CRF Blog

Bypassing the Bankers

by Bill Hayes

In Bypassing the Bankers for the Atlantic, William D. Cohan reports on peer-to-peer banking.

One of the more hopeful consequences of the 2008 financial crisis has been the growth of a group of small companies dedicated to upending the status quo on Wall Street. Bearing cute, Silicon Valley–esque names such as Kabbage, Zopa, Kiva, and Prosper, these precocious upstarts are tiny by banking standards, and pose no near-term threat to behemoths like Goldman Sachs, Morgan Stanley, JPMorgan Chase, Bank of America, or Citigroup — banks that between them control much of the world’s capital flow. But there is no question that these young companies have smartly exploited the too-big-to-fail banks’ failure to cater to the credit needs of consumers and small businesses, and will likely do so more noticeably in the years ahead.

At the forefront of the group is Lending Club, a San Francisco–based company founded in 2007 by Renaud Laplanche, a serial entrepreneur and former Wall Street attorney. Laplanche, 43, grew up in a small town in France and, as a teenager, worked every day for three hours before school in his father’s grocery store. He also won two national sailing championships in France, in 1988 and 1990. Now an American citizen, he created Lending Club after being astonished at the high cost of consumer credit in the United States. Lending Club uses the Internet to match investors with individual borrowers, most of whom are looking to refinance their credit-card debt or other personal loans. [more]

Biotechnology & Drugs

by David De La Torre

In A new opium pipe, The Economist reports that new opiates might be manufactured from yeast.

Opiates, such as morphine, are widely used as painkillers. Some are extracted directly from opium poppies …, which grow well in places such as Afghanistan and Turkey. Others, such as oxycodone, are chemically derived from natural poppy-molecules. Many of these drugs, though, are also used for recreational purposes — particularly diamorphine, an acetylated version of the principal poppy extract that was branded “Heroin” by its manufacturer, Bayer, in the late 19th century. Since such recreational use is generally illegal, the authorities keep a strict eye on the opium trade, and would no doubt welcome the chance to make that eye even stricter by cutting poppies out of the loop and making diamorphine and its cousins from scratch in facilities they can watch. That, plus the possibility the drugs might be produced more cheaply, has encouraged Dr Smolke [of Stanford University] to use synthetic biology to see if she can create an alternative source for opiates. [more]

How the Filthy Rich Live in Rising Asia

by Bill Hayes

In How the Filthy Rich Live in Rising Asia for the New Republic, Ramachandra Guha reviews Capital: The Eruption of Delhi by Rana Dasgupta.

The novelist and critic U. R. Ananthamurthy once said that India lives simultaneously in the twelfth and twenty-first centuries. He might have added: and all the centuries in between. No city better exemplifies Ananthamurthy’s maxim than the country’s capital, Delhi. The three port cities of Chennai, Kolkata, and Mumbai were given shape by the British in the eighteenth and nineteenth centuries, whereas Delhi, which lies deep in the interior, has been a center of political and economic power for close to a thousand years. And perhaps even longer: some of the action of the epic Mahabharata is said to have taken place close to what is now Delhi.

Judged by this deep history, my own acquaintance with Delhi is insubstantial; but by the standards of an individual’s life span, it is slightly more than modest. I was born and raised in Dehradun, a sub-Himalayan town five hours drive north of the capital. I visited Delhi often as a boy. In 1974, I moved there to go to university. My years as a student coincided with Indira Gandhi’s Emergency — whose atmosphere of fear and intimidation I recall vividly — and the victory of the first non-Congress government in independent India. I returned to Delhi in 1989 to work as a scholar, and I was witness to the alarming rise of religious conflict in and around the capital, and the state’s loosening of its formerly tight rein on the economy. Later I moved to Bangalore, but I still visit the capital four or five times a year. It is hard to resist the city’s fabulously beautiful monuments and its Indian classical music scene — but it repels me with the cold, hard individualism of its inhabitants, who seem much more within and unto themselves than the warm-hearted hillmen of my own hometown, or the garrulous Bengalis of Kolkata, a city in which I have also spent long periods.

The history and heritage of Delhi are encoded in, among other things, its road signs. This must be the only city in the world to have them in four languages — English, Hindi, Punjabi, and Urdu — each with its own script. These different languages denote differences of religion, ethnicity, and class. English stands for the Christian conquerors who moved here from Kolkata in 1912 and built a grand edifice of buildings and bungalows, the so-called “Lutyens’ Delhi.” The Hindi stands in part for the nationalist elite, who moved into the white man’s offices and homes after Independence, and in part for the ordinary (and usually Hindu) speaker of what is North India’s, and now Delhi’s, most commonly spoken language. Urdu denotes the pre-colonial past, when Muslim rulers professed to speak Persian but their subjects elaborated a vernacular hybrid known for its subtle humor and its lyrical poetry. Punjabi (written in the Gurmukhi script) is the language of the Sikhs, who have had a long presence in Delhi, as workers, traders, rebels, and refugees. [more]

In Search of Mickey Li’s

by Bill Hayes

In In Search of Mickey Li’s for Foreign Policy magazine, Paul French, a China market analyst, asks, “why doesn’t China have its own fast-food mega-chain?”

It’s an acknowledged fact of the globalization era that pretty much everyone likes Chinese food: From Accra to Zagreb, it’s not hard to find a decent Cantonese or Sichuanese restaurant. So why do the Chinese, so adept at replicating and re-engineering everything from Caterpillar bulldozers to iPads, find it so stubbornly difficult to replicate a McDonald’s for local food?

There are any number of theories. My favorite is simply this: China may have only one time zone, but it has no national cuisine. That’s not to say you can’t find great food just about everywhere, just that there’s no one thing that Chinese crave everywhere — think of this as the cheeseburger-with-fries problem. [more]

How to Protect Your Money From Cyber Attacks

by Bill Hayes

Bloomberg Businessweek offers a number of ways to Protect Your Money From Cyber Attacks.

[Chief technology officer at Seculert, Aviv] Raff says the best thing you can do to protect yourself is monitor your accounts closely. “I usually take time once a week or once every couple of weeks to go through the transactions just to make sure that I am familiar with them,” he says. He uses an app called BillGuard that collects all his account statements so he doesn’t have to log in to a lot of different sites to see them. BillGuard also alerts you when a store where you’ve shopped announces a data breach. [more]

Rules prevent solar panels in many states

by Bill Hayes

The Los Angeles Times reports that Rules prevent solar panels in many states with abundant sunlight.

The business models that have made solar systems financially viable for millions of homeowners in California, New England and elsewhere around the country are largely illegal in Florida, Virginia, South Carolina and some other Southern states. Companies that pioneered the industry, such as SolarCity Corp. and Sunrun Inc., do not even attempt to do business there.

“We get all kinds of inquiries every day” from the South, said Will Craven, spokesman for SolarCity. “People there want to be our customers.”

Florida, in particular, is known as the “sleeping giant” of his industry, Craven said. “It has a ton of sunshine, a ton of rooftops,” he said. “But there is no rooftop solar industry in Florida.” [more]

Everything you need to know about global warming

by Bill Hayes

In 25 short cards, Vox explains Everything you need to know about global warming. Below is the first card.

What is global warming?

The world is getting hotter, and humans are responsible. That’s the short version.

When people say global warming, they’re typically talking about the rise in average temperature of the Earth’s climate system since the late 19th century. Temperatures over the land and ocean have gone up roughly 0.8° Celsius (or 1.4° Fahrenheit) in that span. Some places have warmed more, some less. But that’s the worldwide average:










The consensus among climate scientists is that this recent temperature increase has been driven primarily by the extra greenhouse gases that humans have put into the atmosphere since the Industrial Revolution. Greenhouse gases such as carbon dioxide trap heat at the Earth’s surface, preventing that heat from escaping back out into space too quickly. So when we burn coal or oil for energy or cut down forests and add even more carbon dioxide to the atmosphere, the planet warms up.

Global warming also refers to what scientists think will happen in the future if humans keep adding greenhouse gases to the atmosphere. A 2013 report from the Intergovernmental Panel on Climate Change projects that temperatures could rise at least 2°C by the end of the century under many plausible scenarios — and possibly 4°C or more.

A 4-degree rise is considered a drastic shift. Many experts and politicians consider even 2°C (or 3.6°F) of global warming to be “dangerous,” increasing the risk of deadly heat waves, droughts, flooding, and extinctions. Rising temperatures will drive up global sea levels as the world’s glaciers and ice sheets melt. Further global warming could affect everything from our ability to grow food to the spread of disease. [more]

Why Are Chinese Millionaires Buying Mansions in an L.A. Suburb?

by Bill Hayes

In Why Are Chinese Millionaires Buying Mansions in an L.A. Suburb?, a feature story, Bloomberg Businessweek looks at how Chinese millionaires are transforming the once upper-middle-class town of Arcadia.

For buyers from mainland China, Arcadia offers excellent schools, large lots with lenient building codes, and a place to park their money beyond the reach of the Chinese government.

The city, population 57,600, projects that about 150 older homes — 53 percent more than normal — will be torn down this year and replaced with mansions. The deals happen fast and are rarely listed publicly. Often, the first indication that a megahouse is coming next door is when the lawn turns brown. That means the neighbor has stopped watering and green construction netting is about to go up.

This flood of money, arriving from China despite strict currency controls, has helped the city build a $20 million high school performing arts center and the local Mercedes dealership expand. “Thank God for them coming over here,” says Peggy Fong Chen, a broker in Arcadia for many years. “They saved our recession.” The new residents are from China’s rising millionaire class — entrepreneurs who’ve made fortunes building railroads in Tibet, converting bioenergy in Beijing, and developing real estate in Chongqing. One co-owner of a $6.5 million house is a 19-year-old college student, the daughter of the chief executive of a company the state controls.

Arcadia is a concentrated version of what’s happening across the U.S. The Hurun Report, a magazine in Shanghai about China’s wealthy elite, estimates that almost two-thirds of the country’s millionaires have already emigrated or plan to do so. They’re scooping up homes from Seattle to New York, buying luxury goods on Fifth Avenue, and paying full freight to send their kids to U.S. colleges. Chinese nationals hold roughly $660 billion in personal wealth offshore, according to Boston Consulting Group, and the National Association of Realtors says $22 billion of that was spent in the past year acquiring U.S. homes. Arcadia has become a hotbed of the buying binge in the past several years, and long-standing residents are torn — giddy at the rising property values but worried about how they’re transforming their town. And they’re increasingly nervous about what would happen to the local economy if the deluge of Chinese cash were to end. [more]

Driving in Circles

by Bill Hayes (h/t: Damon)

In Driving in Circles for Slate, Lee Gomes writes that the self-driving Google car may never happen.

A good technology demonstration so wows you with what the product can do that you might forget to ask about what it can’t. Case in point: Google’s self-driving car. There is a surprisingly long list of the things the car can’t do, like avoid potholes or operate in heavy rain or snow. Yet a consensus has emerged among many technologists, policymakers, and journalists that Google has essentially solved — or is on the verge of solving — all of the major issues involved with robotic driving. The Economist believes that “the technology seems likely to be ready before all the questions of regulation and liability have been sorted out.” The New York Times declared that “autonomous vehicles like the one Google is building will be able to pack roads more efficiently” — up to eight times so. Google co-founder Sergey Brin forecast in 2012 that self-driving cars would be ready in five years, and in May, said he still hoped that his original prediction would come true.

But what Google is working on may instead result in the automotive equivalent of the Apple Newton, what one Web commenter called a “timid, skittish robot car whose inferior level of intelligence becomes a daily annoyance.” To be able to handle the everyday stresses and strains of the real driving world, the Google car will require a computer with a level of intelligence that machines won’t have for many years, if ever. [more]

Interview of the Day: Kevin Powers

by Bill Hayes

The New York Times Book Review interviewed author Kevin Powers for its “By the Book” series.

What book has had the greatest impact on you?

Probably the “Collected Poems” of Dylan Thomas. I first read it when I was 12 or 13 and couldn’t believe what language was capable of. I responded to it totally and fundamentally. By the time I got to “Fern Hill” I felt like I was having a quasi-spiritual experience. I mean, I was just a kid, but it was really important to me. Still is. [more]

Latino Voters and the 2014 Midterm Elections

by Bill Hayes

The Pew Research Center’s Hispanic Trends Project has a new study titled Latino Voters and the 2014 Midterm Elections, which includes many surveys with analysis.

A record 25.2 million Latinos are eligible to vote in the 2014 midterm elections, making up, for the first time, 11% of all eligible voters nationwide. But despite a growing national presence, in many states with close Senate and gubernatorial races this year, Latinos make up a smaller share of eligible voters, according to an analysis of Census Bureau data by the Pew Research Center. [more]

Latino Voters 14

Now comes data-driven prosecutions

by Bill Hayes

Writing in the Los Angeles Times, Heather Mac Donald reports that First came data-driven policing. Now comes data-driven prosecutions.

The Manhattan district attorney, for example, created a Crime Strategies Unit in 2010 with the single goal of gathering and deploying intelligence on Manhattan’s crime patterns and its most serious offenders. The unit has compiled a database of Manhattan’s most significant criminal players — now numbering about 9,000 — whose arrest anywhere in the city immediately triggers an alert to one of the Crime Strategies Unit attorneys. The attorney will then contact the local prosecutor who has been assigned the case — whether in Manhattan or another borough — to make sure the defendant is prosecuted to the full extent of the law rather than slipping through the cracks.

The arrest alert system recognizes that a defendant’s official history of arrests and convictions may fail to convey his position in the criminal food chain. [more]

Prison in America

by David De La Torre

In Protection rackets, The Economist reviews The Social Order of the Underworld: How Prison Gangs Govern the American Penal System by David Skarbek.

In “The Social Order of the Underworld” David Skarbek, an American political economist at King’s College London, shows how gangs have spread through the prison system in the United States. He argues, convincingly, that gangs offer protection and governance in places where established institutions fail, and that it makes sense for prisoners to join them.

Gangs did not exist until the 1950s. Prisons were governed according to the “convict code”, unwritten rules followed by everyone. At its most basic, the code decreed that inmates should not help officials in matters of discipline, nor should they ever give them any kind of information. With a small prison population, this worked. [more]

Hardings Love Letters

by Bill Hayes

The Library Congress has announced that President Warren Harding’s Love Letters Are Open to the Public. In case you are interested.

Ebola Tests America’s Weakened Public Health System

by Bill Hayes

In Ebola Tests America’s Weakened Public Health System, Bloomberg Businessweek reports that years of cuts have hurt our public health system.

City, county, and state health departments employ almost 60,000 fewer people than they did in 2008, according to tallies from groups representing health officials. That’s a drop of almost 20 percent in six years.

The decline is a consequence of the recession, which cut tax revenue to state and local governments, and the drive for austerity in Congress, which has led to lower federal spending on health preparedness. In 2007 the two federal programs that help local officials plan for public health emergencies — Public Health Emergency Preparedness grants and the Hospital Preparedness Program — gave states and cities $1.3 billion, according to the National Association of County and City Health Officials. For the budget year that began on Oct. 1, that shrank to $800 million. [more]