Archive for category: Uncategorized

With the political landscape looking Dune-like to many and as we here at INTN increasingly worry that we will not witness the Seattle Mariners in the World Series in our lifetime (a certain shortstop and first baseman are on our list–that list is long and extensive with not nearly enough repercussions), it is always helpful to step back and get a little perspective about our world. Our species has been around for but a blink of an eye as illustrated nicely by the blogger, Jason Kottke, who publicized the concept of The Great Span. This is the idea that it is easy to connect two historical events or figures across large swathes of history, illustrating just how short human history is. For example, “two empires [Roman & Ottoman] spanned the entire gap from Jesus to Babe Ruth. Three civil war widows were alive in the 2000s. President John Tyler’s grandson is still alive.” So worry not too much about current events, today is but a flash in the expanse of time and space. Nonetheless, the brevity of human existence leads us to delve into how to power electric vehicles in Europe, discover where the largest airports are and gape in astonishment at where women executives rule. It’s this week’s International Need to Know, remembering that Vin Scully was announcing when Connie Mack was still manager, even as we pass on international wisdom in nanoseconds (relatively speaking) of time.

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

The Electric Slide

For ten years, from 1989 to 1999, the Electric Slide was the number one dance in the world. If more evidence is needed for both the agony and the ecstasy of the 90s, you will not get it here. We dance our own electric slide examining a new report from the European Environment Agency (EEA) about the rise of electric cars and the new infrastructure required to support them. The EEA examines two scenarios for the year 2050, one in which half of cars in the EU are electric and one in which 80% are electric. Either scenario should be good news, right? But the agency rightly points out that an increase in the use of electric cars does not help the environment unless that electricity is generated by renewable resources. Under Europe’s current energy infrastructure, there would be a net reduction of CO2 emissions (see chart below) and for some other pollutants. But, because cars emit very little sulphur dioxide, there would actually be a net increase in 2050 of this pollutant unless the electricity for the vehicles is not generated by fossil fuels. Fortunately, as we’ve pointed out previously, thanks to advances in solar power generation and storage, we are likely to no longer need fossil fuels to a large degree long before 2050 (probably by 2030).  It’s electric, boogie woogie woogie.

Come Fly With Me

There’s a reason why Boeing and Airbus eye China and the rest of the Asia Pacific region like a seven-footer seated in coach greedily eyes first class. Thar’s gold in them there skies. Airports Council International released their latest data on who and what is flying from where. The Asia Pacific region continues to be the largest air passenger market with 2.46 billion passengers, an 8.6% increase over the previous year. But as fast as the Asia Pacific traveling market is growing, the Middle East is actually the fastest growing region with a 9.6% increase (though far few passengers overall–334 million). Of course, the Middle East market is benefitting from Emirates Airlines efforts to successfully make Dubai an international airport hub–Dubai is now the second-largest international airport as measured by international passenger traffic. One worrisome sign in the data is the relatively modest growth in air cargo (2.6%), another sign of the slowdown in international trade we noted earlier this year. 

Where the Women Executives are

The United States may, or may not, elect a woman president this year. If we do, we’d be catching up to other countries, many of which have long ago elected female leaders. The United States is not only behind other parts of the world in electing a woman president but is also lagging behind some countries on the number of women business executives. You may be surprised to learn that Russia leads the world in the percentage of women in senior roles in business, coming in at 45 percent. In fact, Eastern Europe as a whole does well with 35% of senior roles held by women. In the United States, 23% of women hold senior roles in business. China is at 30%. Maybe in the future a crazy, loud-mouthed businesswoman can run for president.

Humans are a remarkable species. We have transformed from simple cave painters to creating masterpieces on the ceiling of the Sistine Chapel. We have discovered prime numbers, built machines that can fly, developed self-driving cars and created a computer network through which all the world can communicate. It’s a remarkable development for any universe. But perhaps the species has peaked with the invention of the inflatable Irish pub. Yes, two Irish immigrants now living in Boston (see, immigration is good for America), have developed what they call the Paddy Wagon Inflatable Pub. So, even as we pour a Guinness and order one of these pubs online, we find more evidence for the coming of peak oil usage, discover where young people are retiring (not just in Portland, Oregon) and most appropriately find out what the most popular liquor in the world is. It’s this week’s International Need to Know, trying not to grow faint at the American presidential race as we deliver healthy and sane doses of the world to your inbox.

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

More on Peak Oil Usage

Keen INTN readers will recall that earlier this year we speculated on peak oil usage coming to a world near you and noted that while oil prices may rise in the mid-term, in the long term they would stay low as other energy sources increasingly power the world. This week brought two bits of news increasing the likelihood of this scenario.  First, the International Energy Agency (IEA) reported that oil consumption growth is below their projections, growing at only 1.3 thousand barrels per day. Yes, oil consumption continues to grow worldwide but at a slower rate than previously and below expected growth rates. The IEA believes slowdowns in China and India is one reason for the slower growth in world oil consumption. If so, perhaps this is more evidence that China is not growing as fast as advertised. But slow economic growth leading to slower growth in oil consumption is a bridge, perhaps over troubled economic waters, to other future factors that will slow the growth in oil and eventually lead to decreasing consumption. General Motors announced this week that they are releasing a Tesla before Tesla. Their new Chevy Bolt that will be released later this year will have a range of 238 miles, slightly more than Tesla’s Model 3 coming next year. Analysts believe the 200-mile range is the tipping point for making electric cars viable. The Bolt will cost a somewhat reasonable $30,000 (after a $7,500 federal rebate). In addition, new non-electric cars have much better gas mileage than their predecessors. Our new Subaru gets about 20% better gas mileage than the 2007 Subaru we owned previously (by quota, 47% of all Seattle citizens must own a Subaru). Gas mileage is mandated in the U.S. to become even more fuel efficient in the future. More people around the world will be driving (though the advent of self-driving cars will change that) but the amount of oil used to power those cars will decrease. Peak oil usage is not here yet but it’s coming sooner than people realize with all the benefits and economic disruption that will entail. 

Living Longer, Retiring Earlier

Life spans are increasing all over the world as health and nutrition improves. Perhaps surprisingly, people are also retiring at a younger age. The OECD (Organization for Economic Cooperation and Development) informs us that, “In almost all OECD countries, the effective retirement age has declined substantially since 1970.” The OECD defines “effective retirement age” as “the average age of exit from the labour force during a 5-year period.” In most OECD countries, the effective retirement age is now below the age when citizens receive retirement benefits (what the OECD terms the “normal” retirement age). Japan and Korea are the exceptions where men on average retire at age 70 despite the “normal” retirement age being age 60. Perhaps not surprisingly given challenges in OECD economies, the trend of retiring at a younger age has abated or in some cases reversed in the last decade. But, even so, people still retire at a younger age than in 1970. Below is a list of retirement age changes for men for a variety of countries in 1970 compared with today. Women on average retire two years younger than men. 

The Most Popular Liquor in the World

Like most who have traveled overseas often for work, we have sampled a wide range of tasty and on occasion dubious liquors. In Korea, of course, we drank soju, an alcohol made out of rice, barley and increasingly today from potatoes and sweet potatoes. Koreans drink soju in large quantities but we were surprised to learn this week that it is the most consumed liquor in the world (and even more surprised to learn of this through the sports and pop culture website, The Ringer). Much as we have been impressed by Koreans drinking ability, obviously this is an indication that soju is popular throughout Asia (and now there is a big push of it into America). This is perhaps appropriate since soju’s origins date to the Mongol invasion of Korea in the 1300s. History, as always, circles around itself (or stumbles drunkenly as may be the case). According to IWSR (which tracks such things), soju dominates the top spirits sold around the world, claiming three of the top ten spots. In second is India’s Allied Blender & Distiller’s whiskey, Officer’s Choice. Smirnoff’s takes fifth place. The top ten below is full of surprises, at least for this internationally traveling imbiber.

Late Monday night we stumbled upon a story that implied that the organization, Search for Extraterrestrial Intelligence (SETI), believed we have found signs of life on a planet only 95 light years away. A signal detected by some Russian scientists exhibited signs of being transmitted intentionally and SETI is now monitoring the planet. Our immediate thought was, wow, this is the biggest news of the century. Then we thought, crap, now we’re going to have to build a wall around earth to keep out the illegal aliens. But upon further reading, and fortunately for interstellar defense budgets, it is extremely unlikely that this relatively nearby planet contains life. So we remain focused for the moment on the strange life forms of our own planet, particularly the advent of autonomous ships, China’s so-called corporate debt and the outsized effect cities have on countries’ economies. It’s this week’s International Need to Know, miraculously pulling relevant information out of the black hole that is our data rich world.

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

If I Had a Boat

Now that autonomous cars are so old-hat that even Pittsburgh has them, we turn, as so many old men* have before, to the sea. Across the pond we discover that Rolls Royce is working with universities and other companies to develop an autonomous cargo ship. A press release from Rolls Royce announces that the company “is testing sensor arrays in a range of operating and climatic conditions in Finland and has created a simulated autonomous ship control system.” Like self-driving cars, these ships would be equipped with infrared detectors, high-resolution cameras and laser sensors. Rolls Royce will begin with remote controlled ships, claiming “We will see a remote controlled ship in commercial use by the end of the decade.” From there, they will develop completely self-driving boats. The big challenge for autonomous ships has been lack of high speed bandwidth to transmit the massive amounts of data needed to guide the ships. But, new satellite technology is making fast affordable bandwidth possible. Rolls Royce believes autonomous ships could reduce costs by 22%. So all the cargo on the ships can be sold at a much lower cost to customers who won’t have any money to buy these goods because they lost their jobs to autonomous cars, boats and other vehicles.

*Not that we’re copping to being old, mind you.       

China’s So-Called Corporate Debt

Ahh, China. Complicated, large, ever changing. We have seen a number of people recently ringing alarms over China’s corporate debt. We like to clang that bell of worry as much as the next person and will even note that China’s corporate debt is now 145% of GDP. But, Chinese corporate debt isn’t your average country’s corporate debt. More than half (55%) is attributable to state-owned enterprises so in a sense this is government debt not corporate debt. David Lipton of the IMF notes that SOE’s only account for 22% of economic output. For the most part, these SOEs represent the “old” Chinese economy. China is attempting to transition from a manufacturing export economy to a more high tech, services economy. But it also wants to maintain high rates of growth (China continues to claim a 6.7% growth rate this year). To do that they are pumping credit into the economy and propping up the SOEs to prevent massive job losses. The worry is that more credit is now needed to achieve the same levels of GDP growth. And, of course, they are doing this partly by preserving inefficient, large companies. Yesterday, China announced the latest Purchasing Manager Index (PMI) figures (see chart below). The index rose for large companies (many of which are SOEs) but for small and medium size companies, it decreased. Where this credit pumping, SOE backing will ultimately lead, no one knows, probably not even those in charge of China. But, the rest of us can humbly speculate.

When the City is the Economy

We are in the midst of the great urbanization of our world. For the first time in history, more humans live in cities than in rural areas. Studies have shown that the United States economy is organized around metro regions. But in a few countries, the largest cities are essentially the economies of the country. Oslo, for example, accounted for nearly 90% of Norway’s GDP growth from 2000 to 2013. Copenhagen was responsible for three-fourths of the economic growth in Denmark and Santiago drove half the growth in Chile. These are all relatively smaller population countries where a large share of the people have congregated in these large urban areas. But even though these urban areas make up between 22% and 36% of their countries’ respective populations, their economic impact is still outsized. Tokyo, which believe it or not, is home to 25% of the Japanese population, accounted for 38% of Japan’s economic growth. This is still out of proportion to the size of its population but not to the extent of these other cities. At any rate, for the foreseeable future, cities rule.

Life rhymes in coincidences, hums in ironies and occasionally crashes the hi-hat cymbal with karma. We were well aware of this yesterday while driving and listening to the radio news tell us of Ford’s announcement that they will release a fully driverless car without a steering wheel or pedals in five years for use in ride sharing fleets. Even as we listened and noted that Delphi will beat Ford to the punch in Singapore in 2019, a taxi in front of us careened across two lanes in order to make a sudden right turn. We have great empathy for the millions who will be put out of work by this rapidly advancing technology but will gladly see that particular taxi driver off the road. Even so, we would swerve across a busy six-lane highway to tell you about democracy’s difficulty in getting a date, remind you even so that the world is getting better and examine whose genomes are being sequenced. It’s this week’s International Need to Know, striving to be the Michael Phelps/Katie Ledecky of international information.

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

Voting Against Democracy

The slow arc of history towards liberalized democracies seems to have taken an unfortunate bend in recent years. Twenty years ago, it seemed inevitable that we were moving towards a world full of such political systems. But a coup in Turkey, the rise of authoritarian parties in a number of countries and the slow pace of democratic reform in others, has led a number of people to express concern about the path of our world. So we were curious what people think about democracy nowadays and it turns out there are indeed some worrying trends in people’s attitudes. Via Timothy Taylor we were pointed to The Democratic Disconnect which looks at surveys over the years of people’s views on democracy. Fewer people today in Europe (and the U.S.) have a positive view of what Churchill called the worst political system save all others. And it’s younger folks and rich people who most skew against democracy. In the Netherlands for example, “Only one in three Dutch millennials accords maximal importance to living in a democracy.” And it’s not just that a rising number of people are dismissive of democracy but also that growing numbers of people favor authoritarian rule: “In Europe in 1995, 6 percent of high-income earners born since 1970 favored the possibility of “army rule”; today, 17 percent of young upper-income Europeans favor it*.” So I guess young, rich people are our most likely future brown shirts. Obviously we need an AI to rule over us all and tell us to be democratic. Er, uh, or something like that.

*I’m still diving into the data for countries like China and India. More, perhaps, on those later.

And Now for Some Good News
Perhaps we should leaven the news of people’s increasing appetite for authoritarianism with a longer view of how well the world is doing over all. The Human Development Index (HDI) measures key dimensions of human progress over time. It includes life expectancy, health outcomes, literacy rates and access to education and GDP growth. The better a country does at these things the higher their HDI score. It purposely looks not just at economic growth but at a variety of factors that make people healthy, wealthy and wise. As you can see in the chart below, the trend for all regions is up and has been since 1870 (a very good year for wine and human development which may not be a coincidence). The only blip during that time period is Eastern Europe and Russia from about 1970 to 2000. But even they are up in the last 15 years. This two century good trend is something we may want to remind all those wanting to tear apart our world and its institutions.

Diversifying Genomes

The cost to sequence genomes has come down dramatically in the last decade, falling to around US$1000. In fact, we expect over the next five years, it will become affordable for most Americans and other high income countries’ populations to have their genomes sequenced. A prediction far more reliable than an American swimmer’s story of being robbed in Rio. Putting aside for the moment how useful it is to sequence genomes to improve health outcomes, we should note that in many parts of the world it is not affordable. As you can see in the chart below, by far Africa has the least number of genome sequencing centers. The United States, China, and parts of Europe lead the way. Given the seeming importance in diversity of samples, developing more genomic efforts in under-utilized countries will be important. And if costs keep coming down dramatically as expected, affordable. 

International Need to Know is prone to contrarianism, of which we are not necessarily proud–it is a vice like any other, occasionally useful and entertaining but also easily bent to mischief. So as we witness this summer of discontent with violence both real and rhetorical pounding us from every direction, our natural inclination is to see the blue skies, hear the birds chirping and taste the good times. After all, despite all the bad news the all-consuming media presents every hour of the day, by many measures, we live in one of the most peaceful times in human history. Populations are healthier. People around the world are more prosperous. Crime is down to near historic lows. So I read with interest (beware: it contains strong off-color language) an explanation of why we feel like the world seems doomed even as we live in relatively good times. But neither misanthropy or optimism prevented us from examining the emergence of Esports* around the world, the threat against Korean pop stars, and who around the world are buying up our houses. It’s this week’s International Need to Know, your clear eyed, full hearted, can’t lose look at our Friday Night Lights world.

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

Be a Good eSport*

Even as Russian swimmers down their Olympic sorrows in straight vodka rather than their usual THG-laced cocktails, we saw an article about the Brazilian soccer player Wendell Lira retiring to play videogame soccer. This led us to wonder about the rise of E-sports and how long the Olympics, full of corruption and polluted waters, will be larger than the E-variety. There are now close to 200 million regular viewers of Esports around the world and viewership is increasing at a rapid rate each year. The top esport players earn more than $1 million per year (we hear the sound of INTN readers rushing to buy Xboxes). So where are the largest centers of E-Sports? Lo and behold, they are not dissimilar to which countries will win the most medals over the next two weeks. Thumbs and screens are gaining on the javelin. Below are the top ten Esport countries compared to the top countries likely to win Olympic medals:

China Pops K-Pop

Analysts and experts continue to worry about the tensions in Asia between China and its neighboring countries, whether over the South China Sea disputes or military realignments. It’s one thing when these tensions could spill over into military action or endanger merchandise trade, but have things gone too far when K-pop stars in Korea are at risk? The Hollywood Reporter informs us that China is retaliating against Korea’s decision to deploy a U.S.-made missile defense system by banning K-pop stars from appearing on Chinese television. “According to two sources cited by the South China Morning Post, China’s national media regulator informed TV stations in Guangdong Province that TV shows featuring South Korean pop stars would not be granted approval to air ‘in the near future.'” Markets are betting on Chinese retaliation as “shares in South Korean entertainment companies took a dive Tuesday.” In case you don’t know, Korean pop music and TV dramas are very popular in China. But Gangnam Style might be going out of style in China, or at least among its leaders.

Whose Buying Your House?

The worldwide headquarters of INTN is in Seattle, a place that has seen rapid increases in housing prices over the last few years. Traditionally Seattleites curse the hated Californians for moving up to the Pacific Northwest and spoiling our pristine area with their, well, evil California-ness, including driving up our housing costs. But recently Seattleites also worry about Chinese driving up the cost of residential real estate. So we ask which international populations are buying houses in the United States? The National Association of Realtors tell us to Blame Canada, at least until last year when Chinese did indeed surpass Canadian buyers as the largest foreign buyers of residential real estate. That trend continues so far in 2016. The top five states attracting international buyers are Florida, California, Texas, Arizona, and New York. Washington is the fourth-largest destination of foreign buyers from China so we may be able to credit (blame?) Chinese at least for a little bit of the rise in our property’s value.  By the way, half of foreign buyer purchases were made using all cash.

*Is it “eSports” or “esports” or “E-sports”? We dove down some deep, dark Internet holes to find out, including a long and rancorous Reddit thread (what’s more amusing [and dispiriting] than watching people cruelly insult others for how they spell a word that didn’t even exist a decade ago?), and we could find no consensus. Clearly the UN Security Council needs to take this up at its next meeting in October.