Well, good morning, ladies and gentlemen, and it's just wonderful to see so many of you here today. Welcome to the CBI annual conference. A huge thanks, first of all, to our headline sponsors, Harvey Nash and Ernst and Young, who frankly without them we couldn't do this. And our supporting sponsors, equally important, Barclays, Jones Langlisell and, of course, BA Systems. I'm sure you've all seen in the hall today some of the magnificent products that they actually make for this country. Just a little bit of housekeeping, as always, just make sure that the mobile phones are switched off, always helps. And there is no scheduled fire alarm today. So if one goes off, we have a problem. And there are people that are around the sort of auditorium who can guide you through to the exit. We have assembled, I think, the most remarkable list of speakers for you, the Prime Minister, the Leader of the Opposition, the Mayor of London, the Business Secretary, plus a host of top business leaders, all on the same day, all in the same room, but probably for the sake of good order, not all at the same time. It promises to be a fascinating day, and I think we'll end with an equally engaging and enjoyable dinner when our guest speaker will be Andrew Marr. So hopefully a number of you are staying for that. It's just about a year since I stood here and spoke of the challenges we needed to overcome in this country, and the national sense of entitlement we needed to cure. If we were all to succeed in what is clearly an increasingly competitive world. And I think we've come a long way in 12 months. The improved taxation levels we campaigned for, more in hope than anticipation, both corporate and personal, now in place. The Olympic success that we worked for in construction, in presentation, and performance, now firmly on the scoreboard. With the echo of great British achievements, both on and off the track, still echoing around the world, and what a magnificent August that was. We've got reduced inflation and we've got stable unemployment, both now a reality, and I think most importantly the first signs of growth that quite frankly we prayed for, and it's just starting to inch through. So I think going round the country it's no surprise that when I talk to members the mood is it's tough, it's been challenging, but it certainly could be a lot worse. On the international front in the last year we've seen many changes. We've seen a mix of established and new faces in fact wrestling with many of the old problems. In the west wing the return of the old team overseeing I think what is a stuttering recovery, and politically a wall of resistance in the House of Representatives. In Beijing a new team nurturing continued albeit slightly slower growth in China, and in Europe a partially refreshed team trying to sort out the same old problems to avoid what would clearly be an international catastrophe. So for the UK halfway through the cycle with the existing team I think self-help looks like the best way forward. When we look at home we benefited from an opposition that's growing in stature, knowing that a strong opponent always makes for a better government. We've had a government to be fair sometimes stumbling in presentation but I am pleased to say never wavering in determination keeping a firm grip on the finances of the country, low interest rates and of course favourable exchange rates being the prize that has continued to underpin our steady recovery. The CBI's message to the Chancellor has been equally resolute, keep prescribing the medicine but resist increasing the dosage. The patient is fragile, accept a longer convalescence, it is in itself infinitely preferable to the risk of a sudden relapse from a heavy overdose. So however well intentioned the doctor must be patient. For modest recovery is evident, statistics are improving and exports to countries outside the EU now account for more than 55% of our trade. This hasn't been the case since the 70s and the value of goods exported to China was 24% higher in August than in the same period last year. That's no small achievement and for the first time in 40 years which is sadly within my own living memory we are a net exporter of cars quite unbelievable if you turn the clock back only 20 years. Shareholders have started to rediscover their role as stewards with a little encouragement and businessmen whilst remaining performance driven are encouraged to be more values led and very pleasingly more women are actually now joining boards. So when we glance in the rearview mirror it gives us a little feeling of comfort that some progress has been made in difficult times some difficult terrain covered but a look through the windscreen continues to show that it's a difficult course ahead with some pretty nasty potholes on what is still a bumpy ride. Confidence remains in short supply whatever the domestic achievements the risk of a seismic shift in economic conditions from what is still an unstable european continent continues to rain back any sort of feeling of real optimism and big investment enthusiasm in many of our boardrooms and no change in the short term to be fair looks likely but I have to say when most around us in our neighbourhood are slipping backwards forward momentum however small is still welcome progress and it's on these modest foundations that we must now jointly commit that's politicians and business leaders to accelerating the pace of our sustainable growth program so as we look forward I want to examine four key messages that will be the central thrust of the cbi agenda in 2013 and indeed our conference today first we must all business and government redouble our focus on export performance with renewed vigor and importantly we must get after those opportunities that are still outside our traditional comfort zone not just china and india but turkey indonesia russia and of course south america this is a race that continues there is no winning post there are only marker posts and at each stage we must see that where success achieved is simply a spur to take us on to even greater effort in cost reduction in product innovation and indeed clearly in new market penetration I saw some pretty remarkables of this a couple of weeks ago meeting with cbi members in hong kong in beijing and shanghai it was very very enlivening all the people were fired with enthusiasm all were delighted with their success and all were excited about the prospects for future growth not only household names like tesco jaguar landrover intercontinental hotels gkn diagio but also smaller companies service providers and manufacturers respected for their expertise and valued internationally for their skills and they're doing well all who had summoned up the courage to go all who had shown the tenacity to stay and all enjoying our rates of growth that we in the west can only dream of ambassadors consular officials uk ti all their enforce supporting encouraging smoothing and I have to say schmoozing working with the business community and the cbi in the field to make it happen a real demonstration of where a shift in government focus in the foreign office has actually created a change in the behavior of its people while channa itself may regard seven percent six to seven percent growth as a little disappointing in perspective we all have to remember that it is still equivalent to one greek economy every three months and one finish economy which is actually more difficult to visualize but one finish economy every 12 months I mean it's major so message number one is is almost a reprise of last year but it remains vital there's a world of opportunity out there and we all must get our share if we are to return to prosperity at home the second point I think whilst looking for new partners we mustn't forget old friends europe however challenged remains home for half our exports and it's like many relationships can't live with you can't live without you but somehow the partnership continues to survive and whatever the popular appeal may be of withdrawal businessmen and politicians must keep a bridge to europe firmly in place as the countries of europe bind together in pursuit of salvation we in the uk must work harder to avoid the real risks of isolation europe is the bedrock of our international trade it should be viewed as the launch pad from which our global trade can expand not a land mass from which we wish to retreat and if we are to avoid an exit vote in any referendum it is essential that the voice of british business is loud and clear in extolling the virtues of future engagement not as a reluctant participant but as the linchpin of our wider global ambitions my second message therefore is politicians must engage corners must be fought and battles must be won for this country but the cold business logic of a european partnership out of self-interest must be argued for and ultimately must prevail my third point my third point is aimed pretty firmly and squarely at government our success in the world will undoubtedly be driven by the strength of an identified industrial strategy at home a strategy that doesn't pick winners but support sectors an economy that welcomes all comers but still manages to look after our own now this year i think we've seen encouraging progress in the evolution of a real plan through the work of the business secretary who clearly we're going to hear from a little later and the report of michael heseltine so these are good things which very much align with the cbi's thinking about the need for a real plan for this economy but our criticism of government has never been one of mindset it hasn't been one of lack of initiatives or policy direction for pro business it's been about delivery business frankly doesn't need a lot more new initiatives it requires existing plans and published words to be converted into good deeds in infrastructure local enterprise partnerships energy outsourcing there are a list business wants consistency not policy made on the hoof it wants clarity not into departmental interpretations of policy it wants certainty through policy and hopefully some cross party agreement at the highest levels and most of all it wants delivery efficient execution of promises made to quickly become promises kept only then will confidence return for investors to make long-term commitments in an uncertain world so my third message to government is in the words of the great Nike slogan just do it now undoubtedly an area of government that has met much of this challenge is the area of education where for some the scale of change and the pace of doing it has almost been maybe sometimes a little too hectic the cbi message is clear and will be even clearer during this afternoon's debate we want academic achievement but we want it blended with social skills we want our students to be grounded and rounded fit for purpose in a competitive world we want British students to be the best equipped with the skills today not only academic but be able to work in a business environment to have those skills so they can prosper tomorrow and frankly nothing could be more important the young unemployed are becoming a social fault line across Europe it is wrong and it is dangerous to be without prospects is to be without purpose and to be without purpose is to be alienated from society and without education there is no hope for recovery of the next generation and the generation that follows and lastly my final message there is no doubt if we wish to educate our children to be fit for purpose we must give them inspiration and a place that they believe is fit to work we must demonstrate that we are a generation that is focused not just on how much money we make but how we make money we must collectively work to salvaging the reputation of business as businesses and individuals standards have been variable greed occasionally prevalent and fairness forgotten in a number of sectors banking and media at the forefront but others from all walks of life sometimes also showing signs of bad behaviour it's given commentators a license to tar all with the same brush and to poison the minds of many as to the values and value of business in society nobody should expect forgiveness from those that have lost their homes their jobs their reputations their privacy or their prospects by the misdeeds of the powerful and contemptible but i'm pleased to say few but lessons have been learned banking boards and practices have been refreshed media moguls chastised and executive greed contained by a mixture of regulation legislation stewardship and boardroom self-discipline now the direction of travel is positive there still remains of course more to do but we must encourage those that see from the outside a view of business as something that is not good for society we must see that they stop saying all leaders don't care when they do all energy companies rip you off when they don't all bankers are despicable when they are not or big business is bad business when it isn't those making things better should be supported those creating wealth should be rewarded and business big medium and small when doing good business should be respected and only then will society and business be at one good governance and great performance must go hand in hand those businesses that strive for it those commentating on it should celebrate it and for all of us we should recognise at the end of the day when it works we all benefit from it during the course of the day i think these themes are going to reoccur and they're going to be developed in some of the panels and speeches that follow mine the panels we have an excellent grouping that i think will add real interest to the topics and we have a speaker list second to none during the course of the year the cbi team are going to be working for you the members to turn our collective ambition in these areas into solid achievement john and the team are utterly committed to doing just that so thank you all this morning for coming thank you for listening i wish you all an engaging rewarding and most of all an enjoyable conference thank you


Scott's a good buddy. You've probably seen his wife Tiffany on the show. Tiffany's got some great cookbooks. Scott has done tons of stuff on TV. Today he's got a great tip for you deer hunters. Once you get the skin off your animal and you have it cooling, don't think that the work is done. Here we have an animal that was shot perfectly through the shoulder or right behind the shoulder. So what we're going to do here in order to remove some of this blood shot, we're just going to cut right behind this. The front shoulder is easy to remove because there are no bone-to-bone connections. Come underneath the shoulder with my knife and start cutting it open. That shoulder blade runs back up towards the back strap there. I'm just going to pry it open and just keep cutting. And I'll get it to the point that's going to lay open like that. Now you can see all this blood shot in here. We've opened up the front shoulder on the other side as well. If you cut them to the point like that, they're just going to butterfly open naturally and start cooling. Now we're not quite done there. What I want to do at this point is start removing a bunch of this blood shot. So I can come in here with my knife. I can start scraping that out. If there's any blood shot around where the bullet hole is, I'm going to start cutting that out as well and removing that. And the reason is because of this blood, as it sets up and quaggulates, this is where you're going to get a gamey taste. So if you can look at all this blood that's in the front shoulder, had we just let this sit here or hang here and age, this is basically going to be breaking down and rotting away. This is one of the reasons people don't like eating wild game. So no matter where you hit your big game animal, not all shots are perfect like this.  It comes down to the hunter not taking proper care of the meat in the field.


possible today. And next up, we're going to have Jonathan Chang, who's the IT Chief Engineer from NASA's Jet Propulsion Laboratory. He's going to be talking about how OpenStack is going to take us to Mars, so that's pretty cool. So let's welcome him out. Well good morning everyone. It's really an honor to be here. I feel like I have the fortune of working at what I believe is one of the most innovative and exciting places in the world. It's a place where humankind attempts to discover the origin of life.  So here's my family portrait. At NASA JPL, we've had a robotic presence on the surface of Mars since 1976 when the Viking landers and orbiters returned more than 50,000 images and mapped 97% of the Martian surface. Since then, we've delivered a number of robotic rovers of increasing magnitude of complexity to conduct scientific experiments on the surface of Mars. In 1997, we successfully landed the path... I'm sorry, the sojourner rover, the first mobile object mankind has ever deployed on the surface of another planet. Building on the success of Pathfinder in 2004, we successfully landed Spirit and Opportunity. Opportunity went on to conduct seven years of science and discovery, while the Opportunity rover is currently on its 11th year of active mission on the surface of Mars and traveled the distance of a marathon 26 and a half miles. As you saw from the video, the latest rover Curiosity was a tremendous effort in undertaking that required millions of lines of code and was a result of reasoned engineering thought and a great amount of calculated risk. So what is JPL? Well, we're a federally funded research and development center managed by the California Institute of Technology. We are a primary contractor to NASA. We are the leading US Center for the robotic exploration of our solar system and beyond. We are nestled in the foothills of Pasadena surrounded by the Rose Bowl and residential neighborhoods and we'll get back to that while that's important later. We operate a fleet of Earth sensing satellites and investigate our rising sea levels, salinity in our oceans, the availability of water in our future and understanding extreme events such as earthquakes such as the Nepal earthquakes and the hazards that created. We study floods, volcanoes, with many, many current Earth missions. We also manage the deep space network, NASA's national array of giant 70 meter radio antennas that supports interplanetary spacecraft missions, a few Earth orbiting ones and in the near future human deep spaceflight. This is the low density supersonic decelerator. We experiment in new technologies and develop capabilities for future missions. LDSD is a technology experiment that may potentially help us land humans on the surface of Mars. On June 28th, NASA's low density supersonic decelerator project conducted the first shakeout flight of a new way of testing technologies that will one day be used to land heavier, more massive payloads on the surface of Mars. We used a large 34 million cubic foot scientific balloon to hoist a 7,000 pound test vehicle to an altitude of 120,000 feet. The test vehicle was then released from the balloon, spun up for stability and a large solid rocket motor accelerated to over four times the speed of sound in an altitude of 180,000 feet. A condition very similar to the conditions it would see at Mars. Once we reached the correct speed and altitude, we despawned the vehicle. And then we got a chance to test our new supersonic inflatable decelerator. The camera lens covers deploy. We see that inflated very uniformly without disturbing the vehicle too much. And now we're seeing previously unreleased high definition, high resolution, high speed video taken during the test. We used the supersonic inflatable decelerator to slow us with something closer to two and a half times the speed of sound. We use a balloon to help deploy the new supersonic parachute. The balloon is shot out the back of the vehicle at over 200 feet per second and then we cut the balloon free and it begins to pull the parachute off the back of the vehicle. As the parachute begins to inflate, we see one of the surprising aspects of this test, which is the early onset of tears in the parachute. We see where those tears began, how they propagated, and otherwise how the parachute behaved as it began trying to inflate behind this very blunt object moving two and a half times the speed of sound, punching a hole in the atmosphere and creating an extremely turbulent chaotic environment for the parachute to exist in. We now have a data set that we will use to prepare for two more tests beginning in June of 2015. So although the parachute deployed correctly, it broke up upon exposure to the 2,000 mile per hour winds. So many would consider this a failure, but the amount of information collected was analyzed and has since been corrected for the June deployment of the second LDSD saucer at the Pacific firing missile, missile firing arrange in Hawaii. This truly demonstrates the ability to experiment, prototype, and learn in an extremely accelerated manner. And we are continuing to dare mightier things.  A world that shows evidence for an ocean of liquid water beneath its icy crust which could host conditions favorable for life. We are also developing the asteroid redirect mission, a first ever robotic mission to visit a large near-earth asteroid, collect a multi-ton boulder from its surface and redirect it into a stable orbit around the moon. Once it's there, a crew of astronauts will explore it and return with samples in the 2020s. And this technology demonstration is an experiment to advance the new technologies and spaceflight experience needed for human mission to the Martian systems in the 2030s as our president has mandated. This graphic kind of shows all the various technologies and experiments that we conduct, including the space launch system, landers on the surface of Mars, a future sample return mission from Mars, all of our orbiters, and the Orion capsule. All these things will eventually allow us to carry humans to the surface of Mars. Kind of reminds me of the Apollo program. But meanwhile, back on Earth, our new orbiters have the capability for missions to collect multiple terabytes, excuse me, of raw data every day in magnitudes of 40 to 80 terabytes every single day of raw unprocessed data. JPL is struggling with space, power, and the cooling to host the computing storage needed to meet these demands. As I mentioned earlier, we are in a very small area in Pasadena and surrounded by the Rose Bowl and residential areas. We can't grow out of our data centers. Transporting the mass amounts of data from where it's collected to where it needs to be processed continues to be a challenge. We're talking about 87 terabytes a single day. We need to process all that data in that same day, but moving that back to JPL is no simple feat. And our project life cycle oftentimes requires us to buy infrastructure for the life of the mission before it's needed. We have a very CAPEX-like model. And many times that hardware remains underutilized for a good duration of its lifetime. And by the time we do use it, its replenishment is near. So here's our open stack story. It's pretty simple. JPL needs an open and free technology that allows us to consolidate our underutilized infrastructure and make it easily available and provisionable by projects who no longer have the funding or resources available, while still preserving the capability for the missions that will need the infrastructure in the future. Just to recall, the opportunity rover was intended to be a 90-day mission and now it's in its 11th year. So I'd like to take this opportunity to thank the community for truly supporting our mission and ask you continue to support OpenStack because it is doing a wealthy good for NASA. Thank you very much. All right. Thank you, Jonathan. Wow. It's amazing what people are doing out there with OpenStack. Just thinking large and experimenting.


Sing it. New, new, new. New, new, new. New, new, new. New, new, new. New, new, new. New, new, new. Where's my cable? New, new, new. We'll edit this the best. All right. First up. Okay. So we have a revision, but it's a revision that I want to talk about because it's a big deal of vision. So the INA 219, which we revised to add STEM acute connectors. People love this. High or low side current sensor. And it goes over I squared C. It's one of our oldest products. I think it's like product number 904. So it's quite old. But here's the thing. So, yeah, sorry. Yeah. Click here. So, yeah. So we revised it and it looks a little different. And I want to explain what changed. So we could not get the INA 219B, which is the version of the SOP 23 chip that we've had for a really long time. So instead, what we did is we revised the board to use an SOIC sized chip. So the chip is bigger. And it's the INA 219A, not the 21... It may be the 219A, not just the 219B. The difference is the 219B I think is 0.5% precision and the 219A is 1% precision. The thing is, is that resistor is only like 1% precise anyways. So it's not like it's going to make a huge difference. But I do want to mention that the precision has changed slightly. We never promised that we'd have the 219B. We kind of just said it was the 219. We just couldn't get the 219B chips anymore. It was very difficult. We wanted to keep these in stock. And I think for most people's usage, the 219A is just fine. If this is absolutely killing you and you absolutely need the 219B. I think in the next few months, we might be able to revert back to using specifically the B subtype. But the next few months, basically we could only get the A type. And I thought it would be better to have it in stock, even if it's 0.2% less precise. Okay, next up. Okay. Next up, we have, you know, this is actually something handy for people who have a micro bit or you have a circuit playground express or circuit playground or any other, you know, project where it has like alligator clippy pads. So we had Tower Pro, which makes the servos that we really like, create a version of their micro servo, but this time it has alligator clips on it, which makes it really easy. Good for workshops. It's great for basically. Yeah. This is going to, if you've ever had to do any like step-by-step instructional learning, especially with youngins, you will appreciate this because you can get right to controlling a servo and not trying to figure out which way to plug it in. Yeah. Wrong stuff. Wrong wires. Wrong this. Okay. So it's going to be overhead. And I'll show off this demo. Okay. So basically this is a demo moving back and forth, but it's the same micro servo, geared plastic servo that you're used to. Send it one to two millisecond pulses and you can power it from ground and signal. And in this case, I'm powering it from V out, which happens to be five volts, but you can also power it from 3.3 volts. It won't move as fast or as strong, but I know the micro bit only has three volts available. But basically we have a servo to alligator clip adapter cable, which you can use with any servo, but if you just want to get started quickly with the micro servo, this is very compact and easy to use and the wires are color coded, which took us quite a few tries to get the right color coding, but power is red. Signal is white and ground is black. Yeah. This is going to save a lot of people a lot of time. Okay. I had the USB-C cable right here. It was plugged into one. Yeah. So it always is. I know. And also it takes like three times of plugging the cable to us. Yeah. I got it all. Okay. So we're continuing on our path to have our seven segment backpacks all come preassembled so that people don't even have to solder in the LED segment displays. So these are Stem and QT capable seven segment backpacks. So they're plug and play and you don't even have to solder in the LED segment. So let's go to the overhead because I'll show these off. Yeah. Do you want me to show both of them before we go to the overhead? Sure. Yeah. There's blue and white. We also already put in red and green. I think that was the last few weeks. Yeah. So we go to the page so you can select and get all the different colors. Correct. Here is the... Also one of our first products was the seven segment backpacks. It's great to be updating it. Okay. So beef one, two, three, four. So this is the two blue and white. They're incredibly bright. Matrix drivers and what's nice is of course now you don't have to solder anything at all. You can just plug and play over I squared C. You can have up to eight of them if you solder close these jumpers over here. But otherwise they're just stackable. You can put them next to each other. They stack up side by side. So you can have very long digits if you so wish. And always stem IQT. So we're trying to get everything to as little soldering as possible required to get started. Okay. Next up. Okay. Another update. So there's many updates because of the chip shortage which is causing a little bit of a back and forthness in the market. Oh, I was on the C-mail third. Oh yeah, these came in. Cool. These came in. It is like that. It's like, oh, these are finally... I can get these to you. Great. Okay. So this is the OpenMV M7. This is like a smart machine learning camera that you can program with micro pythons. Very powerful. It uses the STM32 H743, which if anybody knows is basically like total unobtainment. But they were able to get some stock to fabricate some. The only deal is they couldn't fabricate the version 2 with the... I think it's the MT9411 camera. So this has, I think, the OV56 something-something camera. It's basically version 1 for why we're selling version 2, but then chip shortage hit, crushed all hopes and dreams of getting STM32 H7. So the one thing we were able to get is to go back to V1. If you absolutely need V2, you really want that new MT9411 or whatever part number camera, please wait. Maybe in six months we'll have some of the V2s. But for most people's uses, it doesn't really matter. The camera quality is almost identical. The chip is the same. The software functionality is the same. So we have a couple hundred of these in stock. Honestly, I don't know when... And neither is open in Veno when they're going to be able to make more of these. Yeah, I figured I'd go on Chicago. So if you want one... Maybe a little bit. You may not want to wait out until the V2 is available. You might want to get the V1 and it's basically the same. Anyone has been waiting on ST chips. Yeah. If you're in an STM32 F7 or H7 world, you're... Yeah, you're in a world of pain. Okay. And no parts. Next up. And look, here's another STM based board. What a coincidence. So actually, this is funny. This one, they went to the GD32 F105, which is a giga device ST compatible chip. So this is the Blackmagic Probe. This is a really cool all-in-one debugger that has built-in debugging capabilities for a variety of chips, arm core chips. It's SWD programming. But what's really neat is it's kind of built into the chip itself. So you don't necessarily need to install open OCD. It's very popular. And we were out of stock for a very long time. They had to do a bit of a redesign for chip shortage reasons. But thankfully, we were able to get some of... They've also updated the firmware. It's now v2.3.  And I think they'll be able to keep these in stock. Hopefully, giga device can supply them with the chips. And basically, this is kind of an advanced programming debugger for folks who are using... If you're using STMs or AMDs, any of the Cortex M0, M3, M4 processor, this will do the job. Check out the open source code also on GitHub. You can see the changes and also make sure that your chip is supported. All right. Next up. Okay. This is a very weird cable. So we didn't get a lot of these. What is this? Okay. So this is extra weird because we've actually stocked the... We've stocked USB-C PD cables already. And USB-C... What's interesting, it looks... I thought this was like makeup on it, but it's actually a translucent cable. Yeah. So these are very interesting cables in that you plug in the USB-C side into a wall adapter that can supply USB power delivery 5, 9, 12, 15, 20 volts. There's like power supplies that can supply different voltages based on what kind of cable device is plugged in. So we stock the cables that when you plug it in, they will give you like a fixed 9 volts out or a fixed 12 volts out. It's very handy because you no longer have to have multiple wall warts. Like you know how we have that box of wall warts at home? Yes. And like we can't get rid of it because it's always like you need it. No, there's always like I need that one. There's always something you need. So the idea is to replace those instead of having different wall warts with different voltages, the cable defines or the device defines the voltage. So we had the fixed cables and if you want like a fixed voltage, like I always want 9 volts or always want 12 volts, get that. Now, if you're freaky like me and you want a cable that can be reprogrammed to request different voltages, this is your thing. So this cable and this is so dangerous. It's like sometimes we carry stuff and I'm like you're going to hurt yourself. So try to like not hurt yourself. But this cable comes a little dongle. You see the dongle on the top right. You can program that there's some Windows software that comes with it and you can reprogram the power delivery requester chip to request different voltages. So you can have it be 5, 7, 9, 10, 12, 15, 18, and 20, I think.  And then the cable turns into that cable. So one day you can have it be a 5 volt requester cable. The next day it's 12 volt. The next day it's 20. You can have it request the highest voltage up to you or the lowest voltage whatever. There's like different programs that you can program it with. Basically it's extremely dangerous because you don't know what you're going to, you know, like if you thought that you programmed it for 9 but it's actually 12. This is a super fun cable. Yeah, you could get 12. If you're interested in experimenting with power delivery, though I think it's, I think this does have some use cases, you know, especially if you're not sure what power delivery you want or you want to test a power supply with different voltages. So it's like kind of funky. I will say you do have to reprogram it between each settings. Like you can't, there's no button or anything to switch the setting. You have to reprogram it each time for the different settings. But it's one cable that can do them all. You know, just try not to hurt yourself with this. Don't forget what you set it to because you think it was set for 5 volts. It's actually set for 20.  So super fun. Okay. And Sarah said tonight besides you, lady, our team, our community, our staff, everyone who works with us, everyone who's supporting this adventure called Eight Fruit is the PCF 8575. Now you might be wondering well, why do you have a 16 IO expander? Don't you have the NCP 23 or 17? Yeah, we do. But we're not getting chips till 2024. So, or maybe, I mean, hopefully we'll get some sooner. But I wanted to have something out there for people who needed a 16 bit GPIO expander and did not want to wait for the MCP 23 or 17 expander to come back into stock. This is very inexpensive. It's very easy to use. It's a bit of a funky chip. We stock the F, F, sorry, P F, PCF 8574, which is the 8 bit version. And that's been in the store for a bit and people have liked that. The thing with that is, and this is they actually use very similar code. There's technically no direction register for the pins on this. There's only two modes for each IO. It's either a light pull up input or a strong syncing output. Basically, what this means is that if you want to wire up an LED, this cannot source current. It can only sync current. So you have to connect the LED from the power, one of the power rail pins to the GPIO. And if you want to have a button connected, you have to have the button connected to ground. So when you press the button, it shorts to ground. And that will use the light pull up on the input. It's not as powerful and amazing as something the MCP 23017. However, it's available and it's very inexpensive. And there's a lot of drivers out there. We wrote Arduino and CircuitPython slash Python code. There's three address pins so you can have eight of these. There is an interrupt output. There is an interrupt output pin. All light pull up inputs are automatically added to the IRQ. So it's a very simple chip, right? There's not a lot going on. There's like one iSquirtZ register, but it does work quite well. So I thought I'd show this demo, which is using the USB-C cable that I finally found. So I just have it, one thing that I liked about this breakout was that it was a little space so I added a power rail ground and power. Because again, LEDs, you have to connect the anode to power and the cathode to LED. You can't do it the other way. You can't connect it from the IO to ground. It will not be able to source current. It only gets sink current. And here's a button connected from one of the ground pins to an IO. And then I have a little Arduino sketch running on here. It switches which LED is lit back and forth, back and forth, all over GPIO and then just fell out. Second. There you go. Very simple demo, but it's effective. I mean, one thing that is nice about this is because the iSquirtZ interface is so simple, it's very fast. Like you don't have to read a bunch of registers and do bit masks or whatever. There's literally, you either write the 16-bit output or you read the 16-bit input. And that's it. Okay. And that is new products. Yay! New, new, new. New, new, new. New, new, new. I found my cable. New, new, new. New, new, new. All is good. New, new, new.


Hi everyone, in this tutorial I'm gonna show you how to install beautiful soup library on Windows. Because the beautiful soup library is not default Python library, it must be installed. In order to do that, first I'm gonna open windows command prompt and inside it I'm gonna type the command pip install beautiful soup 4, if you're having two versions of Python on your machine Python version 2 and Python version 3 and if you want to install this library for the Python version 3 then you need to use command pip3 install beautiful soup 4. And now I'm gonna press enter. As you can see, beautiful soup library is successfully installed on my machine. That's all in this tutorial, don't forget to subscribe to my channel and to like this video. See you in the next tutorial, bye.


After months of ease from COVID-19, cases are continuing to trend upward without any sign of slowing down in Pike County. Right now what we're seeing is an average of 32 cases a day, so a little higher than it was the previous week. That equates to about 55 cases a day per 100,000. If you really want to normalize the data and look at it across the state and the country, we're seeing about 55 cases a day for every 100,000. According to the CDC guidelines, Pike County is currently in the red for COVID cases and has been for a few weeks now. Historically what we're seeing is that there's some sub variants to Omicron. We're seeing a lot and according to one model with the CDC about 80 percent of the current population has been infected at one time or another. Currently with the active cases, a majority almost all are Omicron sub variant B-A5. What we're seeing with that is we are seeing an easier transmission. It appears but definitely less disease severity. We're not seeing the impact on our hospitals like we were with Delta earlier on, the Delta early with Omicron. This life of time that's given to us all, it is all in our hands, it is all in our hands. Experienced heart specialists and sub specialists collaborating for the benefit of your care. Top 10 percent national hospital rankings for patient safety and heart attack and heart failure treatment. The technology is skilled to perform extraordinary complex minimally invasive cardiac electrophysiology, interventional and structural heart surgeries. This is a heart and vascular institute at Pikeville Medical Center. It is all in our hands, it is all in our hands. When it comes to your heart, place your care in our hands. It is all in our hands. While many public places do not require a mask, those who are at risk or immunocompromised are encouraged to wear a mask indoors. Typically we don't treat sick people, we're here for prevention but it is a healthcare facility so we do wear a mask indoors in other healthcare facilities and masks are being worn you know in congregate settings but according to the CDC's community labels when you're in the red if you're indoors and especially if you're in congested areas you should wear a mask particularly those who are at high risk for a poor outcome. Vaccination is still a key part of preventing the spread and severity of the disease. The data still holds true that about 90% of the deaths in Kentucky under age 60 were unvaccinated and over 60% over the age of 60 deaths in the state of Kentucky are currently remain unvaccinated. So the data clearly points to the protection of vaccination that it provides is clear you know that it saves lives decreases disease severity so I can't stress that enough and I'll continue saying it because the data in the science were there. Pike County has 320 confirmed deaths from COVID-19 and 261 active cases. For more information visit pikecountyhealth.com. For mountaintop news I'm Kelsey Deane.


This is Rob Johnson, president of the Institute for New Economic Thinking. I'm here today with an extraordinary man. Well, I've known back to the days when I worked in finance, but knowing him and being able to keep up with him are different things. This is Jim Chenos. He has his own investment firm, has been involved in the markets now for over 40 years. Recently, he's been teaching a course. I guess recently, for the last 13 years, he's been teaching a course called A History of Financial Market Fraud, A Forensic Approach. Jim has written things on the Inet website and in many other places related to financial instability. He's written about China. And he is one of the people that, when I look at who is successful, independent, high integrity, courageous, and practices what he preach, Jim Chenos fills that bill as well as anyone I've encountered. Jim, thank you for being here today. Well, thank you for that over-the-top introduction, Rob. It's good to be here. Well, you've got to have a bubble for you can have a crash, but we don't have a crash today. But let's start talking about recently the phrase, the golden age of greed. You've talked about what you're observing, what kind of things are happening in the United States and perhaps in the world economy and with a global financial market, it's not even clear where the sovereigns are sometime. But paint the picture for us. What is the golden age of greed? Well, it's actually worse than that. It's the golden age of fraud. And so I coined that term a couple of years ago as I started to see post-pandemic, the excesses really begin to build in the financial markets, both public and private, culminating in 2021, which was the most speculative year that I've experienced in the markets in over 40 years. And one of the things I teach in my class, Rob, is that the fraud cycle follows the business and financial cycle with a lag. That is, the longer you have an expansion, the longer a bull market goes on, the more the incidence of fraud occurs as it matures. And then, of course, once things turn down, you begin to get fraud exposed because many frauds are at their basis a Ponzi scheme and need to raise new and new capital. And so the poster child for that obviously is what we saw happen in crypto last year, which was the red-hot culmination of speculative frenzy, lack of oversight, lack of law enforcement, and just pure unadulterated greed that got caught up and then exposed in all kinds of schemes that they were, at their very nature, simply Ponzi schemes. And I think that now we see another aspect of what I teach in the class, and that is when people ask, where's the regulation? Where's law enforcement? One of the things that is as old as financial markets is that we don't see oversight or new laws and regulations until after people lose money. And that is certainly now the case in crypto, where after the fact we're going to see much more regulation as we speak, the SEC is cracking down now on both onshore and offshore crypto firms and so on. So it dovetails with what I teach in real time. In fact, last year, anecdotally, the now infamous interview in Bloomberg with Sam Bankman Freed was released on a Monday afternoon in April. I teach my class at Yale on Monday afternoons. And I was reading this while I was having my coffee before class, and I ran up to our audio video guys to ask them if they could put this interview that I was reading on my smartphone up on my PowerPoint for that afternoon's class because it's very rare that in real time you see an industry luminary discussing his industry by describing it as a Ponzi scheme, which is exactly what SPF did in that interview in late April with Matt Levine and Joe Weissenthal on Bloomberg. And so it all came together last spring and summer in this particular subspace of the financial markets to prove what we've been talking about and what I teach about these cycles of greed and fraud that occur in financial markets when things go too long and oversight becomes lax. And do you see what you might call a recipe or a vision for a corrective structure of governance that would diminish these, like how overreaches or these calamities that follow with excess? Yeah, it all depends, and I know that's kind of a weasel answer, but in past cycles where we've seen large amounts of speculation and large amounts of fraud, the evidence is mixed. So for example, if we just look at the market since the 20th century, I mean after the crash of 29 and the resultant amount of fraud that was exposed and people forget about that, if you look over my right shoulder back there, there's some stock certificates of Ivar Kruger's firm, the great match king as written about by Frank Portnoy. And the securities acts of 33 and 34, which came after the crash, was not really about the crash. It was about all the various different pieces of paper that were floated on American investors through state regulatory vehicles and so-called blue sky laws that ended up basically being worthless. And so that was the real impetus to get the framework for the SEC and the securities laws that we still use today. So there the backlash was tremendous. But if we go to say the global financial crisis, I mean we got Dodd-Frank, but there was a lot that was undone or not done after that wave of fraud and excess that we saw in the residential real estate market. And of course part of the problem there politically was was that lots of everyday people were committing the fraud. People were lying on their mortgage applications and then Wall Street was packaging, Wall Street was going in on the lie or looking the other way or did willful blindness and looked the other way as these things were packaged into leverage securities and then distributed throughout the global financial system. So it became very, very difficult to prosecute the bad guys when we were kind of all the bad guys. And then you can look at the corporate waves of fraud in the dot-com era with Enron, WorldCom and then also go back to the savings and loan crisis where George Bush Sr. put thousands of bankers into jail for simple loan fraud and back in 1990 and 1991. So it all depends. I mean we've seen pendulum swing where the public gets outraged, loses lots of money and demands change and justice. And then there are other times where the public kind of shrugs and says, ah, they're all crooks, what are you going to do? So we'll see. Yeah, I would guide our audience to look at this or listen to this podcast. It's a six or seven part series by Alex Gibney and David Sarota called Meltdown. And it was not about the meltdown of the financial markets in 2008. It was a meltdown in the confidence of governance regulation and expertise that fostered Tea Party, fostered Occupy Wall Street, a Republican House, a Republican Senate and I guess Donald Trump. And the feeling that everything was rigged, right? That was rigged on behalf of the rich guy and market participants and not rigged to the detriment of the public. But what's really crazy, Rob, is that in the 10 to 12 years that followed that, that the public decided the way they were going to get even was to speculate themselves in crazy securities in 2020 and 2021. So they started buying crypto. They started buying worthless meme stocks. They started buying SPACs. And to get back, and if you get on social media and read what's in the mindset of these small investors is they want to get back at the man. They want to get back at hedge funds and regulators and the SEC and not understanding that in fact they're the ones that are being basically duped again to buy these securities. It's a remarkable experiment in human psychology. It's almost like imitation of the person that harmed you. There's got to be a Freudian term identification with the aggressor, I think, was the Freudian phrase for replicating the practices of those who abuse you. I kept pointing out to a number of them on social media during the meme stock crazes, and there's been a few of them, that overpaying for worthless pieces of paper is not going to stick it to the man. It's going to stick it to your portfolio. And making these statements in the markets can be dangerous. And so it really has become a bit more of the Wild Wild West and certainly so in 2020 and 2021. And I think we're going to be paying for that going forward in maybe some unspecified ways. In the middle of 2021, I was down in Coronado Island for an event celebrating the life of a man that was extraordinary. And one of my friends came up to me and said, you used to be really interested in all these financial markets. And he said, I've been making lots of money. And I said, I didn't know you were a financial guy. I thought you were a surfer.  And I said, be careful. Be careful.  But it was just a kind of a silly thing. He was so enthusiastic. This is June of 2021. And he was very, what I'll call, emotionally intoxicated. Well, we're still seeing the echo chamber of that. Option trading is hitting new records. And what has a lot of people like me concerned is that it's now the volume is all coming in what's called zero DTE options, zero days to expiration, meaning people are buying options for stock prices on that day that expire. And so this is like literally gambling, going down and just betting on red and black. And so we've really gotten a casino like culture coupled with the equity culture that is a bit frightening in terms of market structure. And again, I mean, regulators have kept their kind of hands off this. I don't want to date myself too much. But if we go back far enough, one of the ideas was that the Fed was supposed to now take away the punch ball, but was supposed to warn people when things were getting overheated by such indications as raising margin requirements. They're completely quaint and antiquated in today's markets, but nonetheless would send a message. And as we know really since Volcker, the Fed and others have had as their third mandate financial market stability and some might say maintenance. And that's now the unlegislated third mandate for all central banks. And in and of itself after enough years where people get used to that, the so-called Fed put, it breeds its own instability because people take more risks than they otherwise would assuming that the government has their back. And every once in a while they find out to their horror and misery like 2002 and 2008 that doesn't necessarily happen that way. And so it's concerning. And then of course we overlay on that the fact that in this golden age of fraud as I've called it, we're seeing all kinds of egregious corporate actions that I think really should be cracked down on and aren't. The most prominent when people say well where is the fraud occurring right now?  If you look at most corporate reports right now, they do not publish at first and foremost in front and center their gap results. They report adjusted metrics. So GE, Stagial GE is a great example of this. GE put its earnings out two weeks ago. And GE had 16 pages of adjustments in its earnings report for the fourth quarter to get you to the number that they wanted you to get to as to what they thought their profits would be adjusted. Not what they were.  And Silicon Valley has taken this almost to an absurd level. I have companies that are going to report that have 40, excuse me, 80% of their revenues are share based comp expense where they're just issuing stock instead of cash to their employees. And under the current guys, companies add that back to their P&L. They say it's not an expense. So increasingly it gets to this equity based, you know, equity based world that we're in. More and more companies, particularly aggressive companies are paying their employees lavishly in stock because they don't consider it an expense. And the SEC has guidelines on this that it is just not enforcing. And so routinely you'll hear someone like an Uber or a company like that talk about we are now adjusted profitable and this is the first time in 10 years we're a profit. And then you look at the financial statements closely and you realize they're still losing money.  And I think it's something that the SEC and other regulators should have cracked down on a long time ago. I'd love to report to my partners our investment results without the bad stocks. I guess Ronan Jailer might do that. Yeah. Yeah. It's an interesting dilemma to see all these machinations that you can be because of your expertise alert to. We're also seeing a lot of the public that you mentioned a few minutes ago wanting to catch up but they don't have that insight or that equipment. And then you have let us say the large number of people that don't do much beyond subsistence. And as the despair in all these categories starts to rise and the loss of faith in governments like you'd said system is red which was kind of a mantra of Donald Trump's 2016 campaign. And I always encourage people to look at the video of the three-minute speech that he made on the night of Game 7 of the World Series which was the Sunday before the Tuesday election when the Chicago Cubs were striving to overcome. I think they had one since early like 1904 or something. And the turnout for those games were huge. He played this ad six or seven times over the course of the game to the national audience and he kept saying the system is rigged and the only people strong enough who could band together to fix it are the American people. And it was this piece of propaganda that showed Lloyd Blankfein with Hillary Clinton or Hillary Clinton with Xi Jinping or George Soros and others in the background. And he's casting all of this we call discord and then saying we're going to fix it. And a lot of people bought into that. The guy who took six or seven of his companies bankrupt and I was short a number of his securities in the 90s and the early millennium in the junk bond market and the equity market and being short Donald Trump's companies was like watching numerous slow moving ocean liners hitting multiple icebergs repeatedly. I said that on a fundraiser and President Obama loved that and stole the line. But it's true. To have Donald Trump give us a lecture on the system being rigged is high comedy in my eye. There's nothing to do with his other politics. It's just as an observer of financial markets he was a master of that. And so it really is ironic. But what's even more frightening as we've alluded to is that the outrage of 2009 and 2010 which was Occupy Wall Street and Tea Party as you mentioned has turned itself into well I'm just going to go to the casino myself and put it all on red. And you know that to me is even more frightening because it's as if someone said this the other day at a meeting I was at he said it's kind of like the public is that guy at 3 a.m. in the casino at the roulette table with eight or nine drinks in him and half his stack is gone but he's going to be damned if he doesn't get his money back before he goes to bed. And you know he's going to lose everything. And I just worry that where this is going to put it politically come the next true bear market where a lot of these small retail investors who are in the market like never before you get wiped out and they're going to get wiped out. And so I think that that that would worry me as an observer of political economy through the lens of finance and then what will the backlash be what will people want to do at that point. And so will it be will it be anti Wall Street will it be anti corporate America will it be some combination of both. And how will the politicians on both sides of the aisle you know stoke that fear. Yes. Well Martin Wolf the famous columnist for the Financial Times has just released a book on the crisis of capitalist democracy and I've worked with him quite actively on the book and we just did a podcast a couple weeks ago. It just came out on 7th of February and he's he comes from a family not his mother and father but the Nazis who were destroyed by the Nazis. And the ominous sense that he has it's not it's not even what will the government do it what kind of government will people submit to in the despair say in the after the fall down of the markets in the next recession or bubble breaking deeply. And then the last piece I guess I want to add to make this tension even greater is we have the baby aging out now and those people with 401ks or whatever if those all evaporate given the cost of elder health care what kind of crisis are we going to have when the people who need support money evaporated and the size of the working age population relative to the retired population is at an all time low. There's a lot of stress on the horizon. So two thoughts there so the first one on on on Martin Wolf's book and I look forward to reading it is that what was really terrifying and what brought forth the 30s particularly in Germany and Italy was the and even Soviet Union was was the first crisis of the early 20s right and then amplified by the global crash in 29. And so you had you had in Germany and Italy and of course through civil war in Soviet Union you had this horrible wipeout of savings and capital in the early 20s in Germany through hyper inflation and in Italy through economic depression and in Soviet Union through civil war and then just as things were sort of maybe trying to write themselves even though politically it polarized those countries well certainly Germany and Italy then you had the crash of 2932 and that's what brought Hitler in for example was the fact that that not only did people lose their life savings in the hyper inflation in 23 but then everybody hit the bread lines in 1930, 31, 32 and at that point people said I have nothing to lose. I'm going I'm going to either vote communist or or national socialist and we know what happened and and and that's the that's what worries me is that that if this occurs you know within within anyone's memory of 0809 and and and then the backlash is going to be I think significant number one number two is it turns out 401 case and health care costs. I really do think that that that one of the other aspects of what we've seen in the the equitization of society and the finance financialization of society is is beyond just the Fed put in the markets is now a general sense particularly post-pandemic that well if worse comes to worst the government will will send me a check will make me whole will will open up the flood gates and we'll get national health care or whatever it might be and and that is that is the flip side monetarily and inflation deflation side of of what happened post-pandemic we now have a belief in light of what the government did to stem the pandemic what makes people actually think they won't open up the floodgates in the next depression or recession and and probably they will and that's fine but I'm just saying that that we now can see a different script from the deflationary 40 years from 1979 to to 2020 when I got on Wall Street in 1980 rates were 14% going to zero and and that's not going to be repeated and so we saw labor ascendant in the late 70s I was earning $14 an hour working in a steel mill in Milwaukee Wisconsin to pay for my college education and I got all the hours I wanted at night weekends holidays because the union workers there were making a lot of money and all had you know lake homes and whatever and and you know when I got on Wall Street in 1980 I made more money in two months in the summer of 79 working in steel than I made my first full year on Wall Street imagine that today but that was that was the peak of labor that was Thatcher's election in 79 and Reagan in 80 and the pendulum has swung back and now of course it's all capital and no labor and and if that pendulum swings back the other way and you know we've seen it happen a couple of times in American society in the last hundred and fifty two hundred years you know people are going to be wrong footed and and there will be like we've seen when those things change you know wholesale societal changes and political changes so it will be very interesting you know and the movement they now are calling de-globalization may play a role in that that might it might indeed would get to our friends in China yes well you know the how would I say people like Bronko Milanovic and others have made a good point which is God wasn't necessarily born in Pittsburgh in Detroit and the globalization development did create a rising tide for living standards for many many people on planet earth but that process perhaps was maturing but also with some of the breakdowns related to adversarial nationalism and the pandemic and so forth I would edit he may not have been born in Detroit or Pittsburgh but he ended up vacationing in Davos yeah man the yeah Peter Goodman will have to put that on the jacket of his paperback edition of Davos men but I think the the sense that I have now is that we are in a what I'll call an unstable dynamic and there is all kinds of tension directed at governance I know a lot of people the other night who said the state of the union address was brilliant but can we practice what we preach and and I said somebody said to me later and it reminded me of your comment moments ago Trump preached what he practiced but with a mask and Biden has put out something whether it's dealing with the cost of medical care for elders or financial transparency or he just went through a whole laundry list of things but the the sophisticated people I know are saying how is he going to implement that in the world of money politics and I don't want to fan the flames of cynicism and drive us further towards that authoritarian alternative and I do myself find myself grateful that the president of the United States did shine a light on directions he would like to see us go for a better balance not necessarily every single thing he said but the thrust of it but but nonetheless his stepping out like that made me think we really are in a treacherous place that the the impetus to his breaking away and making that speech is probably related to concerns of despair within the White House yeah I can't you know I can't speak to that I don't know but I would say that you know the inability now obviously like most presidents he got whatever legislation he's going to get through he got through in the first half of his term and now you know it's going to become incredibly difficult with the Republican House so it has to be via executive action and the regulatory system and so that's why you see the initiative about things like junk fees and and things like that but but even then I mean it becomes more and more difficult and and and politicized as we get closer to a presidential election because if the White House does do that and I think they should in many cases you know it will be painted as as regulatory overreach and big government stomping down on business and and so it's it's a tough road to hoe without a doubt politically yeah well as I mentioned Bill Greider used to say the Fed is independent he'd say the independent from whom and now people are saying how how are we going to protect freedom when the only freedoms that seem to be protected are things like a space program for Elon Musk or Jeff Bezos on his own and where's the common good this where's where's the protection of students from the profits of gun makers and I'll go one step further with Tesla and that's the company we're short in the interest of full disclosure is is NHTSA allowing them to test their full self driving beta software on roads that you are you and I are on where other other automakers you know legitimately use test tracks and test for years he's testing them on our highways and and you know I think it was any other company if it was Toyota doing this the federal regulatory apparatus would have told them to stop it immediately but because it's Elon Musk he gets a pass and part of that gets back to the equitization of this country and the financialization of this country that I talked about he's held up as a as a hero and Tesla is the most owned stock by retail investors in the world and so he's going to get he's going to get I think special treatment yeah I think that's an interesting hypothesis I hadn't thought about that broad based retail coalition that might be underpinning it and he can play the he can play the common man in the theater of the financial markets now that's it wow the limit let me reach back a little bit in history my former wife was the head of Japan analysis in the 80s for the Federal Reserve under first Volcker and then Greenspan and we watched that bubble burst and we watched that country aging and yet when you look at satisfaction in life you look at surveys longevity whatever measures you want the Japanese didn't collapse and I guess I want to contrast that with some of the ominous things that you and I have put on the table how was Japan and how they say these are still dynamic things the the downturn could still be tomorrow but were they able to step aside and have a u.s. China positive multiplier be the rising tide that raised all boats and sustained them to avoid a crash or or are there things we can learn from them so that we don't fall off the cliff well one thing that everyone forgets about and the Japan analogy is somewhat apt I think it's more apt as it applies to China than the U.S. but what everybody forgets about that the 30 40 years no 35 years at this point that Japan has stagnated is that Japan has had declining population so it's flat GDP over that period are up slightly on a per capita basis is actually up in line with the EU and the United States is or not far off and so that that because the company the country is shrinking again the math way the math works is people really have it individually felt it and so that's a really important point people should consider however I mean Japan in 1989 at its peak had eerily lease is eerily similar to China in terms of the economic model I have a slide in my China deck about this you know Japan was was heavily heavily an investment driven GDP model although nothing like China it was at its peak it was investing about 30% of its GDP in investment China is in the mid 40s and has been for better part of 15 years it was investing in greater Asia now in China's case they're investing internally but greater China is supporting that in terms of Hong Kong and Singapore and South Korea it had a basically government driven economic model if you remember we were directing investments by corporate Japan in many cases it had an export driven economy and with a pretty controlled currency so there were a lot of similarities between the Japanese economic model of the late 80s which was the miracle and the Chinese economic model from say 5 to 10 years ago when it was still putting up those big numbers and then the final similarity which is the most ominous was Japan had a real estate bubble and had a banking system that peaked out at about 400% of GDP in terms of assets and now let's go to China and take a look at what happened in China over that period so when China entered the WTO in 2001 it had an economy about $1 trillion US in terms of GDP it had a banking system that was about $1 trillion US in assets 40% of those assets were bad they were loans to state owned enterprises that ultimately had to be worked out over time they wrote some of them off over time because they had to recapitalize their banking system in the western financial markets in Hong Kong and in New York and so it took them a while to work that out of their banking system fast forward to today Rob and China's economy is about $15 trillion US and assets in their banking system are roughly well actually over $60 trillion so they're 4x that's very similar to where Japan was at the peak it's very similar to where some of the bad European countries were in 0708 like Ireland and Spain and Iceland and so you start to get up to a banking system that's 4 or 5 times the size of your economy and it's the banking system that the banking system tail that wags the economic dog and how does this happen well it almost always happens because of real estate which is a leveraged asset class I joked that Chinese apartment prices are the second most important price you gotta know other than US treasury rates because it's roughly a quarter of China's residential real estate and China is still building 20 million flats a year even though it doesn't need them and the declining population yeah and I joked long that China's the only advanced country that knows its annual GDP on January 1 of that year they can preset it legally right it's an accounting identification if half of your economy's investment you can literally direct investment to make a GDP number if you never write off the bad investments but I guess what you're saying in a dynamic sense these buildings or what you might call excess apartments don't add to productivity and therefore income to service that growth in the balance sheets of the banks and financial institutions so if they were investing in productivity enhancing resources human capital or physical capital or whatever you might have a more optimistic sense which they were in the Deng Xiaoping reforms after Tiananmen Square and even in the first 10 years of the new millennium after they entered the WTO it wasn't until after the GFC that this went crazy and we've seen this massive increase in banking assets and apartments and apartment loans driving GDP a lot of it was government driven they needed to make numbers the way the Communist Party worked was the local party was set targets by the National Party you need to grow 7 or 8% this year what's the easiest way to grow 7 or 8% stick a shovel in the ground the problem with this you can't segue into a consumer driven services economy which is what most modern economies are because you remember your macroeconomics Rob s equals i so the fact that if you're going to invest 46% of your economy every year you've got to save 46% and thus the problem the segue to a consumer driven economy will create speed bumps the like of which no Chinese premier wants to encounter and every time that they try to sort of reign this in they've tried three times since I've been following China closely in 09 three times they've tried to hit the brakes and all three times they've let up and hit the accelerator again because the economy immediately goes into stall speed and they panic and I've called it the treadmill to hell they can't get off it and there's no other playbook and so the inevitable reset is going to happen it's just a matter of when and from what level we're like Japan Japan hit this reset in 89 and Japan's alternative is to muddle through for 40 years with no growth I don't know if China has the cohesion internally and politically and they might to do that and that is either that or you're going to have to face severe downturn clean out the system clean out the bad deaths and start over I don't know if they have the stomach to do that and or if they don't try to find foreign adventures to offset that risk you know starting 2019 in Hong Kong now the saber rattling over Taiwan that's always a possible response policy wise as well yeah I'm going to for all parts particularly with an end game of nuclear threat it's interesting to me I spent a lot of time going back to the time of Tiananmen Square in China and I remember there was a place probably around 2012 where a lot of professors at universities were saying to me we had this old model where you'd run around the country say the equivalent of high school students and test who are the best and the brightest to bring them in and teach them to be the government but now in the advent of the digital age there's a whole lot of what I'll call private sector potential and there are a lot more people who want their children educated whether it's in engineering or you know the skills the 3 Rs or what have you and these professors were talking to me about their frustration that the economics of the support for the universities by the state wasn't what I will call working to upgrade human capital where all the potential lied and they said you know we've had a lot of people migrate from the farms to the cities and they work many times with their hands and then they moved in manufacturing in the beginning then they've moved to construction of infrastructure and construction of real estate but we're not building the human capital and I think I guess just to conclude that vision the way in which Jack Ma has been dethroned is sending a very negative signal about technology is creating what I'll call freedom and independence that maybe the government doesn't want the society to inhabit. Well as we know from our own wrestling with big tech big tech becomes a power center literally in and of itself and that's the one thing the Chinese Communist Party won't broach right, it won't broach any political power by a new power base technology, entrepreneurs, big technology companies like Alibaba, Baidu, Tencent and so that's why we saw that those companies and those executives were getting fabulously wealthy and that became a political threat that the CCP was just not going to tolerate so that's number one number two it's coincided with the deglobalization as you called it you know and a little bit more hard headed look at Chinese technology through the national security lens and whether or not we want Huawei equipment or TikTok on our phones and so increasingly that's going to be an issue and so you know it's tough because the Chinese labor market having gotten wealthier has priced itself out of making sofas and bicycles and things like that those are made elsewhere for Walmart and really they were supposed to go up the value change through technology and more advanced products but with this deglobalization trend that's going to be more problematic for China and so they have a series of issues on their table that are not pleasant and alternatives that aren't that pleasant right now and that's what makes me worry a little bit about the saber rattling because one of the classic misdirections for any authoritarian government is to set up enemies outside the border that's the cause of our problem not our own policies Yes and I know my friend Orville Schell who's spent a lot of time studying China and he wrote a book with John DeLarie called Wealth and Power and it was about what he saw as a coming crisis between the US and China which was from the humiliation they call the century of humiliation from the opium wars through the Japanese invasion the idea that China has what you might call regain its stature at the head table is very powerful at the same time you have the United States leading the western system doesn't want to be a partner it wants to be the captain and the United States from what I'll call a Cartesian Enlightenment system the Taoist Confucius the eastern philosophy in China means that it's quite possible for the two sides to misunderstand each other because they make projections from their own imaginative mindset on to the other that Subigna Brzezinski talked about this a great deal in 2010 and 11 that it was going to be very hard to have a G20 but as this distrust is reinforced by what you might call a stammering or sputtering economy and discord within both the United States and China that Bismarck recipe find something that you can dislike outside and unify the people behind you seems to be as a matter of fact one of the other teachers at Yale Steven Roach formerly of Morgan Stanley I did a podcast with him a couple of months ago about these questions and I read something by Chas Freeman last week about what you might call a lose-lose framework unnecessary losses that might be on the horizon don't underestimate also the fury that China has toward our ally Japan who's announced a rearmament program for whatever differences between West and East there are in philosophies and the ability to misunderstand each other in any kind of policy square off there is just outright hatred in China for the Japanese much of it legitimate I might add for what happened in World War II and we forget that there was a massive land war while we were fighting our way across the Pacific via our Navy and Marines there was a massive land war going on in China between the Japanese army and the Chinese army replete with many of the atrocities we saw from the Third Reich that has not been forgotten in China I can assure you the fact that Japan is now embarked upon a new policy to rearm itself is raising strategic issues in Beijing that here to for it didn't worry that much about it, worried about the US but a re-armed Japan is a different animal in the Pacific so it's something they talk about a lot more than we do obviously Yes and I guess it's hard to figure for me what the Chinese government thought it was doing inciting with Russia and so many of their trading partners are on the other side I've wondered if that decision while it's a way of showing how to say beating your breast or stiffening your spine in some simple way if it's not going to exacerbate the economic stresses because the Australia's, the EU and others are going to step back themselves Well keep in mind that Xi Jinping the first thing he did when he became the leader back in 2013 was give a speech about the weakness of the Soviet Union in allowing perestroika and how it was one of the biggest disasters of the 20th century was the fall of the Soviet Union and there's actually an institute for the study of the fall of the Soviet Union in China but perhaps more interestingly and ominously remember that the only major foreign leader that attended the Sochi Winter Olympics that were Putin's showcase was Xi Jinping and this was before the Ukrainian invasion so there has been a growing warmth between Russia and China because of shared interests against the West for a while now Yes, I think that's right and in my own work when I was running the Quantum Emerging Growth Fund I used to ride around all of these countries in emerging Asia and read their novels and watch their movies and seen from that, how do you say the analyst reports but I also like to get the cultural vibe that's coming forward and one of the things that haunted me in recent years was the movie Wolf Warrior 2 which absolutely characterized China as the savior of the global south from the global north led by America but America and Europe oppressors and all kinds of things including the National Museum exhibit in China we're emphasizing more and more and more which I call pride on their side and defiance and it feels to me like at a very subtle level but it's now accelerated that these tensions that Orville Schell and you and others have foreseen are quite ominous they're really coming to the surface what would you do if the president called you in tomorrow and said what do we gotta do to take the steam out of this how do we come back to a win-win situation well it's tough because I mean we have one major obviously issue sitting there right in the south China sea called Taiwan and Taiwan is important not just because we have back Taiwan but because Taiwan along with South Korea and to a lesser extent Japan is the center of the most important commodity in the global economy right now which is semiconductor chips semiconductor chips are to the economy today what oil was to the global economy in the 70s and 80s and it's crucial that we keep that supply going now we are trying to you know build up domestic production but if there were to be a shooting war in Taiwan and or Korea that would disrupt global chip supplies I mean it would make it would make the you know the pandemic look like child's play in terms of how quick everything would would collapse and so that's a problem and I think that first and foremost you know I think the west needs to buy time to de-globalize in effect and onshore the importance of semiconductor chips that are essential to our economy that's number one so Taiwan is everything and how you diffuse that I don't know because the rhetoric is getting more and more bellicose you know what if China puts a what if China does enable blockade around it I mean you know what we do I mean there's lots of scenarios that are at pay grades above my level that I'm sure you know the national security apparatus is kind of trying to think through as it relates to financial and economic policy China is kind of got the best of all worlds with access to western financial markets without being a full participant one of the things I rail about in finance is the Chinese VIE structure for example which has enabled companies like Alibaba and others to raise billions of dollars in the west in what's basically a fraudulent kind of a structure, a governance structure the Chinese courts do not recognize the VIE structure and for the listener and the viewer what it means is is that western investors cannot own the corporate assets outside of China by law for the most part there's some exceptions but Elon Musk for example owns his plant in Shanghai so go figure but for the most part you and I can't own Alibaba's actual assets within the People's Republic so what they've done is they set up this artifice where they set up a holding company in the Caribbean in the British Virgin Islands the Cayman Islands and you can buy the stocks and bonds in that holding company the only asset you have is a piece of paper and a safe in the British Virgin Islands that says you will share in the economics of this enterprise in some sort of unspecified way going forward proportionate to your ownership but it doesn't really mean anything legally in China so to the extent that something happens in China to those corporate assets you have no recourse the Chinese courts won't recognize you so for example years and years ago when Yahoo and SoftBank owned a piece of Alibaba and one day they woke up and they found out that the financial arm of Alibaba had been stripped and sold to a group of affiliates of Jack Ma for a bargain price and the company said well the Chinese regulators told us we can't have western indirect investors in financial services so we had to do this well to this day they've never told people what those are shown those people what those regulations were what the order was and the western investors in Alibaba were left holding the bag with no recourse and so this is the problem right that they have access to our financial markets but we have no governance on their companies so all these kinds of things are going to play into any future you know increasing level of conflict with China and I mean obviously I tell my clients to be as disassociated with China as you possibly can in any case because the risks are worth the rewards it is interesting to me say I'm thinking about directions of innovation when Silicon Valley starts and it starts moving towards China not just the plants for assembly but the use of I don't know things like smartphones or laptops or what have you you can see the benefit to the consumer then I remember meeting with Chinese leaders who said a little bit like the movie that Tristan Harris and others made the social dilemma you are the product and they started saying okay these are platforms for commerce but they're also data sets for intelligence and we got to figure out how how those are governed how those are blended but what I'm seeing now is there are things for instance some of the things Huawei's created with the 5G stuff and so on that the direction of this tension has reversed now some of those things could be deployed in the continental United States but is it opening a window to espionage and surveillance on the part of the Chinese well I mean look at just two big examples TikTok which is owned by a Chinese company which is one of the largest social media platforms and of course we're not on it right now but Zoom how many Zoom calls have you been on since the pandemic? I don't have enough fingers and toes to count over and over again a lot of those calls get routed through China through Chinese servers so it's interconnected in many ways and these are all issues that people are thinking about in terms of the deglobalization and our interconnectedness with China as you point out but I guess what I'm alluding to is there are potential losses for the well-being unless which you might call a technological firm in America can imitate those things and put them into the marketplace very quickly the source of all innovation in the early Silicon Valley days was largely the United States now the source of innovation is more spread around like what happened with the auto industry where Japan and Korea started to take the lead in some respects the good news is that like Japan the Chinese financial situation is probably not a huge contagion risk unlike the US and EU financial situation and the global financial crisis where we were all interconnected and lending to each other and distributing highly leveraged products to West German Landesbox and Norwegian pension funds that's not the case by and large with the debt the real estate debt in China that's held on the Chinese banking system for the most part but for the most part the contagion risk is like Japan it's basically centralized in their banking system so they can deal with it internally by flooding their own economy with currency but there's not as much transmission risk as there was in 08 between western banks Jim I remember I just wanted to how I say take our audience on a broader voyage they can look at your reading lists and so forth piece of Yale in your course I listened to a podcast with an Irishman I think his name was David McWilliams that she did recently that explored some of the things we have but other dimensions also quite vivid and I particularly want to encourage our young scholars to engage in following your writings and your interviews and so forth and think about the financial markets which you might call depth and breadth that you do because there's a whole lot of pressure to just be a member until like you've said several times here until the boat goes over the waterfall and then you find out you got hoodwinked again and you're not getting hoodwinked and you're about as good at smelling a rat and also seeing the prize as any finance here I've ever met thank you Rob thank you for being here today and I look forward to another episode and guiding our young people young scholars initiative to learn from your example thanks my pleasure


I'm one of the principal investigators on this project and I'm involved in the consortium. The laboratories are really well equipped with the newest equipment. You can think of completely up to standard with European laboratories, so we have everything we need. It's very exciting with this consortium, there are people from so many different countries and it's basically the best people in the area, very good vaccine experts and experts in other areas which come together to take this forward.