It would be superfluous in me to point out to your Lordship that this is war.” - Charles Francis Adams, Sr

Science, General Knowledge & Environment

Drug-resistant ‘superbug gonorrhea’ is emerging, WHO warns – Cases of antibiotic resistant STD are rising due to the decrease use of condom and globalization.

Google Could Soon Have Access Sensitive Genetic Patient Data— We Should All Be Worried – Google is partenering with the NHS to analyze an unknown (but presumed very large) number of genomes and is about to get access to a goldmine of data. The goal of Google is to use algorithms to help us in our everyday life but we may become trapped and unable to think for ourselves if the machines answer all our questions such as ‘what job should I take?’ or ‘what should I do tomorrow?’

Hackers targeting US nuclear power plants – Hackers have been stealing credentials and passwords from engineers in US nuclear plants. This is probably only the tip of the iceberg and shows how much power can have ‘non-state’ actors that may have different motivations, procedures and reactions than state actors. They’re basically 20 years old with as much power as a president with nuclear codes.

History & Geopolitics

Brexit Starts to Go Pear Shaped from UK Side as Businesses Freak Out – An update of how @#$% is the UK and its Brexit dreams. As the island’s illusions of having the cake and eat it too fades away, citizens, businesses and some politicians are starting (over 1 year after the vote) to realize that their country doesn’t have the upper hand in the negotiations and the EU will not offer them the ‘soft Brexit’ they’ve been believing in. Big business is already asking for ‘indefinite delay in leaving the European Single Market’.

The Saudi-Qatar Spat – Qatar And Iran Are Winning – MbZ, MbS Lose Face – The Gulf monarchies have lost face in their standoff with Qatar. This is another bold gamble from the new young powerful crown prince Mohammed bin Salman (MBS) that has turned sour (after the disastrous 2 years and counting Yemen war). MBS didn’t get the start he expected, made a lot of enemies and a lot of political capital lost, which may hint at regime change.

What If the Chinese Are Just Biding Their Time? – China and the USA competition doesn’t have to end in a disastrous war but this will require significant restraint, compromise and self-awareness from both sides. This article is very good but we would like to add something to think about: what happens when China’s economic growth decelerates rapidly and the country faces its own debt crisis? It doesn’t have to be apocalyptic (e.g.: Japan in 1990’s) but will dramatically change the country’s priorities.

When does North Korea become a crisis? – After North Korea’s latest missile test, the US is left with no option but diplomatic talks (after a decade without 6 Party talks) or military action against North Korea. Given the high risks of retaliation and escalation in the case of military action (Seoul is within artillery range), the only option left are diplomatic talks and stalemate. Not much change from usual…

If Silicon Valley’s Billionaires Want To Fix Our Rotten Politics, They Should Start At Home – A couple of Silicon Valley billionaires created a new group aimed at reforming the Democratic Party (and US politics in general). Over the last 30 years, similar initiatives have all failed because they do not address the underlying political gap between actual people and the elite, and are unable to curtail their owners (big corporations) political power.

Finance & Economics

How Middle-Class America Got Fleeced – An article describing how the US middle class was impoverished by neoliberal rethoric and its subsequent policies, from… Bloomberg!? It remains to see whether the US’ consumer driven economy can continue to extract growth from its ever poorer citizens.

If you can’t put a roof over your head then what’s the point of anything? – Australia immigration policy is the only economic driver left for the country, propping up house prices and increasing total household consumption number at a time when the mining boom has turned into bust. This is benefiting home owners (banks and rentiers) while hurting prospects for the young and less well off. Ironically, the most at risk are also supporting immigration even though it is hurting them.

As China grows, equal opportunity and social mobility are fast becoming a cruel lie – China’s job opportunities are increasingly going to the most connected and well off, a sharp contrast with the meritocracy of only a couple of decades ago. We note that the ‘Chinese dream’ campaign was rolled out as the actual Chinese dream is fading for millions.

The Chinese Debt Time Bomb – China accounted for half of the world credit creation since 2005 but its economy accounts for only 15% of the world’s GDP. The country’s debt trajectory is on a skyrocket path since 2009. The higher it goes, the harder it will fall. The only question is when?

South Korea’s facing another debt bubble – South Korea economy is still driven by large almost monopolistic chaebols that are curtailing the country’s growth potential by smothering competition. Today, household debt reached 153% and the only way to make this number decrease while keeping topline growth numbers is to increase wages (i.e.: take from the corporate sector, especially chaebols).

1997 Asian Crisis Lessons Lost – The 1997 Asian Crisis analysis mostly fall into the Washington Consensus’ framework, blaming government intervention and corruption, instead of focusing on the rapid financial liberalization, short term capital flows and poor government response. The lesson was not lost on China, who keeps tight capital controls (although its answer to the various internal crisis have been rather mediocre).

Picture of the week: The Battle of Mosul


About Carlito Riego

"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi