Lunch at the Labs

Items of Interest

Various web links I found to be of interest recently.

• Adam Smith and the crony capitalist conspiracy

  One of Smith's best known quotes is on this very matter: "People of the same trade seldom meet together, even for merriment and diversion," he wrote, "but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices." The fewer players in an industry, the more powerful those players are and the more they hang around together, the easier it is for the "conspiracy" to kick off and for the ordinary person to be disadvantaged.
  ...
  

  This matters partly because overly concentrated market power is connected with falling investment and innovation, and partly because it is possible that market concentration is one of the things holding down wages in the West. The IMF says that "the labour share of income declines in industries where market power rises".

  However, it mostly matters because it appears to represent an obvious failure of capitalism. In a perfect environment with no barriers to entry - in the form of regulation, access to capital and industry associations - superstar companies would not be around for long: many start-ups would compete their advantage away, wealth would again be spread about a bit and that would be that.

  This is not happening - perhaps because of regulation or the endless and expensive lobbying habits of big business.

• Chuck Schumer and Bernie Sanders call for restricting corporate share buybacks
  • The two senators argue for limiting buybacks unless companies raise worker pay, boost benefits and invest in their business.
  • Large companies are buying back shares while laying off workers, closing stores and shuttering factories.
  • Last year, more than $1 trillion of corporate share buybacks were announced.

  This would also help with reducing income inequality, since share buybacks increase stock prices and the already wealthy benefit the most from that.

• At-Home Test for Colorectal Cancer Could Simplify Screening

  The study found that the FIT test had a sensitivity of a 75 to 80 percent, meaning it identified cancer in 75 to 80 percent of individuals who had the disease, said lead author Dr. Thomas Imperiale, a gastroenterologist at the Indiana University School of Medicine and Regenstrief Institute in Indianapolis. In comparison, colonoscopy had a sensitivity of 95 percent.
  ... colonoscopy is recommended once every 10 years while FIT testing would be recommended every year, which would allow for the discovery of advanced tumors and early treatable cancers each year, he noted.
  

• Goldman Sachs asks in biotech research report: 'Is curing patients a sustainable business model?'

  "The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies," analyst Salveen Richter wrote in the note to clients Tuesday. "While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow."

• Two hundred years of health and medical care

  Growth in life expectancy during the last two centuries has been attributed to environmental change, productivity growth, improved nutrition, and better hygiene, rather than to advances in medical care. This column traces the development of medical care and the extension of longevity in the US from 1800 forward to provide a long-term look at health and health care in the US. It demonstrates that the contribution of medical care to life-expectancy gains changed over time.

• Summary and Table of Life Principles

  Summary of book by Bridgewater hedge fund manager Ray Dalio.

  Also there's the youtube video Ray Dalio: "Principles: Life and Work" | Talks at Google

• MIB: Robert Cialdini, author of Influence

  Barry Ritholtz podcast interview with author and social psychologist Robert Cialdini.

  Influence covers the six mechanisms that impact how people can be influenced: Reciprocity, Commitment and consistency, Social proof, Authority, Liking, Scarcity. These are regularly used by salespeople, marketers and other "compliance agents" in Cialdini's parlance. He also believes we that ordinary people can learn to resist certain influences by identifying them and calling them out.

• Unemployment Rate by Year Since 1929 Compared to Inflation and GDP

  Show this to anyone who gives credit to Donald Trump for the current low unemployment rate.

• Bitcoin Is Worth Less Than the Cost to Mine It, JPMorgan Says
  • Low-cost Chinese operations may still have positive margins
  • Crypto has failed as a diversification hedge: JPM's Normand

  The production-weighted cash cost to create one Bitcoin averaged around $4,060 globally in the fourth quarter, according to analysts with JPMorgan Chase & Co.

• MMT - The Good, the Bad and the Ugly

  An attempt to explain the currently hot economic topic Modern Monetary Theory (MMT)

  MMT is a macroeconomic theory of full employment and price stability that argues that the government is the monopoly supplier of money. Because it issues THE money (currency) it can always afford to spend in nominal terms. In other words, the government cannot run out of money. This also means that the traditional idea that the government needs money before it spends is misleading. The government doesn't need our tax dollars to spend money because it can literally print money if it has to.
  ...
  To summarize, there's a lot of good in MMT and I've always maintained that, but it's foolish to think that MMT is a panacea for a period where people think mainstream economics hasn't served us well. There is, after all, a lot more right with mainstream econ than most people want to admit and this "burn it all down" mentality is not constructive. That said, I am glad MMT is part of the new narrative, but I do hope they defend that narrative with more empirics and less combativeness.

  I still don't get it.

  Modern Monetary Theory Isn't Helping

  MMT is billed by its advocates as a radical new way to understand money and debt. But it'll take more than a few keystrokes to change the economy.

• Neuroscientists Say They've Found an Entirely New Form of Neural Communication

  Scientists think they've identified a previously unknown form of neural communication that self-propagates across brain tissue, and can leap wirelessly from neurons in one section of brain tissue to another - even if they've been surgically severed.

  The discovery offers some radical new insights about the way neurons might be talking to one another, via a mysterious process unrelated to conventionally understood mechanisms, such as synaptic transmission, axonal transport, and gap junction connections.

• Modern Weather Forecasts Are Stunningly Accurate

  "A modern five-day forecast is as accurate as a one-day forecast was in 1980," says a new paper, published last week in the journal Science. "Useful forecasts now reach nine to 10 days into the future."

  "Modern 72-hour predictions of hurricane tracks are more accurate than 24-hour forecasts were 40 years ago," the authors write.

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