpful explanation about investment not decreasing and makes us feel better that current Chinese growth is not slowing dramatically. But, we tweeted back, “If fixed investment was being double counted and no longer is, what does that say about economic growth when such investment was being double counted?” Nobody replied to explain. We agree with Lardy that China bears are overwrought but for China to be a true world leader, they will need more transparency, including and especially in their economy.

Here’s Your Flying Cars

Where are the flying cars? We’ve heard a number of people ask that who believe technological progress has been too slow.. Do not fear, the Japanese government is listening.  According to Bloomberg, Japan is working with a consortium of companies to develop flying cars in the next decade, both to alleviate traffic congestion problems and to help Japan’s industry keep up with technology. Among the companies Japan is partnering with is one just up the road from us, Boeing, as well as Uber, Toyota and others. In fact, the consortium of companies and the Japanese government met yesterday to begin “charting a road map” for the technology. Putting aside the backwards use of a metaphor,  the Japanese government push–they will set safety standards, and take care of other regulatory matters—is much needed if this new technology is to take flight soon (now that’s a more apt metaphor).


Sweet & Sour Mysteries of China, Definition of “Is” and Missing European Unicorns

Perhaps nothing is missing more from public life, in our discourse, on social media, in policy discussions, debates, arguments, writings and verbal jousts, than humbleness. Name the issue or the movement, and they could all use a bit more of it. People are more convinced than they should be that they are correct in their opinions. This despite life continuing to prove otherwise nearly every single day. We ourselves here at INTN are in need of more humblesness as much as anyone. For instance, we once asserted very confidently to anyone who would listen that Jim Converse would win the Cy Young Award before his career was over. Who, you may ask? Exactly. And yet even we continue to make statements like we know what is going on. And policy makers, reporters, politicians and others appear to be even more confident than we are. So we remind all of us, as we once wrote in this space over two years ago, that the three most underused and yet most accurate words in the world are, “I don’t know.” But we are sure we will describe the sweet and sour mysteries of China, question the definition of “is”, and search for the missing European unicorns. It’s this week’s International Need to Know, the world’s most humble analysis of, well, the world.

Without further ado, here’s what you need to know.

Aretha Franklin – Bridge Over Troubled Water

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Without further ado, here’s what you need to know.

Iran’s Universal Basic Income

Fears of robots taking jobs has prompted talk of the need to institute a universal basic income. Putting aside for the moment that, as of yet, robots are not massively replacing humans, so current robotic deployments are not a reason to institute a universal basic income, one of the fears of such a policy is it would discourage work. Lazy Ed down the street would take his basic income and play video games all day rather than finding a job, or so the theory goes. But did you know that in 2011, Iran, of all places, instituted a universal basic income? They did so when replacing a large scale energy subsidy policy. “In 2011, Iran started monthly deposits of cash into individual accounts covering more than 70 million people and amounting to 28% of the median per capita household income.”  A paper was recently published in Science Direct that finds “no evidence that cash transfers reduced labor supply, in terms of hours worked or labor force participation. To the contrary, we find positive effects on the labor supply of women and self-employed men.” This is a surprising result, at least to us, who were one of those expecting such a policy to be a disincentive to work. We do expect more disruption to the labor market from automation in the future. Perhaps a universal basic income will be a possible remedy after all, although we await further study of Iran’s program.

Solving the Graying of China

In some people’s view of the world, China is an all-powerful entity, organized and run better than the democracies of the world. And though China has been remarkably successful the last 40 years—since discarding ideas some are now advocating to get elected to the U.S. Congress—the truth of China is more prosaic, or at least complicated. It is seizing opportunities but also grappling with difficult challenges.  One of those challenges is the graying of its population—17 percent of China’s population is over the age of 60 (15 percent of Americans are 65 or older). Sixth Tone reports that “according to the Chinese Academy of Social Sciences, by 2022, retirees will be growing at a 3 percent faster rate than pension fund contributors.” How to confront this inconvenient fiscal fact? Sixth Tone also tells us that the Chinese government has developed a reverse mortgage initiative for elderly Chinese. China’s State Council encouraged “anyone aged 60 or above with full legal ownership of a property…to apply for a reverse mortgage.” Thus far, very few Chinese are taking up the government on the offer. Or as Sixth Tone poetically puts it, “The public’s response, however, was the equivalent of a single ripple in a vast, otherwise glass-surfaced sea. As of this May, there is only one insurance company in all of China that offers reverse mortgage services, and only 132 people have taken out policies.” China is one of many countries struggling to figure out how to deal with an aging population, but they are the largest, and perhaps, the most important. Our aging, near-sighted eyes will continue monitoring it.

Wage Stagnation is Worldwide

Our American readers are surely aware of the slow wage growth in this country. But perhaps it is not as well known that this is a phenomenon around the world. The OECD (Organization for Economic Cooperation and Development), a consortium of 35 mostly developed countries, recently noted that among these countries, “Wage growth remains remarkably more sluggish than before the financial crisis. At the end of 2017, nominal wage growth in the OECD area was only half of what it was ten years earlier.” This is especially true for the lower rung of wage earners. What’s causing this wage stagnation? The OECD asserts, “Low inflation and the major productivity slowdown have contributed to wage stagnation, as well as a rise in low-paying jobs.” Much of what is dividing America also afflicts the rest of the world. We may all become Iranian some day.

Buying a Chinese Condo, The Young & the Restless and Size Matters

A friend on Facebook (which is to say they are a Russian spy), linked to a New York Times article (recently bought by Pravda) about a woman who was arrested after leaving her four-year-old son in the car in the parking lot on a cool day with the windows ajar and child locks engaged. Our Facebook friend was outraged at the woman’s arrest, and for good reason. A couple years ago we protested a “driving while using our cellphone” ticket (as in all matters, we were completely innocent) and while we waited watched the case before ours where a sixteen-year-old girl had been arrested for being in a park after dark. The girl was accompanied in court by her Mom, and was let go eventually with a fine. We found the fact she was arrested at all to be ridiculous. If she was in the park after dark, just tell her to get out. Everything is criminalized in America nowadays. A book that, full confession, we have not read but confirms our bias (even INTN is susceptible to bias) so we quote it anyway, asserts that the average American commits 3 felonies per day without knowing it. So even as we aim to commit a fourth infraction today, we discuss China’s household debt, explore the young of Africa and examine where size matters. It’s this week’s International Need to Know, the Jesse James, Pretty Boyd Floyd, John Dillinger of international information and data.

PS INTN will be MIA next week but back the week after.

Without further ado, here’s what you need to know.

How Many Miles Do I Earn Buying that Condo?

As the U.S. slid into the Great Recession in 2007, U.S. household debt was both a worry and a possible culprit for the cause of the economic destruction. In the ensuing years, Americans deleveraged though recently we are again incurring more debt. But what if we told you China, the land of the great saver, now has a household debt to income ratio larger than the United States? Actually it’s Christopher Balding telling you in an article in the Nikkei Asian Review, “Despite China’s reputation as a nation of savers, its households embarrassingly now hold more debt than those of the U.S. and Japan…” Chinese are still savers but they are also on a borrowing binge, with household debt growing around 20% per year. Much of this borrowing, including worrisomely borrowing on credit cards, is focused on buying housing which has been such a great investment for Chinese over the last 20 years. We sometimes view Balding as being too hard on China, but the household debt situation is one to keep an eye on.

The Young and the Restless

Last week we wrote of the underrated Ethiopia, touting as one of its assets its young demographics. As it turns out, the ten youngest populations are all located in Africa with Niger* the youngest, followed by Uganda, Chad and Angola. The African Institute for Development Policy (AIDP) considers these demographics with both a dose of optimism and worry. It notes, as we have, that there is a demographic dividend for young countries since GDP only grows through a combination of increased productivity and increased working-age populations. These young African countries will all have growing working age populations in the coming years. But what about productivity?  As the AIDP notes, “What kind of future is in store for another billion plus African people? The answer to this very much depends on the policies that Africans undertake to ensure their populations receive quality education, affordable and quality health care, decent jobs, and so on. The demographic dividend is neither guaranteed nor is it automatic.” Perhaps Ethiopia will be a model for them as early Asian Tigers were for countries throughout Asia.

*We recently discovered the Niger musician, Bombino.  As you see in this video, he’s a revelation as a guitar player and performer. 

Bombino – Adounia Idagh-Live musée des confluences Lyon

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Size Matters

Speaking of population, there is increasingly a change from worries about overpopulation to trying to increase the size of a countries population. Japan, of course, started shrinking a couple years ago. But China has concerns too, thus the end of the one-child restriction in 2016 changing to allowing two children per family. Now some are calling for even that more lenient restriction to be abolished. China’s slowing population growth is creating a variety of challenges, including an aging population. The situation has become so dire that, according to Inkstone News, the province of Liaoning is considering paying people to have babies.” Desperate for a baby boom, the local government is exploring ways to reward couples for having a second child, which may include tax, education and housing benefits, according to a development plan released this month.” The province is desperate because the region’s fertility rate is only 0.9.  We expect China’s central government to weigh in on this issue soon.

The Life of Xi, World’s Most Underrated Country & Who Wants Self-Driving Cars the Most

A long time ago in a galaxy far, far away, we majored in mathematics in college. One upper division class we took in our junior year focused on complex numbers. We were in a haze all semester unable to grasp the concepts, but we dutifully crunched our equations and got an A nonetheless, making us suspicious of good grades ever since. We were reminded of this when reading the article, The Peculiar Math that Could Underlie the Laws of Nature. It features the mathematician Cohl Furey who does understand complex numbers and uses them to explain fundamental forces of the universe. But Cohl Furey, it turns out, is also a fan of New Orleans, which in an alternate, more sane universe, (one explained by complex numbers apparently) would be at its center. Like many trailblazers, Furey’s theories were disbelieved at first but “she told a colleague that if she didn’t find work in academia she planned to take her accordion to New Orleans and busk on the streets to support her physics habit.” We still don’t understand complex numbers but we do understand New Orleans. So even as we explore the Life of Xi, identify the world’s most underrated country and determine who wants self-driving cars the most, we present the video below in honor of Furey’s work to understand the laws of nature. It’s this week’s International Need to Know, the string theory of international news and data, but more understandable.

The Honeypots, Latin Girls, 9th Ward Fest

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Without further ado, here’s what you need to know.

The Life of Xi

China is changing profoundly under President Xi Jinping. As we have noted in this space, Xi is more assertive on the world stage, inaugurated the ambitious One Belt One Road Initiative, has instituted a corruption crackdown (your definition of “corruption” may vary) and has introduced far more censorship into Chinese society, especially on the Internet. And, of course, President Xi has taken a more central role in governance, including eliminating the two term presidential limit. And now comes data that Xi receives more mentions in the People’s Daily (the official newspaper of the Chinese Communist Party) than any Chinese leader since Mao. As you see in the graph below provided by China data tweeter Air Moving Device, “Comparing Xi to previous Chinese leaders in terms of People’s Daily front-page mentions, Xi is close to being mentioned every single day, which is Mao’s record during the Cultural Revolution.” Of course, who knows if Xi will maintain this rate of mentions for as long as Mao did or if Xi will march down the dark roads Mao trod, or one hopes, instead hike up sunnier, more beneficial paths.

The World’s Most Underrated Country?

Ethiopia is bucking troubling world trends and in doing so is sneakily competing for the title of world’s most underrated country. It has been the fastest growing economy in Africa for the last ten years, is the 12th largest country by population and has young demographics (40 percent of the population is under the age of 14), which is important for continued GDP growth and innovation. And in the last two weeks not only has Ethiopia formally ended hostilities with its former combatant, Eritrea, but this week Ethiopia’s Prime Minister has called for the country to become a multi-party democracy. Reuters reports that the Prime Minister’s Chief of Staff tweeted, “PM Abiy concluded: Given our current politics, there is no option except pursuing a multiparty democracy supported by strong institutions that respect human rights and rule of law.” The PM’s party, Ethiopian People’s Revolutionary Democratic Front (always be suspicious of parties that combine the words “people, revolutionary and democratic”), has maintained power since 1991. But the winds are a changing and Ethiopia could become Africa’s first economic Lion similar to the tigers that once rose out of Asia. Our fingers are crossed.

Who Wants Self-Driving Cars the Most?

We have long asserted that because of regulatory and cultural factors, self-driving cars are likely to first take off commercially in countries other than the United States.A new survey by Ipsos buttresses our assertion. IPSOS surveyed 21,000 people across 28 countries and found that the United States came in 18th among country populations who “would own a self-driving car as their main form of use.” Malaysia came in first, followed by Peru, Colombia, Chile and Argentina. In fact, developing countries favored the use of self-driving cars far more than developed countries, perhaps reflecting their worse traffic and unfamiliarity with Uber (We joke! Kind of). Among those countries’ populations who “would not use a self-driving car,” Germany tops the list, followed by Great Britain, Canada, France and the United States. If we are to guess, we predict self-driving cars will first become ubiquitous commercially in Singapore, followed by China.

Update: Waymo and Walmart aim to prove us wrong

Solar in India, Doctors and Truck Drivers and Who is Most Inclusive

Memory is a funny thing. It is remarkably unreliable. We have a memory that we once met one of the Russian interpreters for Mikhail Gorbachev but for the life of us we don’t remember the circumstances. We think it may have been on one of our business trips to Russia many years ago. We are fairly certain the interpreter worked the Reykjavik Summit for Gorbachev when he and Reagan agreed to radically reduce nuclear armaments, but we have no memory of any stories the interpreter told us of Reykjavik, or anything else for that matter. This seems odd and makes us question whether we really did meet this person. There have been many studies that show eyewitnesses are notoriously unreliable. But so often we take eyewitness testimony as gospel. If I ever testify in a trial, don’t believe me, or at least verify what I say. It’s like the lyric from the song, Mr. E’s Beautiful Blues: “Don’t believe anyone and most of all don’t believe me.” What you can believe, however, is how coal has been hit in the Solar Plexus in India, AI medical progress in China and the surprising news about which countries are most inclusive. It’s this week’s International Need to Know, hoping to someday meet and talk with one of the two interpreters who worked the Helsinki summit.

Without further ado, here’s what you need to know.

Coal Hit in the India Solar Plexus

Since practically the inception of INTN, we have pointed out the Moore’s Law-like increase of solar power generation. New data from India shows this trend continuing. You’ll notice in the chart below that solar generation nearly doubled from 2016 to 2018 (there was a blip reversal from 2014 to 2015).  You’ll also note that the generation of new coal plants are falling off a cliff. That’s because, as James Wimberely points out, “new solar can beat existing coal on price by 20%.” Even more important for the future, gains in storage efficiency and price continue to make remarkable progress: “With the rate of decline in battery prices, they will be competing directly with peakers [INTN: power plants for peak demand times] in a few years and beating them consistently by the mid-2020s. The energy revolution is in full swing even if not everyone is recognizing it.

Doctors and Truck Drivers?

There is much fear mongering about China. China’s closed markets are a concern, as are its continued and deepening censorship. But fears of China’s rapidly developing AI capability are misplaced. The world’s economy is a bakery not the standard metaphorical pie. When China, or any other country, develops new technology it will benefit the world, not just themselves. We are not competing over finite slices of pie–the more bakers the more treats. Case in point is the joint ventureof a Singaporean tech company, Hanalytics, and China’s prestigious Tiantan Hospital that has developed a medical AI dubbed Biomind. “After months of deep learning, the machine was ready for a competition against 25 experienced doctors at Beijing’s China National Convention Center testing their ability to analyze images of the brain.” Spoiler alert, Biomind won. Quite easily. Biomind and the doctors competed both on detecting brain tumors in brain images and on images related to strokes. “When the results came in, Biomind beat the doctors squarely in both rounds. In round one, it correctly answered 87% of the questions, versus 66% for the doctors. In round two, it won by 83% to 63%.” The machines will only get better, more adaptable and able to do more medical procedures. Humans? We’ll still be running the medical equivalent of four minute miles. This will be a challenge for human employment but that would be the case whether AI is developed in China, the U.S. or Burkina Faso.

Who is Most Inclusive?

Immigration and border disputes around the world are illustrative of our seemingly divisive age. But even in today’s climate, some countries are more inclusive than others. It won’t surprise you that according to an annual IPSOS Global Advisor survey, Canada is the most inclusive country in the world. But you may be surprised, given recent developments, to see the United States ranked second. In fact, on the question on how accepting people are for naturalized citizens, the U.S. tops the rankings. The IPSOS index scores countries on inclusiveness “reflecting social acceptance of diversity as it applies to religion, immigration, sexual orientation and gender identity, political views, and criminal background.” They surveyed 20,000 people in 27 countries. Of these 27, and we’re not sure how they picked these three cubed number of countries, Saudi Arabia came in last, just behind Malaysia and Serbia.

Mexico, Lead and Violence, Boxing Office China, Where is the Corruption

We traveled on business to Eastern Washington state earlier this week. Because the area is sparsely populated, when we finished our dinner meeting we drove outside the small town to gaze at the star-lit sky, something usually obscured in city-lit Seattle. But nature, ever mysterious, hid the stars with a layer of clouds. It was a windy night and we patiently waited for the sky to reveal itself. Of course, nature is full of revelations, three of which we discovered over the last week when we learned spiders can flyants pass the mirror test and Panamanian monkeys can use tools. Wait, spiders can fly?!!! Yes, arachnophobes out there, spiders use the positively charged atmosphere and their negatively charged webs to fling themselves into the air, often traveling miles at a time. Are you frightened? Not nearly enough. And, yes, ants are one of only nine known animal species that recognize themselves in a mirror. And Panamanian monkeys have recently been discovered to use stones to smash nut shells. No word on whether an obelisk has been discovered in that part of Panama. So while humans distract themselves with short-term, inane distractions, political, cultural and otherwise, remember there’s a whole universe out there waiting to be understood better. And in that manner, as we await a break in the clouds, we present the real reason for Mexico’s elevated violence, insights from China’s box office, and where in the world there’s the most corruption.  It’s this week’s International Need to Know, closing our agape mouth whenever we are outside now that we know spiders can fly.

Spiders Spin Balloons to Fly Away | National Geographic

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Without further ado, here’s what you need to know.

Mexico, Lead and Violence

Andres Manuel Lopez Obrador won a relatively easy election for president in Mexico a few weeks ago. Mexicans want change, including and especially because of the crime and violence in the country. In fact, in declaring victory election night, AMLO (as he is known, which is a strange acronym for a politician to adopt–“Am low”—granted that’s in English, but still), said, “We are absolutely certain that this evil [corruption] is the principle cause of social inequality and of economic inequality,” he said. “Because of corruption, violence has erupted in our country.” We take no position on whether AMLO (it is easier to type than his full name!) will be a good or bad president, but in regards to crime we again remind ourselves of the role lead plays in the rise and fall of crime. Our go-to person on this is Kevin Drum who recently wrote, “Mexico didn’t start to phase out leaded gasoline until 1990, and average blood lead levels were at or above 15 μg/dl until then, especially in rural areas… Mexico…had a generation of kids born as late as 2000 with BLLs this high. The fact that violence is endemic 18 years later is no big surprise. In another decade, things should be a lot better.” We predict a decade from now, when violent crime is way down in Mexico, there will be many claiming credit, including possibly AMLO, but not enough attention will be paid to the elimination of lead from the environment as the cause.

Boxing Office China

The cultural trends in movies used to be a good barometer for a country. That’s changed a bit with the explosion of other media, but two recent developments in China’s cinema are still worth taking note of and perhaps illustrative of its challenges as it continues to step up to the top rung of influential countries. Last week, Chinese authorities called for the capping of movie stars’ salaries“The salaries of on-screen performers should be capped at 40% of the total production costs, according to a joint notice from five government agencies. Leading actors should receive no more than 70% of total wages for the cast, according to the announcement, published in Xinhua.” The unintended consequences of this directive will be fascinating to watch play out: Scene 1: a fancy house with an actor lying by the pool. She gets off the phone with her agent who has negotiated a contract that works around the pay restrictions. And, cut. Scene 2: Male actor in the executive lounge at the airport preparing to fly outside of China for a role that pays more than the restriction allows. And cut. This new directive takes place at the same time that one of the most popular movies in China is a black comedy based on a true story of a leukemia patient smuggling cancer drugs from India into China. Such imported drugs were previously taxed at draconian levels. We expect most people, including officials, will miss the connection between these two China movie articles. Incentives/disincentives often are ignored in policy makers efforts to shape the world to their desires.

《我不是药神》Dying to Survive || 曝国际版预告 双面徐峥异国寻药 金钱欲望戏剧性彰显

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Where is the Corruption

We see corrupting influences every day, or at least they’re splashed across our screens. But what are the least and most corrupt countries? Transparency International’s recentlyreleased annual Corruptions Perception Index aims to provide the answers. The least corrupt countries last year were New Zealand, Denmark (also ranked the happiest country in the world—is there a correlation?), Finland, Norway and Switzerland. The most corrupt? You can probably guess the axis of the crooked: Somalia, South Sudan, Syria, Afghanistan and Yemen. The best performing region is Europe, the worst are Sub-Saharan Africa, Eastern Europe and Central Asia. It turns out a free press is important to shooing corruption away. According to the report, “Further analysis of the results indicates that countries with the least protection for press and non-governmental organisations (NGOs) also tend to have the worst rates of corruption.” Support your local journalist and you will save money on bribes.