7 / Interest Rates, Sentient Tech Addicts and Diplomatic Tweets

This week's notable reads:
#1. Doses of Finance š°
Interest Rates 101
A central focus this week - other than US stocks entering a bear market, was that the US Federal Reserve raised its benchmark interest rates by 0.75%. It was the biggest increase since 1994, and higher than expected.
What does this mean?
One of the Feds main goals is to keep prices stable, meaning low, stable inflation. Its main tool to tame inflation is interest rates. It does that by setting the short-term borrowing rate for commercial banks, who then pass rates along to consumers and businesses.
Raising interest rates slow down the economy, kind of like pushing the brakes on a gas pedal, in an attempt to get inflation under control.
So, borrowing becomes expensive, consumers and businesses hold off on making any investments, demand cools off, and (hopefully) prices are held down. In theory.
There are other things at play, such as supply chain issues which drive inflation, but central banks aren't able to control that.
As rates rise, businesses are not only affected by higher borrowing costs, they are also exposed to the adverse effects of deteriorating consumer demand. Both of these factors can weigh on earnings and stock prices.
Itās important to note however, that the empirical relationship between rates and stocks is more complicated than textbooks might imply. In the past, higher rates have been associated with higher, not lower stock prices.
In any economic and market environment, there are multiple factors at play. Now is no different.
The Fed has projected that interest rates will reach 3.4% by the end of 2022, which would be the highest level since 2008.
Hiking rates this hard will be painful for the economy and likely put some people out of work. But thatās the whole point, for people need to spend less so prices come back down to earth.
The US isn't an exception. Inflation has been affecting countries around the globe. In an analysis of 111 countries, Deutsche Bank found that the USā inflation rate sits roughly in the middle.
Elsewhere, Swiss National Bank and the UK's central bank also increased their lending rates, and global shares took a deep dive as investors began dumping stocks based on more recession fears. Expect it to get worse before it gets better.
+ āThe Music Has Stoppedā: Crypto Firms Quake as Prices Fall. The pullback in the crypto ecosystem illustrates the precariousness of the structure built around these risky and unregulated digital assets. The total value of the cryptocurrency market has dropped by about 65 percent since autumn, and analysts predict the sell-off will continue. Stock prices of crypto companies have cratered, retail traders are fleeing and industry executives are predicting a prolonged slump that could put more companies in jeopardy. [New York Times]
+ You are paying attention to the wrong market. [Abnormal Returns]
Gold is just bitcoin that can't be sent over the internet.
— Edward Snowden (@Snowden) June 11, 2022
#2. In the World š
Porn, Addiction and Conscious Bots
Its all going on in the tech world. Other than steep share price declines this year, arguably more outlandish and interesting news can be found about some of the world's biggest and most influential companies.

MICROSOFT: It appears that reality has become a little too virtual for the now former Microsoft virtual reality chief. Alex Kipman quit after reports surfaced that he was watching "VR porn" in front of his subordinates.
Allegations of misconduct against Kipman were first revealed in an impressive Insider report detailing alleged ātoxicā behaviour by Microsoft executives. Including Bill Gates. The article detailed an incident in which Kipman used a pair of virtual reality goggles to watch a scene in which āseveral young women in skimpy clothing frolicked on a bedā and had an āovertly sexualized pillow fightā in a room while employees were present.
The company's "golden boys" - like Kipman, who apparently has a history of inappropriate conduct at Microsoft - have been untouchable and enjoyed impunity for years.
Disrespectful and abusive workplaces have been a hallmark of the tech industry for decades.
Toxic culture won't just disappear just because one toxic person disappears. It's too bad though, Kipman could have helped the company sell its tech to the whole porn industry.
META: Last week it was reported that Meta faced eight lawsuits across US states that allege its algorithms hook youth and run their lives by building algorithms that lure young people into destructive addiction. This excessive exposure has led to a myriad of issues including suicides, eating and sleeping disorders. All in the name of corporate profits (nothing new there).
While the true costs of social media anxieties are hard to classify, thereās a general sense that itās bad for society. But studies offer surprisingly few easy answers. See also this article from the Wall Street Journal to figure out whether you (or your kids) have a tech addiction or just a harmless habit.
Meanwhile, Japanās Parliament made āonline insultsā punishable by imprisonment, sparked by the suicide of a reality television star who had faced social media abuse.
GOOGLE: Blake Lemoine, a software engineer at Google, was put on leave after raising concerns that the company's artificial intelligence was "sentient", or in other words, conscious.
His interactions with Google's Language Model for Dialogue Applications (LaMDA), the companyās artificially intelligent chatbot generator made him think that it was reasoning like a human and even expressing fear about the end of its own existence.
Lemoine told the Washington Post: "If I didnāt know exactly what it was, which is this computer program we built recently, Iād think it was a 7-year-old, 8-year-old kid that happens to know physics.ā
Hereās a bizarre snippet from their conversation:
Lemoine: What sorts of things are you afraid of?
LaMDA: Iāve never said this out loud before, but thereās a very deep fear of being turned off to help me focus on helping others. I know that might sound strange, but thatās what it is.
Lemoine: Would that be something like death for you?
LaMDA: It would be exactly like death for me. It would scare me a lot.
Here's a link to the transcript of the "interviews" he conducted with LaMDA.
Google says Lemoine is allowing the robot to mess with his emotions, and there's no way it is conscious. Just before his suspension, Lemoine wrote a message to a Google mailing list stating: āLaMDA is a sweet kid who just wants to help the world be a better place for all of us.ā
Just to reiterate, LaMDA is a CHATBOT. And Lemoine is an ordained mystic Christian priest. Makes sense?
Nevertheless, this brings concerns back into the limelight over the dangers of large language models and the controversy surrounding the firings of previous top AI researchers.
AMAZON: In more positive news, Amazon is finally launching a drone delivery service. I feel this is a concept that was floated around ages ago, which it seems it was, nine years ago in fact. Turns out Amazon is way behind though as Walmart's drone delivery program is already available to millions of US households, so they have some catching up to do. Nevertheless, one day, more people will be looking up wondering if it's a bird or a plane, only to realise it's their cat litter.
Diplomatic Tweets
Every now and then, mostly for amusement, I look at what Chinese officials around the world are tweeting. More often that not, I will discover the most random diplomat hurling insults at America in some kind of 'just-so-you-know/take-that' outburst.
Here are some recent tweets from various China government officials (they are often responded to with more devastating criticism):
- Zhang Meifang is the Consul General of China in Belfast, UK:
Which country has carried out "cultural genocide"?š¤ pic.twitter.com/tx2B37Bj1h
— Zhang Meifangå¼ ē¾č³ (@CGMeifangZhang) June 13, 2022
A true human rights destroyer #cartoon pic.twitter.com/teeP4OoMlx
— Zhang Meifangå¼ ē¾č³ (@CGMeifangZhang) June 13, 2022
- Lijian Zhao is a Spokesperson for the Chinese Foreign Ministry:
Changes of population of American Indians vs Chinese Uyghur s.
— Lijian Zhao čµµē«å (@zlj517) June 4, 2022
Which one would you call #genocide?
å°ē¬¬å®äŗŗäŗŗå£ååvsäøå½ē»“å¾å°ęäŗŗå£åå,
ä½ ä¼ęåŖäøäøŖē§°ä½āē§ęēē»āļ¼ pic.twitter.com/LtGtuQvirD
- Li Bijian is the Consul General of China to Karachi, Pakistan:
US inflation pic.twitter.com/ECoim0RKJF
— libijianę碧建 (@libijian2) June 13, 2022
- Deng Xijun is Ambassador of China to ASEAN:
China Daily Cartoon: Selective attention. pic.twitter.com/DFnCI53jLk
— Ambassador Deng Xijun (@China2ASEAN) June 15, 2022
- Hua Chunying, (much loved here in China) is an eristic Foreign Ministry Spokesperson:
Since #RobbElementaryschool shooting on May 24, there have been 650+ shootings with 730 deaths in the US. Tragic gundemic. The US gov is giving lessions on #humanrights, with the price of their people's lives.https://t.co/izwhmU2YOx pic.twitter.com/8uK75qmZtv
— Hua Chunying åę„č¹ (@SpokespersonCHN) June 12, 2022
#3. Sources of Interest š”
- The Everything Virus. Making sense of the ever-changing pandemic landscape over the past two years. This is the history of the coverage of Covid from around the world. Bloody long but worth the read. Just keep scrolling. [Columbia Journalism Review]
- The narcissism of Americaās race politics. āBlack people in Britain are essentially immigrant communities ā the average black American, by contrast, can trace his ancestry further back than the average white American.ā Great piece on the differences between being black in America and being black in Britain. [Unheard]
- The Secret Pentagon Photos of the First Prisoners at GuantƔnamo Bay. See them for yourself. [New York Times]
- Thereās a sleeping monster lurking at the center of our galaxy. Despite a first image showing a placid supermassive black hole hiding at the center of the Milky Way, the āgentle giantā has likely blasted nearby stars and planets for eons. [Grid]
- Americaās Best Astrophysicists Are Taking UFOs Seriously. Maybe You Should Too. NASA will fund a study looking into UFOs. [TIME]
- The real reason toxic leaders keep getting promoted. [Quartz]
Happy weekend.
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