News & Views

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California to Become America’s First “Trans Refuge State”?

California Senate Bill 107 passed the Assembly Appropriations Committee on Aug. 3 with an 11 to 4 vote along party lines. It’s objective: to “make California a ‘sanctuary state’ for children seeking gender-reassignment surgeries and drugs, including children that come to California from states where such procedures are illegal.”

Click here.

 

Another Crypto Hack 

Cryptocurrencies have taken a beating this year. But crypto enthusiasts – at least the ones I know – have not given up hope. On the contrary, they are expecting another rally.

The most important thing to know about cryptocurrencies is that they are currencies. And currencies, as we know, facilitate commercial transactions by providing a trusted medium of exchange. Trust is the key word here. So long as people believe that a currency will be more or less as valuable in the future as it has been in the past, it retains its value.

The history of Bitcoin and other cryptos has been anything but steady and predictable. Chart the prices over the past 10 years and you have a rollercoaster graph. With each crash, some amount of faith disappears. That is not good.

But that’s not the only concern. The other worry is hacking and stealing. When cryptos first appeared on the scene, they were introduced as impossible to steal. But then they were stolen. And stolen again. Just last week, I read about a $190 million hack of the Nomad platform.

Click here.

And here.

No. COVID Vaccinations Are Not Entirely Risk Free.

Based on the reading I’ve done (which is more than I ever intended to spend time doing), I believe that the COVID vaccines are safe. Mostly. But not entirely. There have been reliable reports of seriously negative reactions that are disconcerting. And particularly when they are about children, whose immune systems are typically strong enough to be able to survive COVID at the same rate as they survive the common flu.

A nine-year-old died in California last week after receiving a Pfizer coronavirus vaccination. She had no listed preexisting conditions and was not hospitalized. According to VAERS (Vaccine Adverse Event Reporting System), this was the ninth child death reported since the FDA authorized both Moderna and Pfizer’s vaccines for children between the ages of six months and five years in June. Click here.

Worth Considering

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A Brief History of US / China Relations 

Biden’s recent statement (following Pelosi’s trip to Taiwan last week) that the US would defend Taiwan against hostility by mainland China indisputably increased tensions between the world’s two largest economies and military powers. We now find ourselves watching our politicians discuss the possibility of war against not one, but two military behemoths.

Our diplomatic difficulties with China began in 1949 when we refused to recognize the newly formed People’s Republic of China. Things got steadily worse for two decades until China invited the US table tennis team to a surprise, all-expenses-paid trip to Beijing in 1971. The following year, President Nixon visited China and then issued the Shanghai Joint Communiqué that declared Taiwan part of China.

Since then, things have gone back and forth. (Diplomats have named it Ping Pong Diplomacy.) Today, relations between our two countries may be at an all-time low.

Click here.

And click here for an editorial about Pelosi’s trip to Taiwan by Patrick Buchanan.

Arts & Letters

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Kids Write the Darnedest Things 

From 11-year-old Emily Dickinson

A letter to her brother, April 18, 1842

“[T]he chickens grow very fast I am afraid they will be so large that you cannot perceive them with the naked Eye when you get home the yellow hen is coming off with a brood of chickens we found a hens next with four Eggs in it I took out three and brought them in the next day I went to see if there had been any laid and there had not been any laid and the one that was there had gone so I suppose s skonk had been there or else a hen in the shape of a skonk and I dont know which.”

From 6-year-old Virginia Woolf

A letter to her mother, 1888

“We went out for a walk with Stella this morning up to the pond and there were a lot of big boats. Mrs Prinsep says that she will only go in a slow train cos she ways all the fast trains have accidents and she told us about an old man of 70 who got his legs caute in the weels of the train and the train began to go on and the old gentleman was draged along till the train caute fire and he called out for somebody to cut off his legs but nobody came he was burnt up. Good bye”

From 12-year-old Charles Darwin

A letter to a friend, Jan. 4, 1822

“You must know that after my Georgraphy, she [his sister, Caroline] said I should go down to ask for Richards poney, just as I was going, she said she must ask me not a very decent question, that was whether I wash all over every morning. No. Then she said it was quite disgustin, then she asked me if I did every other morning, and I said no, then she said how often I did, and I said once a week, then she said of course you wash your feet every day, and I said no, then she begun saying how very disgusting and went on that way a good while, then she said I ought to do it, I said I would wash my neck and shoulders, then she said you had better do it all over, then I said upon my word I would not, then she told me, and made me promise I would not tell, then I said, well I only wash my feet once a month at school, which I confess is nasty, but I cannot help it, for we have nothing to do it with, so then Caroline pretended to be quite sick, and left the room, so then I went and told my brother, and he burst out in laughing and said I had better tell her to come wash the herself, besides that she said she did not like sitting by me or Erasmus for we smelt of not washing all over, there we sat arguing away for a good while.”

From 10-year-old Louisa May Alcott

A letter to her mother, Oct. 8, 1843

“I have spent a very pleasant morning and I hardly dare to speak to Annie [her sister] for fear she should speak unkindly and get me angry. O she is so very cross I cannot love her it sees as though she did every thing to trouble me but I will try to love her better, I hope you have spent a pleasant morning. Please axcept this book mark from your affectionate daughter.”

(Source: Letters of Note)

Worth Quoting

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“It’s become a Hallmark sentiment that if you find a career that you care for passionately, everything that is disagreeable about work – the drudgery, the disappointment, and the pain – will disappear and be replaced by complete emotional and intellectual enjoyment.

“This idea is dead wrong in two fundamental ways. First, it’s unrealistic to believe that what one finds to be exciting and fulfilling at the beginning of a career will continue to be so 10 or 20 years later. That’s because it’s nearly impossible to know what a career feels like in advance. You have to do it for a while to find out. Second, working on something you care about doesn’t eliminate drudgery, disappointment, and pain. Doing anything you care about requires the same amount of suffering as something you don’t care about. The goal is not to avoid suffering, but to do work that will make it worthwhile to suffer through it.”

– Michael Masterson

A Word to the Wise

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A behemoth (buh-HEE-moth) – from the Hebrew for “beast” – is something that is enormous, especially a big and powerful organization. In the Old Testament, the behemoth was a beast from the Book of Job – a primeval chaos-monster (king of the animals of dry land), the counterpart of the leviathan (king of the animals of the water). As I used it today in the brief about US / China relations: “We now find ourselves watching our politicians discuss the possibility of war against not one, but two military behemoths.”

Readers Write

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Re “A Short History of the Devolution of Air Travel” in the Aug. 2 issue: 

“This gave me a good laugh! As my wife and I prepare to take our first international flight since 2019, my feeling of trepidation has gone from a 4 out of 10 to a 9 or 10.” – ND

Re the Aug. 2 P.S. about Fred Astaire… from JM: 

“Well, you got me thinking… about Fred… I believe Eleanor Powell was his equal.”

And he included two videos to make his case. Click here. And here.

My Response: Equal in technique. Not in style.

Postscript

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A fascinating short lecture by Jordan Peterson on the evolutionary importance of thinking – actual thinking – and why it’s now more important than ever.

Watch it here.

Friday, August 5, 2022, Savannah, Georgia


Notes From My Journal

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It’s Beautiful. But Is It Safe?

I’m spending the week in Baltimore, where my primary client is headquartered. I’m here for meetings about the receding economy, the effect it’s had on our industry, and the challenges it poses to our business right now.

Baltimore is an interesting small city. It has as much history as just about any city in the country. It has been the headquarters to more than its share of Fortune 500 companies. It has some beautiful buildings, a couple of excellent museums, ample good restaurants, a half-dozen nice little parks (one of which I’m sitting in right now), and all the diversity a SJW could want.

But in most measurable ways, Charm City is going downhill.

For one thing, Baltimore has a serious crime problem, ranking well above the national average. Violent crime spiked in 2015 after the death of Freddie Gray, which touched off riots and an increase in murders. The city recorded 344 homicides that year, or 55.4 per 100,000, the highest rate per capita in its history. And despite efforts to reduce the murder rate, it has continued to climb.

This trend is not limited to Baltimore. At least 10 other cities, including Washington, DC, Chicago, LA, and Milwaukee have experienced the same rise in violent crime. Not only homicides, but also rapes, robberies, and aggravated assaults.

And yet, if you were sitting here in Mount Vernon Square right now, looking at Baltimore’s own Washington monument, you might find all this hard to believe. That’s because, like the other cities mentioned above, most of the violent crime here, approximately 80%, occurs in what they call “underserved” neighborhoods – i.e., largely African American neighborhoods infested with drugs and the gangs that traffic drugs.

So, the mainstream media doesn’t report on it. And the conservative media points it out only to blame it on the Democrat mayors, DAs, and other city officials that run these cities.

But that still leaves 20% of the crime taking place in “safe” neighborhoods like Mount Vernon, where our offices are. And that 20% counts. It is where Baltimore’s businesses, big and small, are located. It is where most of the city’s workers spend their days, both in their offices and at restaurants and shops before and after work. Safety here is an issue. It was always a risk, but a minor risk. Since 2015, though, as I pointed out above, it’s become a serious risk. Employers like us are becoming increasingly uncomfortable with the danger our employees are subjected to on a daily basis.

Since the pandemic mandates, a sizable portion of our employees have been working remotely. Among other advantages, this means they don’t have to worry about being mugged on their way to work. Efforts to bring them back to the office are being met with considerable resistance. This begs the question: Would we be better off if we were located somewhere else?

Politicians can shrug off a rise in violent crime when most of is contained within the drug zones. But when the primary employers of the city’s population begin to move out, how will these cities deal with an accelerating unemployment rate that is sure to follow?

The Economy & Investing

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The Latest Example of What We Can Look Forward To

Robinhood, the stock trading app that was so hot a year ago, announced that it is laying off around 23% of its workforce. This is its second significant layoff. The first was 9%. The layoffs will be primarily in operations, marketing, and program management. They blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”

Why does that matter? As I said in Tuesday’s blog post, the financial advisory market has a history of shrinking months before recessions and subsequent market downturns. Robinhood is not in the financial information business, like we are, but it’s Fintech, which is close.

I see this as another indication of what’s to come. Click here.

If you lost money investing in Robinhood, you should have been reading the advice of my friend and colleague Charles Mizrahi, who pointed out the company’s weaknesses last year. In this short article, he explains why it was a bad “play” to begin with, click here. [LINK]

 

More Bad Economic News

US household debt increased by 2% to $16.2 trillion at the end of June. Given 123 million households, this means the average family debt grew by nearly $10,000 last year. That’s significant.

Also worrying: Debt delinquencies are up. The biggest factors are mortgages, auto-loans, and credit card balances. (Credit card balances jumped by 13%, the largest increase in more than 20 years.) Add to that the fact that the Fed has finally begun to raise rates, which will make repaying current debts more difficult.

What that means: The combination of higher household debt and higher interest rates on mortgages means that sensible people will be spending less on all discretionary expenditures, and senseless people will be quickly spending their way into bankruptcy. Both of these trends will make it more difficult for us to stop our currently shrinking GDP.

 

Business & Marketing

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Here Today; Gone Tomorrow

A Lesson From the Demise of Juul

When you are part of a fast-growing business in a fast-growing industry, it’s easy to imagine that growth is normal and that the good things that come from growth are going to keep on keeping on. But as I’ve discovered many times in my career, it ain’t always so.

In fact, it’s common for fast-growing start-ups to hit a point where sales level out. Or start to fall. There are many reasons why that happens. Four of them can be lethal.

From the inside:

* Insufficient capitalization.

* An inability to discover the optimal selling strategy before the clock runs out.

From the outside:

* An economic downturn in the industry.

* An unanticipated act of government over-regulation.

This last one is what happened to Juul, a pioneer in the e-cig industry that got big fast by promoting its e-cigs to minors by producing them in flavors like mango and crème brûlée. By 2018, the company was dominating the market. Altria (Marlboro’s parent company) bought 35% of Juul for $12.8 billion, giving the business a total valuation of $38 billion.

When the media began reporting on how popular Juul’s products were in middle schools, the FDA took action, and in June banned the company from advertising in the US. Altria’s $12.8 billion investment has since crashed by 97%.

Click here.

 

Uber’s Latest Feature: Is It Good for the Customer Experience?

When dealing with issues in business, you’re always looking for ways to increase productivity by simplifying routines and incentivizing employees to accomplish more in the time they have.

Uber recently introduced a feature that may simplify decisions for its drivers and motivate them. But it may also reduce the quality of the customer experience. I’m talking about the new technology that shows Uber drivers the customer’s destination and what they will earn from the trip before they accept the ride. The company claims this will result in fewer cancelled trips for riders. Yes, it will reduce those annoying, last-minute cancellations. But it will also – almost certainly – mean that if you want an Uber for a short ride, perhaps anything less than 30 minutes, you may have to wait a long time to get one.

Click here.

 

 

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