Month: March 2023

The stock market fell last week after the collapse of Silicon Valley Bank, and it's been on a roller coaster this week as news about the banking system goes from good to bad and then back to good in the space of a few hours. And yet, here's what all the panic looked like by the time the week was over:

All told, the market was up 1.4% for the week. Some panic.

But don't let this fool you. We're still headed for a recession, and the banking crisis only makes this likely to happen sooner rather than later.

This is Charlie being bad. He knows he's not supposed to be on the other side of the fence, but he goes out there anyway. Luckily, a teenager or a dog or something always comes along pretty quickly, which scares him back into the yard.

In fact, Charlie is an excellent outdoor cat. He sometimes roams a little more than he should, but he always responds to us calling his name. Even if he's in a neighbor's yard, all we have to do is call out and he comes bounding back. We've never had a cat quite that smart before.

I've been trying to figure out exactly what warning signs regulators supposedly missed in the months before Silicon Valley Bank collapsed, and I haven't come up with much. The $15 billion hole in SVB's bond portfolio was mildly concerning, but no more than that since it didn't affect SVB's books. The outflow of deposits seemed to be cooling down. Capital ratios were solid, as were leverage ratios.

But today I learned about this:

For Kathryn Judge, a professor at Columbia University with expertise in financial regulation, another “classic red flag” was the fact that SVB was so reliant on the Federal Home Loan Bank of San Francisco for funding, with $15bn of outstanding loans by the end of 2022 after no loans the year before.

“We consistently see that before banks get in trouble, they struggle to access market-based sources of financing and increase their reliance on the Federal Home Loan Bank System,” said Judge. “That does raise questions over how closely the Fed was following developments at SVB.”

Hmmm. This is from five days ago, but I haven't seen it mentioned anywhere else until now. Maybe I just missed it. I wonder how much of a red flag this really was?

Of course, I keep coming back to the same thing: At COB on Wednesday, March 8, virtually nobody was talking about SVB. Newspapers barely even covered their proposed share sale. SVB stock was up slightly compared to the day before. Analysts remained bullish.

It was only after the release of the mid-quarter review in late afternoon—which didn't really reveal anything new about SVB's condition—that anything happened. SVB's stock price tumbled in after-hours trading and the next day Founder's Fund began its infamous run, for reasons that remain veiled. And then SVB collapsed.

So what really happened? Everyone seems to think they know, but they mostly seem to be slaves to narrative. I continue to feel like there's something yet to learn about this whole affair.

Courtesy of the BLS, here's how much it costs to employ various types of workers:

You can find more breakdowns here.

We have dates! My CAR-T treatment is scheduled for April 25. There are several days of pre-treatment, so I will be up at City of Hope starting on April 19. I'll return home whenever they think I'm ready, probably around the second week of May.

And then we wait to see if it worked. Tick tock.

Israel is in tumult over an attempt by its current hard-right government to strip the Supreme Court of power. Former Likud prime minister Ehud Olmert, no one's idea of a dove, says Israel is facing an existential crisis:

This moment, he says, is different from previous political crises that Israel has faced. “If you love Israel, you have to spell it out in the bluntest possible manner against the government of Israel. I’ll tell you why: because the government of Israel is the enemy of the state of Israel,” he told Vox.

....For Olmert, American leadership is needed in response to the Netanyahu government’s efforts. He wishes that President “Joe Biden will step up, sooner than later, and will say he wants to reassess the relations between America and Israel on the basis of the changes which the Israelis took.”

Olmert is no dove, but he emphasized an element of the Israeli government’s radical policies that haven’t been a major focus of the protests: escalatory actions in the West Bank and the oppression of Palestinians.

Sadly, it's too late for Israel. Its doom was sealed years ago by the uncompromising mechanics of demography. In the 1990s Israel was hit with a surge of immigration from the former Soviet Union at the same time that exponential growth in the ultra-orthodox haredi community started to swell. Put together, it looks approximately like this:

Both of these groups strongly support hard-right politics, and the haredim in particular continue to grow. This base of ultraconservative voters is already too large to overcome and it's only going to get larger over time.

I don't know how this ends. Not well, I'd guess.

The Atlantic reports today that three researchers have performed a re-analysis of swabs taken at the Huanan Market in Wuhan early in the COVID-19 pandemic. The original analysis, done last year by a Chinese team, drew no conclusions about the origin of the virus, but the new analysis strongly suggests that the virus developed naturally and then jumped to humans from raccoon dogs:

A new analysis of genetic sequences collected from the market shows that raccoon dogs being illegally sold at the venue could have been carrying and possibly shedding the virus at the end of 2019....The genetic sequences were pulled out of swabs taken in and near market stalls around the pandemic’s start. They represent the first bits of raw data that researchers outside of China’s academic institutions and their direct collaborators have had access to.

....Within about half a day of downloading the data from GISAID, [the researchers] discovered that several market samples that tested positive for SARS-CoV-2 were also coming back chock-full of animal genetic material—much of which was a match for the common raccoon dog. Because of how the samples were gathered, and because viruses can’t persist by themselves in the environment, the scientists think that their findings could indicate the presence of a coronavirus-infected raccoon dog in the spots where the swabs were taken.

“This is a really strong indication that animals at the market were infected,” said Seema Lakdawala, a virologist at Emory University who wasn’t involved in the research. “There’s really no other explanation that makes any sense.”

So that's the latest science. Here's the latest polling:

Sigh.

Why are teen girls so depressed these days. Jonathan Haidt thinks the answer is smartphones and social media, and I expressed some doubts about that a few weeks ago. Haidt is back today and, among other things, shows us this chart:

You can see one of the reasons for my skepticism here: the starting point for the rise in "self-derogation" is around 2009, not 2012, the year that Haidt has always focused on. This may seem trivial, but it's not. If a trend started in 2009, it's all but impossible for the cause to be something that didn't start until 2012.¹

So what do we make of this? Haidt suggests that a big part of the problem is an increasing feeling of not being in control of your life. In psychology-ese, this is referred to as having an external locus of control:

After trying a few different graphing strategies, and after seeing if there was a good statistical justification for dropping any items, we reached the tentative conclusion that the big story about locus of control is not about liberal girls, it’s about Gen Z as a whole. Everyone—boys and girls, left and right—developed a more external locus of control gradually, beginning in the 1990s. I’ll come back to this finding in future posts as I explore the second strand of the After Babel Substack: the loss of “play-based childhood” which happened in the 1990s when American parents (and British, and Canadian) stopped letting their children out to play and explore, unsupervised.

Haidt thinks this began in the 1990s and then accelerated after 2012 when smartphones became widespread. I'm inclined to believe this, mainly because I've long been astonished at the suffocating amount of control that parents apparently have over their kids these days. And the worst part of this, in my view, isn't even the control per se. It's the motivation for the control: fear. Modern parents seem to be extraordinarily sensitive to even the tiniest potential danger to their children, and it's hard to believe that this constant fear doesn't get picked up by the kids. It's probably not even conscious.

But either way, it can't be healthy. If you live in a bubble of fear and control, what happens when you start to move outside of that bubble in your teenage years? My guess is that the answer is increased stress and depression, which is exactly what we see. Smartphones and social media might give this an extra push, but I'll bet they aren't the primary source.

¹I say "all but" because there could, by coincidence, be something else that happened during 2008-12 and then smartphones picked up the ball in 2012. Unlikely, but not impossible.

I've set this video from Microsoft to start at 7:54. Go ahead and watch about 30 seconds of it.

As a former high-tech marketing VP, I can confirm that marketing writing is generally pretty undistinguished. You don't have to be Shakespeare to put together a brochure or a PowerPoint presentation about a new product.

In other words, marketing is ideal for the kind of things GPT-4 is capable of. All that's necessary is that it somehow gets trained on facts and features about the new gizmo. And since this is marketing, even GPT-4's propensity for exaggeration is a feature, not a bug.

So what's the future of marketing communications when Microsoft Office can create data sheets, press releases, product slicks, websites, and so forth in about two minutes?

That's a very good question.