To solve the personal matter, the blog shall be temporary closed and
reopen in next 2 weeks…
Thank you very much.
Vì lý do cá nhân, Blog tạm thời đóng cửa và sẽ mở lại trong vòng 2 tuần tới…
Cảm ơn tất cả các quý anh chị và bạn bè.
To solve the personal matter, the blog shall be temporary closed and
reopen in next 2 weeks…
Thank you very much.
Vì lý do cá nhân, Blog tạm thời đóng cửa và sẽ mở lại trong vòng 2 tuần tới…
Cảm ơn tất cả các quý anh chị và bạn bè.
Diễn đàn trí thức (Diễn đàn trí thức) – Bài tham luận của GS.TSKH Nguyễn Ngọc Trân được trình bày tại cuộc tọa đàm về Nhiệt điện do Ban Tuyên giáo Trung ương tổ chức tại Hà Nội Nhiệt điện than bủa vây ĐBSCL: Phá thế ‘thập diện mai phục’ Giải vây ĐBSCL khỏi nhiệt […]
(Diễn đàn trí thức) – Bài tham luận của GS.TSKH Nguyễn Ngọc Trân được trình bày tại cuộc tọa đàm về Nhiệt điện do Ban Tuyên giáo Trung ương tổ chức tại Hà Nội
(3) Tăng trưởng NLQG phải đi trước và là tiền đề cho tăng trưởng kinh tế. Nhưng với tốc độ nào, liên quan ra sao với hệ số đàn hồi điện là hợp lý? Nhớ rằng:
♦ Nhu cầu và tốc độ tăng trưởng của NLQG còn tùy thuộc vào mô hình tăng trưởng kinh tế;
♦ Mô hình tăng trưởng kinh tế ngày nay của các nước đã thay đổi dưới tác động của hai cuộc cách mạng công nghiệp lần thú ba và lần thứ tư;
♦ Tạo ra nguồn NL mới phải đi cùng với tiết kiệm trong sử dụng NL;
♦ Mô hình tính toán nhu cầu và tốc độ tăng trưởng của NLQG theo tăng trưởng GDP, và phân bổ các dạng năng lượng cần thường xuyên được cập nhật.
Tỷ trọng của kinh tế tri thức ngày càng tăng. Công nghệ thông tin, tự động hóa, kinh tế công nghiệp 4.0, kinh tế nông nghiệp ứng dụng công nghệ cao, thương mại điện tử, và một số ngành kinh tế dịch vụ, sử dụng NL ít hơn các ngành công nghiệp nặng nhưng đóng góp không kém phần quan trọng cho GDP.
(4) Mô hình tăng trưởng kinh tế lại phải được lồng vào bối cảnh toàn cầu hóa kinh tế, hội nhập quốc tế, biến đổi khí hậu toàn cầu và phải tính đến những tham vọng của các siêu cường về lãnh thổ, lãnh hải và tài nguyên thiên nhiên.
(5) Tổng sơ đồ phải tính đến tiềm năng năng lượng của các vùng kinh tế – sinh thái của đất nước, khai thác tối đa các tiềm năng này để đóng góp vào tổng sơ đồ, đồng thời phục vụ cho sự phát triển kinh tế xã hội của địa phương.
Sự đổi mới này trong xây dựng tổng sơ đồ năng lượng quốc gia còn giúp tối ưu hóa mạng lưới truyền tải điện quốc gia, giải tỏa ràng buộc và áp lực “thêm 1MW cần 11 km đường dây”.
Một ví dụ cụ thể đó là tiềm năng NL Gió ở duyên hải Trung Bộ, Nam Bộ và Tây Nguyên, và tiềm năng NLMT suốt dọc duyên hải Nam Trung Bộ, Tây Nguyên và Nam Bộ thuộc loại cao nhất nước.
(6) Kết hợp tập trung với phân tán, giảm tải cho tập trung, cùng lúc với phát huy tiềm năng của phân tán được định hướng bằng chính sách của Nhà nước.
Có như vậy mới tìm được giải pháp cho các bài toán nan giải với cách tiếp cận tập trung bao cấp: đầu tư bao nhiêu để tạo ra một việc làm mới? (USD/job); để có thêm 1MW mới cần 11,8 km đường dây?; cần đầu tư bao nhiêu để tăng thêm 1m2 nhà ở/người dân ở Hà Nội, (câu hỏi từ những năm 1980), v.v. …
Năng lượng phân tán, một mặt sẽ giảm tải cho tập trung, mặt khác sẽ tạo ra việc làm mới (job engine) mà người dân tự đầu tư và hưởng thụ thành quả. (Xã An Bình (Lý Sơn) từ khi có điện là một ví dụ).
(7) Tầm quan trọng, vai trò của chính sách mà Nhà nước kiến tạo cần ban hành. Chính sách đúng sẽ giải phóng năng lực của xã hội. Đó là một trong những bài học lớn của Đổi Mới 1986.
(8) Các tiếp cận trên đây đan kết với nhau. Do vậy cách xây dựng tổng sơ đồ cần được đổi mới với tầm nhìn rộng, với quan điểm hệ thống và động, và tư duy luôn đổi mới.
(*) Bài tham luận được trình bày tại cuộc tọa đàm về Nhiệt điện do Ban Tuyên giáo Trung ương tổ chức tại Hà Nội, ngày 05.03.2019.
(1) Xem thêm: Shannon N. Koplitz et al, Burden of Disease from Rising Coal-Fired Power Plant Emissions in Southeast Asia. Environ. Sci. Technol. 2017, 51, 1467−1476, DOI: 10.1021/acs.est.6b03731
(2) EVN, Tổng hợp tình hình tro xỉ tại các NMNĐ than của EVN. Tài liệu Hội nghị “Sản xuất VLXD từ tro xỉ” Hà Nội, 20/6/2018.
(3) Công việc đã được thực hiện tại Phòng thí nghiệm Kỹ thuật hạt nhân thuộc Trường Đại học Khoa học Tự nhiên, Đại học Quốc Gia Thành phố Hồ Chí Minh.
Thành phố Hồ Chí Minh, ngày 04.03. 2019
Là tổng thống đầu tiên của Hoa Kỳ, bên cạnh tài năng lãnh đạo chính trị và quân sự xuất chúng, George Washington nổi tiếng kỹ tính với vấn đề đúng hẹn.
Khi Washington hẹn người bán ngựa đưa những con ngựa ông muốn mua đến vào lúc 5 giờ sáng và người đó đến muộn 15 phút, người quản ngựa nói với anh ta rằng Ngài Tổng tư lệnh đã ở đây đợi từ lúc 5 giờ nhưng giờ Ngài đã đi làm việc khác, Ngài cũng không thể kiểm tra tình trạng của lũ ngựa cho đến tuần sau.
Nếu ông hẹn gặp các thành viên Quốc hội vào giữa trưa, người ta thường thấy ông ấy bước vào phòng làm việc Quốc hội vừa lúc đồng hồ điểm 12 tiếng.
Sự đúng giờ của Washington còn thể hiện cả trong giờ giấc ăn uống. Ông ấy ăn tối đúng 4 giờ chiều mỗi ngày. Nếu các thành viên Quốc hội được mời đến dùng bữa đến muộn hơn giờ hẹn, họ thường ngạc nhiên khi thấy ngài tổng thống đã ăn được nửa bữa ăn hoặc thậm chí đã kéo ghế đứng dậy. Trước sự sững sờ của vị khách lề mề, Washington sẽ nói: “Ở đây chúng tôi rất đúng giờ. Đầu bếp của tôi không bao giờ hỏi khách đã đến chưa mà chỉ hỏi đã đến giờ chưa.”
Khi thư ký của Washington đi họp trễ và anh ta đổ lỗi cho chiếc đồng hồ đeo tay của mình, ngài tổng thống chậm rãi trả lời: “Thế thì cậu phải thay đồng hồ mới thôi, hoặc là tôi phải thay thư ký mới.”
Thái độ nghiêm túc với việc đúng giờ của George Washington bắt nguồn từ cuốn “The Rules of Civility” (tạm dịch: “Quy tắc ứng xử lịch sự”), cuốn sách ông đọc từ ngày trẻ. Ngài tổng thống lặp lại nhiều lần những châm ngôn trong cuốn sách như “Không chịu trách nhiệm với những điều bạn không thể làm nhưng một khi đã hứa thì phải làm đến nơi đến chốn”. Đối với Washington, đúng giờ là cách thể hiện sự tôn trọng đối phương và ông hy vọng mình cũng nhận lại điều tương tự.
Những câu chuyện trên cách chúng ta hàng thế kỷ nhưng ý thức đúng giờ thì không mất đi tính thời sự của nó. Người ta gọi đây là một “đức tính giản dị nhưng đáng tin cậy” và chắc chắn là nó không làm khó chủ nhân đến mức phải gồng mình lấy hết dũng khí và sức lực để thực hiện. Sự đúng giờ thể hiện tính kỷ luật và tự chủ. Ngay cả khi nó không được thừa nhận rộng rãi là một nét tính cách quyến rũ, sự đúng giờ vẫn là yếu tố cần có ở một người đàn ông đáng tin cậy.
Tầm quan trọng của sự đúng giờ không mang tính phổ quát, nó phụ thuộc vào từng nền văn hoá. Ở châu Mỹ La tinh hay Quần đảo Thái Bình Dương, giờ giấc giữa nhiều nơi có thể khác nhau và nhiều khi thời gian gặp gỡ không được rõ ràng. Thế nhưng không ai có thể phê phán giá trị của sự đúng giờ đối với một người đàn ông sống trong nền văn hoá luôn coi trọng việc đúng hẹn. Giống như việc một người đàn ông phương Tây luôn cẩn trọng trong từng cái bắt tay, cách đeo cà vạt và cả cách anh ấy giữ cửa cho một người phụ nữ, họ làm những điều này như một phần cuộc sống của mình cho dù không phải ở nền văn hoá nào chúng cũng phổ biến.
Sau đây là những lý do tại sao đúng giờ lại quan trọng:
Đúng giờ thể hiện sự quyết đoán. Khi bạn nói với ai đó bạn sẽ gặp họ vào một thời điểm cụ thể, thực tế bạn đã đưa ra một lời hứa. Bạn hẹn sẽ có mặt lúc 8:00 nhưng 8:15 bạn mới đến tức là bạn đã thất hứa. Việc đúng giờ thể hiện bạn là người dám nói dám làm.
Đúng giờ thể hiện bạn là người đáng tin cậy.Người ta tin tưởng những người nói được làm được – nếu anh ấy nói anh ấy sẽ có mặt, anh ấy sẽ có mặt. Nhưng với người không đúng giờ, người ta sẽ không thể trông cậy vào anh ấy – họ không biết tìm anh ấy ở đâu khi cần. Những người cộng tác với anh ấy sẽ cho rằng người này không biết tự sắp xếp thời gian của mình và nghi hoặc này sẽ dần vượt qua giới hạn của vấn đề giờ giấc, câu hỏi dấy lên trong mắt nhiều người là: “Nếu anh ta đã không coi trọng thời gian thì còn điều gì anh ta không coi trọng nữa?”.
Benjamin Franklin từng nói với một nhân viên luôn đi muộn nhưng lần nào cũng lý do sẵn sàng một câu như này: “Tôi nhận ra là người giỏi bao biện ngoài giỏi cái đó thì chẳng giỏi thêm cái gì khác.”
Đúng giờ đảm bảo cho việc bạn có thể thể hiện bản thân tốt nhất. Sau khi đâm vào đuôi xe ai đó, phóng xe với tốc độ bàn thờ, nhấp nhổm tìm kiếm bóng dáng cảnh sát giao thông hay chửi thề trước đèn đỏ, bạn khó có thể dồn sự tập trung cho bài thuyết trình mình sắp phải trình bày hay buổi xem mặt bạn đợi chờ cả tuần lễ – bạn run và căng thẳng trước những áp lực bạn mới trải qua. Trái lại, nếu bạn đến đúng giờ, sớm hơn một chút càng tốt, bạn sẽ có vài phút để sắp xếp những suy nghĩ trong đầu, lướt qua tài liệu và giữ biểu cảm gương mặt ở trạng thái tốt nhất.
Đúng giờ thể hiện tính kỷ luật. Người đàn ông đúng giờ cho thấy anh ấy biết tổ chức thời gian của mình và lưu tâm đến tiểu tiết. Anh ấy có thể tạm gác việc kia để làm việc này hay anh ấy có thể hoãn việc vui chơi lại để lo cho công việc.
Đúng giờ thể hiện sự khiêm tốn. Châm ngôn “Always late, but worth the wait” (tạm dịch: “Luôn đi trễ, nhưng đáng công đợi chờ”) có nghĩa là đôi khi sự chậm trễ và sự trân trọng đi đôi với nhau. Người ta sẽ rất vui mừng khi bạn đến nhưng họ còn vui hơn nếu bạn tới đúng giờ.
Đúng giờ thể hiện sự tôn trọng bạn dành cho người khác. Đi trễ là một biểu hiện của sự ích kỷ, bạn đặt nhu cầu của mình lên trên mọi người. Bạn muốn có thêm một phút để làm những việc bạn muốn, nhưng để có một phút đó bạn phải lấy đi một phút của người khác, đó là lý do tại sao…
Đi trễ là một hình thức ăn cắp. Đó là sự thật phũ phàng nhưng nó vẫn là sự thật. Khi bạn bắt ai đó đợi chờ, bạn đang lấy đi của họ những giờ phút họ không bao giờ có thể lấy lại được, những thời giờ có thể đem lại cho người ta tiền bạc hay chỉ đơn giản là để họ làm những điều họ cảm thấy quan trọng. Để đến đúng giờ đã hẹn với bạn, người ta phải hy sinh. Hy sinh đó có thể là dậy sớm hơn, rút ngắn thời gian tập thể dục, từ chối đọc cùng con một câu truyện cổ tích và sự lề mề của bạn làm những hy sinh này đổ sông đổ bể. Nếu bạn không có ý định trộm 10 nghìn trong ví ai đó, bạn cũng đừng nghĩ đến việc trộm của người ta 10 phút làm gì. Đi đúng giờ thể hiện bạn quý trọng thời gian của mình và không coi rẻ tài nguyên quý giá nhưng hữu hạn này của người khác.
Đi trễ làm cản trở trải nghiệm của người khác. Sự lề mề của bạn không chỉ đánh cắp thời gian của người khác mà cả sự tập trung họ dành cho những trải nghiệm của mình. Đó có thể là cậu sinh viên bước vào lớp khi bài giảng cúa giáo sư đã đi được một nửa, một gia đình đi qua mặt bạn để tìm ghế giữa lúc bộ phim đang đến đoạn cao trào hay một anh bạn kéo cánh cửa xập xệ khi cả khán phòng đang chìm trong im lặng. Khi một ông cụ được hỏi tại sao ông luôn đến nhà thờ làm lễ đúng giờ suốt hàng chục năm trời, ông đã trả lời: “Đức tin của tôi là không làm cản trở đức tin của người khác.”
Đi trễ khiến các mối quan hệ của bạn trở nên căng thẳng. Khi bạn trễ hẹn, đối phương sẽ nghĩ bạn không coi trọng họ. Những việc níu kéo bạn thì quan trọng hơn và họ không đủ ảnh hưởng để bạn sắp xếp những khoảng thời gian hợp lý trong lịch trình bộn bề. Vị khách bay một quãng đường dài để gặp bạn cảm thấy mình như một kẻ ngốc đứng trơ trọi giữa sân bay; người yêu bạn khó xử vì cô ấy phải ngồi một mình trong nhà hàng và con bạn cảm thấy bị bỏ rơi khi con bé cùng cô giáo ngồi hàng tiếng đợi bạn đến đón trong khi các bạn đã được bố mẹ đón hết ngay khi tan trường.
Đi trễ gây cản trở cho sự nghiệp của bạn. Dù bạn là người đi làm thuê hay bạn tự khởi nghiệp, trễ giờ luôn là hòn đá cản đường thành công của bạn. Rất nhiều công ty đặt ra những quy định khắt khe về việc đúng giờ – thử đi trễ vài lần xem, bạn sẽ bị cho thôi việc. Tất nhiên, nếu bạn đi trễ ngay từ buổi phỏng vấn, bạn sẽ không bao giờ được nhận vào vị trí bạn đã ứng tuyển. Nếu bạn đang cố thuyết phục một khách hàng tiềm năng mà bạn đến muộn giờ hẹn 10 phút, công việc khó có thể diễn ra suôn sẻ. Kết quả tương tự nếu bạn hẹn khách hoàn thành một phần việc nào đó trước thời hạn nhất định và bạn thất bại, nhiều khả năng khách sẽ tìm kiếm dịch vụ bạn đang cung cấp ở một nơi khác.
Đi trễ gây thiệt hại cho đời sống của bạn. Lúc nào cũng đi sau người khác gây thiệt hại trong mọi mặt đời sống. Nhiều cơ hội mất đi: lỡ chuyến bay, vắng mặt trong cuộc họp, lỡ một phần quan trọng trong bài học, lỡ mất đám cưới của đứa bạn thân. Không chỉ thế, nó còn gây ra căng thẳng, có thể cả tai nạn dọc đường. Trễ giờ đẩy bạn vào nhiều pha “mất mặt” và buộc bạn phải nghĩ ra đủ loại lý do bao biện cho việc bạn đi muộn, ảnh hưởng xấu đến sự thành thật cũng nwh danh dự của bạn.
Tóm lại, đi trễ giờ khiến cuộc sống của bạn phức tạp hơn. Nếu bạn muốn sống một cuộc đời đơn giản, trước hết hãy tập cho mình thói quen đúng giờ.
Giá bán lẻ điện bình quân đã có 9 lần tăng trong 2009 – 2018, có lần tăng tới hơn 15%.
There is a beautiful passage on the last page of Laura Ingalls Wilder’s, The Little House in the Big Woods. She writes of an evening in the cabin with her family, her father playing the fiddle, her mom knitting in a rocking chair.
“She thought to herself, ‘This is now.’
She was glad that the cosy house, and Pa and Ma and the firelight and the music, were now. They could not be forgotten, she thought, because now is now. It can never be a long time ago.”
It’s a passage that has resonated with millions of people over the last 86 years, including the writer Gretchen Rubin who ends her book Happier At Home with a meditation on how it has inspired her for most of her life.
But what does it mean? It means the same thing that the Stoics have always talked about. That you have to live in the very now, even when it is ordinary and quiet, because the now is very special. It is the only thing that is true. What has passed is past, and our memories of it gradually degrade and betray us. What has yet to pass is future, and as we should know by now is never guaranteed. Now is all that is real.
“Give yourself a gift,” Marcus Aurelius wrote, “the present moment.”
Yet too many of us reject that gift. We continue to think of long ago. We dream of or fear a distant future. We are distracted or preoccupied and miss what is happening around us. It’s the quiet evenings at home with family that we should be present for. It’s the ordinary present that we should cherish.
Because it’s all we have.
As research is simplified to suit a mainstream audience, some things get lost in translation
As a molecular biologist, I laugh alongside my colleagues in the lab when we read stories in magazines or hear breaking news reports about the latest “cure” for cancer. We understand that scientific research can be a little dull. And publications in scientific journals can be virtually inaccessible to the general public, both in terms of their jargon and their exorbitant pricing. To sell a scientific story, research findings get spiced up, simplified, over-extrapolated, and even distorted.
For example, I feel like I read a headline about a new “cure” for cancer every week. If I had to meet only the scientific standards of a news corporation, I would have personally “discovered” 57 new anti-tumor drugs during the course of my PhD studies alone.
Ultimately, there isn’t a great deal of danger to stories like these. Sure, they may get people’s hopes up prematurely. But chemotherapy drugs take years of clinical testing, millions of dollars, and pages of legal documentation before they reach the market. We start to approach a gray area, however, when the media promotes unregulated products or makes unclear, and unproven, suggestions about the ways our bodies work.
People shouldn’t be basing their health decisions on an article they read online or something they saw on TV. Health choices should be governed by the best possible scientific understanding available and that’s not something that’s going to be gleaned from sound bites in mainstream media.
BBC recently published a story titled “Skinny genes the ‘secret to staying slim,’” which seems to push the idea that being skinny or fat is largely the result of genetic composition. The story opens with: “Scientists say they have discovered the secret behind why some people are skinny while others pile on the pounds easily.” The problem is that when you dig into the details of the article, this isn’t true. The original research doesn’t assign genes as a causeof obesity but, rather, as a heritable risk factor.
Association does not mean causation.
I write a lot about diet, exercise, weight loss, and body composition. I’ve also worked for almost two years in a mitochondrial bioenergetics laboratory that investigates the molecular processes behind the development of obesity and Type 2 diabetes. Yet, I still think of myself as possessing only a basic knowledge of obesity genetics. So, how did a journalist and their editor handle the task of analyzing the significance of a genome-wide investigation into the heritable risk factors for a lifestyle disease? But, of course, the purpose of the story doesn’t seem to have been to educate; it’s more about drawing in readers.
Science journalism takes some liberties in writing “scientists say” and “researchers concluded,” even when this is not necessarily the case. People trust scientists and doctors and, really, any trained professional in a given field. It’s much easier to sell a story if you put the words in the mouth of a scientist.
Although I disagree with the way science news hits the mainstream, we do need a way to educate people about the latest findings in health science research. Time and again, science journalism takes published research and repackages it into something marketable. And while it’s promising that the general public has taken such an interest in science, to the media, it’s just another product to push.
The BBC article was based on an original scientific article published in PLOS Genetics that suggests the findings are “a valuable resource on which to study resistance to obesity in an increasingly obesogenic environment.” When examining the “genetic architecture” of body weight, there is “evidence of association.” But here’s the problem: Association does not mean causation.
The researchers examined the genetic composition of thousands of people who represent the entire spectrum of human body shapes. This included both obese people and “healthy thin” people, as well as people who fall into the normal range of body weights in between.
The major finding of the study was that certain genes are more common among naturally skinny people, much like there are certain genes more common among overweight and obese people. Based on these results, genetic composition can be used to assign a statistical probability of being skinny and a statistical probability of being fat.
Your genes, however, do not cause you to become fat or thin. A person’s actions, and other physiological factors, are still a major determinant of the outcome. It’s just that certain people will find it easier to stay slim than others.
It’s like getting a tan. Some people have fair skin and have to spend several days in the sun for their skin to noticeably darken. Others, however, can spend 30 minutes outside and come back a shade of bronze. Genetic makeup determines how easily a body produces melanin, but genes do not cause skin to tan—exposure to UV radiation causes that.
Science journalism has been following a dangerous trend of insinuating that people are less responsible for our health than we think.
The root cause of an increase in obesity worldwide is an increased prevalence of sedentary living and changes in eating patterns globally. At the population level, the idea that genes are the primary cause of obesity is not scientifically valid. Of course genetic makeup contributes to individual health. But there is also overwhelming scientific and clinical evidence to support the idea that diet composition and physical activity levels can be used to drive or combat obesity. Although it may not be exciting news, reporters should be focusing on the impact of changing lifestyle habits on global health.
Science journalism has been following a dangerous trend of insinuating that people are less responsible for our health than we think. This idea draws in readers because humans love stories that shift the blame somewhere else. But to combat obesity related health problems, we need to accept responsibility for our own health. Both as a society and through individual choices. Society is responsible for creating a supportive platform and we are responsible for acting wisely on our opportunities.
Rising global obesity rates are the result of a classic case of systemic failure. Individuals are not entirely to blame; the global community is at fault. It’s no secret that we live in an obesogenic world. In order to create a more supportive system, we need to better promote healthy lifestyles by 1) refining educational measures that empower us to make informed decisions about diet and exercise, 2) creating work environments that enable us to act on our health choices freely, and 3) revising institutional policies that deny us the opportunity to act in our best health interests.
While society needs to do a much better job of supporting healthy lifestyle choices, we’re all responsible for the choices we make individually.
When globally renowned news outlets suggest we are not responsible for our health, it is not only misleading but dangerous. It negates personal responsibility and, ultimately, does not create a supportive platform where we can make better choices. If anything, it creates a sensation of helplessness, justifying our decision to not act at all.
By Jeremy Braude, Ph.D.
The thing about sleep is that it’s highly prone to the “nod and shrug effect.” That is, it’s the kind of thing that everyone agrees is important, but when you tell people about it, they tend to agree, then do nothing. It’s easy to think of sleep as only a small factor in our overall health, but nothing could be further from the truth.
In fact, sleeping well is one of the biggest factors that impacts our life expectancy. Just as we spend one-third of our lives asleep (hopefully), so we should probably be thinking of sleep as about one-third of what makes us healthy.
I’ve worked through my own issues with insomnia. Additionally, as a personal trainer and online health coach, I’ve helped other people tackle their sleep issues. Some have had trouble getting to sleep, some have had trouble staying asleep, and some just haven’t been finding enough time to sleep.
Regardless, all of them have been unhappy, low on energy, falling out of shape, and having trouble focusing during the day due to problems related to both quantity and quality of sleep.
Treating insomnia requires a lot of knowledge and a systematic process. In this article I’m going to walk you through some of the science of sleep, the three types of insomnia, and fifteen of the most common causes of those three types—along with at least one solution for each of those fifteen causes. At the end, I’ll lay out a systematic process for finding your own personal insomnia solution.
Table of Contents
- Cause 1: Stimulants (Onset & Sleep Maintenance) - Cause 2: Anxiety (Onset, Maintenance, Early Awakening) - Cause 3: Light and Noise (Onset, Maintenance, Early Awakening) - Cause 4: Nighttime Feels Like Daytime (Onset) - Cause 5: Excessive Melatonin Usage (Onset, Early Awakening) - Cause 6: Alcohol (Maintenance) - Cause 7: Lack of Physical Activity (Onset) - Cause 8: Anticipatory Awakening (Early Awakening) - Cause 9: Jet Lag (Onset, Maintenance, Early Awakening) - Cause 10: GABA Deficiency (Maintenance, Early Awakening) - Cause 11: Hunger (Onset, Maintenance, Early Awakening) - Cause 12: Sleeping Partner (Onset, Maintenance, Early Awakening) - Cause 13: Lack of Time (Onset) - Cause 14: Shift Work or Irregular Schedule (Onset, Maintenance, Early Awakening) - Cause 15: Napping Late in the Day (Onset)
The brain produces hundreds of neurotransmitters, but for our purposes, there are four major ones that you should know about. Two are responsible for making you sleep, and two can prevent sleep if your brain produces too much of them at night. We’ll cover how to manipulate these hormones in some of the insomnia solutions later in this article.
Melatonin is the primary neurotransmitter responsible for sleep onset. The brain synthesizes melatonin from serotonin, which in turn is synthesized from the amino acid tryptophan.
Melatonin is normally produced by the brain in the evenings, once the ambient light level drops below a certain threshold. Light — particularly blue light — suppresses melatonin production. The use of electric lighting at night is therefore one of the biggest causes of onset insomnia.
The stimulant hormone norepinephrine, which can be boosted by exercise and some antidepressants, also suppresses melatonin production. On the other hand, eating carbohydrates and foods rich in tryptophan can stimulate the brain to produce more melatonin.
GABA, or gamma-aminobutyric acid, is the chief inhibitory neurotransmitter in the human brain. It relaxes the brain by reducing neuronal excitability. It is synthesized from the amino acids glutamine and glutamate.
GABA is also the main neurotransmitter responsible for sleep maintenance. Where melatonin puts you to sleep, GABA keeps you asleep, and an insufficient quantity of it is often responsible for early awakening.
Dopamine is an excitatory neurotransmitter and the main neurotransmitter responsible for producing motivation and reward-seeking behavior. It is synthesized from the amino acids tyrosine and phenylalanine. It tends to rise in response to pleasurable or rewarding activities and experiences or the prospect of such experiences.
Stimulants like caffeine increase production of dopamine, as do stimulating or inherently enjoyable activities like sex* and video games. Because dopamine is both stimulatory and motivating in nature, excess dopamine at night will both cause you to have too much energy and make you want to get up and do something other than sleep. On the other hand, some dopamine is necessary for REM sleep — so you want dopamine to be on the low side when you sleep, but this isn’t a case of “less is better.”
*To be clear—dopamine rises before and during sex but falls after orgasm. Having sex before bed won’t cause insomnia, at least so long as you reach orgasm.
Cortisol is another excitatory neurotransmitter. It’s known as the body’s main “stress hormone” and tends to rise in response to stress and anxiety. However, cortisol also plays a crucial role in energy metabolism and helping you wake up in the morning. Levels of cortisol are at their highest first thing in the morning and then normally fall as the day goes on.
An excess of cortisol will inhibit sleep and is normally caused by stress and anxiety. However, because cortisol rises after sleeping, excess cortisol can also be caused by napping.
Insomnia is often thought of as difficulty getting to sleep, but its definition is actually much broader than that. Insomnia is better thought of as difficulty getting a full night’s sleep, regardless of whether that stems from issues with getting to sleep or those related to staying asleep.
By that definition, insomnia can be thought of as falling into three types. Note that there’s a lot of overlap between these three types of insomnia; many people suffer from two or even all three, and often more than one type of insomnia will stem from the same cause.
Onset insomnia is what most people think of when they think about insomnia—the inability to easily fall asleep when you need to. It can stem from a wide variety of causes, including anxiety, caffeine usage, ambient light and noise, and jet lag.
As mentioned above, melatonin is the main neurotransmitter responsible for sleep onset, so onset insomnia frequently — though by no means always — stems from a lack of sufficient melatonin. On the other hand, it can also occur when other chemicals, like cortisol and dopamine, block or counteract the effects of melatonin.
Simply put, sleep maintenance insomnia is when you get to sleep but can’t stay asleep. If you regularly find yourself waking up in the middle of the night and having trouble getting back to sleep, you have sleep maintenance insomnia.
Note that this is only a problem if it keeps you awake for a long time and prevents you from getting a good night’s sleep; it’s perfectly normal to wake up briefly once a night. In fact, there’s substantial evidence that this used to be the normal human sleeping pattern before the advent of modern lighting and coffee.
The final type of insomnia is the one that leads you to wake up too early in the morning, perhaps an hour or two ahead of your planned wake time. Early awakening insomnia somewhat resembles sleep maintenance insomnia; the main difference is that in this case, you wake up late enough that it’s impractical to get back to sleep. This is sometimes also called terminal insomnia, since it comes at the end of the night, but that name isn’t commonly used since it sounds misleadingly dire.
Early awakening puts you between a rock and a hard place. Because you’ve slept most of the night, your brain is starting to produce cortisol, which starts to wake you up. And since sleep occurs in roughly 90-minute cycles, you may not have time to get back to sleep and actually get through another full cycle.
Insomnia can have many, many different causes. What follows are fifteen of the most common, best-documented causes of insomnia. Some of them cause only one of the three types of insomnia, while others can cause two or even all three.
Read through them and take note of which factors you think may be causing your insomnia—and then read the final section for my advice on how to go about systematically treating your insomnia.
Can cause: Onset and sleep maintenance insomnia
The most obvious and well-known cause of insomnia is caffeine consumption. Yes, caffeine is a major cause of insomnia. Yes, the solution is to consume less of it and stop earlier in the day. The thing is, caffeine is actually much more harmful to sleep — and for a longer period of time — than most people realize.
Even if it doesn’t stop you from getting to sleep, caffeine can still reduce the quality of your sleep—or make you wake up in the middle of the night. Limiting yourself to two cups of coffee a day and stopping your consumption before noon may not be enough.
A single heavily caffeinated drink consumed first thing in the morning—16 hours before going to bed—is still enough to measurably impair sleep qualityby reducing the time you spend in the deeper stages of sleep. In addition to its physically stimulating effects, 150 mg of caffeine is enough to induce anxiety.
The solution here is to get even stricter about restricting caffeine. Limit yourself to just one cup of tea or coffee, early in the morning—either with or ideally before breakfast. Which leads us to …
Like most ingested drugs, caffeine will be absorbed faster when consumed on an empty stomach. That means that a smaller dose will be able to kick in faster, exert a stronger effect, and then be cleared out of your system faster.
By combining these two solutions — consuming less caffeine earlier in the day and consuming it before breakfast — you can consume one caffeinated beverage a day without inducing insomnia or caffeine dependency. You can sometimes even have two a day, although you probably don’t want to do that every morning.
Can cause: Onset, sleep maintenance, and early awakening insomnia
No surprise here — anxiety can cause insomnia. While it most commonly causes onset insomnia, anxiety can also contribute to the other two types of insomnia. It’s debatable how much anxiety can cause you to wake up in the first place — my belief is that it can — but what’s less debatable is that anxiety makes it harder to get back to sleep once you’ve woken up.
Meditation is a time-tested strategy for reducing anxiety. Thankfully, you don’t need to become a monk or a hippie, attend a silent meditation retreat, or even meditate for all that long. Meditating for as little as two minutes a day can be beneficial, as long as you do it every day—and once you make meditation a daily habit, it’s easy to gradually extend the length of time you spend on it.
This article provides more information on how to build a daily meditation habit. Many of you may also already have a guided meditation app that you love, such as Calm or Headspace. However, if you’ve never tried guided meditation before and want to try it without having to download an app and make an account, try this YouTube video from the UCLA Mindful Awareness Research Center.
This solution is mainly for people whose anxiety stems from thinking about what they need to do the next day. If you find yourself dwelling on all the work and chores you need to get done, your anxiety can be exacerbated by not having a clear plan. You can greatly mitigate this feeling by always having a to-do list for the next day.
Sometimes this list can be as simple as an entry in a journal kept next to your bed. Once you’ve written down the anxiety that’s keeping you awake, you can relax, knowing that the chore or task is captured and out of your head.
However, some people may need to journal quite a bit more, including details like a schedule for when tasks will get done.
Other times there may be dozens of anxieties bumping around in your head. In that case, some therapists and coaches recommend journaling out a “Fear Inventory,” which is simply a list of each of those anxieties.
In all cases, your goal should be to experiment with getting the thoughts that are keeping you awake into a journal in the hopes that your mind will be able to let go of them.
For onset insomnia only
If anxiety keeps you from getting to sleep in the first place, one solution is to fill your mind with other thoughts to “push out” your anxieties — a technique called cognitive overwriting.
The way you do this is by doing something else that’s moderately mentally stimulating for at least ten minutes immediately before bed. The two most common and effective activities are to read a novel or play Tetris, Sudoku, or a similarly simple puzzle game.
Note that Tetris breaks the “no screens” guidance that we’ll explore later. That goes to show that these aren’t hard rules — rather, they are some strategies that may be more or less effective for you than they are for other people.
Cognitive overwriting truly needs to be done immediately before bed, after doing everything else like brushing your teeth and getting into your pajamas, so that when you lay in bed, your mind is filled with thoughts about the book you just read or the game you just played.
Never do work in bed. In fact, never use a phone or computer in bed. Don’t even watch TV in bed. This is accepted and common advice, which I’ve also tested on myself and with clients. However, I’ve never been able to find a scientific study that explains the rationale behind this advice.
What I and other people think is going on is that these activities condition your mind for alertness. If instead you use your bed only for sleeping, sex, and fiction reading, this will condition your mind to start relaxing.
This is going to be vague, but it needs to be said. The above techniques are ways of tolerating anxiety, not eliminating it. The best way to deal with anxiety is to eliminate it at the source wherever possible. That might mean handling your finances better, or getting a less stressful job, or leaving an unhappy relationship. Things like meditation and cognitive overwriting are great, but at some point it behooves you to actually solve your problems. As a middle ground, consider therapy also. Many health plans cover therapy sessions, and you can start to investigate this possibility by looking into coverage for generalized anxiety disorder.
Can cause: Onset, sleep maintenance, or early awakening insomnia
Like caffeine, this is an issue that everyone is aware of but many people still ignore. Almost any amount of light and noise in your bedroom at night is a problem, even the running light on your fan. The only exception here is “white noise,” like the sound of a fan.
Install blackout curtains over your bedroom windows. Unplug or cover up any devices in your room that emit light. For instance, I have a router in my room with a small running light, so I throw a black t-shirt over it. However, a small bit of black electrical tape would probably work better for you (and me). If noise is coming in from another room, stop it if possible. Otherwise, shove a towel into the crack under your door to muffle it.
If there’s any amount of noise you can’t get rid of, use white noise to cover it up. There are white noise generators you can buy for this purpose. For example, this model is $39 at the time of writing, well-reviewed by The Wirecutter, and recommended by my editor. But a fan will do just fine for most people. In fact, many fans have a “white noise” setting for this purpose.
If the above solutions aren’t enough to eliminate all of the light and noise in your bedroom , wear a sleep mask and/or earplugs to bed. If you’re able to see around your bedroom once your eyes have adjusted to the darkness, that means there’s light in it, and you need a mask.
Can cause: Onset insomnia
As I explained earlier, your brain starts producing melatonin once it receives cues that tell it that it’s nighttime. Darkness is the main cue your brain looks for, but relaxation is part of it too. If you’re keeping the lights on and doing high-energy or mentally stimulating activities at night, you may be delaying the onset of melatonin production.
Start dimming the lights at least two hours before bed.
Since melatonin production is blocked by blue light in particular, you can encourage production by blocking out blue wavelengths of light. When you do so, the remaining light will appear reddish or orange in color. Install f.lux on all of your devices to dim and redden the screens at night. Turn on NightShift mode if you own an iPhone. To block out blue light from other sources, you can wear red, orange, or amber-tinted goggles for the last hour or two before bed to increase melatonin production.
Here’s what Consumer Reports found when it tested Blue Blocking glasses:
We tested three pairs of glasses in our labs for their ability to block blue light, measuring light intensity at all wavelengths to find out how much each lens absorbed. Of the three, only one — the Uvex Skyper safety eyewear (orange tinted), $8 — cut out almost all blue light.
The Gunnar Intercept gaming glasses (medium yellow), $58, cut blue light by about half.
However, none of these approaches are an invitation to indulge in continuous screen time before bed. Reducing blue light isn’t always the same as eliminating it.
Spend the last two hours before bed doing things that relax you. These will be different for everyone — common choices include reading, yoga, and watching TV. However, because TV emits blue light, you should wear blue-blocking goggles while watching it in the evening.
Instead of, or in addition to, darkening your nights, you can expose yourself to more bright light during the daytime to make the nighttime feel darker by comparison. Again, sky-blue light is particularly effective. For maximal effectiveness, this light exposure should come as early in the morning as possible.
You can also make this task a lot easier on yourself by taking a melatonin supplement before bed.
The optimal dosage for most people is about 1 mg, or less, thirty to sixty minutes before bed. However, it’s hard to find supplements in anything smaller than 3 mg, so be prepared to break the pill up. Too much supplemental melatonin actually keeps you awake, so be prepared to experiment on yourself, starting with a low dose.
Can cause: Acute early awakening insomnia, onset insomnia if melatonin is discontinued.
The brain normally produces less than a tenth of a milligram of melatonin per night. Granted, not all of the melatonin you ingest will be absorbed into your brain, but even still, taking 5 or even 10 mg is excessive. And yet many over-the-counter melatonin supplements are produced in those dosages.
Using too much melatonin can hurt you in two ways. First, it can cause psychological dependency, making it harder to sleep without melatonin. Second, excess melatonin can fast-forward your sleep cycle, causing you to wake up earlier by tricking the brain into thinking it’s later in the morning than it really is.
Studies have shown that 0.3 mg of melatonin is enough for most people to be able to sleep throughout the night. Taking up to 1 mg doesn’t seem to be harmful, but taking more than that is rarely helpful. If 1 mg of melatonin doesn’t work, you have other problems. The best time to take melatonin is about thirty to sixty minutes before bed.
Many people find that CBD oil helps them to fall asleep and sleep more deeply throughout the night. The research on CBD is a bit mixed—not all studies show that it improves sleep depth or latency, but it has been demonstrated to be anxiolytic, meaning anxiety reducing. So there may be other reasons to replace melatonin supplements with CBD.
The optimal timing for CBD use is the same as for melatonin: thirty to sixty minutes before bed. The optimal dosing is less clear and seemingly more variable. Start with as low a dose as you can and slowly increase it until you find your minimum effective dose. CBD oil can be combined with melatonin, but you should probably not use it every night to avoid tolerance buildup.
If you go down this route, you may run into a subtle difference between CBD oil, which contains trace amounts of THC, and hemp oil, which theoretically does not. If marijuana is legal in your area, you’ll be able to purchase CBD oil. If not, then go ahead and purchase hemp oil. My recommendation is to treat insomnia as a series of experiments, and CBD and hemp oils are worth experimenting with, whichever one is available.
Can cause: Sleep maintenance insomnia
As a depressant, alcohol seems like it would help you sleep. In fact, it often does help people get to sleep. However, alcohol reduces the depth of sleep, both due to its direct effects and because it gets metabolized into sugar as it breaks down. It some cases, this can make people wake up in the middle of the night, but even if it doesn’t, it will make sleep less restful and restorative.
Don’t drink at all most nights. When you do, limit yourself to two drinks and stop drinking two hours before bed.
The UK’s NHS guideline is that it takes one hour for your body to process one unit of alcohol. That’s where the above advice is coming from. But that guideline is very dependent on your body weight, metabolism, and even what you ate that day. In other words, you should be giving yourself a pretty wide margin of error.
Your experience is much more important than the guideline in this article. Are you going to bed feeling even a little bit buzzed? Try giving that up. I know a lot of people believe in a glass of wine at night, but that’s often not a good tradeoff. Sure, the wine may relax you and help you get to sleep earlier, but often at the cost of the quality of your sleep.
As with caffeine, you can also fast-forward through the process of clearing alcohol from your system if you drink on an empty stomach, at least for the first drink of the night.
This recommendation is probably the opposite of what you’re used to hearing. But what I’m saying is: get buzzed for a shorter period of time, not get sloppy drunk. You know your own drinking patterns, and if drinking without eating leads to even more drinking, then don’t do it (obviously).
Can cause: Onset insomnia
It’s widely believed that tiring yourself out via exercise is a good way to help yourself get to sleep. While it can definitely be harder to sleep if you’ve been sitting down all day, in practice, working out doesn’t always seem to help people sleep. Even a very hard gym session of more than an hour often fails to move the needle.
There seems to be a specific type of physical activity that helps people sleep: activity that taxes your nervous system and your sense of balance. While the exact mechanism behind this relationship isn’t clear, the following two methods seem to work consistently for many people.
Spending more time on your feet throughout the day is a reliable way to help you sleep more. The effective dose for most people seems to be about eight or nine hours of standing or three to five hours of walking. However, spending this much time on your feet can be inconvenient and often makes your feet sore; for those who can tolerate it, the best way to work it into your day is to use a standing desk. For everyone else, see option 2.
Instead of standing all day, you can trade time for intensity by doing a short workout that taxes your balance. There are actually two ways to do this. First, you can do a gym session centered around iso-lateral movements. These are exercises that work one side of the body at a time, like lunges, split squats, one-armed rows, and one-armed dumbbell presses. Around forty to sixty minutes of exercise, or twenty to thirty sets, is usually enough.
On days you’re not planning to work out, you can stand on one leg to exhaustion, a few times per leg. You can reach exhaustion faster by slightly bending the leg you’re standing on.
Can cause: Early awakening insomnia
Entrainment is a psychological phenomenon in which the body starts to react to the anticipation of something that normally happens at a certain time of day. You start to get hungry before your usual lunchtime, or you start to have more energy shortly before the time of day when you normally work out.
Entrainment can sometimes cause early awakening, as the body gets energized — and the brain produces dopamine — in anticipation of something that normally happens shortly after you get out of bed. These cues can be any number of things, but there are a few usual suspects to check for first.
Anticipation of breakfast is one potential cause of anticipatory awakening. If you normally eat breakfast shortly after waking, try delaying it by an hour or two for a week and see if that helps you sleep in later.
As with breakfast, caffeine consumption can produce an entrainment effect, causing your brain to start producing dopamine in anticipation of your morning coffee. Try skipping your morning coffee or tea for a week and see if that helps.
Some people wake up early in anticipation of their alarm clock going off. Unlike breakfast and caffeine, in this case the effect is caused not by a positive sense of anticipation, but by an anxiety over the alarm clock or a desire to avoid being jarred awake by it. If possible, try turning off your alarm clock for a few days. If that can’t be done because you need to get up at a specific time, try the techniques listed under Cause 2: Anxiety.
If none of the above work, try eliminating or delaying other aspects of your morning routine, such as TV watching or listening to music. Try each change for at least three days—it may take as long as a week to break the entrainment, but some result will usually be seen after three days if it’s going to work at all. If none of this works, your early awakening may not be a case of anticipatory awakening after all.
Can cause: Onset, sleep maintenance, or early awakening insomnia
Jet lag can throw off your circadian rhythm badly enough to keep you tired and groggy for several days at a time. Obviously you’ll know if and when jet lag is an issue for you, and there are two ways to solve it: you can fix it ASAP, or you can prevent it from happening in the first place.
This is the one case in which it can be beneficial to use higher doses of melatonin and caffeine, if only for a few days at a time. Because jet lag is a short-term problem, you can use higher doses of caffeine and melatonin for two or three days to reset your circadian rhythm but stop short of developing an addiction to either of them.
For the first night at your destination, you can take around 3 mg of melatonin. The next morning, consume 200 mg of caffeine (two to three cups of coffee) first thing in the morning. Cut these dosages in half every subsequent day. So on the second night you’ll take about 1.5 mg of melatonin, and the morning after that you’ll have 100 mg of caffeine (a cup of strong coffee or two cups of tea). Then the third night you’ll have 1 mg of melatonin and little or no caffeine the morning after. At that point you should be over your jet lag.
This solution is only recommended if you’re traveling no more than once a month, meaning you suffer from jet lag no more than twice a month, once at either end of the trip. More frequent travelers should master the next solution.
A more elegant solution to jet lag is to prevent it altogether by starting the adjustment process before you travel. The way to do this is to split your last night of sleep before you fly out in half. Sleep for three or four hours at a time that corresponds to a normal sleep or wake time in the time zone you’re leaving, then stay awake for a while, and then sleep four more hours at a time that corresponds to a normal wake time at your destination.
For example, suppose you’re flying from Los Angeles to London, leaving at 4 p.m. PST and arriving at 11 a.m. GMT. You would sleep from 3 to 7 a.m. the night before your flight. After getting on your flight, you would wait four more hours and then sleep for four hours, from 4 to 8 a.m. London time. Upon waking you’d have some caffeine to help reset your internal clock.
Three hours later you would arrive at your destination, relatively well-rested because you would have had eight hours of sleep in the past day, the second half of which would have been on London time. The next day you’d be completely jet lag–free.
Can cause: Sleep maintenance and early awakening insomnia
Because GABA is the main hormone responsible for sleep maintenance, some sleep issues may be as simple as your brain not producing enough of it. This issue can sometimes be fixed through improved diet or lifestyle, but if that fails, you can address it more directly with supplementation.
GABA itself doesn’t cross the blood-brain barrier except in minute quantities, so supplementing it is rarely effective for insomnia, but there are a couple of other options you can try to effectively raise your GABA levels. Note that supplements aren’t the first thing you should try. Experiment with other options first and come back to them if nothing else works.
Phenibut is a modified form of GABA that was developed in the Soviet Union to treat anxiety and sleep disorders. Structurally, it’s GABA, but with a phenyl ring attached that allows it to be absorbed into the brain. It is only mildly effective at treating onset insomnia, and even high doses won’t really knock you out. However, it is highly effective at helping people stay asleep and sleep more deeply. It’s so effective that cosmonauts use it to help them sleep in space, where it’s hard to maintain a normal circadian rhythm.
Phenibut does come with the downside of rapid tolerance and addiction, however. As a result, usage should be limited to 250 mg a day no more than five days a week. It takes a while to kick in, so it’s best taken several hours before bed. If you’re the kind of person who easily gets addicted to even mild drugs like caffeine or alcohol, it’s probably best not to use phenibut.
Also, many of you will probably find it alarming that this supplement can’t just be found at your local pharmacy or on Amazon. It’s the kind of thing that you have to get from a nootropics dealer online and where you might find yourself browsing Reddit for recommendations on the best supplier.
A less direct approach is to give your brain more of the chemicals that your body uses to make GABA. Glutamine, an amino acid, is the main building block of GABA, while vitamin B6 is used as a cofactor in GABA synthesis. Glutamine can also be processed into glutamate, another amino acid with neurostimulatory effects, which itself can be processed into GABA. Glutamine supplementation often produces a stimulatory effect at first and a sedative effect later, so timing is important here.
As a starting dosage try 10 g of glutamine and 100 mg of B6, taken three to four hours before bed. If this still feels stimulating, try taking it earlier.
Can cause: Onset, sleep maintenance, or early awakening insomnia
Hunger is rarely the sole cause of insomnia, but it can exacerbate an existing case of insomnia, either via the sensation of hunger or because a lack of essential nutrients limits the brain’s ability to produce GABA and melatonin. A small pre-bed meal can help. But don’t just give yourself any meal — it should be one that supports the optimal neurotransmitter mix for sleep.
Based on a few scientific studies and widespread anecdotal experience, the optimal meal for sleep seems to be a small meal (300–600 calories) eaten an hour or so before bed. The meal should be high-carb, with some animal-based saturated fat, like cheese or sausage.
This strategy works on a couple of different levels. Eating in general activates the parasympathetic nervous system, which relaxes the mind and body, sending it into “rest and digest” mode. Sugar in particular helps the brain produce melatonin, while animal fat helps the brain produce hormones like testosterone and growth hormone. Of course, you don’t want to use this as an excuse to overeat, which is why I recommend limiting this meal to 600 calories unless you’re trying to gain weight.
The type of carbohydrates used also seems to matter. Unprocessed starches like rice and potatoes have been shown to aid sleep, while processed starches like bread and noodles may not be helpful and may even impair sleep quality. In my experience, natural sugars like fruit and honey also seem to work well.
As a final note, while protein is great, this meal doesn’t need to be very high in protein. It should have some, but any animal-based food will have enough for this purpose—don’t go out of your way to make this meal high in protein.
Can cause: Onset, sleep maintenance, and early awakening insomnia
Sleeping with a partner can be fun and romantic, but it can also make it hard to sleep. I’m not talking about your partner making noise, keeping the lights on, or watching TV in bed. I assume you can figure those problems out for yourself. I’m talking about the problems inherent in the mere act of sleeping with someone else. Namely, bedmates can jostle each other while they’re sleeping or indirectly disturb each other by shifting the bed.
This is one area in which people’s subjective feelings about sleep quality are dead wrong. Most people report that they feel like they sleep better with a partner, but objective measurements show that quite the opposite is true.
That is, don’t touch or hold each other while sleeping. Keep to your own side of the bed so you don’t bother each other. It’s less romantic, but you’ll probably sleep better.
A king-size bed with a nice mattress can easily run you a few thousand dollars, but it’s an investment that easily pays off in terms of improved productivity and health from better sleeping.
If your partner snores and that snoring keeps you from falling asleep, wakes you up, or keeps you from falling back asleep, then you absolutely should do something about it.
Unfortunately, getting a partner to stop snoring is a very complicated tasks. What I would recommend is to go through the following steps:
Can cause: Onset insomnia
Some people just don’t get to bed on time because they have too much to do in the evening. This is arguably not insomnia so much as poor planning, but there isn’t always a clear dividing line between the two, so I’ll address it here.
As above, it’s important to keep not just a to-do list, but an actual schedule of what you’re doing and when. This can substantially cut down on wasted time at night by giving you a schedule to follow rather than encouraging you to think of the evening as “free time,” even though you have stuff you’re set on doing.
Also, look at your weekends. Many people try to cram too many activities into their evenings — especially weekday evenings — when their weekends are full of time spent lying around doing nothing. Consider shifting some of your nighttime activities to Saturday and Sunday during the day.
Be strict about what you do for the last hour before your scheduled bedtime. At minimum, you shouldn’t be doing any working, and ideally, there should be no TV or computer usage either. Force yourself to start winding down an hour before bedtime, no matter what other things you wanted to do that evening.
If all else fails, give yourself permission to eliminate things from your daily routine. Start with the things you least want to do. Could you hire a maid to come once a month instead of cleaning your own apartment? Are you watching TV shows you’re not even really that into?
The first thing I would look at, however, is commuting. Often you can save yourself an hour a day just by changing when you commute. For instance, a client of mine recently switched from working out at home to exercising in a gym after work, and it has saved him a half hour a day because he drives home after rush hour instead of in the middle of it.
Can cause: Onset insomnia, sleep maintenance and early awakening insomnia
Rule number one of sleeping well is to maintain a regular sleep schedule. Some people are unable to do that due to an irregular work schedule — they work the afternoon shift some days and evening shift on other days, and then on their days off they abandon all pretense of a schedule to catch up on sleep. This is … not healthy, to put it mildly.
Try to get yourself permanently assigned to the same shift or maintain a regular work schedule even if it means compromising on something else. Do this even if it means sticking to a shift you don’t like. Even if you hate the night shift, it’s better to work the night shift every time than to switch back and forth between the night and morning shifts every few days. By keeping the lights bright at night and keeping your home dark during the day, you can entrain yourself to work nights — as long as you have a consistent schedule.
If you alternate between two or more work schedules, find a four-hour period that doesn’t overlap with either of them and always sleep during that time. For example, if you sometimes work from 8 a.m. to 4 p.m., and sometimes from 4 p.m. to midnight, make 2 a.m. to 6 a.m. your core sleep time. You’ll sleep from 10 p.m. to 6 a.m. some nights, and from 2 a.m. to 10 a.m. other nights, but you’ll always sleep from 2 a.m. to 6 a.m. That will give you a decent amount of consistency, as your sleep time will only vary by a few hours either way, rather than being all over the map.
If you tend to change shifts less than once a week and stick to a given shift for at least a week at a time, the same split-sleep strategy I described for beating jet lag can be used to adjust to shift changes. For instance, many police officers work the day shift for six weeks and then the night shift for six weeks—they could easily use this strategy. This doesn’t work so well if there’s no regularity to your shift changes, however, or if they come up without warning.
If all else fails, look for a job that offers more regular hours. This may require you to commute a little further or take a small pay cut, but it’s almost always worth it. You’ll be healthier, will have more energy to put into your career in the long run, and will probably save money by cooking at home more often rather than resorting to fast food because you’re too tired to cook.
Can cause: Onset insomnia
As mentioned earlier, your cortisol levels peak after waking and then slowly drop throughout the day. Normally, cortisol levels reach a nadir at bedtime, so cortisol doesn’t interfere with sleep.
Naps can disrupt this rhythm by resetting cortisol to a higher level. This isn’t usually a problem if you nap earlier in the day, but the later in the day you nap, the more likely your cortisol levels will still be elevated at bedtime.
Just as with caffeine, the solution here is to set a limit on how late in the day you’re allowed to nap and then gradually push that limit earlier and earlier in the day until you find a time when it no longer causes problems.
At the very least, you should refrain from napping fewer than four hours before bedtime. If that isn’t enough, stop napping six hours before bedtime. If that doesn’t do it, avoid napping fewer than eight hours before bedtime. That should be strict enough for most people; taking a nap at, say, noon is unlikely to make it harder to sleep at night, provided the nap doesn’t drag on for two hours or more.
Below is a checklist of the fifteen causes of insomnia along with their suggested solutions. In order to tackle insomnia systematically, you need to be willing to try many solutions. To start, go through the checklist below and check each potential cause that you think is likely to be contributing to your insomnia. Then, for each cause, check all of the recommended solutions that you’re able to try. Don’t second-guess whether you think a solution will work for you; if it’s something you can try, write it down.
_ Cause 1: Stimulants (Onset & Sleep Maintenance) _ Consume less, stop earlier _ Consume caffeine on an empty stomach
_ Cause 2: Anxiety (Onset, Maintenance, Early Awakening) _ Meditation _ Keep a To-do List or Journal _ Cognitive Overwriting _ Your Bed Is for Sleeping _ Lifestyle Change
_ Cause 3: Light and Noise. (Onset, Maintenance, Early Awakening) _ Remove Light and Noise _ White Noise _ Mask and Earplugs
_ Cause 4: Nighttime Feels Like Daytime (Onset) _ Dim the Lights at Night _ Have a Relaxing Evening Routine _ Make Daytime Brighter _ Melatonin
_ Cause 5: Excessive Melatonin Usage (Onset, Early Awakening) _ Use 0.3 to 1 mg Per Night _ Switch to CBD Oil
_ Cause 6: Alcohol (Maintenance) _ Drink Less, Stop Earlier
_ Cause 7: Lack of Physical Activity (Onset) _ Stand/Walk Throughout the Day _ Iso-Lateral Workouts
_ Cause 8: Anticipatory Awakening (Early Awakening) _ Skip or Delay Breakfast _ Delay Morning Caffeine _ No Alarm Clock _ Self-Experimentation
_ Cause 9: Jet Lag (Onset, Maintenance, Early Awakening) _ Melatonin and Caffeine _ Split Sleep
_ Cause 10: GABA Deficiency (Maintenance, Early Awakening) _ Phenibut _ Glutamine Plus B6
_ Cause 11: Hunger (Onset, Maintenance, Early Awakening) _ Small Second Dinner with Animal Fat and Sugar
_ Cause 12: Sleeping Partner (Onset, Maintenance, Early Awakening) _ Don’t Touch Each Other _ Address Snoring
_ Cause 13: Lack of Time (Onset) _ Keep a Schedule _ Protect the Last Hour Before Bed _ Cut Things Out
_ Cause 14: Shift Work or Irregular Schedule (Onset, Maintenance, Early Awakening) _ Work the Same Shift Every Time _ Protect Four Hours of Core Sleep Time _ Split Sleep _ Change Jobs
_ Cause 15: Napping Late in the Day (Onset) _ No Naps in the Evening (and Maybe the Afternoon)
Now, ideally I would have liked to write all of these strategies in the order I would recommend trying them, but the reality is that some solutions are easy for some people to try and very difficult for others. Some workers can easily move to a different shift, while others can’t change shifts at all. Americans can buy melatonin over the counter, but in many countries, it requires a prescription.
So it’s up to you to decide which treatments to try first. Out of all the treatments you’ve written down, arrange them in order of how easily you could try them, from easiest to hardest. For instance, trying melatonin, if it’s available over the counter, should be near the top of your list, while changing jobs or completely changing your lifestyle should be near the bottom.
Now try the solutions you’ve written down, one at a time, in the order you’ve written them. Allow at least a few days for each. Many will require a week of trial to see if they work for you. The whole process is likely to take a month or two, but it’s worth the time to fix your insomnia once and for all. As with anything really important in life, you’ll get better results by going about it systematically rather than applying slapdash solutions in an uncontrolled manner.
By John Fawkes
Morning has broken on the cedar-strewn foothills of the Himalayas. His Holiness the 14th Dalai Lama sits in meditation in his private chapel in Dharamsala, a ramshackle town perched on the upper reaches of North India’s Kangra Valley. Rousing slowly, he unfolds his legs with remarkable agility for a man of 83, finds the red felt slippers placed neatly beneath his seat and heads outside to where a crowd has already gathered.
Around 300 people brave the February chill to offer white khata scarves and receive the Dalai Lama’s blessing. There’s a group from Bhutan in traditional checkered dress. A man from Thailand has brought his Liverpool F.C. scarf, seeking divine benediction for the U.K. soccer team’s title bid. Two women lose all control as they approach the Dalai Lama’s throne and are carried away shaking in rapture, clutching prayer beads and muttering incantations.
The Dalai Lama engages each visitor like a big kid: slapping bald pates, grabbing onto one devotee’s single braid, waggling another’s nose. Every conversation is peppered with giggles and guffaws. “We 7 billion human beings — emotionally, mentally, physically — are the same,” he tells TIME in a 90-minute interview. “Everyone wants a joyful life.”
His own has reached a critical point. The Dalai Lama is considered a living Buddha of compassion, a reincarnation of the bodhisattva Chenrezig, who renounced Nirvana in order to help mankind. The title originally only signified the preeminent Buddhist monk in Tibet, a remote land about twice the size of Texas that sits veiled behind the Himalayas. But starting in the 17th century, the Dalai Lama also wielded full political authority over the secretive kingdom. That changed with Mao Zedong’s conquest of Tibet, which brought the rule of the current Dalai Lama to an end. On March 17, 1959, he was forced to escape to India.
In the six decades since, the leader of the world’s most secluded people has become the most recognizable face of a religion practiced by nearly 500 million people worldwide. But his prominence extends beyond the borders of his own faith, with many practices endorsed by Buddhists, like mindfulness and meditation, permeating the lives of millions more around the world. What’s more, the lowly farmer’s son named as a “God-King” in his childhood has been embraced by the West since his exile. He won the Nobel Peace Prize in 1989 and was heralded in Martin Scorcese’s 1997 biopic. The cause of Tibetan self-rule remains alive in Western minds thanks to admirers ranging from Richard Gere to the Beastie Boys to Democratic House Speaker Nancy Pelosi, who calls him a “messenger of hope for millions of people around the world.”
Yet as old age makes travel more difficult, and as China’s political clout has grown, the Dalai Lama’s influence has waned. Today the Chinese Communist Party (CCP) that drove him out of Tibet is working to co-opt Buddhist principles — as well as the succession process itself. Officially atheist, the party has proved as adaptive to religion as it is to capitalism, claiming a home for faith in the nationalism Beijing has activated under Xi Jinping. In January, the CCP announced it would “Sinicize” Buddhism over the next five years, completing a multimillion-dollar rebranding of the faith as an ancient Chinese religion.
From Pakistan to Myanmar, Chinese money has rejuvenated ancient Buddhist sites and promoted Buddhist studies. Beijing has spent $3 billion transforming the Nepalese town of Lumbini, birthplace of Lord Buddha, into a luxury pilgrimage site, boasting an airport, hotels, convention center, temples and a university. China has hosted World Buddhist Forums since 2006, inviting monks from all over the world.
Although not, of course, the world’s most famous. Beijing still sees the Dalai Lama as a dangerous threat and swiftly rebukes any nation that entertains him. That appears to be working too. Once the toast of capitals around the world, the Dalai Lama has not met a world leader since 2016. Even India, which has granted asylum to him as well as to about 100,000 other Tibetans, is not sending senior representatives to the diaspora’s commemoration of his 60th year in exile, citing a “very sensitive time” for bilateral relations with Beijing. Every U.S. President since George H.W. Bush has made a point of meeting the Dalai Lama until Donald Trump, who is in negotiations with China over reforming its state-controlled economy.
Still, the Dalai Lama holds out hope for a return to his birthplace. Despite his renown and celebrity friends, he remains a man aching for home and a leader removed from his people. Having retired from “political responsibility” within the exiled community in 2011, he merely wants “the opportunity to visit some holy places in China for pilgrimage,” he tells TIME. “I sincerely just want to serve Chinese Buddhists.”
Despite that, the CCP still regards the Dalai Lama as a “wolf in monk’s robes” and a dangerous “splittist,” as Chinese officials call him. He has rejected calls for Tibetan independence since 1974 — acknowledging the geopolitical reality that any settlement must keep Tibet within the People’s Republic of China. He instead advocates for greater autonomy and religious and cultural freedom for his people. It matters little.
“It’s hard to believe a return would happen at this point,” says Gray Tuttle, a professor of modern Tibetan studies at Columbia. “China holds all the cards.”
The boy born Lhamo Thondup was identified as the 14th incarnation of the Dalai Lama at just 2 years old, when a retinue of top lamas, or senior Buddhist Tibetan monks, followed a series of oracles and prophecies to his village in northeastern Tibet. The precocious toddler seemed to recognize objects belonging to the 13th Dalai Lama, prompting the lamas to proclaim him the celestial heir. At age 4, he was carried on a golden palanquin into the Tibetan capital, Lhasa, and ensconced in its resplendent Potala Palace. A daily routine of spiritual teaching by top religious scholars followed.
“Sometimes my tutor kept a whip to threaten me,” the Dalai Lama recalls, smiling. “The whip was yellow in color, as it was for a holy person, the Dalai Lama. But I knew that if the whip was used, it made no difference — holy pain!”
It was a lonely childhood. The Dalai Lama rarely saw his parents and had no contact with peers of his own age, save his elder brother Lobsang Samden, who served as head of household. Despite his tutors’ focus on spiritual matters, or perhaps because of it, he was fascinated by science and technology. He would gaze from the Potala’s roof at Lhasa street life through a telescope. He took apart and reassembled a projector and camera to see how they functioned. “He continually astonished me by his powers of comprehension, his pertinacity and his industry,” wrote the Austrian mountaineer Heinrich Harrer, who became the Dalai Lama’s tutor and was one of six Europeans permitted to live in Lhasa at the time. Today the Dalai Lama proudly describes himself as “half Buddhist monk, half scientist.”
The Dalai Lama was only supposed to assume a political role on his 18th birthday, with a regent ruling until then. But the arrival of Mao’s troops to reclaim dominion over Tibet in 1950 caused the Tibetan government to give him full authority at just 15. With no political experience or knowledge of the outside world, he was thrust into negotiations with an invading army while trying to calm his fervent but poorly armed subjects.
Conditions worsened over the next nine years of occupation. Chinese proclamations calling Lord Buddha a “reactionary” enraged a pious populace of 2.7 million. By March 1959, rumors spread that the Dalai Lama would be abducted or assassinated, fomenting a doomed popular uprising that looked likely to spill into serious bloodshed. “Just in front of the Potala [Palace], on the other side of the river, there was a Chinese artillery division,” the Dalai Lama recalls. “Previously all the guns were covered, but around the 15th or 16th, all the covers were removed. So then we knew it was very serious. On the 17th morning, I decided to escape.”
The two-week journey to India was fraught, as Chinese troops hunted the party across some of the world’s most unforgiving terrain. The Dalai Lama reached India incognito atop a dzo, a cross between a yak and a cow. Every building in which he slept en route was immediately consecrated as a chapel, but the land he left behind was ravaged by Mao’s disastrous Great Leap Forward and Cultural Revolution. Hundreds of thousands died. By some reckonings, 99.9% of the country’s 6,400 monasteries were destroyed.
Tibet’s desire to remain isolated and undisturbed had served it poorly. The kingdom had no useful allies, the government of Lhasa having declined to establish official diplomatic relations with any other nation or join international organizations. The Dalai Lama’s supplications were thus easy to ignore. Tibet had remained staunchly neutral during World War II, and the U.S. was already mired in a fresh conflict on the Korean Peninsula.
“[First Indian Prime Minister] Pandit Nehru told me, ‘America will not fight the Chinese communists in order to liberate Tibet, so sooner or later you have to talk with the Chinese government,’” the Dalai Lama recalls.
When Tibetans first followed the Dalai Lama into India, they lived with bags packed and did not build proper houses, believing a glorious return would come at a moment’s notice. It never did.
Four decades of conversations between China and exiled Tibetan leadership have led nowhere. Consolatory talks began in the 1970s between the Dalai Lama’s envoys and reformist Chinese leader Deng Xiaoping and continued under Deng’s successor, Jiang Zemin. The talks stipulated that Tibetan independence was off the table, but even so, the drawn-out process was suspended in 1994 and after briefly resuming in the 2000s is again at a standstill.
Meanwhile, Tibet remains firmly under the thumb of Beijing. The U.N. High Commissioner for Human Rights has lamented that conditions are “fast deteriorating” in the region. In May, Tibetan businessman Tashi Wangchuk was jailed for five years merely for promoting the Tibetan language. In December, the government issued a directive to stop Tibetan language and culture from being taught in monasteries. Once known as the “abode of the gods,” Lhasa has become a warren of neon and concrete like any other Chinese city. Although the U.S. officially recognizes Tibet as part of China, Vice President Mike Pence said in July that the Tibetan people “have been brutally repressed by the Chinese government.”
Many allege their cultural and religious freedom is under attack by the Beijing government. Some in Tibet resort to extreme measures to protest their treatment. Since 2009, more than 150 Tibetans — monks, nuns and ordinary civilians — have set themselves ablaze in protest. Often self-immolators exalt the Dalai Lama with their final breaths. Despite his message of nonviolence, the Dalai Lama has been criticized for refusing to condemn the practice. “It’s a very difficult situation,” he says. “If I criticize [self-immolators], then their family members may feel very sad.” He adds, however, that their sacrifice has “no effect and creates more problems.”
Beijing vehemently refutes accusations of human-rights violations in Tibet, insisting that it fully respects the religious and cultural rights of the Tibetan people, and highlights how development has raised living standards in the previously isolated and impoverished land. China has spent more than $450 million renovating Tibet’s major monasteries and religious sites since the 1980s, according to official figures, with $290 million more budgeted through 2023. The world’s No. 2 economy has also greenlighted massive infrastructure projects worth $97 billion, with new airports and highways carving through the world’s highest mountains, nominally to boost the prosperity of the 6 million ethnic Tibetans.
This level of investment presents a dilemma to Tibetans stranded in exile. The majority live in India, under a special “guest” arrangement by which they can work and receive an education but, crucially, not buy property. Many toil as roadside laborers or make trinkets to sell to tourists. And so large numbers of young Tibetans are making the choice to return, lured to a homeland they have never known. “If you want a safe and secure future for your children, then either you go back to Tibet or some other country where you can get citizenship,” says Dorji Kyi, director of the Lha NGO in Dharamsala, which supports Tibetan exiles.
Many of the returnees are armed with better education and world experience than their peers who grew up in Tibet. “Some of them do well,” says Thupten Dorjee, president of Tibetan Children’s Village, a network of five orphanages and eight schools that has cared for 52,000 young Tibetans in India. “But if they get involved in political things then they land into trouble.”
Tibet still has a government-in-exile, the Central Tibetan Administration (CTA) in Dharamsala, but it is dogged by infighting and scandal. Exiles are instead forging their own path. Last September, the Dalai Lama himself was filmed at his temple telling young Tibetans that it was better to live under Beijing’s rule than stay as “beggars” in exile. Speaking to TIME, he said it was “no problem” if exiled Tibetans chose to return to China.
Even those who have achieved prosperity elsewhere are opting to return. Songtsen Gyalzur, 45, sold his real estate business in Switzerland, where his Tibet-born parents immigrated after first fleeing to India, to start China’s Shangri-La Highland Craft Brewery in 2014. Today his award-winning brewery has an annual capacity of 2.6 million gallons of lagers, ales and porters. He recruits 80% of the staff from orphanages his mother set up in Tibetan areas in the 1990s. “Tibet has so many well-educated, well-trained professionals abroad who could have a real impact on people’s lives here,” he says.
Despite the “Lost Horizon” legend, the kingdom was never a spiritual and agrarian utopia. Most residents lived a Hobbesian existence. Nobles were strictly ranked in seven classes, with only the Dalai Lama belonging to the first. Few commoners had any sort of education. Modern medicine was forbidden, especially surgery, meaning even minor ailments were fatal. The sick were typically treated with a gruel of barley meal, butter and the urine of a holy monk. Life expectancy was 36 years. Criminals had limbs amputated and cauterized in boiling butter. Even the wheel wasn’t commonly employed, given the dearth of passable roads.
The Dalai Lama has admitted that Tibet was “very, very backward” and insists he would have enacted reforms. But he also emphasizes that traditional Tibetan life was more in communion with nature than the present. Tibet hosts the largest store of fresh water outside the Arctic and Antarctic, leading some environmentalists to term its frozen plateau the “third pole,” and especially vulnerable to the choking development unleashed by the Beijing government.
“Global warming does not make any sort of exception — just this continent or that continent, or this nation or that nation,” the Dalai Lama says. Asked who is responsible for fixing the crisis, he points not to Beijing but to Washington. “America, as a leading nation of the free world, should take more serious consideration about global issues.”
The Dalai Lama is a refreshingly unabashed figure in person. His frequent laughter and protuberant ears make him seem cuddly and inoffensive, and it’s difficult to overstate how tactile he is. He appears equally at home with both the physical and the spiritual, tradition and modernity. He meditated within reach of an iPad tuned to an image of a babbling brook and mountains and a few minutes later turned to Tibetan scriptures written on wide, single sheets, unbound. He retires at 6 p.m. and rises at 4 a.m. and spends the first hours of his day in meditation.
“Western civilization, including America, is very much oriented toward materialistic life,” he says. “But that culture generates too much stress, anxiety and jealousy, all these things. So my No. 1 commitment is to try to promote awareness of our inner values.” From kindergarten onward, he says, children should be taught about “taking care of emotion.”
“Whether religious or not, as a human being we should learn more about our system of emotion so that we can tackle destructive emotion, in order to become more calm, have more inner peace.”
The Dalai Lama said his second commitment is to religious harmony. Conflicts in the Middle East tend to involve sectarian strife within Islam. “Iran is mainly Shi‘ite. Saudi Arabia, plus their money, is Sunni. So this is a problem,” he says, lamenting “too much narrow-mindedness” and urging people of all faiths to “broaden” their thinking.
Buddhism has its own extremists. The themes of Buddhism, as a nontheistic religion with no single creator deity, are more accessible to followers of other faiths and even ardent atheists, emphasizing harmony and mental cleanliness. But the Dalai Lama says he is “very sad” about the situation in Myanmar, where firebrand Buddhist monks have incited the genocide of Rohingya Muslims. “All religions have within them a tradition of human loving kindness,” he says, “but instead are causing violence, division.”
He keeps a sharp eye on global affairs and is happy to weigh in. Trump’s “America first” foreign policy and obsession with a wall on the southern U.S. border make him feel “uncomfortable,” he says, calling Mexico “a good neighbor” of the U.S. Britain’s impending exit from the European Union also warrants a rebuke, as he has “always admired” the E.U.
In his ninth decade and moving with the help of assistants, the Dalai Lama continues to explore human consciousness and question long-held shibboleths. During a series of lectures in February to mark the Tibetan new year, he pontificates on everything from artificial intelligence — it can never compete with the human mind, he says — to blind deference to religious dogma. “Buddha himself told us, ‘Do not believe my teaching on faith, but rather through thorough investigation and experiment,’” he says. “So if some teaching goes against reason, we should not accept it.”
This includes the institution of the Dalai Lama itself. Even as a young boy, his scientific mind led him to question the idea that he was the 14th incarnation of a deity king. His former tutor recalled that he found it odd that the prior Dalai Lama “was so fond of horses and that they mean so little to me.” Today the Dalai Lama says the institution he embodies appears “feudal” in nature. Leaving the spiritual element aside, he says he doesn’t believe any political authority should be conferred when he dies. “On one occasion the Dalai Lama institution started,” he says. “That means there must be one occasion when the institution is no longer relevant. Stop. No problem. This is not my concern. China’s communists, I think, are showing more concern.”
Indeed they are. In a blow to the Tibetan exile community, China has set about bringing the leadership of Tibetan Buddhism into the party fold. When the Dalai Lama named a Tibetan child as the reincarnation of the previous Panchen Lama in 1995 — the second highest position in Tibetan Buddhism after himself — China put the boy into “protective custody” and installed a more pliant figure instead. The whereabouts of the Dalai Lama’s choice remain unknown.
So when the Dalai Lama leaves this plane of existence, it’s highly likely a 15th incarnation will be chosen by the godless CCP. “It’s pretty obvious the Chinese state is preparing for it, which is absurd,” Tuttle says. Tibetan Buddhists will be forced to choose between the party’s Dalai Lama and the selection of Tibetan exiles. On this point, at least, the incumbent is very clear. Any decision on the next Dalai Lama, he says, should be “up to the Tibetan people.”
No doubt the party’s desire to name a Dalai Lama stems from the fact that there are 244 million Buddhists in China — a cohort that dwarfs the CCP membership by 3 to 1. The party craves legitimizing its power above all else and believes yoking it to the institution of the Dalai Lama will provide that. But Beijing clearly also hopes it will be a symbolic final nail in the coffin of Tibetan self-rule, completing the absorption of Tibet into the People’s Republic of China that began seven decades ago.
So in a twist of irony, it seems the incumbent God-King’s wish will eventually be granted. One day a Dalai Lama will return to China — in this body or the next, with his blessing or without.
Correction, Mar. 7
A photo caption in the original version of this story misidentified a group of people waiting to see the Dalai Lama. They are devotees, not Buddhist monks.
Full link: http://time.com/longform/dalai-lama-60-year-exile/?utm_source=time.com&utm_medium=email&utm_campaign=the-brief&utm_content=2019030711am&xid=newsletter-brief&eminfo=%7b%22EMAIL%22%3a%221eLQ3nz9tkRy7AoaFTE5osEFAz5azrR8%22%2c%22BRAND%22%3a%22TD%22%2c%22CONTENT%22%3a%22Newsletter%22%2c%22UID%22%3a%22TD_TBR_27D13C79-0BBE-48EE-B2CC-33613116D9C4%22%2c%22SUBID%22%3a%22120794911%22%2c%22JOBID%22%3a%22942467%22%2c%22NEWSLETTER%22%3a%22THE_BRIEF%22%2c%22ZIP%22%3a%22%22%2c%22COUNTRY%22%3a%22VNM%22%7d
As of 2018, there were 3.7 billion people who accessed the internet through a mobile device, according to Statista. That’s more than half the world’s population.
Aside from the astounding growth of mobile, many countries are witnessing people purchase smartphones first, bypassing PC ownership as their first means of internet connectivity. And marketers need to adapt.
How do inbound marketers leverage the power of the mobile device to provide a personalized experience for the user while not intruding in their day-to-day lives? The answer lies in not thinking of the mobile device as another PC, but rather another limb for your busy, active customers and prospects.
Here’s a comprehensive list of tips and tricks every marketer should know to master mobile marketing.
Mobile marketing uses any and all digital, social, and related content marketing channels to reach an audience via their mobile devices. In a sense, it takes a marketing strategy — its messaging, design, and target audience — and optimizes it for delivery through a smartphone or tablet.
While mobile marketing limits the use of some marketing channels you might focus more on outside of mobile, it also presents several new ones. The following is a list of marketing channels you can include in a mobile marketing strategy — we’ll go over each of them in more detail in this guide.
A mobile marketing strategy uses a combination of marketing channels to connect with an audience through a mobile device, and generates leads through these channels. Which channels you use depends on where your buyers spend their time and what type of content they’re consuming on their smartphone.
A responsive website is one that might’ve been developed originally for PC, but has been optimized for navigating to and from on a mobile device. This “responsive design” allows users to reveal buttons, text, and webpages within the website they might not be able to see on a mobile screen had it not been optimized correctly.
Making your website responsive allows it to remain a critical marketing channel when your audience switches from computer to mobile. Learn how to make your website mobile-friendly using this guide.
More than 60% of Google searches take place on a mobile device, as opposed to a computer. With such a high percentage of searches done over a smartphone, search engine optimization (SEO) should be just as a big a part of a mobile marketing strategy as it would in a broader digital marketing strategy. Learn about some of the most important Google ranking factors here.
Did you know mobile users check their email three times more often than non-mobile users? Not only that, but mobile is responsible for at least 50% of all email opens, according to data we collected from Campaign Monitor. Make sure the email newsletters you deliver to your subscribers are optimized for viewing on most mobile email platforms — we’ll go over how to do this in a few minutes.
Not only is social media enjoyed on mobile at least as much as it is on PC, but some social networks are designed for mobile. Instagram, the mobile photo-sharing platform, has more than 1 billion monthly active users — and all of them are required to upload photos via their mobile device. Implementing an Instagram presence — in addition to social networks like Twitter and Facebook — into your mobile marketing strategy is a no-brainer (if your audience is on Instagram, that is).
SMS marketing is another term for text marketing, which uses text messages to reach an audience with messaging related to their business. Texts aren’t often associated with brands, and therefore texts from anyone other than a person’s known contacts can be dicey. Nonetheless, there are types of SMS messages that are appropriate coming from a business. I’ll elaborate later in this blog post.
It sounds like a big undertaking, but with just a few engineering resources, you can attract your audience through app marketplaces native to various smartphones. What sorts of apps should you create, you ask? That depends on what your goal is. Got an event coming up? Deliver the event schedule to attendees through a mobile app. Are you in the software business? Your customers might crave a mobile version of your product — you just don’t know it yet.
Virtual and augmented reality are two of the newest opportunities in digital marketing, and in some cases, all a user needs is a smartphone to enjoy it.
Whereas virtual reality (VR) simulates entire environments through a smartphone, augmented reality (AR) literally “augments” the appearance of what’s in front of a user when they look through their mobile screen. Numerous companies have already taken advantage of this technology to offer branded experiences to their customers and even help them make better purchase decisions. Home decor vendor, Wayfair, for example, recently created an AR feature as part of its mobile shopping app that lets its customers see what an item might look like in a certain spot in their home.
To launch a mobile marketing strategy through the channels outlined above, you’ll do three things right off the bat:
As I mentioned earlier, optimizing a marketing strategy for mobile devices should take into account the things users won’t have access to when switching from PC to mobile. Here are a few of those things to remember when launching your mobile marketing strategy:
Some email clients will default to plain text and give readers the option to show pictures, while others will load pictures automatically. Be prepared by ensuring your emails render quickly and clearly in either scenario.
Alt text, or alternative text, is the text that displays in lieu of an image when graphics can’t render. If your email header is an image with a generic name, change the alt text to something that relates to the subject of the email.
When mobile users have a few minutes to check their email, they commonly divide their inbox into three categories: “read now,” “delete,” and “save for later.” With a vague subject line, you’re sure to end up in the “delete” category. Create a clear subject line to get your email read immediately, or at least starred for later.
However your reader is most likely to know you, identify yourself as such in the sender field. This will help alleviate any confusion that would otherwise put you in their trash bin.
If you already have a marketing strategy in full swing, how do you go about updating it to incorporate mobile? In addition to optimizing your website with responsive design, and enhancing your social media presence to include mobile-specific platforms like Instagram, you can also do the following:
As with any other campaign, you can and should track and nurture leads that come through mobile campaigns using your existing customer relationship manager (CRM). Don’t have a CRM? You can use ours for free.
They’ve opted in to your campaign or pulled up your site, so they’re already interested in you. Take advantage of that knowledge by providing content and a user experience tailored to their needs on a mobile device. For example, those in retail or ecommerce can optimize online checkout for mobile and provide easy access to reviews. B2B marketers can let users register for and listen to webinars on their mobile devices.
Mobile browsing should be more streamlined than desktop browsing, but calls-to-action are still a must. Compile the CTAs you’re using across all marketing campaigns, and select those that make sense to use in your mobile campaigns to create a congruent user experience.
Your mobile marketing strategy can include a paid search component by posting Google Mobile ads through your Google Ads account. Be sure to use strong calls-to-action tailored to your mobile searchers.
It’s one thing to take a marketing campaign mobile, but it’s another thing to make this campaign unique to your brand. Here’s how you can customize the mobile experience to your unique audience:
There’s a lot of debate around whether or not mobile apps are better than mobile sites, but there’s room for both. Think of mobile sites as a way to reach a wider audience and bring in people through the top of your funnel, and use mobile apps as a way to increase engagement among people in the middle of your funnel. Use your mobile site to encourage readers to download your mobile app.
The iPad floats somewhere between the PC and a mobile device. If you find tons of users are using an iPad to access your site, develop an app for them that is more robust than what you might offer someone on a smartphone.
Just like you test your site in multiple browsers and check how emails render in multiple email clients, test your mobile campaigns on multiple devices and in multiple browsers to ensure the experience is consistent throughout.
If you have a storefront and directions, then click-to-call functionality is important. If you sell products, make it easy to find a coupon code. Mobile users know what they are looking for, so anticipate those needs when creating content. And if you aren’t a mind reader…ask them!
Like I said earlier, SMS marketing (a.k.a. text marketing) can be a difficult channel to get just right. Mobile users are receptive to branded text messages, but only in special circumstances. When done right, though, they can be a boon for your brand awareness across your industry. Here are a few examples:
SMS stands for short message service, and it’s an easy way to receive feedback and increase engagement from your audience if you had a recent interaction with them or an ongoing relationship wherein you earned their phone number. Send your audience texts that allow them to vote or fill out a poll that helps you improve your service offerings.
You know those screens that say “Text 12345 for your 10% off coupon”? That sequence of numbers is called a short code. Get your own short code for use in SMS marketing campaigns. Then, distribute them to your customers after they perform a certain behavior on your website, like claiming a reward or subscribing to updates from you. Here’s an example:
If you don’t think the short code campaigns are up your alley, you can still use SMS for customer alerts. Give people the option to sign up for an alert when a product on backorder is available, or to receive a reminder when the webcast they signed up for is broadcasting.
Keep in mind text marketing, just like email marketing, is largely unwanted if you attempt to reach people by contact information they didn’t personally give you. Make sure all of your lead-generating campaigns request email addresses and phone numbers before using them.
With great power comes great responsibility. Mobile marketing channels like SMS and app development can give you more data on your customers, and that data must be protected. Here are a few ways to do so:
Be as legit with mobile marketing campaigns as you are with everything else. If you’re using SMS or a multimedia messaging service (MMS), make it clear how to opt out and if any rates may apply if the user engages in your campaign.
If users are submitting sensitive information over their mobile device — such as credit card information, email addresses, or physical addresses — ensure you’ve taken precautions to protect that data from unauthorized use or distribution. Learn how to comply with GDPR, Europe’s latest data privacy law, on this page.
If a user has to agree to terms and conditions before participating in a mobile marketing program, ensure it’s easy for them to understand what those are. It is also illegal to automatically check that box for them, so there’s extra incentive to make the legalese crystal clear.
Ready to get started? Here are some parting thoughts …
While mobile marketing is a widely accepted approach to business growth, not every channel will be right for you. Continue monitoring what works and what doesn’t, and refine your own best practices to fit the needs, interests, and location of your buyers.
Full link: https://blog.hubspot.com/blog/tabid/6307/bid/28776/The-Ultimate-Cheat-Sheet-for-Mastering-Mobile-Marketing.aspx?utm_campaign=Marketing%20Blog%20-%20Daily%20Emails&utm_source=hs_email&utm_medium=email&utm_content=70550203
Buying real estate can be more than just finding a place to call home. Most people have to do a real estate transaction at some point in their lives, and some find it an intriguing opportunity for capturing and creating value. Real estate has become a common investment vehicle, and it continues to be popular despite a very rocky market correction in 2007-09.
Although the real estate market has plenty of opportunities for making a profit, buying and owning real estate can be a lot more complicated than investing in stocks and bonds. In this article we’ll go beyond buying a home and introduce you to some of the basic real estate investments.
Before we dive into types of real estate investments, it is worth looking at one of the main attractions it holds for investors. Investing in real estate gives you one tool that is not as easily available to stock market investors: leverage. If you want to buy a stock, you have to pay the full value of the stock at the time you place the buy order. Even if you are an individual investor buying on margin, the amount you can borrow is still less in total than what you can easily access for a real estate purchase.
A traditional mortgage generally requires a 20% to 25% down payment. However, depending on where you live, there are many types of mortgages that require as little as 5% down. This means that you can control the whole property and the equity it holds by only paying a fraction of the total value up front. Of course, your mortgage will eventually pay the total value of the house at the time you purchased it (plus a not insignificant amount of interest), but you control the whole asset the minute the papers are signed.
This is what emboldens both real estate flippers and landlords. They can take out a second mortgage on their homes and put down payments on two or three other properties. Whether they rent these out so that income from tenants pays the mortgage or wait for an opportunity to sell for a profit, they control these assets, despite having only staked a small part of the total value.
Ideal For: People with DIY and renovation skills and an aptitude for dealing with tenants
What It Takes to Get Started: A healthy amount of capital to ensure access to financing and cover up-front maintenance costs and vacant months
Pros: Rental properties can become new sources of regular income if the investment is successful. They also maximize your available capital through leverage. Moreover, many of your expenses are tax deductible, and any losses can offset gains in other investments.
Cons: Rental properties tend to be hands-on investments unless you use a property management company. Rental property owners often must choose between being ready to field a tenant call at any hour and forgoing income (or taking a loss) to have someone else do it for them.
Rental real estate is an investment as old as land ownership. Basically, you buy a property and rent it out to a tenant. The owner is now a landlord, responsible for paying the mortgage, taxes and costs of maintaining the property. Ideally, the landlord charges enough rent to cover all of the aforementioned costs with enough left over to produce a monthly profit right from the start. However, depending on the rental market, a landlord may have to be patient and only charge enough rent to cover expenses or even take a loss to keep a property occupied. Although this can be uncomfortable and requires a capital cushion to absorb periods of loss, landlords tend to invest for the long term. After all, once the mortgage has been paid on a rental property, the majority of the rent becomes profit.
Of course, the monthly income from a property is not the only focus of a landlord. As with all real estate, the property can appreciate over the course of the mortgage, leaving the landlord with a more valuable asset. According to U.S. Census Bureau data, sales prices of new homes – which can be used as a rough indicator for real estate values – consistently increased in value from 1940 to 2006 before dipping during the financial crisis. Sales prices have since resumed their climb, surpassing pre-crisis levels.
Source: Survey of Construction, U.S. Census Bureau
There are, of course, blemishes on the face of what seems like an ideal investment. You can end up with a bad tenant who damages the property or, worse still, end up having no tenant at all. This leaves you with a negative monthly cash flow, meaning that you might have to scramble to cover your mortgage payments. There is also the matter of finding the right property. You will want to pick an area where vacancy rates are low and choose a place that people will want to rent.
Perhaps the biggest difference between a rental property and other investments is the amount of time and work you have to devote to maintaining your investment. When you buy a stock, it simply sits in your brokerage account and, one hopes, increases in value. If you invest in a rental property, you also acquire the mountain of responsibilities that come with being a landlord. When the furnace stops working in the middle of the night, it’s you who gets the phone call. If you don’t mind handyman work, this may not bother you. Otherwise, a professional property manager would be glad to take the problem off your hands – for a price, of course.
Ideal For: People who want to hold rental real estate without the headache of running it
What It Takes to Get Started: A capital cushion and access to financing
Pros: This is a much more hands-off approach to real estate that still provides income and appreciation.
Cons: There is also a vacancy risk with real estate investment groups, whether it is spread across the group or owner specific. In addition, management overhead can eat into returns.
Real estate investment groups are similar to a small mutual fund for rental properties. If you want to own a rental property, but don’t want the hassle of being a landlord, a real estate investment group may be the solution for you.
In a typical real estate investment group, a company will buy or build a set of apartment blocks or condos, then allow investors to buy them through the company, thus joining the group. A single investor can own one or multiple units of self-contained living space, but the company operating the investment group collectively manages all the units, taking care of maintenance, advertising vacant units and interviewing tenants. In exchange for this management, the company takes a percentage of the monthly rent.
There are several versions of investment groups, but in the standard version the lease is in the investor’s name and all of the units pool a portion of the rent to guard against occasional vacancies, meaning that you will receive some income even if your unit is empty. As long as the vacancy rate for the pooled units doesn’t spike too high, there should be enough to cover costs. In extreme cases investors may be asked to pay back in if costs exceed income for a longer period of time.
Of course, the quality of an investment group depends entirely on the company offering it. In theory it is a safe way to get into real estate investment, but real estate investment groups are vulnerable to the same fees that haunt the mutual fund industry. More important, they are sometimes private investments where unscrupulous management teams take investors for a ride and leave them with nothing but legal proceedings to look forward to. To avoid unpleasant surprises, it is critical to do your research on the company and conduct a thorough review of the details in the investment offering.
Ideal For: People with significant experience in real estate valuation and marketing
What It Takes to Get Started: Capital and the ability to do or oversee repairs as needed
Pros: Real estate trading has a shorter time period during which capital and effort are tied up in a property. Depending on market conditions, there can be significant returns even on this shorter time frame.
Cons: Real estate trading requires a deeper market knowledge and a bit of luck. Hot markets can cool unexpectedly, leaving short-term traders with a loss or a long-term headache.
Real estate trading is the wild side of real estate investment. Like day traders, who are distinct from buy-and-hold investors, real estate traders are an entirely different breed from buy-and-rent landlords. Real estate traders buy properties with the intention of holding them for a short period of time, often no more than three to four months, after which they hope to sell them for a profit. This technique is also called flipping properties and is based on buying properties that are either significantly undervalued or in a very hot market.
Pure property flippers will often forgo putting any money into a house for improvements; the investment has to have the intrinsic value to turn a profit without alteration or they won’t consider it. Flipping in this manner is a short-term cash investment. To take advantage of potentially large returns, flippers have to have cash on hand or access to other people’s money, as traditional financing doesn’t generally work for this type of transaction.
If a property flipper gets caught in a situation where he or she can’t unload a property, it can be devastating because these investors generally don’t keep enough uncommitted cash to pay the mortgage on a property for the long term. This can lead to continued losses for a real estate trader who is unable to off-load the property in a bad market.
A second class of property flipper also exists. These investors make their money by buying reasonably priced properties and adding value by renovating them. This can be a longer-term investment depending on the extent of the improvements. The limiting feature of this investment is that it is time intensive and often only allows investors to take on one or two properties at a time.
Ideal For: Investors who want portfolio exposure to real estate without having to go through a traditional real estate transaction
What It Takes to Get Started: Investment capital
Pros: REITs are essentially dividend-paying stocks whose core business is commercial real estate – an area where long-term, cash flowing leases are the norm.
Cons: REITs are essentially stocks, so the leverage available to traditional rental real estate investors is absent.
Real estate has been around since our cave-dwelling ancestors started chasing strangers out of their space, so it’s not surprising that Wall Street has found a way to turn real estate into a publicly traded instrument.
A REIT is created when a corporation (or trust) uses investors’ money to purchase and operate income properties. REITs are bought and sold on the major exchanges, just like any other stock. A corporation must pay out 90% of its taxable profits in the form of dividends to keep its status as a REIT. By doing this REITs avoid paying corporate income tax, whereas a regular company would be taxed on its profits and then have to decide whether or not to distribute its after-tax profits as dividends.
Much like regular dividend-paying stocks, REITs are a solid investment for stock market investors who want regular income. In comparison to the aforementioned types of real estate investment, REITs allow investors into nonresidential investments, such as malls or office buildings, that are generally not feasible for individual investors to purchase directly. More important, REITs are highly liquid because they are exchange traded. In other words, you won’t need a realtor and a title transfer to help you cash out your investment.
REITs are, in practice, a more formalized version of a real estate investment group. The number of REITs has grown from 34 in 1971 to 222 in 2017. The market capitalization of these REITs, which is mostly a reflection of the value of the underlying real estate, has similarly grown from $1.5 billion in 1971 to $1.1 trillion in 2017.
When looking at REITs, it is important for an investor to distinguish between equity REITs that own buildings and mortgage REITs that provide financing for real estate and dabble in mortgage-backed securities (MBS). Both offer exposure to real estate, but the nature of the exposure is different. An equity REIT is more traditional, in that it represents ownership in real estate, whereas the mortgage REITs focus on the income from mortgage financing of real estate.
Of course, Wall Street has gone far beyond REITs when it comes to financial innovation in real estate. In comparison with some of the other innovations, a REIT is a plain vanilla gambit, whether equity or mortgage. And unlike MBS, REITs have never starred as a key player in a real estate bubble and subsequent burst. In fact, the financial crisis did bring to light some differences in REIT capital structure and how too much leverage can cause REIT share prices to swing much more wildly than expected. So REIT investing isn’t entirely painless, but the research and analysis required is in line with that of any income stock.
We have looked at several types of real estate investment but have only scratched the surface. There are countless variations within these examples and many more types that don’t really fit the definition of simple. As with any investment, there is profit and potential within real estate whether the overall market is up or down.
Of course, this does not mean that investing in real estate is an assured gain. Hopeful real estate investors need to put in the work of becoming conversant with major market indicators and investment-level metrics before diving in. We all tend to put a lot of thought and planning into a home purchase. A real estate investment requires that same diligence without promising the same emotional payoff of living in your dream home. Not that getting a nice financial payoff from being smart about real estate isn’t also an emotional high.
Stock market liquidity, which offers the ability to buy or sell shares with minimal delay and minimal impact on the price, will trend sharply downward over the next decade, raising the risks for investors, per a detailed report from investment management firm Bernstein, as reported by Business Insider. In a worst-case scenario, constrained market liquidity can spark a meltdown in stock prices that sets off a new financial crisis. Three major recommendations from Bernstein are summarized below.
3 Ways to Survive the Liquidity Crunch
Source: Bernstein, as reported by Business Insider
The rationale for increasing cash allocations is straightforward. The same is true for reducing risk by avoiding unduly large portfolio positions and by being wary of crowded trades with the potential for severe selling pressure once market sentiment turns. Investors should also know how many trading days it may take to close a position in an orderly fashion, without having to dump shares at distressed prices.
Meanwhile, strategists at Jefferies recently identified stocks with heavy ownership by high-turnover hedge funds, as reported by CNBC. These stocks are at risk of coming under sudden and intense selling pressures once these funds head for the exits.
On their third recommendation, Bernstein says that the rise of passive investing is reducing liquidity. While they offer no specifics, they believe that active investment managers, like themselves, have the stock-picking expertise to thrive in this environment. However, a growing majority of actively-managed funds are underperforming their passive benchmarks, per research by Morningstar.
Bernstein identifies five forces that are draining liquidity. First, a combination of high frequency trading (HFT) and regulation have been factors spurring a drop of nearly 75% in bid-ask spreads during the last 10 years, but they say that volumes and turnover also have decreased.
Second, fewer investors in the public markets are driven by fundamentals. Instead, investors are turning to passive vehicles such as ETFs. “It can also pressure the more liquid holdings of investors if a larger share of their assets are tied up in illiquid positions that cannot be sold,” as Inigo Fraser-Jenkins, head of global quantitative and European equity strategy at Bernstein, writes in a recent note to clients, as quoted by BI.
The third and fourth forces are the reversal of quantitative easing (QE) by central banks such as the Federal Reserve and rising corporate debt. The fifth and final force is the slowing of the economic cycle.
Plunging liquidity also is a major concern of analysts at Deutsche Bank. They see worrisome parallels today with the opening stages of the 2008 financial crisis and warn that a surge in market volatility is a likely consequence. Marko Kolanovic, global head of macro quantitative and derivatives research at JPMorgan, foresees a “Great Liquidity Crisis” in which the disappearance of willing buyers turns a stock market selloff into a full-blown crash.
A longstanding best practice for active traders is to be aware of average trading volumes and average bid-ask spreads. Trading in illiquid stocks with wide spreads is risky in normal times, let alone in times of market panic. Moreover, a trend towards lower liquidity market-wide also has ramifications for buy-and-holdinvestors who anticipate long holding periods, since eventually the day may come when closing a position is warranted.
Exchange rate fluctuation is an everyday occurrence. From the holidaymaker planning a trip abroad and wondering when and how to obtain local currency to the multinational organization buying and selling in multiple countries, the impact of getting it wrong can be substantial.
During my first overseas assignment in the late 1990s and early 2000s, I came to work in Hungary, a country experiencing a huge transformation following the regime change of 1989, but one in which foreign investors were keen to invest. The transition to a market economy generated significant currency volatility, as the chart below highlights. The Hungarian Forint (HUF) lost 50% of its value against the USD between 1998 and 2001 and then regained it all by the end of 2004 (with significant fluctuations along the way).
With foreign currency trading in the HUF in its infancy and therefore hedging prohibitively expensive, it was during this time that I learned firsthand the impact foreign currency volatility can have on the P&L. In the reporting currency of USD, results could jump from profit to loss purely on the basis of exchange movements and it introduced me to the importance of understanding foreign currency and how to mitigate the risk.
The lessons I learned have proved invaluable throughout my 30+ year career as a CFO of large, multinational companies. However, I see many instances still today of companies that fail to properly mitigate foreign exchange risk and suffer the consequences as a result. For this reason, I thought it useful to create a simple guide to those interested in learning about the ways one can counter currency risk, and the menu of options companies face, sharing a few of my personal experiences along the way. I hope you find it useful.
Fundamentally, there are three types of foreign exchange exposure companies face: transaction exposure, translation exposure, and economic (or operating) exposure. We’ll run through these in greater detail below.
This is the simplest kind of foreign currency exposure and, as the name itself suggests, arises due to an actual business transaction taking place in foreign currency. The exposure occurs, for example, due to the time difference between an entitlement to receive cash from a customer and the actual physical receipt of the cash or, in the case of a payable, the time between placing the purchase order and settlement of the invoice.
Example: A US company wishes to purchase a piece of equipment and, after receiving quotes from several suppliers (both domestic and foreign), has chosen to buy in Euro from a company in Germany. The equipment costs €100,000 and at the time of placing the order the €/$ exchange rate is 1.1, meaning that cost to the company in USD is $110,000. Three months later, when the invoice is due for payment, the $ has weakened and the €/$ exchange rate is now 1.2. The cost to the company to settle the same €100,000 payable is now $120,000. Transaction exposure has resulted in an additional unexpected cost to the company of $10,000 and may mean the company could have purchased the equipment at a lower price from one of the alternative suppliers.
This is the translation or conversion of the financial statements (such as P&L or balance sheet) of a foreign subsidiary from its local currency into the reporting currency of the parent. This arises because the parent company has reporting obligations to shareholders and regulators which require it to provide a consolidated set of accounts in its reporting currency for all its subsidiaries.
Following on from the above example, let’s assume that the US company decides to set up a subsidiary in Germany to manufacture equipment. The subsidiary will report its financials in Euros and the US parent will translate those statements into USD.
The example below shows the financial performance of the subsidiary in its local currency of Euro. Between years one and two, it has grown revenue by 10% and achieved some productivity to keep cost increases to only 6%. This results in an impressive 25% increase in net income.
However, because of the impact of exchange rate movements, the financial performance looks very different in the parent company’s reporting currency of USD. Over the two year period, in this example, the dollar has strengthened and the €/$ exchange rate has dropped from an average of 1.2 in Year 1 to 1.05 in Year 2. The financial performance in USD looks a lot worse. Revenue is reported as falling by 4% and net income, while still showing growth, is only up by 9% rather than 25%.
The opposite effect can of course occur, which is why, when reporting financial performance, you will often hear companies quote both a “reported” and “local currency” number for some of the key metrics such as revenue.
This final type of foreign exchange exposure is caused by the effect of unexpected and unavoidable currency fluctuations on a company’s future cash flows and market value, and is long-term in nature. This type of exposure can impact longer-term strategic decisions such as where to invest in manufacturing capacity.
In my Hungarian experience referenced at the beginning, the company I worked for transferred large amounts of capacity from the US to Hungary in the early part of the 2000s to take advantage of lower manufacturing cost. It was more economic to manufacture in Hungary and then ship product back to the US However, the Hungarian Forint then strengthened significantly over the following decade and wiped out many of the predicted cost benefits. Exchange rate changes can greatly affect a company’s competitive position, even if it does not operate or sell overseas. For example, a US furniture manufacturer who only sells locally still has to contend with imports from Asia and Europe, which may get cheaper and thus more competitive if the dollar strengthens markedly.
The first question to ask is whether to bother attempting to mitigate the risk at all. It may be that a company accepts the risk of currency movement as a cost of doing business and is prepared to deal with the potential earnings volatility. The company may have sufficiently high profit margins that provide a buffer against exchange rate volatility, or they have such a strong brand/competitive position that they are able to raise prices to offset adverse movements. Additionally, the company may be trading with a country whose currency has a peg to the USD, although the list of countries with a formal peg is small and not that significant in terms of volume of trade (with the exception of Saudi Arabia which has had a peg in place with the USD since 2003).
For those companies that choose to actively mitigate foreign exchange exposure, the tools available range from the very simple and low cost to the more complex and expensive.
Companies in a strong competitive position selling a product or service with an exceptional brand may be able to transact in only one currency. For example, a US company may be able to insist on invoicing and payment in USD even when operating abroad. This passes the exchange risk onto the local customer/supplier.
In practice, this may be difficult since there are certain costs that must be paid in local currency, such as taxes and salaries, but it may be possible for a company whose business is primarily done online.
Many companies managing large infrastructure projects, such as those in the oil and gas, energy, or mining industries are often subject to long-term contracts which may involve a significant foreign currency element. These contracts may last many years and the exchange rates at the time of agreeing to the contract and setting the price may then fluctuate and jeopardize profitability. It may be possible to build foreign exchange clauses into the contract that allow revenue to be recouped in the event that exchange rates deviate more than an agreed amount. This obviously then passes any foreign exchange risk onto the customer/supplier and will need to be negotiated just like any other contract clause.
In my experience, these can be a very effective way of protecting against foreign exchange volatility but does require the legal language in the contract to be strong and the indices against which the exchange rates are measured to be stated very clearly. These clauses also require that a regular review rigor be implemented by the finance and commercial teams to ensure that once an exchange rate clause is triggered the necessary process to recoup the loss is actioned.
Finally, these clauses can lead to tough commercial discussions with the customers if they get triggered and often I have seen companies choose not to enforce to protect a client relationship, especially if the timing coincides with the start of negotiations on a new contract or an extension.
A natural foreign exchange hedge occurs when a company is able to match revenues and costs in foreign currencies such that the net exposure is minimized or eliminated. For example, a US company operating in Europe and generating Euro income may look to source product from Europe for supply into its domestic US business in order to utilize these Euros. This is an example which does somewhat simplify the supply chain of most businesses, but I have seen this effectively used when a company has entities across many countries.
However, it does place an extra burden on the finance team and the CFO because, in order to track net exposures, it requires a multiple currency P&L and balance sheet to be managed alongside the traditional books of account.
The most complicated, albeit probably well-known way of hedging foreign currency risk is through the use of hedging arrangements via financial instruments. The two primary methods of hedging are through a forward contract or a currency option.
The intent of this contract is to hedge a foreign exchange position in order to avoid a loss on a specific transaction. In the equipment transaction example from earlier, the company can purchase a foreign currency hedge that locks in the €/$ rate of 1.1 at the time of sale. The cost of the hedge includes a transaction fee payable to the third party and an adjustment to reflect the interest rate differential between the two currencies. Hedges can generally be taken for up to 12 months in advance although some of the major currency pairs can be hedged over a longer timeframe.
I have used forward contracts many times in my career and they can be very effective, but only if the company has solid working capital processes in place. The benefits of the protection only materialize if transactions (customer receipts or supplier payments) take place on the expected date. There needs to be close alignment between the creasury function and the cash collection/accounts payable teams to ensure this happens.
In the equipment example above, let’s assume the company wishes to take out an option instead of a forward contract and that the option premium is $5,000.
In the scenario that the USD weakens from €/$ 1.1 to 1.2, then the company would exercise the option and avoid the exchange loss of $10,000 (although would still suffer the option cost of $5,000).
In the scenario that the USD strengthens from €/$ 1.1 to 0.95, then the company would let the option expire and bank the exchange gain of $15,000, leaving a net gain of $10,000 after accounting for the cost of the option.
In reality, the cost of the option premium will depend on the currencies being traded and the length of time the option is taken out for. Many companies deem the cost too prohibitive.
During my career, I have worked in companies that have operated very rigorous hedging models and also companies that have hedged very little, or not at all. The decision often boils down to the risk appetite of the company and the industry in which they operate, however, I have learned a few things along the way.
In companies that do hedge, it is very important to have a strong financial forecasting process and a solid understanding of the foreign exchange exposure. Overhedging because a financial forecast was too optimistic can be an expensive mistake. In addition, having a personal view on currency movements and taking a position based on anticipated currency fluctuations starts to cross a thin line that separates risk management and speculation.
Even in companies that decide not to hedge, I would still argue it is necessary to understand the impact of currency movements on a foreign entity’s books so that the underlying financial performance can be analyzed. As we saw in the example above, with the German subsidiary, exchange rate movements can have a significant impact on the reported earnings. If exchange rate movements mask the performance of the entity then this can lead to poor decision-making.
For companies choosing a financial instrument to hedge their exposure, remember that not all banks/institutions provide the same service. A good hedging provider should carry out a thorough review of the company to assess exposure, help to set up a formal policy, and provide a bundled package of services that address every step in the process. Here are a few criteria to consider:
Ultimately, foreign exchange is just one of many risks involved for a company operating outside its domestic market. A company must consider how to deal with that risk. Hoping for the best and relying on stable financial markets rarely works. Just ask the holidaymaker faced with incurring 20% more than expected for their beer/coffee/food because of an unexpected exchange rate movement.
Full link: https://www.toptal.com/finance/interim-cfos/foreign-exchange-risk?utm_campaign=Toptal%20Finance%20Blog&utm_source=hs_email&utm_medium=email&utm_content=70560395&_hsenc=p2ANqtz-848muwRb7JSxb6pQkS7jjtTfpJlZDMtESkqAywi_meXOODef_4hQSkBhAWDC4qdXrU9_PEK4dbOM1YOUH-p4FsABgoxQ&_hsmi=70560395
Our mental models about mobility—individually owned cars, gas stations, traffic jams, the driver’s license as a rite of passage—are on the verge of disruption. Mobility is about to become cheaper, more convenient, a better experience, safer, and cleaner—not 50 or even 25 years from now, but perhaps within a dozen.
We describe the coming transformation as mobility’s Second Great Inflection Point, because it has the potential to be as profound as the one that put horses to pasture and revolutionized industries and societies worldwide. A defining characteristic of the new world taking shape is that the automotive industry, which has operated for more than a century alongside but decidedly disconnected from other components of what transportation has come to mean, will blend into a more interconnected, customer-centric ecosystem. That shift boosts the odds that the momentous changes afoot will affect your business, even if the closest you currently get to a car is your morning commute.
How will things change? Think mainstream electric vehicles; robots reading maps; interconnected, intelligent infrastructure networks; and “pay per use.”
In a companion article, we describe the pressures on the old model, the bursts of innovation (ranging from vehicle autonomy and connectivity to electrification and ridesharing), and the evolving expectations that are propelling us toward the second great inflection point (see “Mobility’s second great inflection point”). Here, we drill down on what lies ahead: How exactly will cars, roads, and the customer experience soon be changing? (Think mainstream electric vehicles [EVs]; robots reading maps; interconnected, intelligent infrastructure networks; and, for a growing number of situations, “pay per use.”) What does that portend for competitive dynamics across the broadening mobility ecosystem? (As profit pools reorder and business models transform, opportunities will arise for a wider array of players, challenging OEMs’ notions of their competitive sets.) What are the implications for society, and what speed bumps may we hit along the way? Finally, how should leaders who aren’t yet immersed in the mobility revolution prepare for its imminent arrival? Fresh thinking about industry borders, adjacent opportunities, transport and logistics, and partnership possibilities are all needed.
For the past century, the automotive sector has been siloed—on multiple dimensions. Out of the approximately $8 trillion to $10 trillion spent each year on the transport of people and goods, “only” about a quarter comes from what is commonly understood as the car industry. Those businesses are as massive as they are separate. Fuel and energy, financial services such as insurance and financing, and maintenance all represent more than 10 percent of the total pie. You can’t use your car without them—and yet they are all disconnected from the automotive industry itself.
Automobiles also are disconnected from one another. Cars cannot be tracked and therefore cannot be guided. Traffic jams are one major result. Another is congestion pricing (fast lanes for those who can afford them). Pollution, made worse from idling and the search for parking, is another severe consequence. Car accidents, injuries, and fatalities—overwhelmingly the result of human error—occur every day. The second great inflection approaching will break down silos, with profound consequences that start with our cars, roads, and the customers who use them.
The more interconnected mobility system starts with the cars themselves. Electrification and vehicle autonomy, which are coming fast, stretch the capabilities of traditional OEMs. Less than 5 percent of vehicles sold in 2016 were equipped with EV power trains. Major OEMs have announced that they’re aiming to bring that number above 50 percent by 2021.
By 2030, EVs will be mainstream—and not just within the premium segment, as they are today. Nor, for that matter, will EVs be confined to passenger automobiles. Electric buses, trucks, and other delivery vehicles are rolling toward commercialization at an accelerated rate. (For more, see “The public–private imperative in urban mobility: A view from Canada,” forthcoming on McKinsey.com.) The changes won’t be “one-offs.” To the contrary, they will be magnified by shifts across entire fleets because of the lower costs of electricity as opposed to gasoline, the lower maintenance costs, and the lower overall total cost of ownership.
But that’s just the start. In 2016, only about 1 percent of vehicles sold were equipped with even partial autonomous-driving technology. As of this writing, however, eight of the ten largest OEMs plan to have highly autonomous technology road ready by 2025. Google’s Waymo has already launched a commercial taxi service made up of autonomous vehicles (AVs), in 2018; Uber plans to do so this year, and Lyft in 2021. By 2030, 80 percent of Chinese, European, and US miles will be at or approaching self-driving. That’s not just “hands off the wheel”; it’s drivers’ minds off the road. Indeed, since the function of driving will increasingly be performed by the car itself, cars will no longer need to be designed around the driver, except to the extent that, through advanced artificial intelligence, vehicles will be made to intuit what each passenger wants.
China-based OEM start-up Byton aims to launch its luxury EVs this year.
In many respects, a car will not even look like a car, at least as we know it today. As Carsten Breitfeld, CEO of China-based luxury EV OEM Byton, points out, without an internal-combustion engine, key elements of the interior (including the dashboard and the center air-conditioning console) can be shifted in radically space-saving ways (see “New carmaker on the block: Byton’s CEO on China’s car of the future,” forthcoming on McKinsey.com). With autonomous, connected, and shared vehicles, the changes will go much further. When a vehicle does not need to be designed around a driver, many fundamental tenets of auto design will go by the wayside. Why have a steering wheel? A driver’s seat? For that matter, will you need so much steel when safety requirements change? The design possibilities are fascinating—and the second-order effects for nonautomotive industries could be massive.
Disparate roads and highways—as well as different forms of transportation (buses, trains, airplanes, and even micromobility solutions, such as bicycles and scooters)—will increasingly converge into integrated networks. Early examples are already appearing in Singapore and Barcelona, where strategically placed sensors receive, process, and integrate enormous amounts of data to improve traffic flow, rationalize parking, and keep environs cleaner. Mobile apps such as Germany’s moovel and Finland’s Whim can now analyze a range of public- and private-transit options to identify the fastest and cheapest route from A to B and let mobile users reserve and pay for their journey. That kind of functionality will be scaled and available for consumers around the world by 2025.
Ecosystems, by definition, arrange themselves around the consumer. This makes it easier, faster, and cheaper for people to choose what they actually want. Consider, for a car, “freedom” and “machine.” Which element matters most? In a highly consumer-centric system, people can have freedom—indeed, even more freedom—without having to buy their own vehicles, search for parking, and pay for fuel (and a list of other expenses). Order pizza, get to work, take the family to the beach—when these use cases can be addressed with a swipe, the make or model of the car involved may matter less. (For more on the changing nature of automotive brands, see “Snapshots of the global mobility revolution,” forthcoming on McKinsey.com.)
What will matter—what has always mattered—is customer experience. As more people come to “consume mobility,” that experience will include:
That’s fact, not fantasy. These examples are starting to happen in major cities around the world.
In the past, OEMs competed primarily with one another. In the years ahead, consumers will focus more on different mobility operators, intensifying competition between OEMs and other mobility providers on dimensions such as utility of the interior, quality of the service, and sophistication of the connected-car experience.
Those new competitive dynamics will take place in the context of drastic changes in the economics of mobility. Today, OEMs are making about one cent in profit per mile driven. New mobility services have the chance to up this by a factor of ten to 25. Automotive companies are also very well positioned to capture monetization opportunities from car data. Our research finds that, so far, automobile consumers around the world are highly willing to share their data when they experience value in return.
Today, OEMs are making about one cent in profit per mile driven. New mobility services have the chance to up this by a factor of ten to 25.
That said, it won’t be easy to gain a defensible position across the critical technologies of autonomy, connectivity, electrification, and shared mobility. By our analysis, a company would have to invest nearly $75 billion, much of it going toward electrification and autonomy, to do so. While the new technologies will doubtless generate enormous value, no one can say where the economic profit will flow—and when. At any inflection point, value shifts quickly and unpredictably, and consumers tend to capture more of it.
This is especially so in the digital age. Encyclopedias, newspapers, camera film—when products turn into services, people pay a lot less. In fact, they may not pay at all. In the United States alone, the internet provides consumers about $100 billion of free welfare gain every year. It’s quite possible that a similar dynamic will play out as mobility becomes less about the car and more about a service. As happened with the mass adoption of both the internet and smart mobile devices, the life changes will seem almost imperceptible at first—then overwhelming, and inevitable.
An inflection point is not an end point. It’s a redirection—the launch of a new trajectory. We can already see the pace of change begin to quicken. EVs, outside of the premium segment, have become commercially relevant only within the past three to five years. As late as early 2013, few were searching for “Uber” on Google.1 Carsharing was novel, too. Developments such as these will further speed up the change dynamics, both because adoption is driven by B2B and B2G enterprises rather than B2C businesses and because “ticket size” is much smaller.
The sum of individual decision making—choosing to pay fractions for a trip instead of many thousands for a car—will have enormous effects in the aggregate. Just as mobility’s first great inflection point reshaped society in ways initially unimaginable, the changes this time will reach far beyond the cars we drive (and increasingly, the vehicles in which we are driven). Those effects could include:
The time saved by commuters worldwide could add up to a staggering one billion hours—every day.
Still, changes are rarely seamless, and big changes can be especially bumpy. Net-net, the benefits will decisively outweigh the costs. The harder question ultimately is not whether these changes will happen (they will) or when they will start (in many cases, they already have) but what the best ways to manage the transition are.
The shift to a mobility ecosystem will doubtless hit some speed bumps. Some of these we can probably foresee and, ideally, prepare for, such as cyberattacks on transportation systems or accidents resulting from systemic failures. Additional risks—more likely earlier in the inflection—include the perception of major failures and the unfortunate tendency for a wired-in, social-media world to sensationalize small incidents beyond reasonable proportion. The loss of millions of jobs for truck drivers and taxi drivers is unquestionably a cost, even as the transformation will create a range of new employment opportunities with potential for higher earnings and greater value creation, such as AV and EV technicians, and even trained attendants for disabled and elderly persons traveling by AV (for more, see sidebar “Redefining what it means to be a ‘car person,’” in “Mobility’s second great inflection point”).
Finally, beyond any futurist’s vision are the “unknown unknowns.” Is there such a thing as being too connected? How will geopolitics realign if oil is no longer the prize? What comes next in our collective imagination when stylish rides are replaced by more utilitarian use cases? Sooner or later—and probably sooner—we will find out.
As the second great inflection takes hold, many businesses that do not consider cars to be close to their core industry will find themselves confronting an increasingly far-reaching mobility ecosystem.
There are some obvious first-order effects, starting with how business gets done. Logistics costs will be reduced—in certain cases, dramatically (our colleagues estimate that autonomy in delivery could reduce costs by upward of 40 percent). Long-haul routes will be shortened, too, as 3-D printing reduces the need for some long-distance shipments. Shippers can transport to fulfillment centers or urban drop-off zones, and smaller, purpose-built AVs will be able to handle things from there. Moreover, businesses will be able to become more agile—a capability that they will need in order to meet the demands of their customers, who will expect more products more quickly.
But the implications of the second great inflection point extend much further. Within a decade, the developments we’ve been describing will start having strategic ramifications for a wide array of companies. Here are some early priorities for everyone:
Clear industry borders and siloed business sectors won’t stay that way for long in the new mobility ecosystem. For leaders outside of the automotive, transportation, or energy sectors, those changes can spell both threats and opportunities. Threats, because new competitors and attackers can appear from wildly unexpected directions: just consider the impact that advanced digital mapping had on publishers such as Rand McNally or, for that matter, the consequences that a growing market for EVs can have on the prices of laptop computers (the batteries of both rely on lithium, which tripled in price over a recent ten-month period). And opportunities, because the expanding mobility ecosystem can bring new customers and markets.
The first order of business is to figure out your role in the new mobility ecosystem. Ask yourself and your team where your business might fit in this new landscape—and who else might be entering the picture (for more, see sidebar, “Can auto insurance—and insurers—keep up with the changing nature of mobility?”). Focus on your core sources of value and key customer relationships. How can these be used to your advantage in a multidimensional game? The onus to scenario-plan can’t be on the C-suite alone. Encourage those closer to the front lines to do the same. Expect some internal resistance—“our business has always been this way.” It’s hard to get your team to think and act creatively to prepare for the threats and opportunities of the coming inflection point, and simply passing along the information won’t cut it. Embolden your employees to imagine what they would do differently under different circumstances. Incentivize them to get in front.
Does it seem like just yesterday that you saw your first iPhone? So near in time—and yet such an epochally different world. Keep that frame of reference in mind as you prepare for mobility’s second great inflection point. Relatively speaking, it won’t be long before AVs deliver at a click, commuting patterns change, and car travel becomes “always on” and “wired in.” To a surprising degree, we know the future; we just don’t know—and are more likely to under- than overestimate—how soon it will arrive. Take advantage. Test out pilots where you can gain knowledge in connected businesses (there’s no lesson better than first-hand experience); track your progress with actionable timelines and incentives; and acquire and develop talent prepared for the coming changes.
Both the fluidity of ecosystem dynamics and the agility needed to meet customer needs rapidly mean that your competitors—present and potential—may be active in different business models and multiple technologies. No single player will have the resources or capabilities to capture, defend, and win in manufacturing, designing, mechanical engineering, software development, artificial intelligence, and all the other areas associated with the mobility changes. Meeting your customers’ needs will require serious collaboration, which many companies aren’t prepared for. Start by identifying the “white spaces” you need to fill, the partners that can best help with those gaps, and the “gives” and “gets” genuinely required. Most of all, think strategically about how to best position yourself—and with whom.
Social factors have always been a significant part of the mobility equation. Henry Ford prioritized an affordable wage and created a base of loyal car-buying employees, which had a multiplier effect on sales. Environmental responsibility turns EVs into premium brands. And Waze built its business by building a community. As the second great inflection point approaches, social considerations and public–private cooperation will take on outsized importance. Consider safety protocols, for example: no single player will be able to set the safety standards alone; nor can a government simply dictate them without a deep understanding of player capabilities. Or pooling and robo-shuttles for people and goods: governments and communities will determine mundane but mission-critical details, such as designated pickup, drop-off, and parking spaces. To win in the second great inflection point, develop a well-considered perspective on present and future regulations. And more: Think about how your success ties into the benefit of others. Ecosystems are inherently interconnected. Those that bear societal considerations in mind will be the most connected of all.
As mobility becomes cheaper, more convenient, more attuned to human and business experience, cleaner, and safer, business and society will be transformed. We’ve seen seismic change of that order unleashed when Henry Ford popularized mass production and Alfred Sloan took the organizational construct to new levels. The 20th-century disruption was swift and certain—not just for carmakers but for businesses around the world. Yet few saw those changes approaching. Now, about 100 years later, we’re at the precipice of a second great inflection point. While much uncertainty remains, the transformation is, in many respects, already here. It’s clear that those who aren’t prepared will risk failing one of the 21st century’s early tests.
Full link: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/reimagining-mobility-a-ceos-guide?cid=mobility-eml-alt-mcq-mck&hlkid=0943476879bd40e0a1a36b51d82281b1&hctky=2618809&hdpid=5eee025c-6344-4921-bc04-4adb8d41557d
Japan’s policies to increase women’s employment are finally bearing fruit, especially by allowing female university graduates to continue working during child-rearing years. In 2017, the percentage of first-time mothers who are university graduates in long-term employment rose to nearly 50 per cent, from below 30 per cent in the early 2000s. This trend accelerated after Prime Minister Shinzo Abe started his ‘womenomics’ policy in 2013.
Rather than labour participation, the important ratio is women in long-term employment. Long-term employees are paid far more than non-regular employees. Re-entering long-term employment positions in middle age after being out of the workforce is difficult. A rise in long-term employment implies an increase in the pool of female workers enjoying promotion possibilities.
The government aims to increase female employment without affecting the country’s already low birth rate. ‘Womenomics’ policies focus on changing Japanese corporate culture and improving access to day-care centres to help workers of both sexes achieve a better work–life balance. Six-hour working days for employees with children under the age of three was first mandated at firms with more than 100 employees, and then to all employees. This policy is successful — first childbirth statistically increased for women at mandated firms by 30 per cent after 2009.
The Diet passed three laws concerning childcare in 2012. It aimed to re-coordinate childcare facilities and kindergartens (previously administered by the Ministry of Education, Culture, Sports, Science and Technology as educational facilities) with day-care centres (previously administered by the Ministry of Health, Labour and Welfare as welfare facilities). More kindergartens are encouraged to offer full-time day care. Subsidies for day care also have been extended to small day-care centres and kindergartens. While shortages are still evident, the number of childcare facilities in urban centres is increasing faster than ever before.
Despite these reforms, breaking down or transforming entrenched gender norms at home and in the workplace still has a long way to go. University-graduate males working at large firms — the group with the best income prospects — continue to have the lowest share of housework and childcare responsibilities. This is significant because the timing of second births in double-income families tends to be delayed unless husbands do more child-rearing.
In 2016 the government passed another law mandating firms with more than 300 employees to gather gender-related statistics including hiring, managers, work hours and tenure years. They must disclose some of these statistics to the public, along with their action plans to improve the status of women workers. But the information disclosed is insufficient and misleading because firms can choose what information they make public.
Previously, the government aspired to increase the proportion of women in managerial positions in government and the private sector to around 30 per cent by 2020. That goal was later modified, with more modest targets adopted in some areas. The 2020 target for the number of women in senior managerial positions in the private sector, for example, was reduced to around 10 per cent in 2015. But even this are not expected to be reached. The proportion was still only 6.3 per cent in 2018. While a statistically significant increase of women managers after 2013 is seen, the gap remains large.
Another reason for Japan’s significant gender wage gap is the large share of female workers in non-regular employment that pays less than regular employment. The percentage of non-regular employees who are young women is noticeably high. Of never-married women aged 25–39, 40 per cent of high school graduates, 28 per cent of junior college graduates and 21 per cent of university graduates had non-regular jobs in 2017. In comparison, the percentage of high-school graduate, non-married males in non-regular employment was 24 per cent.
A law mandating the principle of ‘same work, same pay’ — where workers are paid equally for the same work regardless of their employment status — will be implemented from April 2020 for larger firms and from April 2021 for smaller firms.
While the up-take of this principle will be an important step forward, its impact remains unknown. If an employee is not in a job where they can be relocated or ordered to work overtime, for example, as in most long-term employment at large firms, the work may not be considered equal in Japan where commitment to work is enshrined as a defining characteristic of ‘long-term employment’. Married women in non-regular employment also voluntarily limit their work hours to enjoy coverage of social protection for dependent spouse without paying social security tax, and they may not be eager to earn more income.
In October 2016 the social security law was amended to shorten work hour criteria to include more part-time workers at firms with more than 500 employees in the Employees’ Pension Insurance system. Due to labour shortages, more married women than expected were included. In 2017, it was found that inclusion in the pension system encouraged a larger number of part-time status women to work longer hours and gain higher incomes. Though yet small in numbers, it shows an important policy direction for change.
The percentage of high-school graduates who go on to university is increasing (56.3 per cent of males and 50.1 per cent of females in 2018), reflecting ambitions for better futures among Japanese youth. Among them, about 40 per cent have student loans. Repaying loans is not easy, especially for those in non-regular employment. Since a significant portion of women still enter non-regular employment after childbirth, repayment burdens are becoming an obstacle for family formation. One possible solution may be income-contingent student loans.
The Japanese labour market is slowly adjusting to a rise in double-income families. More new mothers are no longer choosing to quit work to raise children, instead continuing as long-term employees. ’Womenomics’ policies are facilitating this transformation. But elements of a system that supports a bread-winner model of family life remain firmly in place, and there is a long road ahead for Japan to fully overcome these.
Author: Nobuko Nagase
Chinese leader’s top priority is trade deal with Washington
TOKYO — If the Hanoi summit between U.S. President Donald Trump and North Korean leader Kim Jong Un had gone according to plan, Chinese President Xi Jinping was supposed to welcome Kim to Beijing straight afterwards, sometime around the afternoon of March 4.
Kim would have had a big smile on his face, if the scenario had unfolded as the mandarins in Beijing and Pyongyang had envisioned it.
Instead, the special armored train carrying the desolate young leader headed straight back through China to the North Korean border without stopping in Beijing.
The collapse of the Hanoi summit had erased the China stop from the itinerary, and with it, the opportunity for Xi and Kim to discuss how to cope with the latest twist in U.S.-North Korean relations.
Before the U.S.-North Korean summit in Hanoi on February 27-28, Trump had said he was in “no rush whatsoever” on North Korean denuclearization, lowering expectations at home and abroad for the high-profile event.
At the same time, Trump continued to send positive messages about U.S.-North Korean ties, giving the impression that things were progressing smoothly. But in Hanoi, he abruptly walked away from the table.
How could Kim have completely misread the situation? As the train wended its way back, the finger-pointing had already begun – and Xi was backing away from his North Korean ally.
“It was dangerous for Xi to meet Kim at this juncture,” one Chinese expert on international affairs explained. “Kim had taken a hard line against Trump and failed. Xi could have been partially blamed for the clash, as the ‘backer’ of North Korea. That would have had a negative effect on the U.S.-China trade talks.”
Xi has held talks with Kim four times in the past year. A meeting in Beijing on the way back from Hanoi would have been their fifth. It is hardly surprising that the world believes China has significant influence on Kim’s actions.
Trump said so himself last year when he initially canceled plans for his first summit with Kim. The American leader was signaling his displeasure with Chinese maneuvering behind the scenes, a likely reason for North Korea taking a harder line at the time. Shortly before the cancellation, Kim had met Xi in the northeast Chinese city of Dalian.
Although Trump quickly reversed his decision and went on to hold a summit with Kim in Singapore, his distrust of China remained.
In the U.S., there has been a lingering suspicion that China is artfully pulling the strings behind the scenes to protect its interests over the Korean Peninsula, and is pressuring North Korea not to compromise with the Americans too easily.
Meeting Kim after the Hanoi summit would only have added fuel to such suspicions.
China also cannot afford to recognize North Korea as a “nuclear power.” For Beijing, as a proud permanent member of the United Nations Security Council, there need only be one nuclear power in East Asia: China.
Xi could of course embark on efforts to persuade Kim to give up his nuclear weapons as Trump wishes. But it is difficult to realize such a goal, given the delicate history of Sino-North Korean relations.
Kim has already formally invited Xi to make his first visit to North Korea. Given the delicate situation surrounding the U.S.-China trade negotiations, however, Xi must weigh carefully whether to make his visit to Pyongyang at this point.
China needs to bring the trade talks with Washington to a successful conclusion at almost any cost. This is Xi’s top priority. A failure in this area would deal a serious blow to the Chinese economy, which is continuing to slow down.
At the annual session of the National People’s Congress, China’s parliament, which opened in the Great Hall of the People in Beijing on Tuesday, Premier Li Keqiang announced that China’s economic growth target for 2019 would be between 6% and 6.5%, a reduction from the 2018 target of around 6.5%. Even that lower target looks an uphill struggle, given the current economic situation.
Since Xi came to power in the autumn of 2012, the Chinese economy has been on a slowing trend despite some ups and downs. The trajectory became very clear from last year.
The much touted “Xi Jinping new era” has had little, if anything, to show in terms of economic achievements which benefit the Chinese people.
Fortunately, Chinese stocks have risen sharply since February amid optimism about the U.S.-China trade negotiations following Trump’s remarks, with the benchmark Shanghai Composite Index recovering above the 3,000 mark in early March.
The best-case scenario for Xi is to convince Trump to roll back the punitive American import tariffs at a summit, and then tout the resulting agreement as his own personal achievement.
Doing so would be fitting for the “centralized, unified leadership” he wields in the Communist Party’s Central Committee, and the top-down decision-making which has been such a feature of Xi’s “new era.”
At the same time, Xi cannot afford to sit down for a summit with Trump until key issues are resolved. Despite consolidating power in his hands, Xi Jinping is not Kim Jong Un. The Chinese Communist Party, on paper at least, still has a collective leadership. Xi cannot make decisions alone.
Furthermore, if Xi fails to reach a final trade deal with Trump through direct negotiations, he will certainly be held responsible within the party.
“I’m never afraid to walk from a deal,” Trump told a news conference following his failed meeting with Kim in Hanoi. “And I would do that with China, too, if it didn’t work out,” he added.
As a seasoned businessman, Trump is good at hiding his cards and Beijing is having a hard time assessing his strategy.
Xi is reportedly planning to visit the U.S. around March 27 for a summit with Trump. With that date fast approaching, and his mind on the trade talks, the Chinese leader has little interest in the National People’s Congress going on in Beijing until March 15.
The rubber-stamp parliament will enact a new foreign investment law that will ensure fair treatment of foreign companies, one of the key U.S. demands. But no serious discussion is expected on sensitive issues such as possible Chinese concessions to the U.S. in the trade talks.
On China’s social media, there has been chatter about how and why the U.S. shifted to an anti-China stance and how the Chinese people missed that change.
“Even the opposing Republican Party and the Democratic Party in the U.S. have formed a united front, hyping up the threat from China and seeing China as an enemy. This situation will not change easily,” one post read.
The post advocated the need for China to “bide its time” and be patient, in the same way as former supreme leader Deng Xiaoping advocated a policy for Beijing’s foreign policy of “tao guang yang hui (conceal ambitions and hide claws),” something inherited by successive Chinese leaders but abandoned by Xi.
To be sure, Premier Li did not refer to the “Made in China 2025” plan in his March 5 speech. The plan is a blueprint for making China’s key industries of the future into global champions, and is something which the Trump administration wants retracted.
Needless to say, China will not withdraw the plan. But Beijing is feeling frustrated by the current situation as it claims it has the right to develop its economy as it pleases.
China is now treading carefully over the North Korea issue, as well as avoiding provoking the U.S. at any cost at this highly sensitive time for bilateral ties. For example, Beijing has refrained recently from making its usual biting criticism of the U.S. over the detention of Meng Wanzhou, the chief financial officer of Huawei Technologies.
China’s position is very clear. All roads lead to Mar-a-Lago, where the Xi-Trump summit is expected to take place later this month.
By KATSUJI NAKAZAWA
Full link: https://asia.nikkei.com/Editor-s-Picks/China-up-close/Xi-distances-himself-from-Kim-Jong-Un-to-focus-on-Trump?utm_campaign=RN%20Free%20newsletter&utm_medium=daily%20newsletter%20free&utm_source=NAR%20Newsletter&utm_content=article%20link
Credits: Kevork Djansezian / Stringer
Stocks Slide as Volatility Returns
U.S. markets fell for the fourth straight day as a vacuum of news surrounding the trade talks is providing very little for investors to get excited about. The Volatility Index (VIX) has jumped significantly over the last two days after having been very quiet over the past two months.
We had gone over two months without a drawdown of more than 1.5% from the most recent high until today. The S&P 500 has now fallen 2.1% from last week’s high. Animal Spirits are awakening.
Still, the major U.S. indexes are up sharply for the year, with the S&P 500 and Nasdaq up 10% since the beginning of 2019, while the DJIA has posted a 9% gain. We are in that ‘in-between’, stage of the business calendar when just a few companies are reporting quarterly results, proxy season has yet to begin, annual meetings are still a few months away and there is not a lot of activity on the IPO front. It’s the grind of late winter, and like the season, it will change soon.
Europe’s Surprise Stimulus
In an unexpected move, the European Central Bank announced a fiscal stimulus plan to ease monetary policy in response to a global economic slowdown. The ECB said it would hold interest rates at their current levels through 2019, and allow banks to make cheap long-term loans to generate liquidity. (See the impact on the euro in James’ chart of the day, below)
Europe will face various headwinds in the coming months. Brexit is at the top of the list as the March 29th deadline approaches for the U.K. to leave the EU. That process has been anything but smooth. Countries like Italy and Spain are beset with relatively high unemployment and low growth. Germany, which was the strongest economy on the continent, has flatlined, and France is grappling with a wave of populism and anti-government sentiment that has paralyzed its leadership.
The Organization for Economic Cooperation and Development cut its forecast for growth in the Eurozone from 1.8% to 1.1%, back in November. If you zoom into this chart from the OECD, you’ll see Europe’s slowdown along with a host of other countries also experiencing economic weakness.
Why it Matters
Europe has its challenges with Brexit topping the list. But, aside from Brexit, which is expected to shave growth from the UK and other countries in the Eurozone, slowing growth is a major problem that is bringing economic and social issues with it. We have seen the orange vest protests in France, the rise of populist movements in Poland and Austria, and high unemployment in the southern countries.
Extreme monetary policy measures like the one taken today by the ECB are usually reserved for times of intense crisis and economic peril. Draghi said Europe is not there yet, so today’s move to curb interest rate hikes and spur lending by banks is a bit of a preemptive surprise. The ECB may be trying to head off a full-blown crisis, but it should be prepared to take even more extreme measures if things get worse. We are 21 days away from the Brexit deadline.
Americans’ Pockets are Lighter
That massive stock correction we experienced last Fall has had a significant impact on household net worth, according to the Federal Reserve. About $3.4 trillion worth of impact, to be exact. The Fed reported a drop in U.S. Household Net Worth of 3.4%, as the overall measure, which includes corporate equity (ownership value of stocks) real estate assets and ‘other’, like cash and other assets.
The market drop in November and December of 2018 knocked $4.6 trillion out of the equity market, and as we have reported, many investors sold stock and hid in cash. Many missed the 18% rebound of January and February.
Why it Matters
Household net worth is just one of the data points the Fed looks at when making monetary policy decisions. It feeds consumer sentiment spending, which feeds the overall economy. While the Fed’s report captures household net worth in the past (the past quarter), it does provide a valuable reading on the health of the overall economy and its citizens. While net worth may have fallen given the decline in the stock market, the jobs market remains strong and inflation – the other main concern for the Fed – is relatively in check.
The most important takeaway from the Fed’s report today is just how much weight the stock market has on the overall net worth of American households, even though the majority of Americans are still not invested in the stock market. That means that the concentration of wealth among those that are invested is profound. Look at the drop on the far right of the chart, courtesy of the Federal Reserve.
Chart of the Day: Euro Plunges to New Lows on ECB Warnings
The euro plummeted to a new 20-month low against the U.S. dollar on Thursday after the European Central Bank (ECB) cut its 2019 economic growth forecast drastically from 1.7% back in December to a new estimate of only 1.1% GDP growth. Aside from this surprise announcement, the ECB kept the eurozone’s record-low interest rates unchanged, as expected, but also postponed the expectation of a rate hike to at least 2020. Previously, the central bank had indicated that there was potential for a hike after this summer. In addition, the ECB’s statement announced a new program to stimulate bank lending amid declining economic sentiment – a program that was intended for economic crises.
ECB President Mario Draghi stated in the subsequent press conference that “the risks surrounding the euro area growth outlook are still tilted to the downside.” Draghi also said, “the persistence of uncertainties related to geopolitical factors, the threat of protectionism, and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment.”
This surprising combination of a much lower growth outlook than expected, delayed monetary policy normalization, and even more central bank stimulus, placed heavy pressure on the already-beleaguered euro. Not since June 2017 has the eurozone’s shared currency fallen to such depths against the dollar, dropping below the lows of November. Of course, the ECB’s announcement also weighed sharply on global equity markets, but the negative effect on the euro was even more heavily pronounced.
Where does the euro go from here? With the EUR/USD having broken down below key support, and fundamentals looking increasingly pessimistic, the currency pair could continue to fall at least towards the 1.1000 level. This could be accelerated even further if the U.S. dollar continues to strengthen to new highs. A major economic release on the horizon that will drive the dollar’s movement will be Friday’s U.S. jobs report.
Unfortunately, the adjusted estimates from the ECB president, Mario Draghi, detailed an expected growth rate of 1.1% this year, which is down .6 points from the last estimate. Geopolitical risks such as trade protectionism were to blame for most of the adjustment which is the lowest estimate since the Greek financial crises prior to 2014.
In the following chart I have used 1-minute candles to illustrate the reaction traders had to the ECB’s announcement on the value of the euro. If you are unfamiliar with the way currencies quotes work, it is important to understand that if the euro is falling the dollar is rising.
As I have mentioned many times over the last few months, a rising dollar is a problem for US equities because it makes US exports more expensive and discounts international profits earned by US multi-nationals which could extend the current correction.
What the ECB is essentially planning to do is ease monetary policy by providing more capital to banks in the form of loans from the central bank. Like quantitative easing, this should lower short-term interest rates which should be a positive for asset prices, but the ECB’s negative tone probably shocked traders a little today.
At one point during his press conference, Draghi said “The risks surrounding the euro area growth outlook are still tilted to the downside.” Comments like that hit banks in the region hard with some, like Deutsche Bank (DB), down more than 5% by the close of market. After a short-lived recovery in the middle of today’s session, the S&P 500 closed at a new short-term low.
It is important to note that today’s announcement wasn’t entirely new information. It may feel like that from reading the headlines, but traders were already aware of the ECB’s plans for bank loans and lowered forecasts. I will argue that the tone in the news is as much a reaction to stock prices that have already been declining since hitting short-term resistance than any fundamental changes. A worsening Eurozone economy is a risk to the market in the long-run, but the pace of the decline is representative of a normal technical correction that happens to coincide with some bad news than a major retracement.
Risk Indicators – ECB Pessimism Hits EM
In his statement to the press, Mario Draghi also suggested that “vulnerabilities in emerging markets appears to be leaving marks on economic sentiment,” which may have contributed to additional selling in emerging market indexes. This was unfortunate because one of the areas we have seen surprisingly strong investor sentiment recently has been in emerging markets–especially China.
One day does not make a trend, but emerging markets had already failed to make any headway after the double bottom breakout in January. As you can see in the following chart, the iShares Emerging Market ETF (EEM) is challenging its breakout point near $42 per share again after failing to break to new highs last week.
I wouldn’t assume that if emerging markets break support, the rest of the market will follow, however, weakness in this asset category is a signal for caution. Emerging markets frequently provide an early sign that stocks have hit a bottom when they rally. I recommend that traders keep their eye on the asset classes for signs of support in the short-term to avoid missing out on a new buying opportunity.
Bottom line: Labor Still an Unknown Risk
In tomorrow’s Chart Advisor newsletter issue I will discuss what we learned from the labor report that will be released before Friday’s open. I expressed some concerns in yesterday’s issue that traders were being setup for a disappointment when the data is released. However, one advantage of the selling today is that it relieves some of the pricing pressure before the announcement. Lower prices today means the market is less likely to fall tomorrow and buyers may find the low prices attractive once the labor report has been released.
Economists fight, often and viciously, like it’s not just their job but their true calling, and sometimes you can ignore them by simply muting Economics Twitter. But other times you have to pay attention, such as with that whole Mint the Coin thing. The latest fight is even more significant.
It’s over Modern Monetary Theory, the idea that as long as inflation is low and you can print your own currency, government budget deficits really don’t matter (I look forward to your angry emails!). Household names are getting involved; today, BlackRock CEO Larry Fink called MMT “garbage,” while former Pimco guru Paul McCulley called it intriguing. Bloomberg Opinion’s own Stephanie Kelton, an MMT proponent, has been fighting about it with Nobel Prize winner Paul Krugman (not an MMT fan), installments of which you can read here, here and here. Fresh off this battle, she today begins a series of columns using MMT to debunk widely held myths about federal budget deficits. In the first, she argues a deficit is not a sign of “overspending.”
It’s fitting this fight is happening in the middle of Twitter’s Neoliberal Shill tournament (whose Sweet 16 includes Bloomberg Opinion’s Noah Smith, the defending champion, who calls MMT “hubris”). Brad DeLong, a high seed in that tourney, suggests it’s time to let the Ocasio-Cortezans of the left — who use MMT as a basis for more government intervention — take the wheel of the Democratic Party for a while. Jonathan Bernsteindisagrees, saying most Democrats don’t identify with the far left and that centrists dominated the midterms, even if the left got more airtime.
But Conor Sen sympathizes with DeLong’s argument, noting mainstream neoliberal economics have mostly let workers down in recent decades, while outside-the-box ideas such as quantitative easing have been effective in a way that flummoxed the normies. Maybe it’s time to give MMT a chance, Conor writes.
It’s pretty bad when your ex-lawyer suing you for millions is only like your 23rd-worst legal problem. Michael Cohen, former fixer for President Donald Trump, sued the Trump Organization today, just a week after calling Trump a racist and a crook in Congress. In that testimony, he accused Trump of fudging asset values for insurance purposes, which reminds Tim O’Brien of the time Trump got millions in insurance payments for hurricane damage to Mar-a-Lago, of which the Associated Press was unable to find proof. That’s just one line of investigation Cohen introduced, and even that is just part of a swarm of probes buzzing around Trump, involving an array of prosecutors and congressional committees, many targeting the one thing Tim says Trump most wants to protect: his business. Read the whole thing.
When the going gets tough, the tough write manifestos. Facebook Inc. CEO Mark Zuckerberg, for example, has had to write five in just the past two years, addressing the many controversies besetting his social-media behemoth. In the latest missive, delivered yesterday, he wrote thousands of words about how Facebook will protect privacy better and make the user experience more intimate. But Shira Ovide is far from convinced. Facebook is working on merging all of its platforms, raising questions about how much more user data it can accumulate. And what if “more intimate” really means abuse is hidden from view? Read the whole thing.
It’s not just Brexit; the EU is having all kinds of trouble keeping itself together. For example, it could have formed a unified front against money laundering, notes Lionel Laurent, but today it rejected a dirty-money blacklist, crumbling under the slightest pressure from Saudi Arabia. Meanwhile, Italy apparently plans to take some of China’s Belt and Road money, over EU objections. Ferdinando Giugliano writes this shows how hard it is for the EU to have one China policy — but also how Trumpian nationalism cuts both ways for America.
Meanwhile, the ECB today jumped back into monetary easing with both feet, just months after ending QE. This is not a good look, though it’s at least a good first step that Draghi & Co. admitted their error, writes Marcus Ashworth. But the dramatic flip-flop is also a sign the ECB and other central banks are still caught in a policy trap, warns Mohamed El-Erian.
Apple Inc. deserves props for cleaning up some of its labor problems, writes Tim Culpan.
Gender-balanced startups are more successful, but private equity withholds cash from women and doesn’t include them in its upper ranks, writes Anjani Trivedi.
There are two basic ways to think about U.S. financial regulation:
One way to put it is that these are two different ways of allocating the benefit of ambiguity. The world has infinite possibilities, and it is impossible to figure out in advance everything that anyone might do, and to write clear rules specifying which things are okay and which aren’t and what the consequences will be. The rules approach says, basically, that ambiguities and gray areas give power to banks: If no one has thought about it, you get to do it. The legal realism approach says, basically, that ambiguities and gray areas give power to regulators: They have lots of vague powers over banks, and can use the threat of exercising those powers to get banks to do what the regulators want, whether or not the rules clearly require it.
Philosophically, for the most part, the first approach is good and the second approach is bad. In a free country, everyone should know what the law is, and should only be punished for violating it; regulators should not be able to act arbitrarily to favor some people and not others; the rule of law should apply, etc.
But there is something to be said for the second approach, particularly in financial regulation, particularly in bank regulation. Banks, especially big banks, aren’t in the same position as private citizens trying to go about their business without interference from the government. They are public franchises, public-private partnerships whose behavior matters for society at large, and they should be constrained by a certain general public-spiritedness (represented by regulators, maybe) rather than just by the letter of the law. Also if you resolve ambiguities in favor of banks then you are sort of stacking the deck, because the banks are full of highly-paid people who are incentivized to find and exploit ambiguities, and so they will tend to be a step ahead of the regulators.
In practice, in U.S. bank regulation, I think that the legal realism approach actually tends to dominate. We talked last year about how U.S. banking regulators secretly prevented JPMorgan Chase from opening new branches because they were mad about a grab-bag of unrelated violations, “as part of an unwritten regulatory policy.” If you tried to go read the rules and figure out how that works, you’d be at a loss.
Anyway here’s a story about how the Federal Reserve used to have a lightly constrained ability to smite big banks with a thunderbolt if it was mad about stuff, and how it is voluntarily retiring that thunderbolt:
Regulators dialed back a practice of publicly shaming the nation’s biggest banks through “stress test” exams, taking one of the biggest steps yet to ease scrutiny put in place after the 2008 crisis.
The Federal Reserve said it would end a system of giving pass-or-fail grades to the largest domestic banks, such as Goldman Sachs Group Inc. and JPMorgan Chase & Co., on a portion of their annual stress tests, which measure whether the firms could keep lending during a severe downturn. …
Bank CEOs have long criticized the stress tests’ qualitative portion as a “black box,” where failing grades could be used to send a message or punish a bank for weaknesses in its business practices or compliance. Such problems had previously been dealt with by the Fed’s supervisors without the threat of public shaming.
The pass-or-fail portion of the test “let the Fed dictate terms to the biggest banks under the guise of capital adequacy,” said Dan Ryan, who runs the bank consulting business at PricewaterhouseCoopers.
The tidy view is that stress tests are a capital-adequacy-supervision tool, and they should be used to test capital adequacy, and if your capital is adequate then the fact that the Fed is mad at you for poor anti-money-laundering controls or whatever shouldn’t matter. The Fed should enforce money-laundering rules through money-laundering rules, not sneak money-laundering enforcement into its capital-adequacy process. The alternative view is, eh, banks are so big and regulation is so hard, why not give the Fed some extra thunderbolts? That view seems to be mostly how it works in practice, but it is shifting a bit.
Elsewhere: “How Financial Regulations Affect the Economy.”
In theory, I suppose, a corporate chief executive officer should be rewarded for (1) doing things that (2) increase the value of her firm. She should mostly not be rewarded for (1) increases in the value of her firm that have nothing to do with her (macroeconomic or industry or commodity trends, etc.), or (2) doing things that do not increase the value of her firm.
In the real world it is not always easy to untangle these concepts, particularly when you are constructing a compensation plan to incentivize the CEO to do stuff that will increase the value of the firm. How do you know, in advance, what will increase the value of the firm? In practice you will tend to construct a compensation plan that rewards the CEO for increases in the value of the firm (giving her stock options that are worth more as the stock goes up, etc.) even if they have nothing to do with her; or that rewards the CEO for doing stuff that you think might be worth doing (opening more stores, increasing revenues, decreasing costs) even if they turn out to be worthless or destructive; or that crudely combines the two, say by giving her more stock options (value-linked) if she opens more stores (doing-stuff-linked).
This problem seems to be particularly acute in the U.S. energy industry where, to oversimplify drastically:
Paying a CEO for increases in firm value might lead to random results, while paying her for doing stuff might be counterproductive. The optimal approach might be to pay a CEO a few million dollars a year to just sit in an office deleting emails as they come in, but who wants that job? (Me, is the answer.)
So here is a story about a shareholder trying to change the compensation structure at shale driller PDC Energy Inc.:
The SPDR S&P Oil & Gas Exploration & Production exchange-traded fund, which tracks the performance of more than 60 U.S. producers including PDC, has lost 59% over the past five years. In the same period, the S&P 500 stock index has gained 48%. PDC shares, meanwhile, have fallen 39%.
Investors blame compensation structures that reward executives for boosting output and adding reserves with little regard for commodity prices. Such pay plans encourage executives to drill wells even if doing so is uneconomic. The practice stems from the shale boom’s early days, when companies raced to exploit newly viable drilling fields.
By late 2014, most of the shale fields had been spoken for and oil prices began their five-year slump, dropping to levels that made many new wells unprofitable. Still, producers have largely continued to pay executives to produce more oil and gas than they did the year before.
PDC’s average daily production, for example, has more than quadrupled since the end of 2014, though that ramp-up has failed to lift its shares.
PDC has based an unspecified portion of Mr. Brookman’s past bonuses on whether the company tops year-over-year production-growth targets, according to securities filings.
One thing that we talk about a lot around here is whether common ownership of multiple companies in the same industry by large institutional investors leads those companies to compete with each other less aggressively. One plausible mechanism for this theory would be that shareholders approve pay packages that discourage competition: If a CEO’s pay is heavily correlated to industry profits, she will not have much incentive to try to gain market share.
Here, though, CEO pay seems to be heavily weighted toward increasing market share, even at the expense of the firm’s profits. This is the pay structure you’d get if shale companies were all owned by irrationally hyper-competitive shareholders, ones who want their team to drill the most oil even if it loses money, not by common shareholders whose economic interest is in maximizing industry profits. PDC’s four largest shareholders are BlackRock, Vanguard, Dimensional and Fidelity, who combine for 36 percent of its stock; they are all also top-10 holders of multiple other large U.S. shale drillers. I do not know what to tell you. The practical explanation might be that CEO pay practices are mostly based on the preferences of CEOs, and passive institutional shareholders tend to sign up for whatever those preferences are, whether they are anticompetitive or pro-competitive or even destructive.
Last week Neiman Marcus Group announced an agreement in principle to extend some of its debt maturities. In return for this agreement from its debtholders, Neiman Marcus agreed, among other things, to make a technical change to its debt that will make it much easier for people who hold credit-default swaps to collect payments on their CDS if Neiman Marcus defaults. (Before the change, that CDS was sort of orphaned, so even if Neiman Marcus defaulted it wouldn’t pay off much; now it will be un-orphaned and will pay off normally on default.) One Neiman Marcus creditor complained bitterly, saying that “this seemingly innocuous provision is a spectacular ‘Devil’s Bargain,’ presumably struck by the Company at the behest of the Sponsors to create a massive windfall for a subset of creditors betting against the Company, in exchange for a release for the Sponsors from all claims against them,” and warning that Neiman Marcus might “suffer a similar fate as Windstream,” a company that was pushed into bankruptcy when Aurelius Capital Management LP sued it for a default on its bonds in order, allegedly, to get paid off on its CDS.
I was mostly untroubled by this. For one thing, there is nothing weird about having CDS that will pay out if your bonds default; that’s how CDS works on most companies, and it’s mostly good for them. For another thing, it’s fine to worry that this trade makes it more attractive for a creditor who owns a lot of CDS to push Neiman Marcus into default later, but that worry is not a good reason to reject this extension and risk pushing Neiman Marcus into default sooner. Handing your creditors a loaded gun seems bad, but if it’s the only way to stop them from stabbing you right now then it’s fine.
On the other hand, Bloomberg News reports that it’s a real Chekhov’s gun:
Aurelius Capital Management helped push Neiman Marcus Group Inc. to tweak its proposed debt swap in ways that could create a windfall later on for investors betting on a default, according to people with knowledge of the matter.
Man, they just did that Windstream trade! They probably showed up at the negotiation with Neiman Marcus still cackling. I stand by my view that it could be rational to get an extension now even at the risk of a default caused by a net-short debt activist later, but it would not be fun to sign up for that.
Elsewhere: “Wall Street Wants to Reform CDS. Here’s Why That’ll Be Tough.”
There is a cycle in financial and economics journalism where there is some weird thing that journalists like (journalists like weird things), and so they ask a bunch of famous mainstream finance and economics people about it, and the famous mainstream people are famous and mainstream in part for their ability to have strongly expressed opinions on whatever topic you throw at them, so some of them say “that sounds weird and bad!” and you can write stories like “Famous Person Thinks Weird Thing Is Bad,” and some of them say “that sounds weird, I like it!” and you can write stories like “Famous Person Thinks Weird Thing Shows Promise.” This doesn’t tell you much about the weird thing, but it does tell you something about the temperament of the famous people: Some are cautious and crotchety and hate weird new things; others are starry-eyed optimists or novelty-seeking tinkerers, and love them all.
Here is “Paul McCulley Sees Value in MMT; Larry Fink Calls It ‘Garbage,’” and I think what I am going to do here is not even spell out what “MMT” stands for. If you have come this far you probably know already and have strong feelings about MMT, and if you don’t it will not make your any life better to find out what MMT is and develop strong feelings about it. But in any case it works better just as a string of letters. “Warren Buffett Sees Value in [series of alien glyphs]; Jamie Dimon Calls It ‘Garbage,’” the actual content doesn’t matter, you can do this with any concept. I am not sure you need a concept even; if you asked Paul McCulley and Larry Fink about QNZ, probably one of them would see value and one would say it’s garbage, even though QNZ is just a series of letters I put together here that, dear lord, I hope do not stand for anything. Here’s Bloomberg’s Joe Weisenthal with the most relevant parallel:
The MMT convo really does feel just like 2017 Bitcoin in the sense that every day, someone from the mainstream, who hasn’t spent much time learning about what it is, trashes it.
Before Bitcoin there was a brief glorious moment where the thing was “the platinum coin,” and oh the fun we had. I still have some hope that “should index funds be illegal” will rise to this level of thing. Mostly though I would like us to push into weirder things still. Wouldn’t it be more fun to ask Larry Fink what he thinks about Yamashita’s gold?
By Matt Levine
English: 7 Environment and Development Stories to Watch in 2019 Một người lính cứu hỏa chiến đấu với cơn hỏa hoạn dọc theo đường cao tốc Ronald Reagan còn được gọi là Quốc lộ 118, ở Thung lũng Simi, Calofornia. Ảnh chụp bởi Ringo H.W. Chiu/AP Một trăm năm trước, năm 1919 là một năm […]
Một người lính cứu hỏa chiến đấu với cơn hỏa hoạn dọc theo đường cao tốc Ronald Reagan còn được gọi là Quốc lộ 118, ở Thung lũng Simi, Calofornia. Ảnh chụp bởi Ringo H.W. Chiu/AP
Một trăm năm trước, năm 1919 là một năm quan trọng: Các quốc gia ký hiệp ước Versailles kết thúc chiến tranh thế giới thứ nhất, Mahatma Gandhi bắt đầu phong trào kháng chiến bất bạo động chống sự thống trị của Đế Quốc Anh, Grand Cranyon (Hẻm núi lớn ở bang Arizona của Hoa Kỳ) trở thành một vườn quốc gia. Và một lưu ý nhẹ, lần đầu tiên lò nướng xuất hiện trong các gian bếp.
Một thế kỷ sau, 2019 cho thấy những dấu hiệu đây sẽ là một năm quan trọng khác – và một năm không ổn định, là Chủ tịch và Giám đốc điều hành của WRI
(World Resources Institute: Viện tài nguyên thế giới ) giải thích tại buổi diễn thuyết hàng năm Những câu chuyện đáng xem của Viện vào ngày 9 tháng 1 tại Washington.
7 câu chuyện sau đây là những câu chuyện đáng xem trong năm nay khi nói về tương lai của môi trường và phát triển quốc tế.
1. Liệu địa chính trị có ngăn cản hành động vì khí hậu quốc tế?
Những biến động chính trị ở các quốc gia lớn khiến tương lai của hành động khí hậu quốc tế trở nên không chắc chắn. Chính phủ Brazil đã nghiêng sang phe cực hữu năm 2018 với việc trúng cử của Tổng thống Jair Bolsonaro, trong khí Mexico chuyển sang phe cánh tả với Tổng thống mới Andres Manuel Lopez Obrador. Hướng tới năm 2019, các cử tri ở Ấn Độ và Indonesia sẽ bỏ phiếu trong khi Trung Quốc đối mặt với thách thức của việc suy thoái kinh tế.
Khí thải toàn cầu đã tăng lên trong năm 2017 và 2018, sau ba năm ở trạng thái bình ổn.
Hai thời điểm quan trọng sẽ cho thấy những thay đổi này ảnh hưởng như thế nào đến hoạt động khí hậu quốc tế: tại Hội nghị thượng đỉnh của Liên Hợp Quốc về khí hậu vào tháng 9, liệu các nhà lãnh đạo của các quốc gia có cho thấy họ sẽ đẩy mạnh các cam kết về khí hậu đầy tham vọng không? Liệu họ có tăng tài trợ cho quỹ Khí hậu Xanh, đầu tư vào phát triển khí thải thấp và đàn hồi khí hậu, trong suốt giai đoạn bổ sung vào tháng 10? Và liệu các doanh nghiệp có vượt qua các chính phủ trong các hành động vì khí hậu táo bạo?
2. Liệu việc thích nghi khí hậu có tăng lên trong các chương trình nghị sự toàn cầu?
Những tác động của biến đổi khí hậu chưa bao giờ rõ ràng hơn bây giờ và đe dọa nhiều như hiện này . Số lượng thảm họa liên quan đến khí hậu, như hạn hán và lũ lụt, đã tăng lên gấp đôi kể từ những năm 1990. Ngày nay hơn 150 triệu người phải đối mặt với các rủi ro sức khỏe liên quan đến nhiệt so với năm 2000.
Số lượng thảm họa liên quan đến khí hậu như hạn hán và lũ lụt đã tăng lên gấp đôi từ những năm 1990. Ảnh chụp bởi NPS Climate Change/Flickr.
Tuy nhiên thiếu sự lãnh đạo, số liệu và tài chính để giúp chúng ta thích ứng với hậu quả của biến đổi khí hậu. “ Sự thích nghi là người chị em cùng khổ của sự giảm thiểu”, Ông Steer nói.
Điều đó có thể thay đổi năm nay. Ngân hàng thế giới tuyên bố rằng một nửa quỹ đầu tư khí hậu của họ sẽ chuyển hướng sang cho việc thích ứng. Ủy ban thích ứng toàn cầu mới, do Kristalina Georgieva, Ban Ki-moon và Bill Gates, ra mắt vào tháng 10 năm 2018 và mục đích là tăng hồ sơ thích ứng và tăng tốc hành động trên khắp thế giới. Ủy ban, triệu tập bởi 17 quốc gia, sẽ cho công bố các báo cáo nghiên cứu hàng đầu vào tháng 9 cùng với một vài hành động theo dõi để giải quyết các thách thức về thích nghi cụ thể.
3. Liệu xu hướng “thời trang nhanh” có chậm lại?
Người tiêu dùng ngày nay đang mua quần áo nhiều hơn 60% so với năm 2000, và một xe rác quần áo thải bị vứt bỏ được thiêu hủy hoặc chuyển đến bãi rác mỗi giây một ngày. Không thể lờ đi các tác động xã hội và môi trường của xu hướng “thời trang nhanh”.
Ví dụ: Một chiếc áo thun cotton cần đến 2700 lít nước (hơn 700 gallons) để sản xuất, bằng một lượng có thể cấp nước uống cho một người bình thường trong 2 năm rưỡi.
Có rất nhiều dấu hiệu ban đầu của một nền công nghiệp bắt đầu giải quyết những thách thức, với sự tăng trưởng đáng kể trong các công ty cho thuê và tái sử dụng quần áo như Rent the Runway và The RealReal. Các nhà chế tạo đang thử nghiệm với các loại vải bền như da được phát triển trong phòng thí nghiệm và sợi làm từ trái cây. Liệu các mô hình kinh doanh này sẽ là một xu hướng kéo dài hay chỉ là theo mốt nhất thời?
Vào cuối năm nay sau, Hiệp hội may mặc bền vững sẽ cho ra mắt một diễn đàn báo cáo nơi các công ty có thể chia sẻ thông tin về tính bền vững của họ. Mục đích sau cùng của hiêp hội là cung cấp điểm hiệu suất cho các thương hiệu, sản phẩm và các nhà máy. Cũng trong năm nay, các sáng kiến mục tiêu dựa trên khoa học sẽ được đưa ra hướng dẫn cho may mặc và giày dép, điều đó có thể giúp các công ty đặt ra các mục tiêu giảm khí thải phù hợp với khoa học khí hậu mới nhất.
4. Liệu các công ty cung cấp hàng hóa có tuân theo các cam kết của họ để ngăn nạn phá rừng?
Bất chấp các cam kết từ gần 500 công ty đa quốc gia nhằm giảm thiểu nạn phá rừng trong chuỗi cung ứng vào năm 2020, năm 2017 được xem là năm có có lượng mất cây che phủ rừng cao thứ 2 từ năm 2001, sau năm 2016. (năm 2018 các con số không có sẵn cho đến cuối năm). Các loại hàng hóa như gỗ, đậu nành, dầu cọ và thịt bò chịu trách nhiệm phần lớn. “chúng ta đang ở trong tình trạng khủng, và đó cũng là vấn đề của nhân loại” Steer nói. “ Hơn 200 nhà bảo vệ môi trường mất mạng năm ngoái”
Xác công ty năm 2020 có đặt ra được các mục tiêu kiên trì hay không? Và liệu rằng sẽ có nhiều chính phủ tham gia và hỗ trợ những nỗ lực này?
Theo dõi bản đồ chống nạn phá rừng từ Ủy Ban Châu Âu; liệu Indonesia tiếp tục làm chậm nạn phá rừng và liệu rằng tổng thống Bolsonaro có mở cửa Amazon để phát triển hàng hóa hay không. Tìm kiếm sự cộng tác công tư [AF1] tại Hội liên minh rừng nhiệt đới vào tháng năm và liệu rằng làm tăng sự chú ý đến đa dạng sinh học có gây thêm áp lực không?
5. Liệu sáng kiến Vành đai và Con đường có hỗ trợ tăng trưởng xanh?
Sáng kiến vành đai và con đường của Trung Quốc là một cố gắng phát triển toàn cầu to lớn, liên quan đến việc xây dựng đường xá, cảng và cơ sở hạ tầng ở hơn 100 quốc gia. Tuy nhiên trong khi các nhà lãnh đạo Trung Quốc biện hộ cho “Việc bảo vệ môi trường sinh thái” ở mọi khía cạnh của sáng kiến vành đai và con đường, các nghiên cứu chỉ ra rằng hầu hết các khoản đầu tư cho sáng kiến năng lượng đều hỗ trợ nhiên liệu hóa thạch hơn là nguồn năng lượng tái tạo.
Năm nay sẽ là năm quan trọng cho việc đánh giá liệu Trung Quốc có thực sự nghiêm túc thực hiện công việc đảm nhận to lớn cho môi trương bền vững hay không. Diễn đàn lớn năm 2019 là một thời điểm tốt để tạo nên các hướng dẫn có tính bền vững cho các dự án khởi điểm. Các dấu hiệu khác của tiến bộ liệu sẽ được Trung quốc tăng tốc các nguồn đầu tư vào năng lượng tái tạo ở nước ngoài hay không, bởi vì quá trình đã được tiến hành trong nước và liệu rằng các kế hoạch khí hậu của các quốc gia có bắt đầu thông báo đầu tư vào sáng kiến vành đai và con đường hay không?
6. Di chuyển Vi mô: theo mốt hay là tương lai?
Những chiếc xe đạp và xe tay ga dùng chung đang được bắt đầu ở các thành phố trên thế giới. Trường hợp điển hình: Bird, một công ty cho thuê xe tay ga điện, là công ty khởi nghiệp nhanh nhất cho đến nay đạt đến “ trạng thái kỳ lân”, có định giá một tỷ đô.
Tuy nhiên cuộc cách chia sẻ mạng vi mô này có một nhược điểm: Một vài xe đạp và xe tay ga có chất lượng thấp, dẫn đến các sự cố và lãng phí, trong khi những cái khác chồng chất trên vỉa hè, chen chúc với người đi bộ. Đây cũng là mối lo ngại về an toàn.
Vậy những chiếc xe đạp và xe tay ga dùng chia sẻ là theo mốt hay là một vật cố định trong cảnh quan đô thị?
Các quyết định đưa ra năm nay có thể giúp bảo đảm cho sau này. Ford, Uber, Lyft and các động cơ nói chung đã tham gia vào không gian vi mô. Liệu có các công ty khác tham gia? Theo dõi cách các thành phố điều chỉnh những chiếc xe đạp và xe tay ga dùng chung, bao gồm cả khi nói đến giấy phép, giá cả và sự an toàn. Sắp tới Liên minh di động đô thị mới (New Urban Mobility Alliance – NUMO) có thể giúp cung cấp những hướng dẫn. Câu hỏi lớn ở đây là liệu rằng các lãnh đạo thành phố và các nhà hoạch định sẽ tập trung vào thiết kế các đường phố để ủng hộ con người và tính vi mô trên ô tô hay không?
7. Hành động vì khí hậu của Hoa Kỳ có phải đang ở bước ngoặt?
Chính quyền Trump đã cố gắng rút lại hơn 70 biện pháp bảo vệ môi trường. Nhưng hành động khí hậu của Hoa Kỳ chưa kết thúc. Thực tế, các tiểu bang, các thành phố, các nhà kinh doanh đang đẩy mạnh, mở rộng các mục tiêu năng lượng tái tạo và định giá carbon.
Cuộc bầu cử giữa nhiệm kỳ 2018 đã cho ra một loạt các nhà lãnh đạo khí hậu mới, bao gồm 10 thống đốc mới với các kế hoạch năng lượng sạch và thêm nhiều thành viên của Quốc hội ủng hộ hành động khí hậu. Thỏa thuận xanh mới đang đổ dồn nhiệt huyết vào cuộc tranh luận về khí hậu hơn tất cả những gì đã được thấy trong những năm gần đây.
Theo dõi các sáng kiến định giá carbon mới, các quốc gia khác tham gia vào the 29 đã có kế hoạch năng lượng sạch và phương pháp tiếp cận của các tiểu bang và doanh nghiệp để giải quyết khí thải từ giao thông, khu vực phát ra khí thải lớn nhất của quốc gia. Quốc hội sẽ hỗ trợ giá carbon, phát hành một thỏa thuận cơ sở hạ tầng mới, hoặc cung cấp thêm nhiều kinh phí cho công nghệ sạch? Và chỗ đứng nào cho khí hậu trong cuộc bầu cử tổng thống 2020?
“ Không giống với cuộc bầu cử tổng thống vừa qua khi mà hành động vì khí hậu cơ bản là không có chỗ đứng, liệu chúng ta sẽ thấy được nó khá là ở trung tâm trong cuộc bầu cử này?” Steer hỏi. “Lần này, chúng tôi tin rằng nó thực sự có khả năng”
Để biết thêm thông tin, theo dõi bản ghi chép của Các câu chuyện của Viện tài nguyên thế giới(WRI’s Stories) để xem các sự kiện năm 2019
In countries where energy is plentiful, most people don’t think twice before plugging into the grid.
Whether it is for a simple top up for your smartphone battery at the airport or the continuous energy chug of household appliances, it’s easy to take the electricity we use for granted.
But do you know where your electricity comes from – and whether it is green or not?
Today’s maps come from Reddit users Dr_Engineerd and PaulsEggo, who have used data from national energy administration agencies for the U.S. and Canada to show what percentage of electricity generated in each state or province is green.
Let’s start with the map of the United States:
The above map combines electricity generation for all renewable forms of energy (such as solar, wind, geothermal, or hydro) with nuclear, which is considered a sustainable energy source by many experts.
The top five states are as follows:
|Rank||State||% of green energy||Top energy source|
Vermont leads the way with an impressive 99.6% mix for electricity generated. Also notable is New Hampshire, which makes the list thanks to its heavy usage of nuclear – the state’s Seabrook nuclear plant (1,244 MW) is the largest individual electrical generating unit on the New England power grid.
Now, here are the bottom five states:
|Rank||State||% of green energy||Top energy source|
|#49||Rhode Island||4.8%||Natural gas|
West Virginia, Kentucky, and Indiana still get the majority of their electricity from coal.
That’s not to say states like Indiana have not been investing in green power – the state actually ranks 12th in the U.S. for wind capacity. It’s just not enough to make a dent in the larger energy mix.
Finally, here’s a similar look, but this time at Canadian provinces and territories:
Regions like British Columbia, Manitoba, Yukon, Newfoundland, and Quebec are known for their hydro power – all get over 85% of their electricity from hydro alone. Meanwhile, Prince Edward Island gets the vast majority of its power from wind.
On the flipside, the only three provinces or territories below the 20% green threshold are Alberta, Saskatchewan, and Nunavut.