Air pollution causes ‘huge’ reduction in intelligence, study reveals

Air pollution causes a “huge” reduction in intelligence, according to new research, indicating that the damage to society of toxic air is far deeper than the well-known impacts on physical health.
The research was conducted in China but is relevant across the world, with 95% of the global population breathing unsafe air. It found that high pollution levels led to significant drops in test scores in language and arithmetic, with the average impact equivalent to having lost a year of the person’s education.
“Polluted air can cause everyone to reduce their level of education by one year, which is huge,” said Xi Chen at Yale School of Public Health in the US, a member of the research team. “But we know the effect is worse for the elderly, especially those over 64, and for men, and for those with low education. If we calculate [the loss] for those, it may be a few years of education.”

The problem is becoming chronic in India, in my view. Most parents don’t understand the long term effect of getting exposed to pollution. Most kids who are yet to develop immunity are especially vulnerable and the effects include asthama, stunted growth and even brain damage

https://www.theguardian.com/environment/2018/aug/27/air-pollution-causes-huge-reduction-in-intelligence-study-reveals

Humans Need Not Apply: What Will Industry 4.0 Mean for India

An experiment done in Japan by Prof. Arai highlights that education today maybe flawed. Instead of absorbing meaning from their studies, she observed that our children behaving more like her Todai robot. They ingest facts and spit them back out, without comprehending. The problem is, Todai and other forms of Artificial Intelligence (AI) will inevitably surpass human memory and cognition at some point. The human brain can never compete with the rote fact-checking power of a computer. Humans excel at pattern recognition, creative projects and problem solving, i.e. non-routine cognitive tasks. We can read and understand. As Prof. Arai notes, computers cannot – at least, so far. “So we have to think about a new type of education, one in which kids are taught not just to deposit facts, but also to analyse and think critically about them. At the same time, we have to think in a hurry because time is running out.”
For India, which lives in multiple civilisations at the same time, this becomes all the more important. If a robot can pass an entrance test in Japan, we can safely assume that it can do so in India too. India’s skill development ecosystem needs to be more responsive to these new challenges. Currently, in order to cater to the large unemployed population, Skill India is focused on job roles that are narrow, repetitive and can be done with minimum supervision. These are exactly the kind of tasks that technology is coming after and aiming to reduce human drudgery in.
Nor can robots have non-cognitive socio-emotional skills – teamwork, creativity, innovation. Even technical jobs seem to be getting more intensive in higher-order general skills, as Indian IT industry is realising.

https://thewire.in/labour/industry-4-0-skill-india-unemployment-artificial-intelligence

JP Morgan’s top quant warns next crisis to have flash crashes and social unrest not seen in 50 years

J.P. Morgan’s top quant, Marko Kolanovic, predicts a “Great Liquidity Crisis” will hit financial markets, marked by flash crashes in stock prices and social unrest.
The trillion-dollar shift to passive investments, computerized trading strategies and electronic trading desks will exacerbate sudden, severe stock drops, Kolanovic said.
Central banks will be forced to make unprecedented moves, including direct purchases of equities, or there could even be negative income taxes.
Timing of when this next crisis will occur is uncertain but markets appear to be safe through the first half of 2019, he said.

https://www.jpmorgan.com/global/research/10-years-after-crisis

Four in five adults at risk of early death, heart-age test shows

I am pretty sure the answer will not be different if we were to do this test in India. Infact I fear the results will be worse because of additional problem of Pollution

https://amp.theguardian.com/society/2018/sep/04/four-in-five-adults-at-risk-of-early-death-heart-age-test-shows?__twitter_impression=true

 

 

The significance of the velocity of money

Martin Armstrong writes……”The economic growth in most countries has been declining for decades as has the velocity of money, As the velocity declines, it shows that people are either saving more or they do not have disposable income after taxes to spend. Normally, the velocity will decline and that is a sign of a recession. This is the normal reaction when people save and do not spend. However, if you are not in an economic recession/depression there is no FEAR FACTOR of what the future will bring, then the velocity declines because people really do not have the money after taxes to spend. This is one reason I keep harping on – it’s the taxes stupid!
In the USA, the velocity bottomed during the 2nd quarter of 2017 and has started to turn up with Trump lowering taxes. This is the first uptick since the decline began from the 3rd quarter of 1997 when the capital flows began to shift creating the 1997 Asian Currency Crisis. When Obama raised the tax rate from 35% to 39.6% in 2013, that began the real sharp decline.
The decline in the velocity of money and the rising burden of taxation is very alarming. That has been the worst combination for global economy.

Below is the chart of US velocity of money

Conclusion

US is the only country trying to cut taxes and put money in the hands of people. In most other countries , they just don’t understand that raising taxes or letting govt spend money on your behalf will just reduce velocity of money and future GDP growth.

Clogging China’s cash pipeline to silicon Valley

The most overlooked aspect of Trade war between US and China. It is not about Trade deficit, honestly Americans would not care if the money Chinese make out of trade surplus is invested in US treasuries, but Chinese money actually started going into  US IPR and US technology companies and this article from Evergreen takes a deep dive into this process which started in 2014 and set alarm bells ringing

Most coverage of the mounting US-China strategic tensions has focused on tariff threats. Equally significant are moves by the US to choke off Chinese investments in the US technology sector. These moves are part of a strategy to ensure that China can’t catch up to the US in critical technology fields by buying, or buying into, cutting-edge American firms.
Alarm bells began ringing in 2014, when Chinese investors started to surge into venture-capital funding rounds in Silicon Valley. In 2016 the total annual Chinese direct investment of all kinds in the US tripled to US$46bn. The targets of Chinese acquirers were varied, but a good chunk of that money went into technology firms. Some observers believe the wave of spending was prompted by a mandate under Beijing’s Made in China 2025 industrial policy for Chinese firms to boost their technological capacity through foreign acquisitions.

The first response to this wave was an increase in the number of China-funded deals blocked by the Committee on Foreign Investment in the United States, the interagency government panel that vets inbound direct investments for national security concerns. Two new laws enacted this month have greatly strengthened the ability of the US government to restrict incoming investments from China or any other country. Their key feature is expanding the remit of CFIUS and the export-control agency to block deals, not just on narrow defense-related grounds as in the past, but to protect American control of a wide range of technologies.

Read More

https://blog.evergreengavekal.com/clogging-chinas-cash-pipeline-to-silicon-valley/

Picking stocks in EM and Ex US Dm is like walking through a minefield

Gavekal Writes in its Knowledge Blog….Chalk it up to strength of the US dollar, trade, policy risk, or whatever, stocks outside of the US are in bad shape. One of the ways we systematically measure the relative attractiveness of a stock in a particular sector, region or country is to calculate the percent of stocks in a group that are currently flashing a red performance alert. A performance alert is activated when a stock has a combination of negative short-term, intermediate-term and long-term trends relative to the global equity market and it is a strong indicator that a particular issue is at risk of further underperformance  ( this is the proprietary knowledge). At the same time, they calculate the percent of issues with a positive overall trend, which helps them identify areas of relative strength.

In the US, only about 28% of stocks are flashing a performance alert, which is a relatively modest number. Whereas in case of India 52.5% of all stocks are flashing performance alert with only 18.6% in positive trend

So to sum things up, on the basis of their performance alert measure, US is the only major market without a preponderance of stocks in a risky position. In DM ex US and EM, picking stocks is like walking through a minefield

Read full article on

https://blog.knowledgeleaderscapital.com/?p=14687

why India is outperforming

Christopher wood who writes GREED & fear ……is surprised by the extent of Indian outperformance year-to-date in an Asia and emerging market context in US dollar terms. So, GREED & fear suspects, are many fund managers.


The Indian outperformance has become quiet marked. The MSCI India Index has declined by only 1.3% in US dollar terms year-to-date, while the MSCI AC Asia Pacific ex-Japan Index and the MSCI Emerging Markets Index are down 5.1% and 7.6% respectively over the same period.
Why has India been so resilient and defied bearish expectations? One reason is that India, as primarily a domestic-driven economy, is clearly much less exposed to Trump-driven trade concerns. But in GREED & fear’s view the stock market’s resilience may also be a sign that India is contra cyclical in the sense that the economy is accelerating at a time when many other markets in Asia could be near their cyclical peak. In this respect, it needs to be remembered that it is 10 years since the last investment cycle peaked. The gross fixed capital formation to nominal GDP ratio has declined from an estimated 36% in FY08 to 28.5% in the past three fiscal years . When that new investment cycle commences it will be very bullish for the stock market. This is the main reason why GREED & fear has been less concerned about the undoubtedly high valuations in India.

India’s corporate profit as % of GDP has declined from 7.1% in FY08 to 3.1% in FY18 ended 31 and is in the process of bottoming out.

But it must be noted that the Capex cycle has still not picked up and the economy is still dependent upon borrowed consumption spending and mortgage. How long will this sustain is a million dollar question?