How I Met Your Internet

“I told him that I had a daughter and he told me he had one, too. And he said, “Never give up on family.” And I didn’t. I took his advice. My God, the universe is random, it’s not inevitable, it’s simple chaos. It’s subatomic particles in endless, aimless collision. That’s what science teaches us, but what does this say? What is it telling us that the very night that this man’s daughter dies, it’s me who is having a drink with him? I mean, how could that be random?” – Breaking Bad

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The Mrs. took this picture during a particularly pernicious rainstorm.  They tell the kids to stay inside during a thunderstorm.  Meh.  If I get hit by lightning I’m buying a lottery ticket.

So, this is the 100th post.  I think the best way to deal with this is to skip the structure of wealth, wisdom, and health for this post.  The discipline of structure is nice, and I’ve learned a lot of things by doing it, but it’s nice to vary from that structure from time to time to be spicy, like taco-flavored kisses.  So, here are some random bits of fog from my brain.  Some of these may end up as posts at some point . . .

  • If someone is cloaking a concept in really, really confusing language, they’re lying or trying to cover something up.  The desire to create an impression contrary to truth requires that they twist the language to the point of ripping.  Using bigger words and confusing, academic phrasing are just camouflage for the lie.  For example:  At a dinner party, a gentleman was talking about overpopulation.  His solution?  Reduce the population by a billion or so through “caloric restriction.”  He was confronted by another guest . . . “You want to starve a billion people to death?”  Yup.  Really happened, according to the article.
  • If you depend on someone to give you money or things so you can live, they control you.  This is why welfare is control.  This is why parents get to make the rules.  This is why bosses can be arbitrary, and the Hollywood predator gang could stay so safe, for so long.
  • There is no objective morality without a belief in a higher power.  Without that, we’re all just meat and cells.
  • Children need enough privacy to grow, enough structure to grow well.
  • Youth is rarely wise, but it might be smart.  My brother, John Wilder (yes, we have the same name – just different parents – my family tree looks like an inkblot) talked about how his company had hired a 30 year old CFO.

Me:  “He won’t last a year.”

Bro:  “He’s smart.”

Me:  “Yeah, but he’s got a LOT of growing up to do.”

The guy flamed out in a year.

  • I don’t know why wisdom costs us so much pain and difficulty in life.  Is it because, like divorce, it’s worth it?

Rorschach, Copyright DC Comics

How my family tree would look as a superhero. © Certainly DC Comics, Fair Use Claim, Will Remove on Request

  • Liars lie.  The only thing that stops them is when they get caught and something tragic happens, and mostly not even that.  I’m not sure why they do it.
  • Cowards are the most dangerous of men.  They will quickly befriend you even when you don’t deserve it.  They will desert you at the first sign of an angry mob.  And they’ll join the mob.
  • Being close to a coward is bad.  But you can always count on a coward being a coward and acting like a coward.  Having a liar close to you is worse.  They might tell you pleasing lies for a time, and you might forget their nature.
  • You are the average of your five closest friends.  Choose wisely.
  • People say, “Kids tell the truth!  It’s natural.”  Oops, I meant people who never seen an actual child say that.  Kids lie as soon as they can figure it out, as any parent can tell you.  No, I didn’t eat that cookie.
  • Between the ages of 10 and 14 are the only times you really have to parent.  Before that, it’s teaching.  After that, it’s supporting.  Something happens between the ages of 10 and 14 that determines whether or not the kid goes bad.  They’ve learned how to inflict pain and but haven’t learned empathy or kindness or responsibility – they’re a group of snotty acne-covered psychopaths.  This is why middle school age children are such miserable creatures, and once you win the battle as a parent you can hit the autopilot once they hit high school.
  • Underarm hair grows back.  A reputation doesn’t.  In other words?  One drop of snot ruins all the eggnog.
  • Always take an offered breath mint.
  • We waste a lot of time.  (I include me in that.)  Ben Franklin said, “If thou loveth lifeth, wasteth noteh time, for that is what life is made of.”  And a big part of that waste is in pursuits that produce . . . nothing.  I’ve been accused of being a “hillbilly” for fixing a faucet rather than buying a new one.  In my defense, my name isn’t Billy.  And I could fix the faucet for $5 and an hour of time, and some cussing and bruised knuckles.  And I know how to fix a faucet now!  A faucet that was last manufactured in 1980.
  • Buy new faucets instead of fixing them.
  • You can’t reason with someone who’s acting out of emotion.  And you ESPECIALLY can’t reason with a crowd of people who are rioting.  Fight reason with reason.  Emotion with emotion.  And rioters with force and/or Optimus Prime®.  Thus the following is the best thing to wear to a riot (LINK) (and no, not getting paid for this link):

optimus-prime-costume-hoodie.main

  • Reason is something we use to convince ourselves that what we want is wise and, well, reasonable.
  • Cultures aren’t all equal in the output they produce.  Some cultures produce much more violence, less wealth, and much less freedom, and some even create all three negatives at once (Venezuela).
  • I invented a gravity cannon.  It consists of two huge counter-rotating cylinders of the matter from a neutron star (this stuff is denser than a Kardashian at 900 pyramids of weight for a single teaspoonful).  Thick cylinders, but hollow.  I think it would only require a dozen or so neutron stars to build.  To shoot it, you have to jam the inner cylinder into the hollow outer cylinder.  The result is a vortex of gravity that might stay stable enough (if the cylinders are rotating fast enough) to slam into your enemy – an invisible ring of gravity death travelling at them at whatever speed you slammed the cylinders together at.  It would also create a massive black hole and a huge gamma ray outburst that would roast a turkey from 100 light years away.  Is it impractical using a dozen solar masses and the approximate energy put out by our galaxy in any given year for one shot at an enemy?  Possibly.  But maybe I need a government grant to study it?  We wouldn’t want Russia to have one and us not.
  • There is bacteria growing on the space station.  On the outside of the space station.  While it’s in space.  I sense a 1950’s B-Movie:  The Fungus from Mars.
  • Tip well.  Show gratitude when it makes sense and when you can afford it.  Give a hard working waitress a $10 tip on an $8 dollar bill?  They’ll mention it for days.  Where else can you make someone so happy for so little?

Hope you’ve enjoyed the first 100 as much as I have.  See you Monday!

Soviet Genetics, Mangoes, Your Momma, and Swedish Weight Gain

“The only difference between Señor Chang and Stalin is that I know who Señor Chang is.” – Community

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This duckbilled dinosaur could have been a kitten, if only it had been loved.

When I start a blog topic, most of the time I know where I’m going, and, generally where I’m going to end up.  Most of the time.  Sometimes I end up learning something completely unexpected that changes my conclusion.  Sometimes I learn that we, as humans, are only scratching the surface of how really, deeply weird the world around us is.  This post is deeply weird.  Hang, on, buckle up and enjoy my favorite health post ever . . . .

Trofim Lysenko was born in Ukraine in 1898.  Apparently the baby name books in Russia includes the name “Trofim” even though to me it sounds like a fitness product advertised on an infomercial at 3AM on The Discovery Channel® – get fit with new Trofim™!  Frankly, Lysenko sounds like a bathroom cleanser – so poor Trofim was destined for failure, right?

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Would you buy a used economic theory from this man? – photo of Lysenko, public domain, via Wikimedia

Trofim studied agriculture, and, apparently came up with a bunch of ideas about how plants could better grow around the time the Soviet Union was starting up.  His theories included the idea that cows that were treated well would give more milk, and that plants could cooperate somehow to make more wheat.

Joseph Stalin LOVED Lysenko.  His theories dovetailed exactly with Stalin’s Communism – the importance of genetics went to zero.  With proper nurture, you could create a True Soviet Man – people weren’t just created with equal rights – they were BORN equal.  If you could create the right conditions, everyone would BE equal, just like George Clooney, Brad Pitt, and me.  Oh, wait, that’s observably false.  Brad Pitt could never get my SAT score, even if he studied.  Clooney?  Let’s see him go bald, huh?

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Unrecorded in the West is the fact that Stalin’s giant head was carried in local parades by men in white suits up until 2003, when it was retired to a farm outside of Minsk where it now lives with gently treated cows and monkeys. – photo of MegaStalin, Bundesarchiv, Bild 183-R78376 / CC-BY-SA 3.0

Lysenko singlehandedly destroyed genetic research in the Soviet Union for forty years, as well as being responsible for the jailing (and sometimes execution) of everyone who disagreed with him.  Certainly no one in the West would do that about people who dissent scientifically . . . right?  Anyway, Lysenko set the standards for political correctness in research, and yes, the Soviet Union is where the term Politically Correct came from – the idea that ideas themselves couldn’t be discussed unless their politics were in vogue at the moment.  And if you brought up politically incorrect ideas?  Gulag for you, comrade.

Mao Zedong proved that this point could be taken to extremes when the Pakistani ambassador gave him a case of mangoes.  Mao didn’t like mangoes.  So  . . .

In the afternoon of the fifth, when the great happy news of Chairman Mao giving mangoes to the Capital Worker and Peasant Mao Zedong Thought Propaganda Team reached the Tsinghua University campus, people immediately gathered around the gift given by the Great Leader Chairman Mao. They cried out enthusiastically and sang with wild abandonment. Tears swelled up in their eyes, and they again and again sincerely wished that our most beloved Great Leader lived then thousand years without bounds … They all made phone calls to their own work units to spread this happy news; and they also organized all kinds of celebratory activities all night long, and arrived at [the national leadership compound] Zhongnanhai despite the rain to report the good news, and to express their loyalty to the Great Leader Chairman Mao.

August 7, 1968 People’s Daily

Yes.  The Chinese people worshiped (for 18 months) mangoes so they didn’t disappoint Chairman Mao.  And it had lasting consequences for some.   A dentist was executed for saying the mango touring his village looked like a sweet potato.

Don’t believe me? A lot more about it here (LINK).

But, we were talking about Lysenko.

He killed genetic science because of the laughable idea that everything was nurture, not nature.  We do know that there are lots of things that are totally genetic:  intelligence, likelihood of being criminal, eye color, hair color, blood type, et cetera.  For example, you can stunt a smart person’s intelligence through poor nutrition.  But their overall capacity to be intelligent is about 70%-80% genetic.

So Trofim (snicker) Lysenko was entirely wrong?

No.

We’re learning a lot more about something called epigenetics now.  Epi in this case means “over” or “over-genetics.”  If you remember, DNA is a double helix molecule that stores all of the information about how to make a copy of you.  One gram of DNA can, according to folks at Harvard, store 700 terabytes of data, or about as much information as 14,000 Blu-Ray® discs of Geostorm© when it comes out.  Which will also be 13,720 more discs than Geostorm© sells.

DNA stores lots of information, but at a cost.  DNA is information dense, but it is looooooooooong.  Each cell has about 2 meters of DNA if you stretched it out.  Take all of the DNA in your body and lay it end to end?  (Do NOT try this at home, it’s kinda messy – if you’re going to do this, at least use the garage.)  There’s enough DNA, laid end to end, which would be roughly diameter of all of the planets in our Solar System.  That includes Pluto – we’re gonna take it back.

DNA is long.  And since our cells aren’t 2 meters long, something happens to the DNA in your cells.  Rather than tossing the DNA into the cell like The Boy and Pugsley throw extension cords onto the garage floor, the cell has little cord winders that wind up the DNA so it’s not all tangled up like Johnny Depp’s finances.  So, the DNA is tightly wound around the cord winders.  In my garage.  In your cell.

But it turns out that the cord winders themselves (I know this analogy is getting a bit stretched) are very much impacted by your behavior.  And, the scary part?  Potentially your mother’s behavior.  Scarier?  Even your grandmother, and we all know what a tramp she was.

I recall reading a story about a Native American tribe in Arizona that experienced famine that killed off a significant portion of the tribe.  The result?  A bunch of really, really fat Native Americans two generations later.  My theory had been that the people with the skinny genes had all died out, and that the remaining Native Americans had all had genes that were really, really efficient with calories.  And liked Twinkies®.  Makes sense?  Sure.

But then?  Epigenetics.  Turns out that this phenomenon was repeated in Sweden, where in some really northern town, named “Rejëllyfaarnøørthernplåcedüde” there was a periodic starvation, because they didn’t live where any food was, except seals.

All the kids from Rejëllyfaarnøørthernplåcedüde got fat.  Really fat.  Turns out the operative theory is that the environment that the mothers grew up in changed not the DNA but the cord winders and how the DNA was wound up.  Because of the changes to the cord winders (which are really enzymes) certain parts of the DNA were exposed that changed the way the cells work.  This is entirely necessary, because when you’re a baby, your eye cell needs to know that it’s an eye cell and not a lung cell, otherwise you could see your guts and have to remove your glasses to breathe, which would make dating . . . complicated.

The end result of this epigenetic change was it made the kids more likely to burn off energy slowly – which is a great adaptation if you’re starving.

But it looks like there are a whole host of other adaptations that may be driven by epigenetics:  addiction, depression, anxiety, fear conditioning, and that’s just the bits we’re beginning to understand.  Yes.  What scares you might be related to what scared great grandma.  One experiment with mice shocked the feet of the mice when a cherry blossom smell was introduced.  The mice babies from the mothers . . . who had never been shocked . . . were scared when they smelled cherry blossoms.  The impact on the baby mice from the experience of their mothers was transmitted . . . without genetic change.

So, Lysenko was not totally wrong.

The health implications are stunning.  Can there be a pill that you take that switches “on” a weight loss enzyme?  Maybe.  What other conditions can we change?  Can we make Kardashians attractive?  Sadly, no.

But beyond that, it may go to explain weird things . . . motherly love?  The baby’s DNA is floating around inside the mother (you can determine a baby’s sex through a blood test of the mother, so, the DNA is there).  How does this impact the way a mother bonds with a baby?

What about surrogate moms?

What about all of the things that we can change?  We can’t make ourselves smarter through epigenetics, but . . . can we make ourselves better?

Like I said – this is weird territory, and we have a LOT more questions than answers.  And, fortunately, we have plenty of mangos to worship.  Just don’t compare epigenetics to Johnny Depp’s sweet potato.

Your Passion is Stupid

“No, not unpopular, they just have a more selective appeal.” – This is Spinal Tap

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Okay, there’s a time when your passion of throwing big rocks in the river should be followed.  That’s whenever you’re at the river.

Pop Wilder was a banker.  Oh, I know what you’re thinking, John Wilder is the banker’s son, summers in Maine, winters in Switzerland.  No.  Summers in the forest cutting firewood in Colorado, winters in Colorado on snowmobiles fifty miles into the back country.  Okay, winters were better than Switzerland, at least since the CIA stole the secret of the Swiss “hot chocolate” technology and weaponized it in Swiss Miss® cocoa packets.

On occasion, especially after a few bourbon and waters, Pop Wilder would get a bit melancholy.  “John Wilder, you can be whatever you want to be when you grow up, but don’t be a banker.”  Although by any measure, Pop was successful.  And he was passionate about his work.  He left every morning before the Sun came up to open the bank.  He got home two hours after the bank had closed.  He unlocked the place and locked it back up.  He never took more than 10 vacation days in any year, and I never saw the man take one day off due to being sick.  (An aside:  I’m stunned that’s the first time I came to that realization – I haven’t taken a sick day off since 2000.  Wonder where that stubbornness comes from?)

Pop Wilder, you see, wasn’t the “snort cocaine off a stripper’s butt” type banker, but rather the “small town banker that drives a car to work that’s eight years old.”  I think he might have not abused his power enough . . . I’m not sure.  What’s the use of having power, if you don’t abuse it?

What always bothered Pop Wilder the most was when he had to explain to a person who wanted to borrow money that he wouldn’t lend it to them – he didn’t think the loan was based on sound collateral, or the borrower’s income wasn’t enough to cover their living expenses plus their debt.  He was proud at the end of his career that he’d never had to foreclose on a single home.  To him, the act of lending money was a moral event – you didn’t burden a borrower with more debt than they could pay.

That didn’t make the borrowers who he turned down happy.  They were (understandably) upset that Pop had crushed their dreams, but in the process, he’d done them the biggest favor of their lives.  In a weird way, his “no” had saved their financial future from the siren song (read The Odyssey or watch Oh, Brother, Where Art Thou (LINK) if you missed that reference) of their dreams and passions . . .

One of my favorite things to see is the garden variety successful person who’s being interviewed.  Let’s pretend it’s me, since I’m rich and semi-famous:

Oprah:  “What’s your secret, John Wilder?  How did you get to the pinnacle of success and yet maintain those superb washboard abs?”  (Oprah bites her lip.  Perhaps I should have not worn such a tight shirt.)

John Wilder:  “I followed my passion, Oprah.  My passion is all consuming.”

Fade to Clip of Me Synchronized Snowboarding Off the Top of Mount Everest Accompanied by an Actual Yeti.

You’ve heard that, too:  successful people telling you to follow your passion.  I probably heard that two dozen times between high school and college.  Follow your passion.  Invariably it was by short salesmen who were in suits while I was wearing an Iron Maiden t-shirt.  And I was (really) thinking about going skiing or checking out the girl of the week.  My passion did not and does not involve being an old man in a suit.

Hopefully you haven’t done followed your passion, because your passion is stupid, unless you are the ghost of Steve Jobs.  Steve, you can follow your passion.  Only you.  Namaste.

I’m sorry to tell everyone else a simple fact: your passion is stupid.  And my passion?  My passion is stupid, too.  Maybe even really stupid.

The Mrs. and I have been married roughly since the invention of dirt.  We’ve thought about opening our own businesses several times, and even produced a business plan or two.  All of them have been based on things we like, things we are passionate about.  We’d discuss, fine tune, get the spreadsheets ready, and then decide if we were passionate about it.  As you’ve hopefully read in the fine pages of this blog before – the best deals are the ones you don’t do.  We’ve passed on most of the deals.

But one in particular we got all of our ducks in a huddle, got a small business loan application together, and went off to the local bank to ask for a small business loan with our spreadsheets and our plan and our proposals and estimates and projections.  I didn’t go to the meeting – I was at work.  But The Mrs. walked in, and the banker didn’t blink an eye before he got to his response.  “No.  Not now.  Not ever.  Please pretend we’ve never met.”

The Mrs. was upset when she got home.  I shrugged, and we decided to carry on without opening that business.  About a month or two later we read in the local newspaper about how someone had opened a business that was nearly exactly what we’d planned to open up.  They did a detailed story on the place, nearly a full page, with color pictures.  Amazing amounts of free advertising.

That business closed up before six months had passed.  The banker who said “No” had saved us $55,000 of loaned money.

Oh.  I get what Pop was doing.  Rather than helping people live their passion, he was saving them from their passions.

The people who say that you should follow your passion are generally not passionate about the thing that they’ve done, whether it be roasting coffee beans or creating BookFace®.  No.  They’re passionate about success.  They’re passionate about their business because it brought them success.  It’s like pretending you like Tootsie Rolls Lollipops® for the outer candy shell.  You don’t.  You like the center.

And that’s the secret of success.

I am passionate about playing the guitar.  I love to do it.  Unfortunately, my guitar is as good as Johnny Depp’s personal hygiene or money management skills.  So, of course, I devoted my entire career to playing bad guitar?  NO.  I suck at guitar.  I will never be good at it.  But . . . I do math and science-y things really well.  I have the intuition on that stuff that Eddie Van Halen has for meth guitar.  Maybe not that good, but I found that the combination of the math stuff and the science stuff and the planning stuff and the intuitive grasp of physical systems and processes (with a dash of normal human empathy) pops me into the top 0.1% (hint, that’s the only place the money is).  That combination allows me to win where other people would lose (in certain situations).  And in one instance the application of those skills allowed an IPO to go through that netted a company a billion or so dollars.  Yay me!

And winning in situations like that makes me passionate about combining those skills.  So, am I following my passion?  Well, I’m following my success, which is a lot like following passion.  Except following my passion would make me bankrupt because my guitar is only slightly better than my singing.

So it comes down to . . . what are you good at?  I mean, really good at?  Not what you’re passionate about.  Let’s face it:  you can be passionate about drinking bourbon, WWE, MMA or anthropology, but none of those things are helpful unless you’re part of the 0.1% AND you can figure out how to win/make money with that skill combination.

Can you make money with it?  Most things you’re good at don’t pay any (really any) money at all.  You’re in the top 0.001% of the world at trimming nosehair?  No.  Next.  Your skill should translate into actual income.  What does the best person in the world at what you’re good at make?  Can you live on 1/10 of that?

Okay.  You’re good at it.  It’s a rare skill.  You can make money at it.  Good money.  Now your challenge?  Get better at it.

Most people take a decade or more of really hard work, over 10,000 hours, to become world class at a skill.  Generally, the longer they execute the skill and the more they work at it, the better they become, peaking in their forties or fifties.  These aren’t physical skills – those peak about 24, and take a big nosedive once you pass 30 or so, and if your skill is there, strike quickly – age will pull you away faster than you anticipate.  What I’m talking about are mental skills that are honed by experience.

Passion?  No banker will lend on that.  They’ll lend on experience, skill, and excellence.  Be passionate about those and the world will allow you to snowmobile in Colorado in winter . . .

People will call you lucky.  Just smile and ignore the sweat.

Creative Destruction and the Fight For Your Eyes

“You know what it is?  You’re always attracted to someone who doesn’t want you, right?  Well, here you have somebody who not only doesn’t want you, doesn’t even acknowledge your right to exist, wants your destruction! That’s a turn-on.” – Curb Your Enthusiasm

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Behold, the chainsaw of Creative Destruction. This one will take care of those pesky optometrists!

There were vast periods of human history where . . . absolutely nothing happened.  If they had a newspaper, it would be blank for decades at a time.  Our Neanderthal (many of us) and other cave-dwelling hominids (all of us) ancestors lived for tens of thousands of years with little or no innovation, and that innovation that did show up was not all that exciting.  My bet is that most of them were fairly stupid, and it took generations of stupid people not having kids until humans were smart enough (and eloquent enough) to make an attempt at civilization.

Even with that first civilization, things changed only very slowly.  A thousand years of Egyptian dynasties (the pharaohs ruled Egypt for three thousand years) could pass and no one invented Cool Whip®.  You an Egyptian forward in time a thousand years and the only thing that had changed was that the music the kids listened to these days was too loud and just plain awful.  To put how very stagnant these civilizations were in perspective:  Jesus is closer in time to the people living today than He was to the time of the construction of the pyramids.  This statement will be true for another FIVE HUNDRED YEARS.

The Egyptian empire lasted a really long time, and since nothing changed, like a televised baseball game, it seemed even longer.  But then?  The Romans began to change the world, with a much shorter period of dominance.  And things keep changing faster, and faster.  More perspective:  an 85 year old has lived through 37% of the history of the United States.  An Egyptian 85 year old would have lived through less than 3% of the total length of the 3000+ year span of the pharaohs.

But scientific progress undid the pharaohs in what economist Joseph Schumpeter would call “Creative Destruction.”  Schumpeter originally derived Creative Destruction from his readings of Marx (Karl, not Groucho).  Creative Destruction is predicated on technological innovation coupled with entrepreneurial spirit in an effort to make money by disrupting previous economic structures and replacing them with new, more efficient structures.  An example:  Live performers were replaced by records.  That were (briefly) replaced by 8-Tracks.  That were replaced by cassettes.  That were replaced by compact discs.  That were replaced by .mp3 files.  That were replaced by . . . streaming music.  Each innovation replaced and (mostly) eradicated the previous iteration, making music more easily and reliably available.  Unless you have our mobile phone service:  streaming doesn’t work so well, since our wireless phone provider uses a series of wire coat hangers where we live to broadcast signal.

On Friday (LINK) I wrote about the coming Optopocalypse™.  This is another example of Creative Destruction in action.  Records destroyed local bands – you could hear better at home anytime than the local talent.  mp3’s destroyed record companies.  And 75%+ of optometrists will be looking for work soon enough because technology will have made most of what they do irrelevant.  And, outside of their families, the “Destruction” part of Creative Destruction results in greater value to all of society – more people will be able to see, since there’s hardly anyone that won’t be able to afford the low cost of the EyeQue®.

Another example is Zenni Optical (LINK).  I got great glasses from them (via my new prescription from EyeQue™).  I was testing out that prescription, and wanted to get some glasses.  I put my order in, and was even allowed to pay via Amazon, so they didn’t get credit card information.  I ordered my glasses on a Thursday, and got them the following Saturday (nine days later).  They were perfect in every way!  I then put in a new order for three more pairs.  Total cost, including express shipping?  About $200 for the three pairs, with the best lenses they offered, plus extra slip on sunglass attachments (and bifocals).

I ordered them on Saturday, and tracked progress.  By Sunday they were complete.

Here’s the shipping:

Origin Scan
CN
10/25/2017 9:49 P.M.
Order Processed: Ready for UPS

Shanghai, CN
10/25/2017 11:16 P.M.
Departure Scan
Arrival Scan

Anchorage, AK, US
10/25/2017 3:26 P.M.
Brokerage released the package. It will be processed through a clearing agency before final release to UPS.

Anchorage, AK, US
10/25/2017 4:46 P.M.

Departure Scan
10/26/2017 2:54 A.M.

Arrival Scan
Louisville, KY, US
10/26/2017 5:32 A.M.
Departure Scan

10/26/2017 5:51 A.M.

The glasses hit my hands about 2pm that day.  And, just like the first order, they were perfect.

If you look, it appears the package goes back in time a bit, but remember about the whole date-line thing.  Regardless, I’ll go with the story that my glasses came from the future.

Well, they did come from China.  Express, for $18.

This is certainly a great way to add value, and it (by definition) changes the price that many people will pay for glasses.  It’s Creative Destruction on a grand scale – Zenni will make billions.  But it cuts off another revenue stream that will add to the Optopocalypse™.  If you look online, optometrists are out in droves complaining about both EyeQue™ and Zenni®, some of which take the form of reviews that I think are less than honest.

And the optometrists are also fighting by trying to make innovation illegal – at least innovation that hurts their profit margin and their monopoly over information about your eyes.  They typically will call the bill a “patient protection act” or something similar, so it makes it sound like it’s really for the benefit of the patient.  I’m picking on optometry not because they’re unusual – they’re much the same as everyone else who is facing having their entire life and livelihood replaced by a disruptive app or Silicon Valley startup.

These regulations and laws actually end up hurting the economy – they make it more likely that companies like Zenni manufacture outside of the United States and not subject to US or state law rather than creating an eyeglass factory in . . . Kentucky, or Illinois.  I’m not unsympathetic to the 55 year old optometrist – and I don’t have a good answer for what he should do.  Becoming a roustabout in North Dakota in the oilfield is probably not a reasonable answer.  In times past, however, people displaced by technology and Creative Destruction have found new things to do.

Maybe they could ascend to that highest throne of prestige and power.

Blogging, anyone?

Stock Bubbles, Tulips, and Toilet Paper

“There’s only two things I hate in this world:  people who are intolerant of other people’s cultures and the Dutch.” – Austin Powers in Goldmember

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Read this blog or this man will shoot that car.

People can be stupid.

People in groups are almost always stupid, and they can remain stupid until they do quite a lot of damage.

Let’s take a trip off to Europe (unless you already live in Europe) and back in time to 1636 A.D. (unless you already live in 1636 A.D.) and review the price of . . . flowers???

The Dutch (at least I think that’s what they call the people from the Netherlands, but you can call them Sven or Maria or whatever suits you) in 1636 were a  seafaring bunch, who made money trading all over the world and had colonies in North America, South America, South Africa, India and all those islands between Asia and Australia.  One thing that a Dutch guy brought back (and I don’t think this one was lost) in addition to the most efficient way to remove hair and lint from your bellybutton was the tulip.

In a parallel development, the Dutch were big on trading stocks in companies, like the Dutch East India Company, or in commodities like sugar or pancake mix.  The markets were sophisticated.  In 1632, you could buy sugar for delivery in 1633.  This was nice if you wanted to guarantee your sweet tooth, but you could also trade that contract to somebody else for a higher price if they decided they needed the sugar to make PEZ® or Fruit Pies.   Nowadays we call those “futures” contracts.  Yup, the Dutch were doing this 400 years ago.

But a slight change in laws made those contracts different.  The buyer could buy the right to buy sugar.  The seller had to fulfill the contract, but the buyer had no obligation to buy it.  It was his or her (yup, plenty of Dutch female speculators) option to buy the sugar.  This is what is now known as “futures options.”  And you could buy them on . . . anything.

Even tulips.

In November of 1636 something must have broken in the minds of a batch of silly dead (now, not then) Dutchmen and women.  They started bidding up the futures options contracts on . . . tulips.  And various colors and varieties became more valuable, especially one that that had a virus that changed and made a tiger-striped pattern.  They looked awesome.  But one tulip bulb went for the same price as ten years’ worth of a typical laborer’s wages.  That’s $250,000 or $300,000 today.  For a tulip bulb.

There appears to be little record of people going broke in big numbers when the bubble burst, but certainly there were some people who came out a bit poorer, and the entire reputation of traders was ruined.  Not that it was that great in the beginning, but Jan Brueghel the Younger painted the fine painting below, Satire on Tulip Mania, depicting the traders as monkeys.  If you look closely you can see the nifty tiger-striped tulip in the left corner.  Myself?  I’d pay much more for a monkey that traded futures options contracts, even if he did a lousy job.

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Yes, it’s public domain, being nearly 400 years old, unless Disney® wants to try to make a movie about it….

This was the first recorded financial insanity of this type, and it was fairly benign.

What other manias occurred during history?  Well, lots.  But researching them all would take quite a lot of work, and far more wine than I have in the house right now.  So, let’s just look at the ones that I want to talk about:

  • Salem Witch Trials – 1692 to 1693. Twenty people executed when a bunch of kids played a prank.  Or there were real witches.    This is still a bubble, but it was just teen angst magnified a zillion times.  Fortunately, they had awesome wood floors, like in the picture below.  Are those oak?  I’m so jealous!

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  • The South Sea Bubble – in 1720, the price of shares in the British South Sea Corporation went from £100 to £1,000 (the £ is the funny symbol that British people use for money). Sounds like a great deal, right?  Well, the records seem to indicate that the South Sea Corporation spent most of their time issuing stock and very little time on actually, you know, making money.  So why did so many people (including Isaac Newton himself) shove all of their spare £ into a company that just made stock?  Isaac Newton is reported to have said:  “I can calculate the movement of the stars, but not the madness of men.”  Apparently Newton couldn’t manage £1,000-£100=£  Below is a public domain picture by dead artist Godfrey Kneller of Isaac Newton when he was in his “looking like the guitarist from Queen” phase.

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  • Radium – 1920’s to late 1930’s. Everything had radium in it or was named after radium.    Drinking water.  Watches with glow in the dark faces.  My college mathematics classroom (yeah, after I took Calculus I, Calc II, Calc III and Differential Equations in the same room?  Enough radioactivity to power all of North Korea and a lot of corpses that are technically nuclear waste.  I have a straight razor case from the era.  You guessed it:  “Radium Straight Razor Company.”
  • 1920’s Stock Bubble – The classic. Fueled by post World War I enthusiasm and the rise of new technology (radio, the automobile, phones, and PEZ®) people went . . . insane.  Everybody was investing in the stock market, including a shoeshine boy, who famously gave Joe Kennedy (father of President John F. Kennedy) a stock tip.  Kennedy then decided if shoe shine boys were involved in the stock market, too many people were in the stock market.  He then proceeded to smuggle a bunch of liquor and manipulate a senator or two, then lunch.
  • Hula Hoops™ – Watch The Hudsucker Proxy to see exactly how this was invented. Okay, I kid.  But the Hula Hoop® hit when Hawaii was just becoming a state, and there was a large mania about the place, even though it had been a part of the US for nearly a century.  100 million were sold within two years, despite the US population being only 180 million at the time.  Sales fell off when people were finally told that there wasn’t a limit on the number of times a hoop could be hooped prior to it wearing out.
  • Johnny Carson’s Toilet Paper Run – in 1973, Johnny Carson (a late night television host back when there were only three channels and who was very popular) noted that there was a toilet paper shortage, but was referencing commercial grade toilet paper. He used that to make a few jokes.  (Toilet paper is just plain funny).  People took him seriously, and pretty soon there were shortages and rationing of consumer grade TP in several cities.  Shortly after the commotion, Carson told his audience he was joking.  People in the US could again poop without fear.
  • Pet Rocks® – A rock. As a pet.  For money.  Broke sales records, until people figured out that they’d paid $3.95 (plus tax) for a rock.
  • Cabbage Patch Kids© – A really ugly doll, but middle-aged women jumped out in droves to fight each other in a series of battles that would have made the gladiators of the Colosseum in Rome proud, if they had been middle-aged women with purses the size of four year old children fighting each other for dolls in the aisles of K-Mart®, Montgomery Ward™ and Sears©.
  • Beanie Babies™ – A really cute doll that spiked in popularity in the late 1990’s. The creator of the company decided to make special “limited runs” of a cheap, plush doll that looks like a dog’s chew toy.  Middle-aged women fought each other in the aisles for these as well, but it was the 1990’s so they all had greasy ham-hair like Kurt Cobain.  After a brief spike of popularity, most Beanie Babies are worth . . . dog chew-toy value.  There are a very few that might be worth some change, but don’t hold your breath.
  • Dotcom Bubble – The thing I wrote about Beanie Babies™ above? Just replace “Beanie Babies®” with “stocks” and “Middle-aged women” with “greedy but stupid baby boomers.”
  • Tasers© – At one point in 2004, Taser™ the company would have had to sell three Tasers® to every person in the United States to make the profit the stock $150 stock price implied. We didn’t buy the Tasers®, and neither did you, so you can buy the stock for $20 or so.
  • Housing Bubble –House prices never go down. It’s a fact!  Except when it’s not and imperils the entire economy of the world.
  • Tesla® – I’m not saying it’s a bubble (LINK), but it’s a bubble. Tesla© is not worth more than Ford™.

Most of the bubbles or manias I’ve listed above share a similar pattern –

  • Start – The guy started making Beanie Babies®. They only sold a few.
  • Spark – A reviewer mention in an article that some are “valuable” and “rare”.
  • Information Spread – Engage middle-age lady network.
  • Publicity – News stories show up in newspapers, television.
  • Mania – Nobody wants to be left behind, so everybody buys all the Beanie Babies®.
  • Market Collapse – Somebody writes an article questioning paying $10,381 for a dog chew toy. “Bubbles burst when fools run out of money.”
  • Regret – Closets of Beanie Babies© sit in closets, since one day they’ll be valuable.
  • Next Mania – Well, maybe next time I’ll be in first and make all the money…

And financial markets work exactly the same way, but with less dog chew toys.  People want to seek a return on their money, and when there’s enough money just lying around, stupid investments get made.  And some of those investments pay off in a huge way, especially for those that got out early.  The Dotcom crash?  Plenty of people sold as it was on its way up, and made huge amounts of money.  The housing crash?  One guy predicted it and put in place investments so that he made hundreds of millions off of the crash.

But sometimes what looks like a bubble . . . isn’t a bubble.  It’s a trend, and a real trend based on sound, rational economics.  The guy who was sure that the smart phone was a fad (me), the guy who thought that credit cards would never catch on with a rational public (my dad), and the guy who thought that Europe would be plunged into a horrific war (my great, great grandfather).  Oh, wait, the last guy was right.

And sometimes there are bubbles, and sometimes there are trends.  One person working to figure out the difference is a geophysicist named Didier Sornette, who has an amazing Wikipedia page (LINK), and looked at the mathematics that surrounded earthquakes and compared it to stocks or other financial assets in a bubble.  Turns out that the bubble was analogous to a really stressed mass of rock.  He made some predictions after the Dotcom bubble, and was right enough that he got hired to just study financial crises in Zurich (LINK).  Tough duty.

When you think a deal is too good to be true, or you see a group of people jumping on a bandwagon, think twice (cough Tesla® cough).  You want to avoid the Hula Hoop® Witches™ without Toilet Paper.

This blog is NOT stock advice, I don’t own any positions in anything mentioned, and don’t plan on any for the next month or so.  

The Future of Employment, or, Almost All of Government is a Jobs Program

All right, listen closely.  I was at the unemployment office and I told them I was very close to getting a job with Vandelay Industries, and I gave them your phone number.  So now, when the phone rings you have to answer “Vandelay Industries.” – Seinfeld

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Notice it doesn’t say Texas Pain RELIEF Institute?

What are we going to do with everyone?

I’ve been (throughout my life) a proponent of the human race.  I like it.  I may not like certain individuals, but I’ve got a great degree of hope when it comes down to humanity.  And up to now, the equation has been that more people equals more Einsteins, more Isaac Newtons, more Nikola Teslas, and more Stephen Hawkings.  These are shining examples of humanity – folks who helped the human race achieve much more than we would have or could have without their knowledge.  I read an article recently (I am not making this up) about rising obesity rates in Ghana due to KFC® becoming the restaurant of status and choice.  And we know how much Einstein contributed to the secret government project that led to KFC™’s fried, greasy goodness.

There are seven billion of us, and 2.1 billion have the problem of being obese or overweight.  Less than 800 million are suffering from hunger or malnutrition.  This is a victory of the greatest magnitude.  Yes, obesity is bad, but I would much rather have people having heart attacks in their fifties after having a tasty chicken wing versus starvation at fifteen.  Everyone who has that choice would make the same choice, and raise their greasy hands up if asked.

In general, the world is getting better as we as a society create more wealth, as I talked about in previous posts (LINK).  But I’m really concerned as I look forward with simple questions:

How much does the future need us for continued prosperity?  How many people do we really need?  How many can be actively employed in productive work?

There are various reasons that I’m wondering:  Increasing Productivity, AI, Smart Machines, Robots to name a few, though there are other issues as well that we’ll skip today.

I’ve written before that trucking is a sure bet for replacement once self-driving trucks are approved by the Department of Transportation and the various states and a self-driving unit costs less than (about) $400,000 per unit.  After those conditions are met, at least a million jobs (and likely more) will be gone as fast as the autonomous trucks can be produced.  But it’s not just truckers.  It will be fast food workers.  It will be janitors.  It will be an increasing number of lower and mid-skilled jobs throughout industry.  If it can be described by an algorithm or computer program, it will be automated.  A large number of sports articles and financial news articles are now produced with no human intervention.  Journalists would worry, if there were enough of them left to worry.

And jobs that aren’t eliminated will be minimized.  An example:  a structural engineer nowadays runs calculations for a new bridge or skyscraper through a computer program that analyzes the stresses in the structure and optimizes the design for code and seismic conditions.  It then chooses the beams and columns and other structural members based on tens of thousands of calculations and three dimensional finite element analysis, and then pops out design drawings. Sproink.  (That’s the noise the drawings make when they come out of the machine.)

Fewer engineers are required, and the engineers don’t need to be as proficient since the engineering knowledge is built into the program.  Both the number of people and the quality of people goes down.

Another example:  I just bought (for $30) a device the will give me the data I need to order glasses online.  No prescription, no optometrist, no waiting.  Also, no glaucoma check, but I don’t have to take off time from work to visit the doctor.  And the glasses I ordered online cost less than I would pay, even at Wal-Mart®.  I may describe it in Friday’s blog.

Another example:  I had a cold that I was pretty worried was heading into my lungs and I was worried that I’d get pneumonia.   For $60 I got online from my basement (where I was in a cold sweat despite my 101˚F, got antibiotics, and got better.  Otherwise?  A $120 doctor visit where my copay would have been at least $100.  Yes, a real doctor was involved in the visit, but it was incredibly efficient for them – I’d imagine they make $300 an hour.  No office, no actual contact with icky sick people.  It was a great transaction for both of us.

But . . . it means we need fewer Doctors.  And fewer waiting rooms.  And fewer nurses.  Et cetera.

Efficiency is awesome.  It lowers costs, and does that while quality is increased, in most cases.

When economists study inflation, they study the price of the item.  I have a color TV in my house.  When my dad bought his first color TV, he spent (on an inflation adjusted basis) over $3,000 in today’s dollars.  With that kind of money today?  You could buy a 75” Sony® Ultra HD that also has a popcorn maker and margarita blender built in.  So, economists measure how much better a thing has gotten as well as what the thing costs.  They call this measurement “hedonics” because it’s way more confusing than “measuring how stuff got better.”

So, we live in a world where getting sufficient food to eat is easier than at any point in history.  We also live in a world where getting information is easier than at any time?  Want to listen to a song?  Unless it’s the Beatles™, it’s pretty much on YouTube®.  And we can make more things, better, faster and cheaper, than at any time in history.

But why hasn’t efficiency hit, oh, say the Department of Motor Vehicles?  Or the local County office where I go to get license plates?  At both places, you have to stand in line.  At both places, hours are limited, and you’d better get done before quitting time, because they’re serious about closing up at 4:30pm.

In a typical business, the best parking spaces are reserved for the customers.  In government?  The best parking places are reserved for the employees.  And I think government is giving us a hint:  the most important consumers of government are its employees.  You and I are the product.

And why, in a world where I can apply for $100,000 credit at midnight can I only get my driver’s license between 9AM and 4:15PM (closed for lunch hour)?  Why is it harder each year to deal with government?  Why do their budgets keep going up, faster than inflation?

Because nothing the government does is intended to help you, the consumer.  The bright folks that are hired to make wonder weapons?  Jobs program.  We do NOT want people that smart on the street.  The people who work for NASA®?  Jobs program.  They don’t even have to make rockets anymore, and Elon Musk has clearly shown that if he had NASA’s budget he’d be building Burger Kings® on Mars, because he’s have a million people living there in the next decade.  NASA spent money putting together braille books on the solar eclipse in August.  That might explain why we have to piggy back a ride with the Russians to get to the International Space Station.  NASA is a jobs program.  Originally it had a job to get people to the moon.  Now?  It produces new classes of astronauts with no vehicle to fly.  Thankfully they have a budget for cardboard boxes to sit inside and make rocket noises.  There’s even a budget for markers to write “ROKET” and “USA” on the side of the boxes!

The Department of Education, which has taught no classes?  Jobs program.  The Department of Energy, which has never produced a Watt?  Jobs program.  The military?  Parts of it are a jobs program, but most if it is real.  But you better pay attention to what congressional district and state the new weapons will be built in . . .

Your liberal-arts college professor?  Given a job so that they wouldn’t agitate for revolution in the streets, rather, they can agitate for revolution to rich kids who would much rather play Playstation® and X-Box©.

Ever wonder why they rip up a section of street that looks pretty good, and then work it for months?  Yup.  Jobs program.  Not to say that the original Interstate Highway System wasn’t real.  It was.  But now what do we build?  What infrastructure is left?  Dams are awesome for hydroelectric power, but just try to build one nowadays . . . it’s easier to declare war on Ghana.

It really took me by surprises that this was the case – that most government spending is based on the concept of giving people money so that they don’t riot in the streets (dumb people) or so they won’t plot and plan a revolution (liberal arts professors) or build wonder-weapons in a James Bond worthy plot for foreign governments (government scientists)?

Why is government inefficient?  It’s not.  It’s a very efficient jobs machine.  You’re just the product, not the consumer.

But what about the jobs that are already out there?  A recent study says that the average worker works less than four hours a day.

Think of the creativity that creates!  How to look busy for eight or nine hours a day when you’re done working after four?  And how long will a business stand for this?  Eventually, in private business, all of the “four hour a day” jobs will be eliminated – the business has to pay taxes, remain competitive.

But government will respond.  New regulations will be created and enforced that require new employees to compile data and report it to the government.  This is done mainly so that the government has excuses to hire more employees, but has the side effect to requiring more private sector compliance workers.

I actually had a job once where, on my start date, my office wasn’t yet ready.  They told me . . . come back in two weeks from now.  Did they pay me for the two weeks?  Yes.  And, who did this?  Yup.  It was a government job.  And, although I saved them several million dollars, they were kinda disappointed.  They wanted to spend their full budget.

But there will be in the next decade millions of people becoming unemployed as their jobs are minimized or eliminated due to clever business disruption, probably faster than the government can create jobs (hint: the government is broke (LINK)).  I’d love to suggest a minimum basic income, but we can’t pay for it.  We can’t even afford PEZ®.

What do we do?

There are millions of people in the United States right now that would love to work.  And millions more in made-up jobs that produce nothing that would love to work in productive jobs.  Around the world, this number is surely in the hundreds of millions.

And we need fewer of them every day.

How about . . . we let someone smart pay them to work on something really important . . . like going to Mars?

Paging Elon Musk . . . .

Unless someone else has a better idea?  Raise your greasy hand and sing out!

Value Creation and Zombie Steve Jobs

“Lies are like children: they’re hard work, but it’s worth it because the future depends on them.” – House, M.D.

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Pugsley, prior to going for his midnight shift in the PEZ® mines.

I was talking to a friend yesterday when he mentioned that he had been transferred to manage a group of newly graduated college kids.  To be clear – this group of college graduates is in no way typical – I imagine that they’re making in range of $80,000-$90,000 a year.  Not Harvard Law money, but still pretty good for the small(ish) town my friend lives in.  So, as a new manager to the group (he’s been managing people for decades, and he’s a good one) he got the group together to explain what he was looking for from them, what his general expectations were of his employees.  In one line that has been standard for him for years, (I heard it from him when Bill Clinton was President) he indicated that he expected the group to put in, on average, fifty hours a week.

Chaos!

Pandemonium!

My friend had become Literally Hitler.

He eventually backed down to forty-five hours per week, and was demoted to just being Literally Saddam Hussein.

As he told the story, I laughed.

The irony is that these college grads that actually do put in the long hours that my friend suggested will soon be so far ahead of their colleagues that their colleagues will never be able to catch up with them:  the harder worker will have more knowledge, more skills, more credibility, and very soon, much bigger raises and promotions.  Their colleagues will call them, “lucky.”

90% of success is showing up on time.  At least 5% is working just a bit harder, so your skills build up faster, especially when you are young.  (The remaining 5% is turtles.  All the way down.)

What’s the point in all this hard work and achievement?  To be rich?  To stress yourself out to the point where you have a heart attack in your 30s and die?

No.

The point is Value Creation.

One of the coolest aspects of the capitalist system is that it allows you (really, forces you in a purely capitalist system) to be of value to your fellow man.  Capital flows to those that create and provide value.  So, in a truly capitalist system, you create wealth for yourself by creating value for someone you might not even know or ever meet.  Bill Gates made money when I bought my copy of MicroSoft® Word™, and yet he’s never invited me for dinner.  Nor will he, unless that restraining order lapses.  I’ve told him to stop calling me, but that man won’t listen.

Value creation is like magic.  You take an idea or concept to make someone else’s life better, and then you create a product or service out of wood, metal, plastic, or just plain computer code, or, like this blog, just out of pure ideas.  If your idea is good, people will buy it, eat it, or read it, but probably not all three, unless it’s breakfast cereal.

Capitalism is simple – you (should) make money only when you create value for someone else.  Value Creation is nearly alchemy.  Alchemy was (at least in part) focused on turning lead into gold.  Capitalism is better.  It can turn cow poop into gold – when sold as fertilizer.  In a capitalist system, we transmute lower valued items into higher valued items every day.

The flows of capital follow the paths cut by Value Creation.  Those people (and businesses) that are best at creating value get more money.  What do they do with that money?  Do they put it in a box?  No.  They use it to create more value.

And that’s what my friend’s newly graduated college students do not get.  The business isn’t there for them to have a great life.  It doesn’t exist to pay them a living wage.  It won’t pay more because housing is more expensive where the business is.  Companies pay based on the value the employees create.  Don’t create more value than somebody else would for minimum wage?  You’ll get minimum wage.  Don’t create enough value for a three bedroom house on two acres in San Francisco?  Your boss and company don’t care.

In the end, it’s Value Creation.  How do you do it?

There are lots of ways, but perhaps the best way to create value is to solve someone’s problem.  The bigger the problem and the greater the number of people, the greater the value creation, and, generally, the greater the wealth that the person or company can expect to get.  The cell phone is a great example – before it existed, people spent no money on it.  After it was invented, people would spend . . . some money on it.  After the phones got data, and the phones got smart?  Massive floodgates of money poured into a product that had never existed.  Apple© went from a value of $30 billion to a market cap of 30 times as much, nearly a trillion dollars after their innovation with the iPod® and with the iPhone™.  They created a new category, and brought value to people in ways that nobody (except Steve Jobs) anticipated.  I hear that their primary focus right now, however, is bringing Steve Jobs back to life, so they can have a new idea.

The effort that went into creating the new products that Apple® launched was legendary.

And it was more than forty hours per week . . . because changing the world takes more effort than that . . . .