Ten interesting things we read this week

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 favorite 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 ‘Car emissions scandal’, ‘Localization of cloud storage in India’ and ‘Paul Krugman on cryptocurrencies’.

Here are the ten most interesting pieces that we read this week, ended August 10, 2018.

1) Car emissions scandal: Loopholes in lab tests [Source: Financial  Times]
When Volkswagen was caught cheating diesel emissions tests in 2015, one of the first actions its engineers took was to launch a secret project: to obtain cars from rival manufacturers and conduct tests on their emissions. Its aim was to find evidence of widespread cheating across the industry, so guilt could be spread around and penalties diluted. There’s another explanation too. Engineers uninvolved in the original cheating had to use rival cars as control variables to better understand their own sophisticated software — some of it supplied by third parties and used by rival brands. What the engineers found shocked them. Rival brands’ NOx emissions were considered “a complete disaster”. Performance on the road was “completely different to the technical data”. The overall summary of whether rivals were also skewing emissions results was clear: “It’s not only VW who is cheating.”

What is unclear is whether rivals were deploying the same strategy as VW — using a “defeat device” to illegally trick regulators into believing its cars were green — or if they had simply become better at bending the rules on tests, a problem that still exists with petrol cars today, as the European Commission revealed last month when it disclosed the latest “tricks” carmakers were using to exploit loopholes for incoming 2020 emissions procedures. The distinction is blurred but important. VW paid the consequences of crossing the line and cheating NOx emissions tests in the US. But the efforts of other carmakers to legally undermine testing for both NOx and CO2 in Europe have never resulted in real penalties. It had been an open secret in the industry for years that carmakers were gaming the EU lab tests in myriad ways: over-inflating tyres, taping doors, removing the sound system and turning off the air-conditioning were just a few of the methods that helped cut emissions in the lab but that were impossible to replicate on the road.

From 2001 to 2013, the gap in CO2 emissions in the lab versus on the road nearly quadrupled from 8 per cent to 31 per cent, according to the International Council on Clean Transportation. Even with carmakers under scrutiny, and European regulators under pressure to enforce rules, the gap has since widened — reaching 42 per cent in 2016. Within months of VW ‘project’, allegations implicating Mercedes, Fiat-Chrysler and Opel, among others, began to emerge as the institutes and EU regulators performed their own comprehensive NOx emissions tests. But Europe has not taken strong action to penalise — and thus deter — them for using legal tricks to undermine C02 tests, which is why problems persist, says William Todts, executive director at the European Federation for Transport & Environment, a clean energy group. By contrast, the US, which operates “the most stringent policy enforcement practices” according to the ICCT, has taken strong action.

In the US, the EPA sets and enforces the rules; in Europe, Brussels sets the rules but enforcement is left to the national authorities. Critics of the EU system say the national authorities’ independence and incentives are questionable. For instance, Germany’s transport authority, the KBA, is in a difficult position to impose billions of euros in fines on a car industry that employs 800,000 people in the country. When, in April 2016, the KBA found that Mercedes, Opel and VW cars were understating pollution by turning off emission controls in temperatures not found in test procedures, it recalled 630,000 cars. It issued no fines but simply told carmakers to stop exploiting the loophole.

Emissions testing in the EU is being overhauled, albeit gradually. Simple lab tests under the New European Driving Cycle first designed decades ago and described by T&E as “utterly discredited” are being replaced by longer tests designed to better replicate on-the-road conditions. The new system also gives the commission powers to check cars already on the road, and it can penalise carmakers up to €30,000 a car in case of non-compliance. Yet critics say Brussels is not going far enough. Also, carmakers were already undermining these new CO2 emissions tests — before they even become mandatory next month. They do it by inflating the base and exploiting the fact that absolute targets are being replaced by targets measured in percentage terms.

2) How nature sounds became a multi-million dollar industry [Source: The Economist]
In 1984 Edward Wilson, a Pulitzer-prize-winning biologist at Harvard, published his theory of “biophilia”. Humans, he argued, “subconsciously seek [connections] with the rest of life” and nature because they create positive responses and feelings: the faces of baby mammals are a source of joy, as are long hikes in the woods or swims in natural lakes. In recent years, architects and interior designers have turned to biophilic design, a sustainable design strategy that brings natural elements into buildings. Grocery stores might make a feature of wood, for example, or an office might emphasise natural light. One of the most faddish biophilic trends is to use natural sounds as a soothing backdrop for work or relaxation. Though the scientific evidence for the benefits of this is mixed, meditation and wellness apps that use ambient sounds have become popular among smartphone users worldwide. Both Headspace, which is used by 12m people, and Calm, downloaded by around 8m, are valued at $250m. Flowing and Windy, apps targeted at “upgrading sleep”, are built on recorded sounds of waterfalls, birds and crickets.

But the general idea predates smartphones, and even the biophilia hypothesis, to long-form field recordings made in the 1960s and 1970s. Those recordings were made by Irving Teibel, an American sound technician, and they marked the first time that natural sounds were hawked as a product. Teibel was inspired by the theories of Hermann von Helmholtz, a German physician and physicist, who in the 1860s wrote that reproducing the sounds of the wind and the sea could benefit human psychological health. Teibel studied synthesisers at the New School and while working on the soundtrack for a friend’s film, Teibel was asked to record the ocean waves at Brighton Beach in Brooklyn. As he edited his tapes, he found the sounds relaxing—much more soothing than his unusual musique concrète creations. He set about recording various beaches along the American Atlantic coast hoping for the perfect ocean sound. He made more than 100 recordings and eventually released “Environments 1: Psychologically Ultimate Seashore” in 1969 as a long-playing record. Not quite a real field recording, and nowhere close to a synthesizer record or sound effects collection, it had no obvious place in the stacks at record shops. It wasn’t music as anyone knew it.

Teibel criss-crossed the country selling the LPs—and eventually cassettes and eight-tracks—marketing them as a stress-reducer. The recordings had benefits, he said, such as better sleep, better meditation and better sex. The lines between America’s hippy counterculture and pop culture were blurred by then, and his innovation was a hit. “Environments” gained major label distribution from Atlantic Records. As America endured a tumultuous decade, Teibel’s records found their ways into yoga studios, self-help seminars, New Age gatherings and after-hours comedowns. College kids bought them, possibly as study aids. Audiophiles used them to showcase their hi-fi systems. Teibel made ten more “Environments” records from 1969 to 1979, evoking the experience of a “wood-masted sailboat”, a “country stream”,  the “ultimate thunderstorm”, an “alpine blizzard”, “gentle rain in a pine forest” and more.

By the 1980s New Age, a soothing, often synthesized genre of music suited to meditation, had gained popularity. Not long after, ambient electronica took off. Both could be seen as extensions of what “Environments” tapped into, rendering simple natural sounds curiously out of date. Teibel’s albums washed up in yard sales and second-hand stores as relics from the dawn of the environmental movement. As technology increasingly shapes modern life and cities house an ever-growing share of the world’s population, these natural sounds and settings have become idealised once more. But there is a difference between appreciation and preservation. Many of the places Teibel recorded are developed or ruined due to natural disaster: Hurricane Sandy washed away the section of beach from which he recorded and the Bronx Zoo aviary he taped collapsed after a snowstorm. The meditative quality of “Environments” belies an unsettling and uncertain future for its subject. 

3) India panel wants localisation of cloud storage data in possible blow to big tech firms [Source: Livemint]
A panel working on the Indian government’s cloud computing policy wants data generated in India to be stored within the country, according to its draft report- a proposal that could deal a blow to global technology giants such as Amazon and Microsoft who offer such services. As per the author, it could not only raise their costs because they will need to ramp up the number and size of data storage centres in India, where power costs remain high, but at least some of those increases are likely to be passed on to customers who include everyone from small start-ups to large Indian corporations. The policy will be the latest in a series of proposals that seek to spur data localisation in India, as the government finalizes an overarching data protection law. Local data storage requirements for digital payments and e-commerce sectors are also being planned.

India’s push for localisation comes at a time of heightened global scrutiny of how companies store user data. In July, India said its federal police had begun probing Cambridge Analytica’s misuse of Facebook user data, which New Delhi suspects included information on Indian users. The draft report of the cloud policy panel, which is headed by the co-founder of Indian tech giant Infosys, Kris Gopalakrishnan, said a “forward looking” data protection regime was needed as India’s IT laws framework was “not sufficient” for cloud computing. “We recommend localization of cloud data and any data that is stored about Indian entities or data generated in India,” it said, adding this data “must be available for investigative agencies and national security agencies.” Industry executives said many Indian businesses store their data on cloud servers located outside the country and a localisation mandate could force them to migrate data to India.

The Indian public cloud services market is set to more than double to $7 billion by 2022, the draft report said. Enterprise spending on data centre infrastructure software will rise 10% to $3.6 billion in 2018, research firm Gartner estimates. The government panel’s draft listed Amazon, IBM and Microsoft among key companies already registered under a government initiative on cloud computing. It also listed Alphabet Inc’s Google, Oracle and Salesforce.com Inc as those with “significant presence”. The report, however, highlighted infrastructure and connectivity challenges faced by cloud service providers in India — such as high power costs and the need to get various permits — which raise the cost of running data centres. More than 80% of India’s data centre supply was concentrated in five cities, the panel said. It recommended conducting a study to identify 20 locations conducive for such infrastructure, while also looking at incentives and relaxed tax structure for the industry’s growth. The panel also plans to recommend development of a “national cloud strategy” that could bring cloud service providers under a single regulatory and policy framework.

4) The rise of India’s super-rich is threatening the country’s chance of becoming an advanced economy [Source: LinkedIn]
James Crabtree – author of “The Billionaire Raj” - recollects his experience at the Mumbai airport which had improved over his five year stay from 2011 to 2016. The new Terminal 2, for many in the financial capital of India, symbolized what was going right with India. Mumbai’s elite certainly viewed it with thinly disguised elation, as if their home had finally shed a shaming indictment, complete with its third-world interiors and clouds of mosquitoes. Inside, the building is efficient and stylish, with soaring ceilings supported by pillars resembling the feathers of a peacock, the national bird. Yet the city’s infamous slums still push right up against the airport’s fence, while even the highway that leads to the airport marks a curious kind of progress, in that it is a public facility that only the most prosperous will ever be able to use.

He believes that this is India’s future challenge in microcosm. Not only has the gap between those inside that fence and those outside remained unbridgeably vast—but in many ways it has grown even greater over the last decade and a half, a period in which an already unequal country has grown ever more segregated by wealth. On the one hand, India’s development aims are straightforward: first to cement its position as a firmly middle-income parliamentary democracy, then to enter the ranks of advanced economies at some stage after the midpoint of this century. Yet he says, until it grapples with the three fault lines of what Mr. Crabtree calls ‘The Billionaire Raj’—inequality and the new super-rich, crony capitalism, and the travails of its industrial economy—the path to achieving those goals will remain uncertain.

Since 2008, when risk of oligarchy in India was highest, the threat of oligarchy has receded, at least to some degree. Some of India’s best-known tycoons fell to earth spectacularly. The country’s old system of corruption, with its political favors and risk-free bank loans, came under intense scrutiny. He recollects how during his meeting with Vijay Mallya, the latter described the speed at which India’s new prime minister had shut down the political access he and his fellow tycoons had long enjoyed. Yet it would be wrong to view India’s super-rich as in retreat. In fact, they are thriving. The ranks of the country’s billionaires keep swelling, reading 119 at last count, more than any country except the United States and China. The fortunes of the merely very rich continue to shoot up as well. In many ways this should be welcomed. India needs affluent entrepreneurs, a point recognized even by left-wing thinkers. “There is something a little deceptive about focusing on the very rich,” he was once told by Amartya Sen. “Having lots of rich people is not always a big problem so long as they get no special favors and pay fair taxes.” The problem is that these increases in wealth have turned India into one of the world’s least equal countries.

Mr. Crabtree says there will be grim consequences if these trends continue unabated. Those Latin American economies with the widest social divides have proved less economically stable and more likely to get stuck in the “middle-income trap,” in which poorer nations achieve moderate prosperity but fail to become rich. The more successful countries of East Asia, by contrast, grew prosperous while managing to stay broadly egalitarian, partly by building basic social safety nets. Of the two models, it seems clear which India should want to follow. While India has taken steps to counter corruption and to push basic education, health, and pension provision for those at the bottom of the social ladder, there remains a danger of complacency. He says that kickbacks still dominate swaths of public life, from land purchase to municipal contracts. Criminal probes have dragged on, with almost no one sent to jail. State and city governments are just as venal as ever, while surveys say India remains the most bribe-ridden nation in Asia. Perhaps most importantly, the country’s under-the-table political funding system remains largely untouched.

This balance of growth and corruption also lies at the heart of the struggles of India’s industrial economy, the final of the three fault lines. India’s problems of heavily indebted conglomerates and ailing banks were well known when Modi arrived in office. Yet progress towards fixing them has been slow, leaving India facing a lost decade of investment. The crony capitalism of America’s Gilded Age ended when rampant nineteenth-century clientelism was curbed by impartial, meritocratic twentieth-century public administration. Mr. Crabtree says in India’s case, similar breakthroughs will require a focus on what is often called “state capacity.” Ending corruption is part of this battle, but it also involves the more complex objective of building a state machinery able to create and implement wise public policies, while remaining impartial between different social groups. That this can be done is clear from the case of China, which achieved huge social and economic progress while also being amazingly corrupt, largely because its machinery of state is so capable.

5) Rural Indians are not giving up their television sets that easily: BARC [Source: Livemint]
At a time when Netflix and Amazon Prime Video are battling it out for mindshare in India’s urban homes, good old television viewership continues to grow, especially in the countryside. Television viewership in rural India rose 10% between 2016 and 2018 while that in urban areas grew 4% over the same period, the Broadcast India 2018 Survey conducted by Broadcast Audience Research Council India (BARC) showed. TV penetration rose from 99 million to 109 million in rural India, and from 20 million to 21 million in the mega cities—Delhi, Mumbai, Kolkata and Bengaluru—during the period, the viewership monitoring agency said. The survey also shows a 6.9% increase in male TV viewers (from 401 million to 429 million) versus a 7.5% jump in female TV viewers (from 378 million to 407 million).

The viewership figures come at a time when many people have switched to online streaming. FICCI-EY’s media and entertainment industry report in 2017 estimates 481 million Internet users in India, with 186 million rural and 295 million urban users. The number of smartphones sold in the country by the end of December 2017 was 127 million while 250 million people viewed videos online in 2017 for news as well as entertainment. But obviously, TV isn’t going away in a hurry. Apart from the size of the screen, sound and picture quality, the advent of state broadcaster Doordarshan’s free-to-air direct-to-home platform DD Free Dish is hugely responsible for the continuing dependence on TV in rural areas. This is because apart from spending once on equipment such as a set-top box and a dish, Free Dish consumers do not need to pay any monthly subscription fee. Rural audiences are, therefore, hooked to the dated content on these channels.

“I think this data needs to be looked at in finer, nuanced, qualitative ways. For example, even if TV viewership is growing in absolute numbers, what is the kind of time spent and lapsed or how many daily active users there are and in which regions,” said Sameer Nair, chief executive officer at content studio Applause Entertainment, which makes shows for video-streaming platforms. Nair added that television may be a staple in most homes but is also an ageing medium. “The television and digital media are already co-existing, it’s a matter of how much time people give to what,” he said. While Bihar and Jharkhand remain India’s lowest TV penetrated markets, growth since 2016 has been the highest in these two states at 24% (from a combined 6.5 million TV households to 8 million), followed by Assam, Sikkim and the north east at 20%. Like in 2016, south Indian states such as Karnataka, Kerala and Tamil Nadu had the highest TV penetration at over 91%. Andhra Pradesh and Telangana have also joined the list this year.

The BARC survey saw a rise in other indices too—the number of TV-owning individuals grew by 7.2% (from 779 million to 835 million) while the total number of TV homes in India increased by 7.5% (from 183 million to 197 million).

6) Transaction Costs and Tethers: Why I’m a Crypto Skeptic: Paul Krugman [Source: NY Times]
Renowned economist Paul Krugman in this piece talks about why he’s a crypto-skeptic. He says it comes down to two things: transaction costs and the absence of tethering. He explains this by saying that monetary history shows a clear direction towards reducing the frictions of doing business and the amount of real resources required to deal with those frictions. First there were gold and silver coins, which were heavy, required lots of security, and consumed a lot of resources to produce. Then came bank notes backed by fractional reserves. These were popular because they were much easier to deal with than bags of coins; they also reduced the need for physical precious metals. Even so, the system still required substantial amounts of commodity money. But central banking, in which private banks held their reserves as deposits at the central bank rather than in gold or silver, greatly reduced this need, and the shift to fiat money eliminated it almost completely. Meanwhile, people gradually shifted away from cash transactions, first toward payments by check, then to credit and debit cards and other digital methods.

Mr. Krugman says that set against this history, the enthusiasm for cryptocurrencies seems very odd, because it goes exactly in the opposite of the long-run trend. Instead of near-frictionless transactions, we have high costs of doing business, because transferring a Bitcoin or other cryptocurrency unit requires providing a complete history of past transactions. Instead of money created by the click of a mouse, we have money that must be mined — created through resource-intensive computations. He adds that these costs aren’t incidental, something that can be innovated away. The fact that it’s expensive to create a new Bitcoin, or transfer an existing one — is essential to the project of creating confidence in a decentralized system. He also says that banknotes worked because people knew something about the banks that issued them, and these banks had an incentive to preserve their reputation. Governments have occasionally abused the privilege of creating fiat money, but for the most part governments and central banks exercise restraint, again because they care about their reputations. But you’re supposed to be sure that a Bitcoin is real without knowing who issued it, so you need the digital equivalent of biting a gold coin to be sure it’s the real deal, and the costs of producing something that satisfies that test have to be high enough to discourage fraud.

Conventional money, according to him, generally does its job quite well. Transaction costs are low. The purchasing power of a dollar a year from now is highly predictable – orders of magnitude more predictable than that of a Bitcoin. Using a bank account means trusting a bank, but by and large banks justify that trust, far more so than the firms that hold cryptocurrency tokens. In eight years after Bitcoin was launched, cryptocurrencies have made very few inroads into actual commerce. A few firms will accept them as payment, but according to him its more about signaling — look at me, I’m cutting-edge! — than about real usefulness. While cryptocurrencies have a large market valuation, he says it’s because they’re overwhelmingly being held as a speculative play, not because they’re useful as mediums of exchange. As to whether it’s a pure bubble he points that there are other currency-like assets that don’t actually get much use as money, but which people hold anyway like Gold and cash.

The fact that dollar cash holdings have actually risen as a share of GDP since the 1980s — a growth entirely accounted for by $50 and $100 bills, is mainly explained by factors like tax evasion, illicit activity, etc. According to Mr. Krugman, cryptocurrencies are in effect competing for some of the same business: very few people are using Bitcoin to pay their bills, but some people are using it to buy drugs, subvert elections, and so on. And the examples of both gold and large-denomination banknotes suggest that this kind of demand could support a lot of asset value. So does this mean that crypto, even if it isn’t the transformative technology its backers claim, may not be a bubble?

This is where tethering — or, more precisely, its absence for cryptocurrencies — comes in. People accept dollar notes because other people will accept dollar notes and ultimately, it’s backstopped by the fact that the U.S. government will accept dollars as payment of tax liabilities — liabilities it’s able to enforce because it’s a government. If you like, fiat currencies have underlying value because men with guns say they do. And this means that their value isn’t a bubble that can collapse if people lose faith. To some extent gold is in a similar situation. Most gold just sits there, possessing value because people believe it possesses value. But gold does have real-world uses, both for jewelry and for things like filling teeth, that provide a weak but real tether to the real economy. Cryptocurrencies, by contrast, have no backstop, no tether to reality. Their value depends entirely on self-fulfilling expectations — which means that total collapse is a real possibility. If speculators were to have a collective moment of doubt, suddenly fearing that Bitcoins were worthless, well, Bitcoins would become worthless.

7) The WTO has become dysfunctional [Source: Financial Times]
How will the world trade regime handle a large, increasingly powerful country such as China that apparently plays globalisation by different rules? According to this piece, this is the question that keeps US and European policymakers awake at night. The fever runs highest in the US, where the Trump administration has blamed China for engaging in economic aggression and has declared trade war in response. The US president’s methods may be frowned upon, but the view that something has to be done about China’s trade and industrial practices is widespread among mainstream policy elites. The tone is softer in Europe, but the concern is shared. But US and European policymakers are asking the wrong question. The problem is not with China’s policies as much as it is with the world trading regime. The World Trade Organization — as well as every trade agreement since — has been predicated on the idea that economic practices in different nations would eventually converge. This has not happened, as China’s example amply indicates. More importantly, there is no good reason for national economic models to converge in the first place.

The trade agreements concluded in the early postwar period left plenty of space for countries to pursue their own paths. The various trade rounds under the old General Agreement on Tariffs and Trade system covered only explicit barriers to manufactured goods at the border, mainly import tariffs and quotas. Services and agriculture were excluded. Developing countries could do almost as they pleased. When an import surge in garments threatened economic dislocation in developed countries in the early 1970s, a special regime was established that enabled these countries to re-impose quantitative restrictions. The WTO changed all that. Negotiated at a time of neoliberal triumphalism, it reached inside the border to constrain domestic policies in subsidies, health and safety and intellectual property. Any domestic regulation with an adverse impact on imports could now be treated as a trade restriction. Subsequent trade agreements went further, prioritising trade and foreign investment over domestic concerns.

Western policymakers tend to think of today’s global trade rules as neutral and impartial, treating all participants fairly. But trade agreements are political documents, reflecting the interests of dominant coalitions. Multinational corporations, international banks and Big Pharma play a particularly important role in shaping them. It is no surprise that long-term concerns about development, or indeed labour rights and the environment, are given short shrift. While there is little doubt that China violates the spirit, if not the letter, of WTO rules on intellectual property and subsidies, when the US and Europe complain that China is infringing “global norms and rules”, they forget their own economic history. China’s policies are not so different from those that they too embraced while catching up with technological leaders of the time. For example, US patent rules were notably lax in the late 18th and 19th centuries, and the US textile industry would never have arisen without widespread “theft” of technological secrets from Britain.

They also forget that China’s heterodox policies have generated not only significant domestic economic growth and poverty reduction, they have also created a huge market for western exports and investment — a market that surely would not have been as large if China had been hemmed in by western textbook economic policies. According to the author, when they are better suited to local realities, divergent economic strategies are beneficial to trade partners. Of course, government activism can be taken too far. But even then, it is the domestic economy that bears the brunt of the cost — just as with the EU’s wasteful common agricultural policy. For its part, the author says, China must recognise that other nations also have the right to craft their own social and economic strategies. When trade threatens to undermine domestic labour standards, fiscal systems, or investments in advanced technology, rich nations should be just as entitled to privilege these concerns over imports and foreign investment.

8) How leaders handle intimations of mortality [Source: Financial Times]
Death and disease are the last corporate taboos, as the passing of Sergio Marchionne, chief executive of Fiat Chrysler Automobiles, reveals. Marchionne was a towering figure, architect of the turnaround of not one, but two legendary carmakers. So his sudden death last month, aged 66, fuelled wild speculation about what had happened. The Swiss hospital where he died tried to stop the rumour mill but instead gave it another spin, by stating it had been treating Marchionne, “due to serious illness”, for more than a year. Fiat Chrysler said it had not been aware of his condition until days before his death. The author believes boards have a right to know about the health of their senior executives. Either Marchionne should have informed his directors about the seriousness of the condition — which, based on video of his last faltering public appearance in June, was becoming obvious — or his chairman John Elkann, grandson of the great Fiat industrialist-statesman Gianni Agnelli, should have inquired about it.

The regulatory obligations are not so clear, though. Listed companies usually disclose material facts that could affect investors’ decisions on whether to buy or sell company stock. But in health matters, the right to privacy sometimes trumps transparency. A corporate chieftain’s passing is the equivalent of the death of a monarch, with power, wealth, ambition and intimate family concerns entangled. Mr Elkann knows the delicacy of such situations better than most. When grandfather Gianni died of cancer in 2003, leadership of the family holding company passed to his uncle Umberto, who himself died of cancer a year later. Those announcements were carefully orchestrated. Only days after Umberto’s funeral, with Fiat on the brink of a succession crisis, Marchionne was named chief executive and Mr Elkann vice-chairman. The author says that there are other precedents for how to handle intimations of mortality at board level — and how not to.

He says treatable illnesses and accidents are relatively simple. In 2012, for instance, Warren Buffett announced he had early stage prostate cancer and told investors in Berkshire Hathaway his condition was “not remotely life-threatening or even debilitating in any meaningful way”. Two years later, Jamie Dimon, chief executive of JPMorgan Chase, modelled his declaration that he had curable throat cancer on the Buffett statement. The more acute the illness, though, the more acute the sensitivity. In May 2010, Sara Lee, the packaged goods group, said chief executive Brenda Barnes had been taken ill, then a month later admitted she had had a stroke, which eventually led to her resignation that August and a scramble for a successor. Similarly, Hunter Harrison, the highly valued (and highly paid) head of CSX, continued to claim he was fit to run the company despite needing to use a portable oxygen machine at one shareholder meeting last June. In December, the company said he was on medical leave. He died two days later. Compare CSX with AIG, the insurer, which revealed in 2010 its chief executive Bob Benmosche was undergoing “aggressive chemotherapy” only five days after his cancer diagnosis. Benmosche, who survived another five years, acted so quickly that even some family members only learnt he was ill when they read the regulatory declaration.

At the other end of the spectrum of disclosure was Steve Jobs. The Apple chief notoriously obfuscated about his cancer in 2008-09. Enraged by speculation about his health, he issued an open letter in January 2009 claiming he was undergoing treatment for “a hormone imbalance”. He failed to inform some directors fully, yet confided in others. According to biographer Walter Isaacson, he “became very emotional, both ranting and crying at times, when railing against anyone who suggested that he should be less secretive” — including disgruntled Apple shareholders. According to the author, executives should be open about the worst with colleagues, board members and investors, despite the sensitivities. But Marchionne’s apparent noble determination to preserve his and his family’s privacy is worth consideration. After all, “not ‘breaching protocol’ when facing one’s mortality” is hardly of paramount importance.

9)    Bank of America staff move raises concerns about London’s future [Source: Financial Times]
Bank of America is preparing to move research analysts from London to its EU hub in Paris, heightening concerns about London’s future as a financial services centre after Brexit. Research analysts were among a “small number” of staff being considered for relocation as the bank worked towards putting at least 200 additional workers in the French capital. While the numbers of research staff involved are small, the precedent of moving staff who could stay in London into continental hubs will worry the UK, which is keen to preserve as much of its financial services ecosystem as possible even though Brexit will make it difficult for UK-based operations to trade directly with EU clients.

As negotiations between the EU and the UK falter and public figures including Bank of England governor Mark Carney speak of the “uncomfortably high” risk of a no-deal outcome, banks are treading a fine line on how many staff members to move ahead of the Brexit implementation date in March 2019. On one hand, they are trying to move as few people as possible to minimize disruption for staff who do not want to leave London and to avoid unnecessary cost in case the final Brexit deal enables a reasonable level of access to the EU market from London. On the other, they are trying to create a critical mass at their new centres to prove to regulators there that the operations are not “brass plate” entities.

Most banks are erring towards the side of moving as few people as possible, and according to FT the biggest 15 international banks in London would move less than 4,600 staff, or 6 per cent of their total workforces, in their first phase of their Brexit strategies. Bank of America has been one of the most advanced in its planning, naming leadership teams for both its Dublin and Paris operations, and canvassing other staff on their willingness to move. Apart from BoA, Credit Suisse, one of the last to reveal its plans, said it would set up operations in Paris and Madrid, while its financial statements revealed that a new entity was also being created in Frankfurt, the biggest beneficiary of banks’ Brexit moves.

10) Researchers at CERN break “The Speed of Light” [Source: physics-astronomy.org]
Scientists have recorded particles travelling faster than light - a finding that could overturn one of Einstein's fundamental laws of the universe. Antonio Ereditato, spokesman for the international group of researchers, said that measurements taken over three years showed neutrinos pumped from CERN near Geneva to Gran Sasso in Italy had arrived 60 nanoseconds quicker than light would have done.  If confirmed, the discovery would undermine Albert Einstein's 1905 theory of special relativity, which says that the speed of light is a "cosmic constant" and that nothing in the universe can travel faster. That assertion, which has withstood over a century of testing, is one of the key elements of the so-called Standard Model of physics, which attempts to describe the way the universe and everything in it works.

The totally unexpected finding emerged from research by a physicists working on an experiment dubbed OPERA run jointly by the CERN particle research centre near Geneva and the Gran Sasso Laboratory in central Italy. A total of 15,000 beams of neutrinos - tiny particles that pervade the cosmos - were fired over a period of three years from CERN towards Gran Sasso 730 (500 miles) km away, where they were picked up by giant detectors. Light would have covered the distance in around 2.4 thousandths of a second, but the neutrinos took 60 nanoseconds - or 60 billionths of a second - less than light beams would have taken.

Much science-fiction literature is based on the idea that, if the light-speed barrier can be overcome, time travel might theoretically become possible. The existence of the neutrino, an elementary sub-atomic particle with a tiny amount of mass created in radioactive decay or in nuclear reactions such as those in the Sun, was first confirmed in 1934, but it still mystifies researchers. It can pass through most matter undetected, even over long distances, and without being affected. Millions pass through the human body every day, scientists say. To reach Gran Sasso, the neutrinos pushed out from a special installation at CERN - also home to the Large Hadron Collider probing the origins of the universe - have to pass through water, air and rock.

The findings were such a shock that CERN's scientists spent months checking their data before making their announcement. But they have asked American and Japanese teams to confirm the results before they are declared an actual discovery. The data will also be put online overnight so that it can be scrutinized by experts across the world.

-Prashant Mittal is Strategist, at Ambit Capital. Views expressed are personal