February 2, 2016
Earnings per share for the S&P 500 Index peaked in the third quarter of 2014. The dramatic plunge in the prices of oil and industrial commodities as a result of slowing demand from China together with increased supply from the United States, decimated energy and materials companies’ profits. In the years ahead, oil production will decline to remove excess capacity, prices will again rise above costs, energy company margins will recover, and market-level earnings will return to a normal rate of growth. ... The future secular real rate of growth in corporate profits is far more important than the current commodity cycle to investors’ long-term real wealth accumulation. During the past quarter-century, politically facilitated globalization allowed profits to grow much faster than per capita GDP, wages, and productivity, propelling capital’s share of income to an unsustainable extreme. ... The distribution of the economic pie is ultimately a political choice. With populist frustration increasingly pressuring policy change around the world, investors should expect labor, tax, and interest expense to rise faster than sales, thereby depressing profit margins and slowing real growth in earnings per share over the decades ahead.
After selling 7 deals in 7 years for $7 billion, press-shy wildcatter Trevor Rees-Jones is better equipped than anyone to pick through the wreckage of the oil and gas bust. ... With plenty of natural gas to work with, Rees-Jones is looking for oilfields that enjoy the same low-cost advantage as his Marcellus gas operation. ...as the oil bust grinds on, we will learn which oilfields are the best, because they will be the last spots with drilling rigs still operating. And it’s in and around those places where he hopes to find assets to buy. ... There are plenty of sweet spots in North Dakota, Colorado and the Eagle Ford field in Texas. His team has been eyeing some multilayer shale formations in Oklahoma and is developing some conventional (that is, nonshale) fields that had been overlooked in recent years, including one in Florida. But ultimately, he says, “the Permian Basin would be my favorite place. There is just so much oil out there.”
Until recently the military junta had imposed artificial caps on access to smartphones and SIM cards. Many of the farmers we spoke with had never owned a smartphone before. The villages were often without running water or electricity, but they buzzed with newly minted cell towers and strong 3G signals. For them, everything networked was new. ... Almost all of the farmers we spoke with were Facebook users. None had heard of Twitter. How they used Facebook was not dissimilar to how many of us in the West see and think of Twitter: as a source of news, a place where you can follow your interests. The majority, however, didn’t see the social platform as a place to be particularly social or to connect with and stay up to date on comings and goings within their villages. ... What follows are a series of diary entries and notes culled from our interviews. The interview teams were composed of three or four people: a translator, a photographer, a notetaker, and sometimes a facilitator. ... Everyone is data sensitive he says and reiterates: Facebook. Nobody needs a special app for their interests. Just search for your interest on Facebook. Facebook is the Internet. ... Everyone installs apps using Zapya, an app-sharing app. Makes a local network. Everyone nearby connects to it. Allows groups to send data—apps, videos, music—back and forth without using bandwidth. ... there is no incumbent electric giant monopolizing rural areas to fight against solar, there is no incumbent bank which will lobby against bitcoin, there are no expectations about how a computer should work, how a digital book should feel. There is only hunger and curiosity. ... They don’t have email addresses and so often don’t know their logins. If they get logged out they have someone—often the village Facebook guru—make them a new account. “Friends” on Facebook are friends only because the application calls them friends in the interface.
Calories consumed minus calories burned: it’s the simple formula for weight loss or gain. But dieters often find that it doesn’t work. ... more than two-thirds of American adults are overweight or obese. For many of them, the cure is diet: one in three are attempting to lose weight in this way at any given moment. Yet there is ample evidence that diets rarely lead to sustained weight loss. These are expensive failures. This inability to curb the extraordinary prevalence of obesity costs the United States more than $147 billion in healthcare, as well as $4.3 billion in job absenteeism and yet more in lost productivity. ... part of the problem goes way beyond individual self-control. The numbers logged in Nash’s Fitbit, or printed on the food labels that Haelle reads religiously, are at best good guesses. Worse yet, as scientists are increasingly finding, some of those calorie counts are flat-out wrong – off by more than enough, for instance, to wipe out the calories Haelle burns by running an extra mile on a treadmill. A calorie isn’t just a calorie. And our mistaken faith in the power of this seemingly simple measurement may be hindering the fight against obesity.
Two centuries ago, public armies replaced private ones as the dominant tool of warfare. Now, private armies are back ... It is a familiar story. A superpower goes to war and faces a stronger-than-expected insurgency in distant lands, yet has insufficient forces to counter it because of political and military constraints. The superpower decides to hire contractors, some of whom are armed, to support its war effort. The armed contractors prove to be both a blessing and a curse, providing vital security services to the campaign, yet at times killing innocent civilians, causing strategic setbacks, and damaging the superpower’s legitimacy. Without these contractors, the superpower could not wage the war. With them, it is more difficult to win. ... The armed contractors in question are not in Iraq or Afghanistan but in northern Italy, and the year is not 2007 but 1377. The superpower is not the United States but the papacy under Pope Gregory XI, fighting the antipapal league led by the duchy of Milan. The tragic killing of civilians by armed contractors did not occur in Baghdad but in Cesena, 630 years earlier. The military companies employed were not DynCorp International, Triple Canopy or Blackwater, but the Company of the Star, the Company of the Hat and the White Company. Known as free companies, these for-profit warriors were organised as corporations, with a well-articulated hierarchy of subcommanders and administrative machinery that oversaw the fair distribution of loot according to employees’ contracts. CEO-like captains led these medieval military corporations. ... The United Arab Emirates (UAE) has hired hundreds of Latin-American mercenaries to fight the Iranian-backed Houthis in Yemen. After years of struggling against Boko Haram, Nigeria finally employed mercenaries to do the job, and they did. Russia’s President Vladimir Putin has sent mercs to ‘liberate’ eastern Ukraine, a conflict that still simmers. Mercs are reportedly working in parts of Iraq. ... ‘durable disorder’: global governance that contains rather than solves problems. Such a world is already upon us.