🎤 Last issue, I wrote about Drake’s beef with Kendrick Lamar, check out Kendrick’s responses here and here, Drake’s responses to those, and then Kendrick’s response to that response. This is what they meant when they said AI would boost productivity.
🛬 Also, a second Boeing whistleblower died…
📚🏛 I finished Augustus this week for my book club. I’ve been a big John Williams fan since I read Stoner and while I didn’t like this one quite as much as I loved Stoner, I still really enjoyed reading this novel. Williams’ prose is perfectly simple and the book is full of interesting observations about poetry, love, power, and ambition. It’s got me listening to Mike Duncan’s well-known History of Rome podcast which has been on my list for a while.
📚🇮🇪 I also finished Say Nothing, Patrick Radden Keefe’s gripping book on the Troubles in Northern Ireland. It focuses on several people involved with the Provisional IRA. It’s already being adapted by FX into a limited series. The history of this period is fascinating. One thing that made an impression was just how contemporary all of this is, both in the sense that the violence of the Troubles is not at all in the far past, but also in the sense that it’s analogous to historical events today.
Obviously, Israel and Palestine come to mind but the Troubles are also a counterexample to the idea that vicious intergroup conflict happens mainly between different ethnic groups or nationalities. I highly recommend the book, but don’t take my word for it, take Dua Lipa’s.
🎧🎬 Finally, and I got to interview director Ed Zwick (Glory, The Last Samurai) about his new book Hits, Flops, and Other Illusions. You can listen to that interview on Spotify or on Substack here:
Highlights in this issue:
some thoughts on the campus protests
IMAX and its big ambitions
proprietary trading firms and how they make stupid amounts of money
Good reading,
—TK
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Here’s a link to my 2024 News Journal where I'm collecting the headlines that catch my interest each day so that when we look back at that at the end of the year, we'll see when things happened, what kind of patterns emerged, without the problem of hindsight bias.
🍿💰 IMAX 0.00%↑ brought in 22% of box office revenue on Dune: Part Two with just 0.8% of the screens, a milestone in the premiumization of the theater experience. I know personally I’ve been trying to watch theater movies only in IMAX or Dolby. It seems like that’s part of a general trend of people going to the theaters for an experience that only the theaters can provide.
Puck’s Matt Belloni interviews IMAX CEO Rich Gelfond here and they talk about the robustness of IMAX’s business and how they’re thriving even as the broader exhibition industry hangs on a precipice. I recommend listening to the whole interview (and Belloni’s podcast in general) but here are some key takeaways:
IMAX controls what plays on their screens and they get a cut of the box office from the exhibitor (e.g. AMC) and from the studio (e.g. Universal)
Will the domestic box office recover to the $10-12B/year level or something like $8-10B? That could be the marginal make or break for the ecosystem and a defining factor for what kind of stuff can get made
The exhibition industry is probably overscreened but IMAX underscreened
The overall exhibition industry box office was down 20% from 2019 (COVID) while IMAX was flat
20% of IMAX’s box office is foreign-language films
Only 1/3 of IMAX screens are in North America
Another thing I learned was that IMAX isn’t just hardware. A good chunk of their business is software. They have the proprietary algorithms to convert regular movies into a format that works for IMAX. I recently saw this at work at a screening of Hereditary, part of a series with A24 with new IMAX versions of some of their movies. Thanks to Arthur for sending me this one.
🎓🇮🇱🇵🇸 I haven’t written much about Israel and Palestine since the Hamas attack on 10/7, because the situation keeps evolving so quickly that I’ve ended up with over 100 open tabs instead of any writing. I still hope to write a more substantial piece on that, maybe just for paid subscribers.
Maybe a more self-contained way into the coverage is the wave of pro-Palestinian campus protests in the last several weeks and the varying responses they’ve elicited, from university administrations, city and state police, and from the general public at large. Over 2300 people have been arrested. The NYT has a good graphic on the scope of the protests here.
Today is the 54th anniversary of the Kent State shootings in which four college students were killed. Fortunately, no one has died in these protests so far although there were close calls when, 56 years to the day, on April 30 the NYPD again arrested hundreds of protestors at Columbia who’d barricaded themselves in Hamilton Hall.1
The Atlantic published a good, short narrative piece about how the scene in Hamilton Hall unfolded:
As a mob of hundreds of chanting students smashed windows and built a barricade by tossing dozens of chairs against the doors and reinforcing them with bicycle locks, as fights threatened to break out that could seriously harm students on either side, Wilson couldn’t see any guards or police officers anywhere around him. Two other students told me they had a similar impression. “I don’t get it,” Wilson said. “There were some legitimately bad actors. Where was the security? Where was the university?”…
The denouement was a tragedy accompanied by moments of low comedy, as when a student protester seemed to suggest yesterday that bloody, genocidal Columbia University must supply the students of the liberated zone and liberated building with food… But moments of true menace were evident, such as when some protesters decided to break into and occupy Hamilton Hall.
On the West Coast, hundreds of encamped protestors were arrested at UCLA on Thursday, after pro-Palestinian protestors and counter-protestors clashed violently on Wednesday. USC recently canceled its commencement ceremony after earlier canceling the valedictorian speech of Asna Tabassum, a Muslim student, over safety concerns.
I won’t get into the longer conversation that’s for its own longer piece. But I’ll touch on two things here. The first is efficacy.
It’s not clear to me how effectively the protests are achieving their stated goals. On a basic level, the aim of the protests is to attract a spotlight and then shine that light on the plight of the Palestinians. They’ve certainly achieved that, dominating US media coverage and forcing Biden to speak on the issue. They’ve also provoked what’s arguably an overreaction from administrations and police forces which is a tactical success in a Saul Alinsky Rules for Radicals kind of way. At some sites like UC Riverside and Brown, protestors were able to negotiate specific demands met by the university administrations in return for clearing their encampments. But the events at UCLA also highlight the risk of unpredictable violence where there’s no order. The heavy-handed responses did probably earn the protestors some sympathy.
Even so, the early polling doesn’t look great for the protestors. 47% of Americans oppose them (vs. 28% support) and only 30% believe that most protests have been peaceful. 33% believe the administrations’ responses have not been harsh enough (vs. 16% too harsh) and 20% believe it’s been about right. Compare that to the fact that 30% believe Israel’s response in Gaza has been too harsh (vs. 15% not harsh enough). To me, those look like bad numbers given the underlying levels of sympathy for the cause. Protestors can say that the media that covered them was biased but if that’s the case, the strategy was misguided from the start.
Divestment from companies related to Israel is also unpopular with 40% of Americans saying it's either unjust and/or infeasible (vs. 25% just and/or feasible). That brings me back to the goals. Having their universities’ endowments divest is one of the more reasonable and popular goals of these varied protests but there’s not strong evidence that divestment itself is an effective tool. On the more expansive side, many protests are connecting their pro-Palestinian advocacy to a larger universe of social justice issues:
“As an environmentalist, we pride ourselves on viewing the world through intersectional lenses,” said Katie Rueff, a first-year student at Cornell University. “Climate justice is an everyone issue. It affects every dimension of identity, because it’s rooted in the same struggles of imperialism, capitalism — things like that. I think that’s very true of this conflict, of the genocide in Palestine”…
At the University of California, Los Angeles, students like Nicole Crawford are demanding that the school sever its relationship with the Los Angeles Police Department, along with calls for greater transparency about the school’s investments. Ms. Crawford, 20, said she connects the suffering of Gazans to the plight of other oppressed people worldwide…
Ari Quan, a 19-year-old Emory first-year student from Columbia, S.C., who uses the pronouns they and them, acknowledged not having followed the conflict in Gaza especially closely, but said there was considerable overlap between the movement for greater justice in policing and pro-Palestinian sentiment.
I think this kind of expansive pattern-matching undermines the potency of a focused pro-Palestinian advocacy and raises questions about the degree to which student protestors, however well-intentioned, are motivated at least partially by a desire to be part of a movement, any movement, on the side of weaker victims fighting against a more powerful and unjust authority.
So the second thing I wanted to touch on is empathy. Something that’s come up in my conversations with friends about this is the potential for over-intellectualizing. What is the proper role of empathy and emotion? In general, I’ve thought for a while now that moral sentiments often get sidelined unjustly, especially in this age of effective altruism and its truncated understanding of ethics. Emotions are inherently constitutive for how we should think about things like violence or justice. To do that without emotion and without empathy would be like trying to find the weight of objects and, for lack of a scale, going by volume.
At the same time, feeling may be first but it shouldn’t be last. There is risk in turning reflexively to empathy and, in a sort of empathic inertia, staying there and only there. Psychologist Paul Bloom has written about the counterintuitive dangers of relying solely on empathy:
In the broader context of humanitarianism… the empathetic reflex can lead us astray. When the perpetrators of violence profit from aid—as in the “taxes” that warlords often demand from international relief agencies—they are actually given an incentive to commit further atrocities. It is similar to the practice of some parents in India who mutilate their children at birth in order to make them more effective beggars. The children’s debilities tug at our hearts, but a more dispassionate analysis of the situation is necessary if we are going to do anything meaningful to prevent them.
On many issues, empathy can pull us in the wrong direction. The outrage that comes from adopting the perspective of a victim can drive an appetite for retribution… But the appetite for retribution is typically indifferent to long-term consequences. (TNY)
With some exceptions2, to change the world requires an accurate understanding of what that world is and how it’s structured. Empathy helps move us and spurs us to action but it does not always help us think about whether those actions are helpful or about their second and third-order effects. The greater the intensity of those who suffer, I think the more we’re obligated to understand and act effectively.
A “politics of empathy” doesn’t provide much clarity in the public sphere, either. Typically, political disputes involve a disagreement over whom we should empathize with. Liberals argue for gun control, for example, by focussing on the victims of gun violence; conservatives point to the unarmed victims of crime, defenseless against the savagery of others…
So there’s the question, “empathy for whom?” Often the more we become attuned to the pain of some, we simultaneously become more indifferent to the pain of others.
That’s why information and its curation are so important (e.g. TikTok). We live in an era, algorithms or not, where we can easily create the kind of information environments we want, seeing some names and faces and never seeing others. I’ve seen some pretty horrible stuff on social media from both sides of the protests, stuff that’s made me want to unfollow one account or another. But it’s too easy to set things up so that you get upset, but only in the way you want, which makes it only more comfortable to think that whatever ugliness is on your own side is far outweighed by what you’ve seen on the other.
That’s where the protests have disappointed me the most, from both a moral and practical point of view. If you want to have the widest reach and the most persuasive message, you have to exercise a high level of message discipline and be smart about who you’re reaching. I’ve seen far too little from the protests in addressing some of the hateful, violent, and ignorant messages from their more extreme wings.
Just as the genocidal rhetoric of figures like Bezalel Smotrich and Itamar Ben-Givr undermines the credibility and moral standing of their political partners in the Israeli government as well as anyone else who does not condemn them, so too does the toleration of and sympathy for the hateful and genocidal rhetoric from some protestors, taint the purported justice of the movement at large and their cause.
🏀📺💰 One of America’s greatest cultural exports, the NBA, is closing in on a new TV deal estimated at $76 billion over the next 11 years, 3x its current deal, as the Lebron era of stars passes on the torch to a new generation.
Warner Bros. and TNT may lose the NBA for the first time in four decades to Comcast. Notably, Amazon Prime is expected to get a big piece of the TV package, expanding into the NBA after recent deals for NFL games.
Lebron James (39), Steph Curry (36), and Kevin Durant (35) have all been eliminated this year in the first round of the NBA playoffs. Nikola Jokić (29) looks to be on his way to winning the MVP award for the third time in four years as well as his second championship with the Nuggets. Jayson Tatum (26) is on his way to leading the Celtics to another Eastern Conference Finals. In the West, the Nuggets will face Anthony Edwards (22) who’s playing like the second coming of Michael Jordan. and then an Oklahoma City team stacked with young talent or maybe Luka Dončić (25). And then of course, next year there’s Victor Wembanyama (20).
🇮🇩🕌 Something that’s been on my mind recently after reading Conquistador and thinking about the first Western contacts with Japan is the question of how Islam spread to Southeast Asia. I was thinking about the Portuguese and Spanish coming into the area and was curious if they were surprised to find Islam already there. This is the kind of question that’s good for ChatGPT/Perplexity where you can get a decent structured answer to point you in the right directions.
I read a good thread this week on the history of Islam in Indonesia, which today is the largest Islamic country in the world and home to over 230 million Muslims. I didn’t know Christianity got there only a century after Islam.
🇸🇬 Singapore’s Prime Minister, Lee Hsien Loong, is stepping down after nearly 20 years in power, passing control of the city-state and its single party outside the family to deputy prime minister Lawrence Wong. Lee is the son of Singapore’s founding leader Lee Kuan Yew.
The PAP, which has governed Singapore since independence, earned one of the lowest vote shares in the 2020 election in the city-state’s history. The party has been seeking to recover public support and bolster Singapore’s status as a trade and financial hub amid an increasingly febrile geopolitical backdrop
On Wong’s challenges ahead:
He will face a difficult task in maintaining Singapore’s delicate geopolitical balancing act. A trading entrepot, Singapore has evolved into one of Asia’s main financial hubs while maintaining its neutrality between east and west. But its open economy makes it vulnerable to macroeconomic issues and US-China rivalry.
Wong warned last year that aspects of the Washington-Beijing rift appeared “insurmountable” and that tensions over the Taiwan Strait were becoming the region’s “most dangerous flashpoint”.
📈👨💻 The proprietary trading firms are making it rain. Ken Griffin’s Citadel hired 20 weather scientists back in 2018 which helped supercharge the firm’s commodities and energy business to a $16B profit in 2022, displacing Bridgewater as the most successful hedge fund of all time. Approximately half of that came from commodities, capitalizing on the volatility in the energy markets after the Russian invasion of Ukraine.
Griffin and his senior team are attracted by the size of the asset class, its low correlation with other markets and its complexity. In gas, supply can be mapped and analysed by his large teams of researchers while the many gas hubs across the US and beyond offer numerous prices that can be traded.
Forecasting demand is much harder. Weather heavily influences usage, which is higher during hot summers because of air conditioners and in cold winters as homes are heated.
This is where Citadel is seen as having a crucial advantage, with its traders fed information by a weather team that uses supercomputers to run forecasts and includes specialists in areas such as thunderstorm and tropical cyclone prediction.
They’re not the only ones doing well.3 Jane Street earned $4.4 billion in the first quarter of 2024. That’s up more than 100% from the same period last year for the secretive money printer which boasts alumni like FTX’s Sam Bankman-Fried.
I knew prop firms made a ton of money but I didn’t know how much. Here’s how much some of them make per employee. Compare that to the traditional commodity traders who make similar financial bets but also move around the physical stuff in the real world too. They still dominate but are facing stiff competition from the hedge fund players like Citadel.
Consultants McKinsey estimate that data-driven trading firms captured a quarter of gas and power trading profits globally in 2022, up from less than 5 per cent in 2021.
That competition has forced traditional commodity traders such as Trafigura, which made a record $7.4bn in 2023, to invest to keep up.
And here’s a further peek into Jane Street.
Until last year’s military coup, Niger had been the cornerstone of Washington’s counterterrorism strategy in the region, with U.S. Green Berets advising local commandos during combat operations against what has become the world’s most active Islamist insurgency.
Even after Yevgeny Prigozhin’s death, Russian military presence and cooperation in the region has been expanding to fill the vacuum left by the departing French and Americans forces.
You’ve made it all the way to the end! Thanks for reading fD. You can support my work by upgrading to a paid subscription or share the newsletter with a friend. —TK
At Columbia, most were students while at City College a majority of protestors were outsiders. (NYT)
There are, of course, also social facts where the “knowing” can be not only descriptive but also constitute changing and making. Also, I think there are instances where sheer force of will, or personal reality distortion fields, can and sometimes is necessary to be able to do some things.
📈 first Derivative [112]