The Weekend Edition

Luck plays a crucial role in our lives: If you’re successful, you’ve already won the lottery, Robert H Frank writes in The New York Times, and not acknowledging the material role of randomness in success has a major impact on public policy. “Most of us have no difficulty recognizing luck when it’s on conspicuous display, as when someone wins the lottery. But randomness often plays out in subtle ways, and it’s easy to construct narratives that portray success as having been inevitable.” Simple “lucky” events like a person’s month of birth or first letter of their last name have a measurable impact on success. Still, “to acknowledge the importance of random events is not to suggest that success is independent of talent and effort. In highly competitive arenas, those who do well are almost always extremely talented and hard-working” That said, more contribution to “making success possible” could be achievable, Frank suggests, hinting at higher top tax rates. He says “evidence from the social sciences demonstrates that beyond a certain income threshold, people’s sense of well-being depends much more on their relative purchasing power than on how much they spend in absolute terms. If top tax rates were a little higher, all homes would be a little smaller, all cars a little less expensive, all diamonds a little more modest and all celebrations a little less costly. The standards that define ‘special’ would adjust accordingly, leaving most successful people quite satisfied.”

…Speaking of success, The Associated Press and Equilar calculated compensation for the highest paid CEOs of 2015. The highest paid was Expedia’s Dara Khosrowshahi, with a total of USD 94.6 mn, followed by CBS’ Leslie Moonves with USD 56.4 mn, Viacom’s Philippe Dauman with USD 54.1 mn, and Regeneron’s Leonard Schleifer with USD 47.5 mn. Overall, CEOs at the biggest companies got themselves an average pay rise of 4.5%. The typical S&P500 CEO made USD 10.8 mn, a sum that includes bonuses, stock awards, and other compensation. “More than half the median compensation of CEO pay is coming from stock and options, rather than cash. And companies are increasingly meting out those stock and option awards based on performance,” the AP says.

The “New Philanthropy”: What Peter Thiel’s bankrolling of lawsuits against Gawker may mean for the future of American media: PayPal co-founder Peter Thiel admitted in a widely-read interview with the New York Times on Wednesday that he financed wrestler Hulk Hogan’s lawsuit against gossip site Gawker for releasing an intimate video of Hogan to the public. Thiel himself secretly underwrote the lawsuit in revenge for Gawker having outed him years earlier. Thiel admits in his interview that he financed other lawsuits against the media site to the total of USD 10 mn with the sole purpose of destroying Gawker. But Thiel doesn’t see it as revenge: he says it’s philanthropy.

… Felix Salmon points out that whatever one’s feeling about Gawker’s journalistic integrity, “Peter Thiel just gave other bn’aires a dangerous blueprint for perverting philanthropy: If Thiel’s strategy works against Gawker, it could be used by any bn’aire against any media organization. Sheldon Adelson, Donald Trump, the list goes on and on. Up until now, they’ve mostly been content suing news organizations as plaintiffs, over stories which name them. But Thiel has shown them how to go thermonuclear: bankroll other lawsuits, as many as it takes, and bankrupt the news organization that way. Very few companies have the legal wherewithal to withstand such a barrage.” Does that warning seem hyperbolic? One should keep in mind that the NYT interview notes that Thiel is a pledged delegate for Trump in California. Without needing to finance other people’s lawsuits, Trump has already done much to bully and harass media figures, what’s to say he won’t also get into a little “philanthropy” himself?

…Currency traders had a not-so-great year: The largest currency trader in the world by market share is Citigroup, according to a Euromoney Institutional Investor survey. This is the third straight year Citigroup led the ranking, Bloomberg says. It had a 12.9% market share and was followed by JPMorgan Chase & Co, UBS, and Deutsche Bank. Overall, trading volume dropped 23% from last year “and the top five banks’ share of the market plummeted to an all-time low.” What’s really interesting in the survey is that XTX Markets, a London-based computerized trading firm, came in ninth place in the survey in its debut. The market as a whole is under pressure: “Concern about the outlook for the U.S., Europe and China, as well as mixed policy signals from central bankers around the world, have contributed to what UBS Chief Executive Officer Sergio Ermotti called a ‘paralyzing volatility’ that’s scared away clients and caused industry-wide trading revenue to tumble to the lowest since 2009.” This is reflected in a large number of job cuts, and created a “void” in foreign-exchange liquidity and foreign-exchange credit-line markets that is being filled partially by non-bank firms.

That email you just sent your minion on this Friday morning? You just violated France’s new “right to disconnect” law. A new labor reform act that includes a “right to disconnect” amendment has been recently enacted in France, effectively banning companies of 50 or more employees from emailing workers outside business hours, the Huffington Post reported on Thursday. “Employees physically leave the office, but they do not leave their work. They remain attached by a kind of electronic leash — like a dog. The texts, the messages, the emails — they colonize the life of the individual to the point where he or she eventually breaks down,” Benoit Hamon of the French National Assembly told the BBC earlier this month. France has been increasingly under pressure to address the nation-wide issue of work-related burnout, where it had been recently revealed that 1 in 10 of the country’s workforce are at high risk of crashing and burning. While the amendment has been well received in France, it comes as the IMF urges Paris to loosen its labor laws further in a bit to stimulate the economy.

Our beloved Mediterranean Sea is home to the sixth-highest accumulation of plastic debris on the planet, according to a study recently published by the scientific journal PLoS One, Phys.org tells us.

Ever wonder whether our descendants will look back on us as we look do the builders of the Pyramids? Mysterious, vaguely defined people whose lives and rhythms are almost impossible to imagine, known only through scraps — of drawings, pyramids, sarcophagi. If you have, go read Archiving a website for ten thousand years in the Atlantic, which uses an economy of words to go deep into the meaning and practicalities of time capsules. Or flip to the inventory of items contained in the 1940-vintage time capsule at Oglethorpe University that’s not to be opened until 8113 (the year eight thousand, one-hundred and thirteen).

Meanwhile: Which Rock Star Will Historians of the Future Remember?“The most important musical form of the 20th century will be nearly forgotten one day. People will probably learn about the genre through one figure — but who might that be?”Any story that can reference Saturday Night Fever and the [Redacted] Pistols’ “Never Mind the Bollocks, Here’s the [Redacted] Pistols” in the same sentence could only have been written by Chuck Klosterman. And we’re betting the answer to the headline question will put a small smile on your face.

Law firm Baker & Hostetler has hired IBM’s AI ROSS to handle its bankruptcy practise, a department currently employing 50 lawyers, reports Futurism. Ross is built on IBM’s cognitive computer Watson and is designed to read and understand language, postulate hypotheses when asked questions, research, and then generate responses with references and citations to back up its conclusions. Ross also learns from experience, gaining speed and knowledge the more you interact with it. “You ask your questions in plain English, as you would a colleague, and ROSS then reads through the entire body of law and returns a cited answer and topical readings from legislation, case law and secondary sources to get you up-to-speed quickly,” the website says. “In addition, ROSS monitors the law around the clock to notify you of new court decisions that can affect your case.” Ross presents the answers in a casual, understandable language. It also keeps up-to-date with developments in the legal system, specifically those that may affect your cases.

The real “rise of the machines” is already underway in China: Apple and Samsung supplier Foxconn has reportedly replaced 60k human workers with robots in a single factory, in an effort to reduce labor costs, a report in the South China Morning Post revealed last week. “More companies are likely to follow suit,” Xu Yulian, head of the publicity department of the Kunshan region in China’s Jiangsu province has said. Kunshan, in which many Taiwanese manufacturers base their Chinese operations, is undergoing a massive reduction in headcount where around 600 companies are making the transition. Last year, 35 Taiwanese companies, including Foxconn, spent a total of CNY 4 bn (USD 610 mn) on AI. Market Watch explains that while AI has higher upfront costs, machines are considered to be more stable and predictable in the long run, and help firms such as Foxconn avoid any criticism over dire working conditions.

How recipe videos colonized your Facebook feed: It all started in June of last year, when Andrew Ilnyckyj, a video producer at BuzzFeed, was filming the preparation of the “All Day Breakfast Burger,” which was part of BuzzFeed’s Tasty page on Facebook. Tasty, which has become BuzzFeed’s most popular page on Facebook in less than a year, “has done this, counterintuitively, by decoupling itself, to a strong degree, from the BuzzFeed brand,” Tanya Basu writes. Tasty’s “ fastidiously choreographed” steps with “simple frames, quick cuts, and first-person perspective of BuzzFeed Food’s recipe videos” are key to BuzzFeed’s ambition to become “the largest food network in the world,” Frank Cooper, BuzzFeed’s chief marketing and creative officer, said. “What Tasty and BuzzFeed have figured out is the niche … They’ll target people interested in snails, or a certain dance video, or people who eat tater tots in Minnesota,” Katie Miller, the social-media director at ICF Olson, told Basu. The main challenge remaining is how to translate those views and likes into revenue. For now, Tasty’s main source of revenue is coming from sponsored editorial spots, but the company is still trying to figure the strategy out.

Springboarding off Facebook: The Wall Street Journal tackles the increasingly popular notion of dressing in a personal uniform (a la Steve Jobs for Facebook founder Mark Zuckerberg) from a woman’s fashion point-of-view. They’re tipping “Puma Match-Lo sneakers … with that McQueen blazer.” (Check out “Something that Made us Think” for more on this, below.)

It’s time to use a little economics in how refugees are settled in host countries, urges Tim Harford. Two Oxford academics are trying to move the debate a step ahead from how many refugees should a country host to asking “to which country should they go? Or within a country, to which area?” This is a classic matching problem, Harford notes, and he points to the matching algorithm created by Nobel laureate Al Roth, which was first used to match hospitals with trainee doctors and, more widely, donated kidneys to patients in need. “Simple systems exist, or could be developed, that should make the process more efficient, stable and dignified. One possibility is a mechanism called “top trading cycles”. This method invites each refugee family to point to their preferred local authority, while each local authority has its own waiting list based on refugee vulnerability. The trading cycles mechanism then looks for opportunities to allocate each family to their preferred location. The simplest case is that, for example, the family at the top of the Hackney waiting list wants to go to Hackney. But if the family at the top of Hackney’s list wants to go to Camden, the family at the top of Camden’s list wants to go to Edinburgh, and the family at the top of Edinburgh’s list wants to go to Hackney, all three families will get their wish.”

Want to study atheism? From the New York Times: “Religion departments and professors of religious studies are a standard feature at most colleges and universities, many originally founded by ministers and churches. The study of atheism and secularism is only now starting to emerge as an accepted academic field, scholars say, with its own journal, conferences, course offerings and, now, an endowed chair.”

A Game of Loans? [warning, spoilers ahead] Another season of Game of Thrones is upon us: Climate change has hit the north, and a haughty white ruler is using scaley unmanned drones to defeat a desert insurgency. Back in war-ravaged Westeros, Queen Cersei is feeling the pain of poor fiscal and monetary policy. For all the magic, swords and scandals that keep us glued to our TVs, a little-appreciated aspect of the story seems to be the economics that underpin and drives the storyline. The Economist’s 1843 Magazine takes a look, drawing comparison with historical models. Cercei’s willingness to default on loans issued to her by the Iron Bank of Braavos has left her credit worthiness in shambles, weakened her army’s prospects, and left her at the mercy of religious fundamentalists. And she isn’t the only one: Khaleesi’s zeal to end slavery, without developing an economic system to replace it, has led to her ouster by an insurgency. It’s these subtle details that have allowed Game of Thrones to transcend the nerdiness of fantasy and establish itself more along the lines of Jonathan Swift than those of C.S. Lewis.

The launch of an Arabic font is rare enough that we typically receive press releases when it happens. Not so much from Apple, which made us do the legwork to find out that Tarek Atrissi (Twitter) of Tarek Atrissi Design designed Apple’s brand new Arabic font, which made its debut on Apple UAE’s Arabic landing page.

Emerging markets are set to account for 80% of the world’s elderly population by 2050, which is likely to put a strain on public finances, according to estimates from Bank of America Merrill Lynch quoted by the Financial Times (paywall). But not only is this a case of EMs mirroring trends in developing countries, “the transformation in the emerging world is happening at a rate inconceivable to most westerners.” The bank warns that age-related spending already makes up 40% of public expenditure in the developed world, and “rising age-related costs are likely to push 60% of sovereigns into speculative grade”. Projections from the OECD suggest the changing demographics “will hit the finances of EM governments hard.” Ageing populations are also likely to “force many EM governments to spend more on healthcare,” BofA argues. “At present, emerging economies spend only 5.6 per cent of GDP on healthcare, compared with 12.5 per cent in developed countries, according to the World Economic Forum.”

Ferris Bueller turns 30 on 11 June. Feel old yet? Read the original review in the New York Times or marvel that the review was buried on page 88 of the 11 June 1986 edition beneath a story headlined “Film: ‘Eyes of the Birds’ Depicts Uruguayan Jail.”

But don’t worry: You’re not old. You’re the human embodiment of nostalgia — and you’ll be reminded of that by the Times’ “TV’s Big Bet on Nostalgia,” which tells us that MacGuyver, 24, Prison Break, Twin Peaks and Tales from the Crypt are all returning to television / iTunes / Netflix / whatever in remakes.

Getting in Vladimir Putin’s face — literally. Photographer Platon took the picture of Russian President Vladimir Putin after he was named Time Magazine’s Person of the Year in 2007. The image (tap here and scroll about half-way down the page, enjoying the other iconic images as you go) has gained more reach than just the magazine’s cover and ended up being used by his political opponents. Platon describes what it was like to take that picture and how he used The Beatles to break the ice. (Run time 02:18)

DOCUMENTARY OF THE WEEK: Going Clear: Scientology and the Prison of Belief is the film all Scientologists don’t want you see. Forget Panama and the Cayman Islands. You want to stash those bns from the taxman, come up with a looney story about an alien overlord, pitch it as a self-help guide and call it a religion. If you were ever curious as to how a racket perpetuated by a paranoid sci-fi author grew to be a multi-bn USD enterprise, got tax-exempt status from the U.S. government, and commanded megastars the likes of Tom Cruise and John Travolta, then you’ve come to the right place. But this masterpiece by Alex Gibney, who brought us such greats as Enron: The Smartest Guys in the Room, goes beyond a mere expose into a cult. Over the course of two hours and interviews with eight former members and high ranking officials of Scientology, the film is a journey into the state of mind at every level of the brainwashing chain. It’s both a mirror suggesting what any one of us could be — and an attempt to answer fundamental questions about religion and human nature. Why are we so willing to give up our individuality and pay so much for the privilege? And how can perfectly rational human beings allow themselves to be imprisoned in such a way? The HBO-produced documentary is available on Netflix and can be found on Youtube (runtime: 2:00:01).

…Oh and if you are curious to get in touch with your inner Thetan (and kick a few naughty habits to boot), the Scientology sponsored drug rehab program Narconon is operating in Egypt. We won’t tell Awqaf if you don’t.

How Nigeria helped the country’s tiniest businesses get bigger: When a small business grows to a medium sized one that can grow to become a big business, jobs, wealth, and other benefits are created. The problem is that with a large number of small borrowers without a sufficient credit history, banks either restrict credit or charge high interest rates. The Nigerian government had a plan to tap into its resources of small business, NPR’s Planet Money explains; it held a nationwide contest, and it was not a scam — “they’d give out piles of cash like nobody else had before.” Host Alex Goldmark says the contested required “no experience necessary, no strings attached. Just go to the website and sign up.” (Run time 16:31)

The toxic element that helps us fly: BBC’s Business Daily continues its “elements” series with a look this week on cadmium. Cadmium is a toxic element, but nickel-cadmium batteries are still being used for planes. The threat from Cadmium is that it “will actually sneak in into the locations that zinc occupies, so you’re really putting a spanner in the works. The results is that cadmium has now been implicated with a whole series of occupational diseases, but particularly cancer,” chemistry professor Andrea Sella says. However, metals consultant Dominic Boyle says “the best days of cadmium are past and in essence it is a dying metal.” (Run time 17:29)

We’re heading toward a “slippery slope” where the lines between “business” and “casual” dress have become blurred, spurred mostly by debates on gender equality. “The slippery slope may have started as a gentle incline way back in the 1970s, and become a bit steeper during the Casual Friday movement of the 1990s and the success of the Facebook I.P.O. in 2012 with its hoodie-wearing [bn’aires].” From women being forced to wear high heels at work to guidelines for woman on how to dress when they appear to testify on elections or ethics bills. And let’s not forget the uproar caused over the short hemlines of 90s TV lawyer Ally McBeal and the subsequent debate on male vs female dress code standards at the workplace. But the issue now goes beyond just gender. “There’s a strain of thought that says an employee represents a company, and thus dress is not about personal expression, but company expression,” Professor Susan Scafidi, a law professor at Fordham University and founder of the Fashion Law Institute, said. “But there’s a counterargument that believes because we identify so much with our careers, we should be able to be ourselves at work.”

In Sweden, manageable long-term debt may be the most efficient road to early independence. 85% of Swedish students graduate with debt, according to the Education Policy Institute, versus only 50% in the US, where public school can run a cost of USD 24,061 and almost double that for private colleges, according to the US College Board. Swedish graduates have an average 80% debt-to-income ratio, higher than of any group of students in the developed world. This comes down to two main factors. High costs of living when compared to the rest of the developing world, and an almost religious commitment to early independence and parenthood. 2% of Swedish men lived with their parents after the age of 30 versus 25% of in Spain and 32% in Italy. But on the long run, the situation may not be as dire as it seems and may ultimately prove beneficial for developed countries. Low interest rates set by the government and maintained through subsidies have allowed the monthly costs of carrying that debt to be pretty cheap, costing 3.8% of estimated average monthly income of new graduates, according to one study, The Atlantic reports. The length of repayment is long: 25 years or until the student turns 60. This system of manageable debt has allowed Swedes to begin lives as viable adults much longer than their sponge counterparts in the developed world.

Which smartphone wins in a drop test to the death? The iPhone 6s or the Samsung Galaxy S7? The most scientific drop test we’ve ever seen is also gut-wrenching for those of us who have destroyed phones with just the right drop from waist height. Run time: 3:33.

Asian suppliers say it’s going to get worse before it gets better for the smartphone market, according to Bloomberg. “The smartphone industry will continue to slow down this year,” said Richard Ko, a Taipei-based analyst at KGI Securities Co. “Competition will worsen and prices will likely continue to fall." Suppliers put out back-to-back earnings reports last week, missing expectations and signalling a real problem. “Some are bracing for a possible triple-whammy: sliding sales, an unfettered market-share competition and crumbling prices.”

The most-clicked stories in Enterprise in the past week were:

• Photo of Al Ismaelia’s renovation work in Downtown Cairo, by company chief Karim Shafei (Facebook)
• Crash Is a Test of EgyptAir’s Mettle (Wall Street Journal)
• Middle-class dynamics and the Arab Spring (World Bank Blog)
• Mark Singer on the Perils of Profiling Donald Trump (New Yorker)
• How To Cook a Steak with Gordon Ramsay (Youtube)

The most-clicked stories in Enterprise in the past week were:

• UAE consumer confidence declines in Q1 2016: Nielsen (Gulf News)
• With Iran-Backed Conversions, Shiites Gain Ground in Africa (Wall Street Journal)
• Just What Were Donald Trump’s Ties to the Mob? (Politico)
• Arby’s Pushing Into ‘Meat-Oriented’ Middle East With 25 Outlets (Bloomberg)
• IMF Staff Completes 2016 Article IV Mission to Saudi Arabia (IMF) (tie)
• Twilight of the Petrostate (National Interest) (tie)

How much are you willing to pay for some privacy? Mark Zuckerberg is ok with a USD 30 mn bill. The Facebook founder has bought the neighbouring houses to his in Palo Alto only to demolish them to prevent prying eyes from peeking into his USD 7 mn residence. “A city planning application filed on Tuesday has revealed he intends to bulldoze the homes he purchased in 2013… [the] homes will be replaced with smaller, lower-profile abodes that might not be so irksome,” NBC News reports.

Tiger Woods hit some golf balls in public for the first time since August and it was “cringe-worthy.” Woods, who was promoting the Quicken Loans National, a tournament that benefits his foundation, hit three short iron shots into the water. “See? Need a warmup,” Woods said. The former number one player in the world underwent a third back procedure recently and eyes a return to competitions, but refused to give a timetable. His next target is attempting to break Jack Nicklaus’ record of 18 major wins. Woods, who has 14 major titles, the last of which came in 2008, believes it is achievable.

This is a very accurate depiction of our daily struggle at the Enterprise / Inktank office: Ordering lunch for the office can be a Greek tragedy, Broti Gupta writes for The New Yorker. “TAYLOR: O, noble friends, I have looked at the menu
In its PDF glory and have humbly decided
That I might just share whatever the others
Decide to order. I will pay what I can,
Based on what you think I owe.
…
BEATRICE: Can it be our secret, friends and loved ones,
That I might get tempura? I can afford one cheat day,
And perhaps another this week if you all keep your mouths shut.
PETER: Dear co-workers, with all of this talk,
My appetite has dissolved into a vapor.
I might simply order an appetizer.
How much, then, will I owe?
ISAAC: The bagel still has not settled.
Should the bagel digest, I might get the lunch special,
No. 2.
BEATRICE: Ooh, I should order the salad.
What do the rest of you think of that?
ME: Faithful co-workers, you can get
ANYTHING YOU WANT. BUT, PLEASE, TELL ME.”

Moral of the story: Don’t be a Taylor. No one likes Taylor.