207 (8 April 2015)

Welcome to week 207!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by a title search.

You can find a pdf of this issue, a cumulative pdf for issues 1-156, and a cumulative pdf for issues 157-present at: https://sites.google.com/site/brucedeanlarson/the-invisible-forces.

(30 March 2015): “Big Oil Pressured Scientists Over Fracking Wastewater’s Link to Quakes” (http://www.bloomberg.com/news/articles/2015-03-30/big-oil-pressured-scientists-over-fracking-wastewater-s-link-to-quakes)

——–In 2014 “Oklahoma passed California . . . as the most seismically active state in the continental U.S.”  In the last 30 years, “Oklahoma averaged fewer than two earthquakes a year of at least 3.0 in magnitude.  In 2015 it’s on a pace for 875,” according to Oklahoma’s state seismologist Austin Holland.  “One significant change in drilling practices is contemporaneous with the increase in seismic activity: horizontal hydraulic fracturing.”  Although “fracking” has been around for decades, horizontal drilling has not.  The method involves “injecting a high-pressure mix of water, mud, and sand into shale formations deep underground . . . Oil production in Oklahoma over the past decade, creating new wealth for the state as well as an unwanted surplus of wastewater. . . . Much of that fluid is injected back underground into wastewater disposal wells.  It’s this water, injected near faults, that many seismologists—including those at the U.S. Geological Survey—say has caused the spike in earthquakes.”

********The springboard of the article is a meeting of state seismologist Holland with the President of the University of Oklahoma, former U.S. senator David Boren, and billionaire founder of Continental Resources, David Hamm, which raised concerns about improper influence on scientific work.  You can learn more about “induced earthquakes” and the research of the USGS on them at: http://earthquake.usgs.gov/research/induced/.  There you will find, among other things, almost two hours of audio and video materials on induced earthquakes in relation to hydraulic fracturing.

(2 April 2015): “Scotch on the Rocks While Bourbon Is Booming” [SR](http://www.wsj.com/articles/scotch-whisky-gets-left-out-of-the-party-1427922058)

——–“Global exports of Scotch whisky fell 7% last years, as American drinkers continued to switch to bourbon and other American whiskeys.  It was the steepest drop-off in Scotch exports since 1998 and only the third annual decline in 30 years.”  Contributing to the move to American whiskeys has been “a nationwide trend toward locally made products.”  Price, however, has played a role in the changing fortunes of Scotch.  “Sales of lower-priced blended Scotches . . . decreased 5% from last year . . . [but] Higher-priced blends . . . increased 2.5%.”

********The article notes that “The average price of Scotch in the U.S. is $24.09 while the average bourbon costs $17.48, according to Nielsen.”  The article leaves me curious about the behavior of bourbon at different price points, in particular, what growth rates have lower-priced bourbons and higher-priced bourbons experienced?

(2 April 2015): “How 300 Emails Led to a Summer Job on Wall Street” (http://www.wsj.com/articles/how-300-emails-led-to-a-summer-job-on-wall-street-1427932335)

——–“To land a summer job on Wall Street this year, Fairfield University junior Matthew Edgar sent 300 emails, made dozens of phone calls and several networking trips to New York banks from the Connecticut campus.  Darwin Li, had a more direct route: The Princeton University junior applied online for positions and attended campus information sessions where company recruiters walked him through the application process and the firm’s culture.”  For students at target schools for Wall Street firms, “it can seem as though banks and consulting firms are the ones in hot pursuit during fall recruiting season.”  But students at non-target students have a harder time and must learn how to compete to get into recruiting pools.  “Without recruiters on campus, they must initiate a blitz of emails, calls and messages through networking sites like LinkedIn to find a banker or consultant willing to flag their application to recruiters.”

********Different businesses, of course, will have different target schools.  One big bank recruiter notes that by the time it invites applicants to a first-round interview “we’ve probably met . . . [the applicant] three or four times” at a target-school campus.

(4 April 2015): “Hunger for Organic Foods Stretches Supply Chain” [SR](http://www.wsj.com/articles/organic-food-firms-tackle-supply-constraints-1428081170)

——–“Last year, executives at organic cereal maker Nature’s Path Foods Inc. grew so frustrated with organic-grain shortfalls that they took a radical step: They bought a farm. . . . Nature’s Path is among a number of organic-food purveyors taking steps to tackle supply constraints that are hampering the growth of one of the hottest categories of the U.S. food industry.”  A wide-variety of companies “are digging deeper into the supply chain with such moves as financing farmers, offering technical training and hiring full-time headhunters to recruit organic growers.”  Over the last decade “U.S. retail sales or organic foods more than tripled to $32.3 billion . . . according to the Organic Trade Association.”

(5 April 2015): “Seeing a Cash Cow in Museums’ Precious Art” (http://www.nytimes.com/2015/04/05/arts/design/seeing-a-cash-cow-in-museums-precious-art.html)

——–“With government subsidies to public institutions being cut back, museums in countries like Britain, the Netherlands and Germany need the income from art sales to close budget gaps, make repairs or finance expansions.  That has led to fears that masterpieces will disappear from public view to adorn the living room walls of a Saudi prince or hedge-fund billionaire.”  The fear is not without basis.  “Some museums in Britain have already shed important works, including a 4,500-year-old Egyptian statue, or arranging to sell objects to create an endowment to help offset government cutbacks. . . . In Germany, a sale last year of silk screens of Elvis Presley and Marlon Brando by Andy Warhol is, in part, financing a new state-owed casino. . . . The Portuguese government is also weighing a sale this year of 85 works by Miró to cover the cost of bailing out and nationalizing the bank that owned them.”  As museums “deaccession” works—the Egyptian statue yielded $27 million—for large paydays, there has been a negative reaction.  When the Delaware Art Museum sold a painting to help settle its debts, the “Association of Art Museum Directors urged its members not to lend works to the institution.”  Likewise, the museum that sold its Egyptian statue “was stripped of its accreditation and became ineligible for national government grants.”

********Marilena Vecco, an assistant professor of cultural economics at Rotterdam’s Erasmus University, notes: “If you want to safeguard cultural identity, you cannot sell the best pieces of your collection . . . This is the challenge for all museums.”  A challenge, to be sure, that extends beyond museums.  What are museums for?  What are national parks for?  What are universities for?  What are animals for?  Increasingly there seems to be a monetary answer.

(6 April 2015): “Recycling Becomes a Tougher Sell as Oil Prices Drop” (http://www.wsj.com/articles/recycling-becomes-a-tougher-sell-as-plastic-prices-drop-1428279575)

——–The fall in global oil prices “has dragged down the price off virgin plastic,” making recycling less economically advantageous.  According to Chris Collier, who is the commercial director for British recycler CK Group, “Many in the recycling industry are hanging by the skin of their teeth . . . Everybody is desperately chasing for money to stay alive.”  Plastics that are not recycled end up in landfills, the land for which is especially expensive in the northeastern U.S., “so local governments in New Jersey and New York could still find it economical to recycle even if they have to pay for their plastic to be hauled away.  Where dumping trash in landfills costs less, some cities might decide to forgo recycling.”

********The article goes on to note that “Oil prices aren’t the only culprit.  Government policies pushed companies to use more recycled materials, and recycling plants have mushroomed in the U.S. and Europe.  That created overcapacity that has become painfully clear now that demand for recycled plastic has shrunk.”  Oil prices (invisible hand) and government policies (invisible foot) are thus at work in determining recycling rates.  So, too, is the invisible handshake, as customers in Essex, England who are reluctant to pay “a premium for recycled plastic” to help out a local recycler.

(6 April 2015): “He Made Them Millionaires” [SR](http://www.wsj.com/articles/book-review-marvin-miller-baseball-revolutionary-by-robert-f-burk-1428270574)

——–[A review of Marvin Miller, Baseball Revolutionary, by Robert F. Burk.  The reviewer is Henry D. Fetter, author of Taking on the Yankees: Winning and Losing in the Business of Baseball.]  “Robert F. Burk’s book is the first comprehensive biography of Miller, the former steelworkers union official who transformed the toothless Players Association into what may be the nation’s most powerful private-sector union.  Mr. Burk ranks Miller’s contributions to the sport with those of Bae Ruth, Branch Rickey and Jackie Robinson, calling Miller’s exclusion from baseball’s Hall of Fame an ‘inexplicable snub.’”

********You can learn more about the book at: http://www.amazon.com/Marvin-Miller-Baseball-Revolutionary-Society/dp/0252038754/.

(7 April 2015): “Silicon Valley Firms Plant Roots in Farm Belt” [SR](http://www.wsj.com/articles/silicon-valley-firms-plant-roots-in-farm-belt-1428348765)

——–“New technologies that promise to change how food is grown, transported and sold are attracting increased interest from the kinds of investors that have fueled Silicon Valley powerhouses.”  Although the amounts of money for food startups is small compared to Internet companies, they are growing: “venture-capital investment soared 54% to $486 million last year.”  Silicon Valley lawyer Roger Royse, who started an agricultural-technology conference in the Bay area two years ago, notes that “Agriculture is the last frontier for a lot of different technologies.”  Five areas drawing interest are: precision agriculture, indoor farming, food safety, alternative foods, and food robots.  With regard to the last item, it is thought that “potted plants managed by robot fleets could enable about 50% more plants to be grown per acre.”

********You can learn more about the 2015 Silicon Valley AgTech Conference at: http://www.svagtech.org/.  Farm-work jobs are likely at risk from the increasing use of robots.  In a related article, it appears that drones are a potential threat to the employment of sheepdogs.  You can learn more in the A-Hed article “They’re Using Drones to Herd Sheep” (http://www.wsj.com/articles/theyre-using-drones-to-herd-sheep-1428441684).  The article is accompanied by a one-minute video of a drone herding sheep.

(8 April 2015): “Hit TV Shows Lose Luster as Cable Returns” [SR](http://www.wsj.com/articles/hit-tv-shows-lose-luster-as-cable-reruns-1428450774)

——–“For decades, cable channels spent heavily to sill their schedules with reruns of hit shows, and Hollywood studios came to count on the steady stream of cash to keep their content-machines going.  But . . . the rerun ‘syndication’ market is no longer the sure bet it once was.”  Viacom, Time Warner, and Crown Media Holdings have had write-downs or adjusted scheduling due to unexpectedly bad financial results from series such as “CSI,” “The Mentalist,” and “The Good Wife.”  Contributing to the diminished success of reruns have been the streaming services of Amazon, Hulu, and Netflix, as well as an increase in the amount of original programming on cable TV.  A Viacom spokesman noted, “The business is changing rapidly as platforms expand and consumer behavior changes . . . Like everyone in the industry, we are looking very carefully at not only the value, but also the shrinking shelf life of acquired programming.”  Adding to the complexity of these decisions is the changing breadth of programs and the profitability of original programming.  Broadcast networks “are ordering fewer shows that appeal to the masses, which means cable networks are less willing to spend heavily for those reruns.”  At the same time, the dilemma facing cable networks is “whether to risk $100 million on reruns or invest that money in original shows where the potential profits are greater.”

********The article provides a glimpse at the challenges of cable network programming at a time of increasing competition from online providers.  Reruns do have a continuing demand, however, as “cable networks need content not just for the evening but also during the day, when there is hardly any original programming.”

May you have a good week!

Bruce

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