Some of the most interesting topics covered in this week's iteration are related to 'our lost language ancestor', 'how PE benefitted from subprime crisis', and 'Why we hate pigeons'.
At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, including investment analysis, psychology, science, technology, philosophy, etc. We have been sharing our favourite reads with clients under our weekly ‘Ten Interesting Things’ product. Some of the most interesting topics covered in this week’s iteration are related to ‘our lost language ancestor’, ‘how PE benefitted from subprime crisis’, and ‘Why we hate pigeons’.
Here are the ten most interesting pieces that we read this week, ended September 7, 2018.
1) Prakrit: The forgotten ancestor [Source: Livemint ]
It’s well-known that most Indo-Aryan languages are derived from Sanskrit. But what is frequently omitted is that the road from Sanskrit to these languages meandered through two other destinations: the little-known Prakrit and the even lesser-known Apabhramsa. Even after flourishing for more than 1,000 years (from fourth or fifth century BC to eighth century AD) as an independent language of sorts, being the court language of at least one important ancient Indian dynasty and possessing a considerable body of literature, Prakrit is largely discussed in relation to Sanskrit and rarely commands an identity of its own.
Historically, Sanskrit has been cast as the “refined” or “polished” tongue that was the repository of high culture and the language of the scriptures. Since it was the domain of the scholarly and the high-born, it was inevitable that the language of the masses could not be Sanskrit. And so, the language morphed into what came to be regarded as a crudity—Prakrit, meaning the “natural” tongue—the lingo of the street. That Sanskrit evolved from what has been termed by scholars as Proto-Indo-European (PIE), the original ancestor tongue, is undeniable. What’s unclear is where the original home of PIE was. There is some evidence to suggest that PIE speakers were located in the Central Asian region and moved into India at some point in the days of the Indus Valley civilization (3,000-1,500 BC). But to which language family did the denizens of Indus belong? One school of thought holds that the Indus Valley civilization was part of the PIE universe and so, Sanskrit is home-grown. Evidence for this claim is scanty. Another school claims that the Indus Valley civilization was Dravidian, perhaps even Austro-Asiatic.
Since the Indus script has not been decoded yet, this has ensured that there is no final word on this matter. Linguists have also identified “non-Aryan” (the word “Aryan” being used in a linguistic sense here) elements in Vedic Sanskrit. This has been done by comparing Vedic Sanskrit with Avestan or Old Iranian, both of which trace their origins to PIE. If Vedic Sanskrit contained words from other tongues then extant in India, the reasoning goes that these tongues must have been spoken fairly widely at a time when Sanskrit was also being used. Therefore, is it owing to the influence of these tongues (possibly of Dravidian or Austro-Asiatic origin or perhaps both) that Prakrit came into being? Or is Prakrit merely debased Sanskrit? This is unclear. What is clear though is that Prakrit is a term for a collection of tongues widely used in different parts of Aryavarta from fourth or fifth century BC to eighth century AD, when these tongues evolved into Apabhramsa, before finally settling down as early forms of the various modern Indo-Aryan languages spoken today. Linguists therefore do not speak of “Prakrit” as a monolith, preferring the term “Prakrits” instead.
Several Prakrits have been identified. Pali, the language the Buddha (circa 563-486 BC) preached in and Ardhamagadhi, which was Mahavira’s (circa sixth century BC) tongue, are both Prakrits. Using these tongues for religious discourse and eschewing Sanskrit was, for both the seers a deliberate choice, in line with their larger philosophy of reaching out to the masses. Indeed, much of the Buddhist and Jain religious corpus are in these tongues. Ashoka (ruled 268-231 BC) had his edicts inscribed in Prakrit, again deliberately, to ensure that people understood his message. These Prakrits are among the oldest that are known. Around the time of Ashoka, or perhaps a little later, it appears that Pali was taken to Sri Lanka by Buddhist bhikkus and later evolved into modern-day Sinhalese.
Roughly between 100 BC and 100 AD, Prakrit evolved in interesting ways. From a crude tongue, it appears to have transformed into a literary language. Shauraseni, Maharashtri and Magadhi came to be regarded as Dramatic Prakrits owing to their extensive use in plays written in this period. The Gathasaptasati, a compilation of Prakrit love poetry written by several writers and possibly compiled by King Hala of the Satavahana dynasty (ruled first century AD), was written in Maharashtri, which was also the court language of the Satavahanas, who ruled over large parts of the Deccan. Kalidasa (fourth or fifth century AD), too, has used Prakrits in his Sanskrit plays. Gandhari Prakrit, spoken in the north-west, in the region that today constitutes Pakistan, was among the more unusual Prakrits. It employed the Kharoshthi script, usually written from right to left, as opposed to the other Prakrits, which used the Brahmi script that ran from left to right. Gandhari inscriptions have been found in Central Asia and China, indicating that it was used over a wide expanse of geography.
Paishachi (from pisach, ghosts or ghouls, literally, the language of the dead) is perhaps the most interesting Prakrit of this period. For one, its existence is unattested. No text in this tongue has survived. What remain are references to this tongue by Prakrit grammarians. Secondly, there is the matter of its name. It is likely that “language of the dead” actually meant a language that was extinct or not in use when the grammarians were writing about it. But interpreted literally, the term has lent itself to many fanciful explanations. Post the eighth century, in their final stage, the many Prakrits broke up into various Apabhramsa dialects, from which the modern languages were derived in and around 800-1,200 AD. Maharashtri and the Apabhramsa tongues it spawned eventually evolved into Marathi and Konkani. Similarly, the Apabhramsa dialects that emerged from Shauraseni gave birth to Gujarati, Rajasthani, Punjabi and, later, to what the poet Amir Khusrau called “Hindavi”, to which modern Hindi and Urdu trace their origins. Magadhi gave birth to the Indo-Aryan tongues of eastern India: Bengali, Assamese, Odia, Maithili and so on. Given the overarching influence of the many Prakrits on modern Indian linguistic distribution, its absence in the wider language discourse is perplexing—and a pointer to how the politics of language plays out.
2) Pinch-hitters from Pakistan: Cricket's loss is baseball's gain [Source: ESPN ]
Waqar Younis is the Burewala Express, but there might actually be a faster gun in town. You are likely to have never heard of him. That's because 32-year-old Ihsan Ullah is a star for the Pakistan baseball team that played in the Asian Games 2018 in Jakarta. "Ihsan is the best pitcher in Pakistan. He's played professionally in South Korea and he's probably pitched the ball at over 100 miles an hour," says team coach Syed Babar Ali Sherazi. It's 100mph in just the wrong sport, unfortunately. Like the rest of the Indian sub-continent, cricket is king in Pakistan. "I used to play district-level cricket," Ihsan says. And while he might pass unrecognized on most playing fields, he's played with some well-known Pakistani cricketers. "I've played alongside Mohammad Irfan in a few club games before the tour of India in 2014," he says.
He isn't the only Pakistan baseball player with a cricket connect. According to team officials, about 70% of the team started out as cricketers (the rest are javelin throwers). Outfielder Ubaid Ullah is another. "I bowled right arm pace in tandem with Junaid Khan during club games in Swabi." says Ubaid, from Naranji in the Northern district. His greatest moment on the cricket field was when he took seven wickets in a district game. That though, was the extent of his career in cricket. "Those who don't perform well in cricket come to baseball. They get to know what their level is," is team manager Mohsin Khan's blunt assessment. There are some obvious reasons too. "There is no shortage of fast bowlers in the Pakistan cricket team," he says.
Many from the squad picked up baseball during their service with the Pakistan Army, which has a culture of baseball, says Khan. "Right from the unit to the corps level there are baseball games that go on. In fact, eight of our players are from the Pakistan army," he says. According to coaches, without the army, there would be fewer baseball players in Pakistan. The lack of opportunities also explains why the majority of the players are from the Khyber Pakhtunkhwa province and Punjab. "We don't have a single player from Karachi because people from Karachi are chalakh (clever) and so they don't put any of their money or time on baseball," jokes manager Mohsin.
The shift to baseball also sees technical mechanics that the players must adapt to. "You can't hit a baseball the same way as a cricket ball," says Tom Valcke, coach of the Hong Kong team. In baseball, the hands start higher (at or above the shoulders) and move downward. "When the ball is travelling in a straight line, it isn't so bad. But when you are facing a fast ball that is coming into you, it's difficult to adjust in time," he says. And when the players' foundational stance is from cricket, it takes a lot of effort to unlearn that technique. "When I first started playing baseball I was confused," Ubaid says, "Because I was always expecting the ball to bounce. I took me a couple of years to get used to it."
Against baseball giants Japan and China, Pakistan lost 15-0 and 16-3. Despite that, there is honour in representing Pakistan, Ubaid says. "I don't meet Junaid Khan a lot but when we meet he is always very respectful because I am wearing the Pakistan jersey." It's an assessment shared by his teammates too. "Regardless of the sport, you're still representing your country," says pitcher Muhammad Usman. Usman, who played club cricket with former U-19 Pakistan bowler Zia Ul Haq, says there is respect from his former cricket mates too.
3) Sapiosexualism is here to stay [Source: Medium ]
Sapiosexualism, a term that most people are using on dating apps, means people highly attracted/turned on by intelligence. But if you go on leftist Facebook groups making fun of people’s dating profiles, you’ll see that leftists in these groups almost universally agree that sapiosexualism is a Bad Thing and immediately outs you as not being Woke. The origins of “sapiosexualism” as a concept date back to 1998 when Livejournal user “wolfieboy” coined the term to describe his sexual attraction. In a 2002 post he writes: “I don’t care too much about the plumbing. I want an incisive, inquisitive, insightful, irreverent mind. I want someone for whom philosophical discussion is foreplay.” In other words, wolfieboy seems to be a bi/pan person who loves philosophy.
So why has sapiosexualism become the target of so much leftist backlash? The argument goes that sapiosexualism is a form of ableism because you are judging people with different mental abilities as being less valid and ignoring the neurodiversity of differently-abled people. Leftists argue along intersectional grounds that sapiosexualism tends to focus on only a single narrow type of intelligence at the expense of other equally valid modes of being. This narrow type is stereotyped by the MENSA-esque type that is good at logic puzzles and doing math in their head, who score high on IQ tests and other tests of “raw cognitive power” as psychologists put it. But IQ is just one “form” of intelligence. Think of a musical or artistic genius with a gift for imaginative thought — they may not necessarily have a high IQ but their minds are brimming with interesting and creative ideas. IQ does have some correlation with creativity but in general they represent two different cognitive systems and one does not necessarily imply the other.
But, why are people attracted to intelligence? Evolutionary researchers say that humans prefer other humans with high intelligence because high intelligence is correlated with higher problem solving ability which is plausibly relevant to surviving and being able to provide calories and protection to offspring. Also, some researchers have hypothesized that creativity, e.g. story telling or musical abilities, could have been sexually selected for as a proxy for intelligence. Now that we understand the basics of sexual selection, we can understand why sapiosexualism is both perfectly normally and acceptable but also ableist and short-sighted. From an operational perspective, having a high score on an IQ test can only mean that you are good at taking IQ tests. Someone might be a “slow thinker” when compared to someone with a high IQ but often that slow turning of thoughts, that mulling-over-process, can lead to tremendous insight. In a fast-paced world sometimes a slower, more reflective approach can generate outside-the-box solutions to otherwise intractable problems. This is why we often get our best ideas when we are sleeping, i.e. when our unconscious brains are filtering through the day’s information and solving our problems for us.
Another problem with sapiosexualism is how it advertises itself within the context of dating profiles: as a sexual orientation. That is, right there beside “gay”, “straight”, and “pansexual” is “sapiosexual”. This positioning misleadingly suggests that attraction to intelligence constitutes an entirely new axis along which we can think about sexual orientation. But this fundamentally misconstrues the domain of sexual orientation, which is about gender. Sapiosexualism has more to do with relationship compatibility than it does orientation.
In the end, we are left with a compromise between those who feel sapiosexualism is a natural extension of their sexual identity and those who feel it is pretentious, elitist, and ableist. We can appeal to evolution to both explain why sapiosexualism makes sense to people and why it is myopic in its understanding of what types of intelligence are attractive in romantic partners. And then there is emotional intelligence, the great glue that ties together relationships. We ignore its importance at our own peril when choosing our partners (or friends).
4) Saudi Arabia’s curious romance with Silicon Valley [Source: Financial Times ]
A Gulf country splashing billions of dollars on overseas investments is a familiar tale. However, the city-states of the Gulf have gone quieter in recent years. But now their big brother has stepped in. Saudi Arabia, the largest oil exporter long dismissed as lethargic and excessively prudent, is rushing to catch up with its neighbours in a variety of ways. Its overseas investment targets are so far not the usual Gulf favourites: iconic buildings, financial services or a football club. Instead, the absolute monarchy is betting big on technology. From a $45bn investment in Softbank’s Vision Fund to a $2bn bet on Tesla and $3.5bn on Uber, the Saudis are chasing returns and hoping that partnerships with Silicon Valley will sow the seeds of a Saudi knowledge economy.
While that is an appealing rationale, according to the author, it’s unlikely to be realized. Young Saudis, who make up a majority of the population, are big consumers of digital services. They download three times more YouTube videos than the average American user. Meanwhile, in a country where there is no freedom of speech, Twitter is where Saudis express themselves. However, the author doubts if foreigners will flock to the kingdom to innovate. For the most part, she feels, it will probably take at least a generation before conditions allow for a new type of economy. Despite decades of diversification talk, Saudi Arabia is still reliant on oil, its education system is stuck in the past, its laws need radical overhaul and the private sector is at the mercy of the state.
She opines that the state has no intention of stepping aside — in fact, it sees itself as the innovator in chief. The Public Investment Fund, the vehicle that acts like a sovereign wealth fund, encapsulates the state’s growing concentration of economic power. It controls many of the government’s domestic assets. Last year, in the name of anti-corruption, dozens of businessmen were jailed. Their release was conditional on giving up assets to the state. Saudi Arabia, moreover, is not the United Arab Emirates (the federation that includes Dubai and Abu Dhabi) or Qatar. It has the largest economy in the Gulf but it is more populous and poorer than its neighbours.
Young Saudis need jobs — now, and in the future. The unemployment rate hit 12.9% in July, according to government figures, the highest on record. Among young people the problem is more acute, with the rate reaching 30%. Women in the kingdom are only now rising from the shadows. Since June, they have been legally allowed to drive but many jobs are still off limits to them. The author feels that while there is virtue in being ambitious, tech investments are not enough to change Saudi Arabia. Some companies may export knowledge and expertise to the kingdom but there is no magic formula quickly to churn out skilled graduates suited for the job market. Nor is there a tech solution to the unpredictability of the investment climate or to economic decision-making that runs on royal whim.
5) Maybe your sleep problem isn’t a problem [Source: NY Times ]
We are always taught that it’s good to go to bed early, and rise early. But, what if they are wrong? What if night owls are actually the unsung geniuses? What if we are the ultimate disrupters and rule changers, the ones who are better suited to a modern, postindustrial society ruled by late-night coders, digital nomads, freelance moguls and co-working entrepreneurs? In this piece, the author throws light on how being a night owl is also an advantage. According to Dr. Matthew Walker, the director of the Center for Human Sleep Science at the University of California at Berkeley, about 40% of the population are morning people, 30% are evening people, and the remainder land somewhere in between. “Night owls are not owls by choice,” he writes. “They are bound to a delayed schedule by unavoidable DNA hard wiring. It is not their conscious fault, but rather their genetic fate.”
When night owls are forced to rise early, their prefrontal cortex, which controls sophisticated thought processes and logical reasoning, “remains in a disabled, or ‘offline,’ state,” Dr. Walker writes. “Like a cold engine in an early-morning start, it takes a long time before it warms up to operating temperature.” That might even serve an evolutionary purpose. When early humans lived in small tribes, as in the early scenes of “2001: A Space Odyssey,” staggered sleep schedules bestowed a survival advantage: Someone was always awake to watch for prowling leopards and club-wielding rivals, according to the book. But it has been downhill for night owls ever since. The rise of agriculture brought fields to till at daybreak. The industrial revolution brought factories with 8 a.m. time clocks. Night owls were forced to adapt, and that appears to have taken a toll.
According to a much-publicized study of chronotypes published this year, night owls may die earlier than morning people. Another study, in the Journal of Psychiatric Research, found that night owls are 6% more likely to suffer depression than people who slept conventional hours. Various studies have suggested that night owls also drink more, smoke more and have more sex partners. Other research has drawn links to the dark triad of personality disorders: psychopathy, Machiavellianism and narcissism. Robert Iger of Disney, Howard Schultz of Starbucks and Indra Nooyi, the departing chief executive of PepsiCo, are all said to rise between 4 and 4:30am, and they are relative lazy slobs compared with Tim Cook of Apple, who reportedly bounds out of bed at 3:45am.
There are many executives who fit well in the category of night owls. “I was never a morning person,” Mark Zuckerberg, the Facebook founder, said in a 2016 Facebook video interview with Jerry Seinfeld. He reportedly rises around 8am, hours later than traditional executives, but perfectly in line with hacker hours that prevail in Silicon Valley. “The most productive coders I know — and writers and probably a lot of other creatives,” said Tim Ferriss, the life-hacking author and tech investor, “tend to do a lot of their best work when others are asleep, at times that coincide with the fewest inbound distractions.” Aaron Levie, the chief executive of Box, told Fast Company that he usually sleeps between 3 and 10am. “I don’t use many apps,” he said. “I use naps.” The traditional 9-to-5 workplace is starting to fall out of favor, especially in Silicon Valley and creative sectors where the workday is no longer tied to daylight hours. And, with robots and artificial intelligence further eroding the old system by taking over the routine tasks, the new workplace culture is less about punctuality and more about creativity and breaking the rules.
6) The story of a house: How private equity swooped in after the subprime crisis [Source: Financial Times ]
For personal trainer Trevor Pace, the house at 418 Homeplace Drive in Stockbridge was more than just a mansion-style home with a fireplace in the bedroom and a jacuzzi en suite. “It was everything we had dreamt,” says Mr. Pace. Yet five years later, a French bank bought a financial security that was, in effect, a bet that the Paces would default on their mortgage and be forced to leave their comfortable suburban home. In the years running up to the financial crisis, the house changed from a solid investment to being sliced and diced as part of a security that Wall Street traders sold on to gullible investors all over the world — and which rocked the global economy when it went sour. Since the crisis, it has been on the books of one of the largest private equity groups which have quietly supplanted investment banks as the dominant players in the financial world.
Looking back in time, the house enjoyed its share of glory. Even with the dotcom bust and the US in recession, house prices were still rising sharply. Part of the reason was a proliferation of mortgages on unheard-of terms, offered to first-time buyers or people who previously struggled to get loans. Among those people was the self-employed Mr. Pace, who moved into the house by borrowing the entire $200,000 purchase price. A few years later he and his wife took out an even bigger loan that offered smaller monthly payments over the first few years. And then it all fell apart. In another time and place, the payments on Mr. Pace’s mortgage would have been the concern of no one but his bank manager. Not so in the globalised financial markets of 2007, where the Paces’ mortgage found its way into Wall Street’s huge securitisation machine. That loan, dated June 2005, was $14,000 larger than the one they took out when they first moved in four years earlier. It was a variable-rate mortgage, with a promotional rate and no repayments of principal for the first three years. The lender was Your-Best-Rate, a small outfit set up in Atlanta by a mortgage salesman named Jeff Cutler, who promptly sold the loan to Countrywide Financial.
Your-Best-Rate did not have to worry too much about whether the Paces would be able to pay back their loan, neither did Countrywide. It piled up thousands of mortgages — many of which, it conceded, were “credit blemished” — and sold them in bulk. The Paces were among 10,507 borrowers whose home loans Countrywide packed into a set of securities called the CWABS Asset-Backed Certificates Trust 2005-11. The quality of the borrowers did not have to be high. Homebuyers could qualify if they had been out of Chapter 7 bankruptcy proceedings for “at least one day”. Once Americans began defaulting in unprecedented numbers, the price of mortgage bonds such as CWABS 2005-11 went into freefall, and it meant no one wanted to buy any more loans from mortgage originators. Your-Best-Rate gave up on writing its own mortgages; in 2010 the company folded.
Countrywide was sued by pension funds and bond investors but the losses on the mortgage-backed securities issued by Countrywide were only a part of the story. The risky MBS were bundled into another instrument called Collateralized Debt Obligations (CDOs) by the likes of Goldman Sachs and rating agencies slapped triple A labels on more than 91% of such instruments. As the crisis unfolded, the consequences cascaded through Countrywide mortgage-backed securities and into the CDOs. The losses stretched far beyond America. Landesbank Baden-Württemberg, a Stuttgart-based savings bank, complained in a lawsuit against Goldman that it lost $37m. Scores of other European banks were burnt by similar investments.
But there was another side to CDOs. Sophisticated investors, spotting the cracks in the US housing market, were looking for ways to profit from a collapse – by betting on it through insurance contracts. AIG famously found its liabilities too high in this regard and was forced to accept a US government bailout. The Paces clung on at 418 Homeplace Drive for years, twice filing for bankruptcy, which forestalled the mortgage company’s effort to take over their house. By 2011 their mortgage was $53,000 in arrears. They owed $218,303 on a house that was now reckoned to be worth barely $140,000, about three-quarters of what the builder had sold it for a decade earlier, and had just $900 in three bank accounts and about $13,000 in retirement savings. Eventually, in November 2013, they succumbed, joining a wave of foreclosures that has seen 7.8m families thrown out of their homes since the beginning of the financial crisis.
Their home was sold at auction on the courthouse steps — but the new owner was not a young family like the Paces. It was an investment fund run by a billionaire financier, for whom the great dislocation would turn out to spell a great opportunity. Since the crisis Blackstone has marched into markets that others have been forced to vacate. Its portfolio of more than 80,000 single-family homes has made it one of America’s biggest private landlords. The result is a company called Invitation Homes that floated on the stock market last year. Today it is worth $21.6bn including debt, buoyed by a 35% increase in US house prices since the start of 2013 and an unyielding approach that few private landlords can match.
7) The origins of our misguided hatred for pigeons [Source: audubon.org ]
In 2005, sociologist Colin Jerolmack went to Greenwich Village to study how New Yorkers used the neighborhood’s “pocket parks,” what they wanted from these tiny green spaces, and how they thought the parks could be improved. He got an answer to that last question almost immediately. In the parks and at community meetings, people told Jerolmack over and over that pigeons were their biggest gripe with the parks. That’s not a complaint unique to Greenwich Village or to New York City. Around the world, we’ve criminalized feeding pigeons, shot them, poisoned them, trapped them, zapped them, fed them birth control, and used all manner of repellants—from plastic birds of prey to spike strips—to keep these “rats with wings” off of sidewalks, statues, and buildings.
Jerolmack says, the problem with pigeons is the way we think about them, and their greatest sin is simply being out of place in our minds. He combed through 155 years’ worth of New York Times articles, tracking the conversation the city was having with itself about pigeons and trying to figure out how and why birds got labeled as pests. He found that while pigeons have been our neighbours in cities for thousands of years, they were problematized only recently, going from innocent bird, to mundane nuisance, to public enemy in just a few decades. The early mentions of pigeons in the paper of record from the late 19th century are actually sympathetic to them, condemning the sport of pigeon shooting. Early in the next century, opinion shifted. “Pigeons became a nuisance through the 1930’s and 1940’s, nesting and defecating in and on landmarks, statues and sidewalks,” Jerolmack writes in his paper, How Pigeons Became Rats: The Cultural-Spatial Logic of Problem Animals. “In the 1950’s, we learned that pigeons carry disease. In 1963, they were framed by several officials as menacing vermin to be exterminated.” In all of these articles, Jerolmack found concrete reasons for New Yorkers to be annoyed by pigeons—feces, noise, links to disease—but to him, they didn’t add up to a satisfactory explanation for the loathing they receive.
They’re certainly noisy, and they defecate on people and property with abandon but you can say the same about lots of animals. The threat of pigeon-borne diseases could explain our hatred, but there’s not much of a threat to speak of. Epidemiologists at the Centers for Disease Control and Prevention (CDC) told him that people and pigeons rarely interact in ways in which the birds could make us sick. If none of the pigeon’s natural characteristics could explain why we hate them so much, Jerolmack figured, then the issue isn’t anything that pigeons do, but how we see them and the spaces we share with them. The pigeon-as-pest, he thinks, is a symptom of people’s idea that the environments we build are separate from natural ones. In what sociologists call our “imaginative geography” of cities, there’s a border that separates clean, orderly civilization and wild, uncontrolled nature. “That doesn’t mean there’s no nature, but ideally, the city is the place where we invite nature in in ways that we control,” Jerolmack says. “We cut out little squares in the concrete, and that’s where the trees belong. We don’t like it when grass and weeds begin to grow through cracks in the sidewalks, because that’s nature breaking out of those boundaries that we want to keep it in.”
Pigeons cross those boundaries frequently and visibly, inhabiting the spaces that we think of as our own. “More than most other urban animals, they prefer concrete and sidewalks and ledges over grass and shrubs,” Jerolmack says. “Rats will retreat to the sewers and bushes, and remain out of view, but pigeons invade the spaces that we’ve designated for people.” By upsetting our imaginative geography, pigeons show us that cities are not as subdued and scrubbed of nature as we think they should be. Those transgressions alone are enough to raise our ire, but because authorities and experts have connected the birds to disease, pigeons don’t just invade our space—they potentially pollute it. Marked as an epidemiological threat despite actually being poor vectors of disease, pigeons have also become a health menace in people’s minds.
The urban terror was given a new name in June 1966, when New York City parks commissioner Thomas coined the term “rats with wings.” With that, Jerolmack says, pigeons were explicitly linked to disorder and disease, and our perceptions of them as nuisances, “dirty” animals, and health threats were all emphasized and threaded together in a neat little package. “Rats with wings” soon went mainstream. It popped up in Woody Allen’s 1980 film Stardust Memories, and appeared in almost every article written about pigeons after 1990 that Jerolmack looked at—not just in the Times but in 51 other papers from around the country—in “language that claimed consensus.” The pigeon had ascended from minor annoyance, Jerolmack says, “to a symbol of what we find vile and morally repugnant in the urban cityscape.” For many people, Jerolmack says, they don’t even count as “real wildlife.”
8) Silicon Valley is changing, and its lead over other tech hubs narrowing [Source: Economist ]
Many young talents are moving out of the Silicon Valley. One of the reasons being soaring real estate costs. The garage in which Hewlett-Packard was started in 1939 is now a private museum—a modest monument to the cut-price creativity and bare-knuckle entrepreneurship that made Silicon Valley famous. Drive south from Palo Alto through 20 minutes of inevitable traffic to Sunnyvale and you will find a landmark of a different kind. Nothing of technological note has taken place there. But in February this small two-bedroom house, which boasts just the sort of garage a startup would once have felt at home in, sold for $2m, 40% more than its asking price, within two days of listing—a new record for the area. That translates into a price of $25,386 per square metre ($2,358 per square foot). More Americans are leaving the Silicon Valley than moving to it. In 2017, several counties in the area saw their largest combined domestic outward migrations in around a decade. In a recent survey by the Bay Area Council, a think-tank, 46% of Bay Area residents said they planned to leave in “the next few years”, up from 34% in 2016.
This is not just a case of people of more modest means being pushed out by carpet-bagging techies. At this year’s “FOO camp”, a freewheeling annual gathering of hackers and others, a session called “Should I/you leave the Bay Area?” saw a strong turnout. Participants shared their gripes about the high cost of living, bad traffic and a “toxic” culture obsessed with money. “We’re seeing a lot of the talent moving or saying they won’t come here,” says Dan Rosensweig, who runs Chegg, an education-tech company in Santa Clara. “It’s hard to imagine doing another startup in Silicon Valley. I don’t think I would,” says Jeremy Stoppelman, the boss of Yelp, a review site. “I will probably never scale another company in the Bay Area,” says one of the founders of a public internet company. He says that for his next venture he will keep a small team in the Bay Area but will hire most of the software developers and executives in other cities, where the cost of talent and the risk of them being poached are both lower.
On top of all that, Silicon Valley’s own products and services make it ever easier to start out elsewhere, or everywhere, and be connected to Silicon Valley’s culture through messaging, video-conferencing and collaborating online. By changing the way companies work, this technology is making it ever more feasible to have a presence in the Valley while keeping most or almost all of your employees elsewhere. No other tech hub in this more spread-out world will grow as powerful as Silicon Valley has been. But its lead over a growing pack of competitors will narrow. Others, though, think things have really changed. AnnaLee Saxenian, dean of the School of Information at the University of California, Berkeley, says she has spent her whole career “defending the Valley’s vitality whenever people have said it’s over”. Now, she thinks there has been an important cultural shift.
In “Regional Advantage”, a seminal study published in 1994, Ms. Saxenian compared Silicon Valley’s culture to that of the rival tech cluster around Boston, Massachusetts, known as Route 128. The Valley started to outstrip its competitor in the late 1980s, she argued, because Route 128 was dominated by large, hierarchical companies that were inward-looking and secretive. They valued corporate loyalty and strongly discouraged employees from leaving for a competitor or starting their own venture. In the Valley, in contrast, information was shared much more freely both within companies and between them. Leaving to start something of your own was not frowned upon. Indeed it was encouraged; established firms helped support or spin off younger ones.
Where Ms. Saxenian sees the ghost of Route 128, Tim O’Reilly, a publisher and Valley-watcher of long standing sees a flickering echo of Hollywood, with successful entrepreneurs acting the part of high-maintenance movie stars. Those with graduate degrees in artificial intelligence can fetch $5m-10m a year. People complain that such pampering has eroded tech’s work ethic, with employees focusing on free lunches and other perks. In the Financial Times earlier this year Michael Moritz, chairman of the venture-capital firm Sequoia, suggested that American techies could learn from the hard-driving culture of Chinese entrepreneurs. Faced with high costs and the chilling effect of the neighbourhood giants, entrepreneurs who would once have planned to build their businesses entirely in the Valley are increasingly pursuing three other courses: launching their startups somewhere else; moving their headquarters somewhere else once they reach a certain size; or keeping their headquarters in the Valley but scaling their operations elsewhere—“Off Silicon Valleying”, as some call it. Mark Pincus, the founder of Zynga, a games developer, predicts companies “will have to think about multiple locations much earlier in their trajectory.”
Coming to Silicon Valley to network and fundraise will continue to provide advantages; nowhere else will match it for apprenticeship or pilgrimage. “There’s no place that’s replacing Silicon Valley,” says Peter Thiel, a venture capitalist. But it will be less critical to stay and set up shop here. “The Valley is going to become an idea instead of a place,” predicts Glenn Kelman, the boss of Redfin, a property company. “Wall Street went through a similar transformation,” he says, its name becoming shorthand for a whole industry. As tech firms set their sights on disrupting old-fashioned industries, like health care and logistics, they may find that it helps to be based in cities that claim deep expertise in these areas—and where garages housing startups are not just the stuff of museums and memory.”
9) Australia’s property boom ends as credit squeeze begins [Source: Financial Times ]
Maggie Lu is one of thousands of borrowers experiencing a credit squeeze, which has abruptly ended Australia’s housing boom and could pose a risk to one of the world’s most successful economies. Economists cite tighter credit and unaffordable prices as the reason for the biggest slump in Sydney property prices for nine years. New figures this week show Sydney prices have fallen 5.6% over the past year, while the national market fell 2%. It marks the end of a five-year boom, which saw prices in Australia’s biggest city rise 70% and household debt surge above 120% of GDP — one of the highest levels in the developed world. This follows a similar pattern overseas, where property markets from London to Toronto are seeing price declines as central banks begin to unwind record-low interest rates, consumers balk at paying record high prices and regulators or banks impose tougher lending criteria on consumers. Australia is becoming a test case of whether regulators can manage a soft landing, rather than a disorderly crash.
Businesses like retail are concerned on the back of this development. Some businesses are concerned. Michael Chaney, chairman of Wesfarmers, the retailing to industrials conglomerate, warned house prices could fall 20% and drag Australia into recession with negative implications for retailers. At the height of Australia’s housing boom in 2015, investors were hoovering up more than 40% of mortgages, according the central bank. Many buyers rely on generous tax breaks on capital gains and negative gearing — when rental income undershoots interest costs — and gambling on capital appreciation to justify purchases. Four in 10 mortgages were interest only at the peak of the boom, according to the central bank. Thinly capitalised investors betting on rising property prices favour such mortgages.
The investor stampede priced many first-time buyers out of the market and prevented owners from trading up to new homes. Since then regulators have tamed the rapid growth in credit by forcing banks to restrict investor lending, interest only loans and tighten lending criteria. A year-long public inquiry into bank misconduct is intensifying scrutiny on lending practices, a point highlighted when Westpac this week paid a A$35m fine for failing to test whether borrowers had the capacity to repay loans. As a result of regulatory intervention, loans to housing investors totalled A$10.4bn in June, down 18% on the same month last year — the lowest approval level in almost five years. Owner occupier loans were almost unchanged at A$20.8bn.
But some analysts feared the credit squeeze could develop into a credit crunch. The rising cost of offshore funding for banks — due to rising interest rates overseas — is eating into the profit margins of institutions, which rely on home loans for two-thirds of their loan books. Last week Westpac hiked mortgage rates even though the Reserve Bank of Australia had kept official interest rates on hold at a record low of 1.5% for 25 months. Other banks were likely to follow. A big risk exists in the stock of A$360bn of interest-only mortgages, which will convert to principal-and-interest loans over the next three years. Up to a quarter of these borrowers may struggle to meet higher repayments and have to sell their properties. Retail, building and real estate sectors would struggle as a result as indebted consumers tightened their purse strings.
10) US justice department signals pursuit of tech giants [Source: Financial Times ]
Last week, Mr. Trump attacked big technology companies including Google, Facebook and Twitter for smothering right-wing views. The US president had said in July that he would investigate what he claimed was a “discriminatory and illegal practice” of limiting the visibility of some tweets. He added last week that Google, along with Facebook and Twitter, “are really treading on very, very troubled territory, and they have to be careful”. Mr. Jack Dorsey, chief executive of Twitter spent four hours answering questions on censorship and content policies from the House energy and commerce committee on Wednesday afternoon, where many Republicans followed the president and accused Twitter of having an anti-conservative bias.
Mr. Dorsey accepted there was growing concern about the power of social media companies. “People view us as the public square and it comes with certain expectations,” he said, but he added: “We believe it is dangerous to ask Twitter to regulate opinions or be the arbiter of truth.” He laid out plans to make changes to Twitter’s site — for example, getting better at detecting problematic content even before it is flagged by users — and to the company. It was considering hiring more employees outside liberal San Francisco, he said. In the Senate hearing earlier, Facebook and Twitter pushed back against a suggestion that they should be legally liable if illegal drug dealers show off their wares on their websites. The two companies are currently not liable for almost all user-generated content, under section 230 of the US Communications Decency Act. But Congress passed legislation last year removing the exemption for content that promotes sex-trafficking and on Wednesday, Senator Joe Manchin asked the companies whether they would be “open” to a similar dilution of the legislation to fight against drug dealing.
Ms. Sheryl Sandberg and Mr. Dorsey told the Senate hearing that their companies rely on the “safe harbour” of section 230. Mr. Dorsey argued that without section 230, Twitter would have to restrict free speech further. Ms. Sandberg said that the rule enabled Facebook to “look for things [illegal content] proactively without increasing our liability and so we would want to work very closely on how this would be enacted”.
The final Senate Intelligence committee hearing on Russian interference in US elections was being closely watched for further clues about whether Washington will pursue tech regulation after a string of controversies. Senator Mark Warner, the Democratic vice-chair of the committee, warned at the start of the session: “The era of the wild west in social media is coming to an end. I’m sceptical that ultimately you’ll be able to truly address this challenge on your own. I believe Congress is going to have to act.” Mr. Warner proposed a whole range of changes, from identifying bots on the platforms to questioning what he said was a “flawed” advertising model. But Republicans are reluctant to impose mandatory rules on the companies, pushing them instead to provide more context and clarity to users to help users make their own decisions.
-Prashant Mittal is Strategist, at Ambit Capital. Views expressed are personal