Simultaneous buying and selling makes the economy extremely efficient. But in our overconnected world, it may also force us into a race to the bottom.
If you want to succeed in an Internet-driven, overconnected world, you must arbitrage.
If you don't, you will become prey to those who do. But in an Internet-driven,
overconnected world, arbitrage may also force us into a race to the bottom.
makes the economy extremely efficient. In the commodity world, arbitrage can be
a miraculous transaction, yielding an infinite rate of return. The arbitrager
buys a commodity in one market and sells it instantly at a higher price in
another. In a perfect arbitrage, the arbitrager collects the money from the
sale before paying for the original purchase. For example, sell a bushel of
wheat for $7.00 and collect the money instantly; buy the bushel in another
market for $6.75 and pay later.
Of course, perfect arbitrage seldom exists. Speculators quickly root out opportunities,
and prices converge. The sale price, for example, drops to $6.85 and the
purchase price rises to $6.84. Of course, the sale price could drop below the
purchase price to, say, $6.75, and the arbitrager would lose 9 cents on every sale.
In the past, the term "arbitrage" was used in conjunction with financial and
commodity transactions, but now it is used more broadly. For instance, people
talk about arbitraging labor costs, referring to using cheap labor in a distant
location to substitute for more expensive local labor.
Successful arbitrage depends on strong and efficient connections. You have to be able to move products from where you buy them to where you sell them. Transaction costs
and other logistics must be kept to a minimum. And in order to find the best
arbitrage opportunities, you have to have good information about markets.
This is where the Internet comes in. Not only does it reduce the cost of
finding opportunities, but it greatly increases the efficiency of doing so. As
a result, the universe of arbitrage opportunities has expanded. Name something
that can be bought or sold, and there may a way to arbitrage it: stocks, bonds,
commodities, precious metals, labor costs, taxes, regulatory environments,
credit card debt, retail shopping experiences.
In 2004, commenting on slow job growth in the U.S., Stephen Roach of Morgan Stanley cited "global labor arbitrage" as the main
reason growth had slowed. Roach predicted that global labor arbitrage was
likely to be an enduring feature of the economy. Our experiences over the past
seven years have certainly proven him right.
Most people might think Roach was referring to factory workers and customer
support workers in India who answer calls in heavily accented English. But
because of the power of the Internet, information-intensive jobs of almost any
type are subject to labor arbitrage. Teleradiology Solutions, a company located in Bangalore, reads X-rays for patients in the U.S. and Singapore. Jobs we thought
were safe are safe no longer. More and more companies are employing engineers
and programmers in India, Russia, and the Balkans. Businesses must either
arbitrage and succumb to the unrelenting pressure to cut costs or face the
prospect of becoming uncompetitive.
Non-traditional arbitrage lurks in some surprising places. Consider retailing. Physical retailers add value by providing a retail experience. Some people enjoy shopping. One of the most important services retailers provide is the opportunity to experience the merchandise. Test drive a Ferrari. Try on a pair of jeans. Then go to an online retailer and arbitrage out the added value and the local taxes as well. Many of us do this without giving it a second thought. We find what we want at the shopping center and then rush home to buy it on Amazon. If we're shameless, we do our online shopping on our smart phone a few seconds after leaving the store.
In financial markets, arbitrage has run rampant. Transaction costs facilitated by
the Internet have plummeted. It has become possible to collect massive amounts
of information inexpensively. As computation power has increased and data sets
have grown, computers can now uncover more and more arbitrage opportunities.
traders use computers to scan the market to scout out the tiniest mispricings. If
a computer can discover an index made up of a few hundred stocks that is priced
too high, traders sell the index short and buy the stocks, making pennies per
share on billions of shares--pennies that add up to hundreds of millions in
profits. Is it any wonder that high-frequency trading now accounts for nearly two
thirds of the trading volume?
arbitrage adventures aren't just for the big guys. I was amazed to learn about
credit card arbitrage. Get a low-interest introductory loan for signing up for
a new credit card, invest that money in a high-interest account, and pray.
The Internet makes it easier to get around financial regulations and circumvent jurisdictions. If regulators in the UK or USA get too tough, the Internet can help: when data flows so efficiently, it's a lot easier to move the regulated entity from London or Wall Street to a more understanding jurisdiction.
If I can arbitrage a growing number of financial transactions, both low-skilled
and high-skilled jobs, and then throw in retailing, what's left? A lot, as it
turns out. Ask people in Hollywood about movies and recordings. Talk to the
newspapers. As bandwidth increases, opportunities to arbitrage will continue to
grow as well. Maybe the only things that will be safe are meals in restaurants
and trips to the hair salon.
Arbitrage is an economist's dream. It squeezes out inefficiency. It creates an intensely price-competitive world. Consumers benefit big time, because they have access to high quality goods at low prices.
But arbitrage has its downside as well. I used to love to travel. I even looked
forward to the flight. I could sit in peace and quiet and catch up on my
reading. Today I can fly for less money, but I also fly less. The qualitative
experience is so poor that it has reduced my interest in traveling.
Price is one of the most powerful motivators known to humankind. Nobody wants to pay
more. When the focus is exclusively on price, qualitative aspects often suffer,
and in many situations that is too high a price to pay. If only arbitragers could find a way to squeeze out
costs while maintaining quality. Now that
would be the perfect arbitrage.="http:>
Allegations against the comedian are proof that women are angry, temporarily powerful—and very, very dangerous.
Sexual mores in the West have changed so rapidly over the past 100 years that by the time you reach 50, intimate accounts of commonplace sexual events of the young seem like science fiction: You understand the vocabulary and the sentence structure, but all of the events take place in outer space. You’re just too old.
This was my experience reading the account of one young woman’s alleged sexual encounter with Aziz Ansari, published by the website Babe this weekend. The world in which it constituted an episode of sexual assault was so far from my own two experiences of near date rape (which took place, respectively, during the Carter and Reagan administrations, roughly between the kidnapping of the Iran hostages and the start of the Falklands War) that I just couldn’t pick up the tune. But, like the recent New Yorker story “Cat Person”—about a soulless and disappointing hookup between two people who mostly knew each other through texts—the account has proved deeply resonant and meaningful to a great number of young women, who have responded in large numbers on social media, saying that it is frighteningly and infuriatingly similar to crushing experiences of their own. It is therefore worth reading and, in its way, is an important contribution to the present conversation.
The national-security adviser is one of the biggest hawks in the Trump administration.
In the increasingly urgent, dramatic debate about the North Korean nuclear threat, National Security Adviser H.R. McMaster stands out in the Trump administration as the strongest advocate of a hawkish position. But where do H.R. McMaster’s views on North Korea really come from? Why, to pose a question The Atlantic’s Uri Friedman recently did, is he so worried about North Korea? Notwithstanding the suggestion, in Friedman’s piece and elsewhere, that McMaster’s views represent some kind of heresy of nuclear deterrence, his worries must be seen in light of how he views Kim’s motives. Indeed, those motives mean the possibility of military action against North Korea could be understood not as a “good thing,” but as the “least bad.”
Years after his daughter reiterated her allegation that the director sexually abused her, more actors are voicing their regret for collaborating with him.
Woody Allen won an Academy Award, the fourth of his career, just six years ago for writing Midnight in Paris. He was nominated again two years later for Blue Jasmine, a film that won Cate Blanchett a Best Actress Oscar. The last year that Allen didn’t release a movie in theaters that he wrote and directed was 1981. Despite the controversy that has dogged him since the early 1990s—when he was revealed to be having an affair with his girlfriend’s daughter and was subsequently accused of molesting his adopted daughter Dylan Farrow—Allen has continued to make movies with the same once-a-year regularity as always, and usually with major stars. He has long denied that he abused his daughter.
But the film industry’s willingness to turn a blind eye to the allegations against Allen seems to be coming to an end. More and more actors who have worked with him in the past are announcing that they regret the collaboration, and it appears the sheen of Oscar-winning prestige he has relied on to attract big names to his projects is fading. Allen, who released Wonder Wheel last month and is set to come out with A Rainy Day in New York this year, may try to helm more movies. But with Hollywood finally beginning to grapple with his enduring presence as an artist, could that be enough to destroy his career?
The stability of American society depends on conservatives finding a way forward from the Trump dead end.
Election 2016 looked on paper like the most sweeping Republican victory since the Jazz Age. Yet there was a hollowness to the Trump Republicans’ seeming ascendancy over the federal government and in so many of the states. The Republicans of the 1920s had drawn their strength from the country’s most economically and culturally dynamic places. In 1924, Calvin Coolidge won almost 56 percent of the vote in cosmopolitan New York State, 65 percent in mighty industrial Pennsylvania, 75 percent in Michigan, the hub of the new automotive economy.
Not so in 2016. Where technologies were invented and where styles were set, where diseases cured and innovations launched, where songs were composed and patents registered—there the GOP was weakest. Donald Trump won vast swathes of the nation’s landmass. Hillary Clinton won the counties that produced 64 percent of the nation’s wealth. Even in Trump states, Clinton won the knowledge centers, places like the Research Triangle of North Carolina.
Can a 3-D printed model of the organ change views on female sexuality? Yes and no. An Object Lesson.
The clitoris really isn’t that confusing. Or it shouldn’t be, anyway. Nonetheless, acknowledging the shape, size, or even existence of this essential body part has not always been par for the course—even in the medical profession. As a 2005 report from the American Urological Association puts it, “the anatomy of the clitoris has not been stable with time as would be expected. To a major extent its study has been dominated by social factors.”
However, heralded by some as a sexual and physiological revolution, a new 3-D printed model of the clitoris is being used to change the public’s view of female sexuality. Free to download, the life-size model was designed by the French engineer, sociologist, and independent researcher Odile Fillod and released early last year.
Stories of gray areas are exactly what more men need to hear.
The story of Aziz Ansari and “Grace” is playing out as a sort of Rorschach test.
One night in the lives of two young people with vintage cameras is crystallizing debate over an entire movement. Depending on how readers were primed to see the ink blot, it can be taken as evidence that the ongoing cultural audit is exactly on track—getting more granular in challenging unhealthy sex-related power dynamics—or that it has gone off the rails, and innocent men are now suffering, and we are collectively on the brink of a sex panic.
Since the story’s publication on Saturday (on the website Babe, without comment from Ansari, and attributed to a single anonymous source), some readers have seen justice in Ansari’s humiliation. Some said they would no longer support his work. They saw in this story yet another case of a man who persisted despite literal and implied cues that sex was not what a woman wanted.Some saw further proof that the problems are systemic, permeating even “normal” encounters.
The last four months have been by far the most productive of his presidency. Will they also prove to be a high-water mark?
Nothing comes easy in the Trump presidency, but over the last few months the White House has shown fitful but real progress toward more effective policymaking.
From domestic policy to foreign affairs, President Trump has notched more real victories over the fall and winter months than during the rest of his administration combined. This includes the passage of a large tax-cut package, the long delayed first major legislative achievement of his presidency. Trump has appointed conservative judges and further cut regulations. He has fulfilled campaign promises by announcing the end of the Deferred Action for Childhood Arrivals program, recognizing Jerusalem as the capital of Israel, and announcing a plan to move the U.S. Embassy there from Tel Aviv. He has also presided over the end of ISIS’s territorial control in Syria and Iraq.
The discreet, disorienting passions of the Victorian era
Even by the formidable standards of eminent Victorian families, the Bensons were an intimidating lot. Edward Benson, the family’s patriarch, had vaulted up the clerical hierarchy, awing superiors with his ferocious work habits and cowing subordinates with his reforming zeal. Queen Victoria appointed him the archbishop of Canterbury, the head of the Anglican Church, in 1883. Edward’s wife, Minnie, was to all appearances a perfect match. Tender where he was severe, she was a warmhearted hostess renowned for her conversation. Most important, she was Edward’s equal in religious devotion. As a friend daringly pronounced, Minnie was “as good as God and as clever as the Devil.”
All five of Edward and Minnie Benson’s adult offspring distinguished themselves in public life. Arthur Benson served as the master of Magdalene College at Cambridge University, wrote the lyrics to Edward Elgar’s hymn “Land of Hope and Glory,” and was entrusted with the delicate task of co-editing Queen Victoria’s letters for publication. His brother Fred was a best-selling writer, well known today for the series of satirical Lucia novels (televised for the second time in 2014, on the BBC), which poked good-natured fun at the pomposities of English provincial life. Their sister Margaret became a pioneering Egyptologist, the first woman to lead an archaeological dig in the country and to publish her findings. Even the family’s apostate, the youngest brother, Hugh, a convert to Roman Catholicism, was considered a magnetic preacher and, like his brothers, was an irrepressible author of briskly selling books. All told, the family published more than 200 volumes.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
A vision to protect those persecuted for non-religion
Lubna Yaseen was a student in Baghdad when death threats forced her into exile. Her crime was to think the unthinkable and question the unquestionable—to state, openly, that she was an atheist.
Growing up in Hillah, a city in central Iraq, she developed an independent mind at a young age. “My mother is an atheist intellectual person, and she brought up me and my siblings to think for ourselves and to be open to anything,” she told me. Yaseen was particularly concerned about her teachers’ attitudes toward women. “I always asked why girls should wear a hijab and boys are not obligated to do so,” she said. Why would “God” treat the two sexes differently? She quickly learned the dangers of expressing these views: Her teachers often threw her out of their classes, and sometimes beat her.