Explanation and Exception

If a rule has exceptions, it probably is not a good rule.

Why are there seasons on our planet?

The ancient Greeks used to have their lore. Persephone, the daughter of Zeus and Demeter was abducted by Hades, the lord of the underworld. When Zeus consented to Persephone being married to Hades; Hades made a concession to allow her to visit her mother for 8 out of the 12 months in a year. This is why we have Spring, Summer and as the time for Persephone to leave comes closer, Summer gives way to autumn. During the 4 months when Persephone is away, Demeter becomes very sad. Demeter being the goddess of fertility robs the earth of its fertility and so the winters are cold.

This is an oversimplification of the story. I did not want to write 4 pages.

If any Greek had even visited Australia, the question of why is it summer in Australia when it is Winter in Greece might have come up. But that was not to be.

It is human to try to find a way to explain all the things that go on around us. This is part of the reason Economics is even an area of study. Truth be told, economics is about the psychological relationship between people and money. Whoever thought it might be possible to translate human psychology into a set of equations. But we NEED to explain.

If the Greeks had come across Australia, they would have probably created an exception to the rule. 

The earth is tilted on its axis and this axial tilt is what causes seasons. It also causes days to be longer in the summers closer to the poles and nights in winter. 

Every axiom, every rule, every law that you have ever been taught which has a corresponding exception is probably a poor explanation. It is there because we do not know the actual explanation. It is a placeholder in the interim so that it does not drive us crazy.

A good explanation does not require exceptions. It often ends up explaining other things that you were not even seeking to explain.

Whether we can weather the Weather | Learning by Proxy

The rich nations of the world are finally having to deal with the consequences of the pollution that their "standard of living" has caused.

Usually, weather updates are for the end but I guess we need to start this one with some updates. If we had left it to our forefathers they would have just thought that the gods are angry with us. Unfortunately, we cannot brush this one away that easily.

Climate Change is real and it is finally knocking on the doors of rich people.


Studying in Agra in 2001, I was used to sweltering heat and freezing cold. Summers would reach up to 50 degrees Celsius. I have watched students collapse while walking from the hostel to the college which was about half a kilometre away. We usually had to deal with that in the absence of electricity given that the campus was located 20 km from the city and the electricity supply was not great. Winters used to be equally hard with temperatures plummeting to low single digits. This weather was a result of climate change.

I just used to think Agra sucked!

The countries in the tropics have been experiencing some of the worst impacts of climate change already. People from Guatemala have been migrating to the USA, not because of jobs - it’s because they want to live. People from Syria are going to Europe not for jobs - for life.

Put yourself in that position. Imagine leaving everything, all your possession, your identity, your life, your relatives and deciding to go to a foreign land undertaking a perilous journey that is half likely to kill you. Would you do that just to get a job??

The march of climate change has progressed to a point where the rich countries can now experience the same. Temperature fluctuations that range 20 degrees within a day, flash flooding, hurricanes, etc. The days of outsourcing pollution and calling it a day are over.

I interned and worked at Liege for months.

And used to pass Verviers often on the way to work

Germans are also required to go swimming in the mountains

In the meantime, as usual, Eastern US is underwater and the Western US is on fire.

Tropical storm Elsa put New York underwater.


220,000 Acres have been burnt by the biggest of the 53 wildfires that are burning in the west. Temperatures have soared to 52 degrees Celsius in Oregon, a place that is under snow most of winter. That is like Shimla having 50-degree temperature. Unprecedented drought, it is so dry and so hot…

Firefighters battling the many wildfires in the region say the air is so dry that much of the water dropped by aircraft to quell the flames evaporates before it reaches the ground.

Source: BBC

People are also starting to realise that weather is a system and one change can affect others. The forest fires are starting to affect the weather in Toronto. Toronto looks like Delhi in Winter now.

Source: CBC

In China,

The subway train in Zhengzhou, a city of five million in central China, was approaching its next station when the floodwaters began to rise ominously on the tracks. The passengers crowded forward as the water rose, submerging the cars at the rear first because they were deeper in the tunnel.

As the water reached their waists, then chests, finally their necks, the passengers called emergency services or relatives. One gave her parents the details for accessing her bank account. Some cried. Others retched or fainted. After two hours, it became difficult to breathe in the congested air that remained in the cars.

Source: New York Times

There was flooding in a city of 5 Million people and the degree of flooding has been unprecedented.

Further west in Iran,

Iran is struggling with a fifth wave of the coronavirus pandemic, an economy strained by American sanctions and stalled talks on rescuing a nuclear agreement that was once seen as an economic salvation.

Now the country is contending with a different but easily foreseen crisis: a severe water shortage.

A prolonged drought and rising temperatures from climate change, combined with decades of government mismanagement of natural resources and lack of planning, have turned the water crisis into a volatile incubator of protests and violent unrest.

Source: New York Times

Iran is a classic case, where you can see how migrations begin. People desperate for water will be forced to move to another country. This will be projected by western media as a political failure and spun to try and extract a nuclear deal out of the country rather than take ownership of the climate catastrophe that they have perpetrated.

So now that climate has come beckoning to their doorsteps, EU legislators are willing to take action on it. They unveiled a new plan,

In what may be a seminal moment in the global effort to fight climate change, Europe on Wednesday challenged the rest of the world by laying out an ambitious blueprint to pivot away from fossil fuels over the next nine years, a plan that also has the potential to set off global trade disputes.

The most radical, and possibly contentious, proposal would impose tariffs on certain imports from countries with less stringent climate protection rules. The proposals also include eliminating the sales of new gas- and diesel-powered cars in just 14 years, and raising the price of using fossil fuels.

Source: New York Times

This proposal need not have waited till 2021. You did not need a flood to wash away two countries to decided to do something about it. Also, now that the troubles at your doorstep, moving too quickly on policy moves of this nature will hurt the developing countries.

Come to think of it, given that they have outsourced most things to other countries, implementing a tariff of this nature would be hard on them. Production and supply chains cannot be changed overnight. Eventually, the cost will be passed on to European consumers and the only solution is for their consumption to come down. In the interim, inflation will increase. How the EU will deal with the economic repercussions of this move will be worth watching.

Chinese Carbon Trade

I had explained the formulation, formation and challenges surrounding the carbon markets in the post I had written 2 months ago. In case, you have not read it, I would recommend it. Last week, China announced their very own carbon trading system. This system will apply to the 2200 power plants in the country, which account for 40% of the carbon footprint.

China has set up the trading platform of the national ETS on the Shanghai Environment and Energy Exchange.

As in other carbon markets, emission permits are allocated to participating firms, which they can use to cover their own emissions or sell on the exchange.

It is part of China's plans to use market mechanisms to help bring emissions to a peak before 2030 and to net zero by 2060.

Source: Reuters

Carbon trading and emission restriction is an important first step in controlling climate change. It will make a huge difference to how the industries decide to regulate themselves.

Under the scheme, power plants will have a free permit to cover their verified emissions. But even if it exceeded its verified emissions by 100% it would be needed to buy only 20% of the surplus emission on the market. This entirely defeats the scheme on its own. If the power plant were causing 100% more pollution, even then, they would be needed to buy the 20% mandatory amount.

Further, there are deeper problems,

The biggest difference between China’s carbon market and Europe’s has to do with the total number of permits allocated. In Europe’s system (and in theoretical cap-and-trade markets that have been proposed by US policymakers, economists, and others), there is a cap on the total number of permits, which falls over time. This drives up the carbon price (Europe’s surged to record highs this year), and drives down emissions.

But China’s system doesn’t have a cap at all. Instead, permits are allocated to each plant based on a formula that accounts for how efficiently the plant runs compared to a benchmark for its class, and on how much electricity it produces relative to its maximum capacity. More efficient plants receive more permits, as do plants that run less often. These forces should push plants toward maximum efficiency, and favor newer facilities.

Source: Quartz

Also, the pricing of the carbon credits is far too low at 40 ($6.18) Yuan per tonne. Compare this with the European pricing of almost 50 Euros per tonne. The price needs to be set much higher considering that the maximum that any plant is needed to pay is also capped. Not to mention the fine is also fixed at a measly $4600.

China aims to expand the ETS to cover eight high-emission industries, including petrochemicals, chemicals, building materials, non-ferrous metals, papermaking, steel, power generation and aviation, though the timescale is not yet known.

Financial institutions or individual investors will not be allowed to participate in trading in the early stage of the national ETS, but institutional investors will be included once the trading mechanism matures.

Source: Reuters

This policy can be only credited as ‘something is better than nothing.’

HR Tech

For every company out there which loves all of its profits, the one thing they do not like to deal with is people. Unlike machines or code, people cannot be standardised. Each one needs to be recruited separately, each one needs to be led uniquely and each has to be evaluated separately. This is painful, time-consuming and most importantly needs a lot of manpower to undertake.

So you need to recruit to be able to recruit.

Companies that purported were founded to make this process easier have all been clubbed under the banner of HR-Tech companies. They all play a role in automating all of the HR processes, starting with recruitment going right up to evaluation.

Today, there are a lot of companies that will teach you how to build a resume so that you can game the algorithms that would evaluate your resume. Two can play this game. But what when an algorithm sends you home?

Stephen Normandin spent almost four years racing around Phoenix delivering packages as a contract driver for Amazon.com Inc. Then one day, he received an automated email. The algorithms tracking him had decided he wasn’t doing his job properly.

The 63-year-old Army veteran was stunned. He’d been fired by a machine.

Source: Bloomberg

MIT Technology Review went after the whole thing, conducting a detailed analysis of all of the different programs that companies have been using to screen candidates. They found software that evaluates you on the basis of your personality or the tone of your voice!!

Performance on AI-powered interviews is often not the only metric prospective employers use to evaluate a candidate. And these systems may actually reduce bias and find better candidates than human interviewers do. But many of these tools aren’t independently tested, and the companies that built them are reluctant to share details of how they work, making it difficult for either candidates or employers to know whether the algorithms are accurate or what influence they should have on hiring decisions.

Source: MIT Tech Review

All these algorithms are built with the biases that the programmers who were writing the algorithm had. To make matters worse there is no evaluation of it, it is just accepted for what it is.

We would never allow a drug to be sold in the market without having gone through rigorous testing — not even in the context of a health crisis like the coronavirus pandemic. Then why do we allow algorithms that can be just as damaging as a potent drug to be let loose into the world without having undergone similarly rigorous testing? At the moment, anyone can design an algorithm and use it to make important decisions about people — whether they get a loan, or a job, or an apartment, or a prison sentence — without any oversight or any kind of evidence-based requirement. The general population is being used as guinea pigs.

Source: Harvard Business Review

Algorithms are having an outsized impact on the lives of people. When your life can start depending on some stupid input that an algorithm got without context it will results in drastic consequences. We are still at a stage where we can stop this but the window is closing.


Why train compartments are divided

Whether we can weather the Weather | Learning by Proxy | Podcast

The rich nations of the world are finally having to deal with the consequences of the pollution that their "standard of living" has caused.


This is the Learning by Proxy podcast for Edition 69. If you do not enjoy reading long-form, get the gist of it in about 10 minutes (or that was the hope). 

This time in the podcast - 

Climate Change is finally paying the rich a visit

China is creating a carbon market that incentivises carbon emission

When computers start hiring and firing people

You can find the whole blog at this link.

Music Courtesy Pixabay

Chance and Life

Chance plays a role in life, whether you succeed or fail!

The lore goes - when Edison created the light bulb he said “I did not fail a thousand times, I just found a thousand ways how not to make a light bulb.”

Now, think about that for a minute.

If you tried to do something a thousand times. It shows determination but it also shows that you are just waiting for probability to kick in and show you the way. If you attempted the IIM entrance exam 1000 times, I am sure at some point you are bound to clear it. Even if you were going there unprepared and just marked A for all questions.

The CEO of Nokia at the time of the Microsoft acquisition was Stephen Elop. He said, “we did not do anything wrong, but somehow, we lost.” In other words, it was sheer bad luck.

I often tell entrepreneurs to speak to those who have failed. They would be able to provide insights on the things that can trip you up. By comparison, someone who has succeeded will have little value to provide. In being successful, one would have certainly avoided several pitfalls. The trouble is, there are often more pitfalls that they avoided by sheer luck, which they did not even know existed, than the ones they avoided thoughtfully. 

Or as Bill Gates put it - Success is a poor teacher, it seduces smart people into thinking that they cannot lose.

Whether you are successful or not, there is a role that chance played in making it happen. We talk about chance only when something does not go our way. We never think about the role of chance in our life when things work out. WE just think that WE made it happen. 

We have gone to such extremes with this thinking that if someone were to succeed and you were to tell them, “it was your lucky day”; they would react as if you slapped them across their face. But someone who failed would love to palm off the responsibility of the failure to, “it wasn’t my day”.

Probability is real in everything we do. We need to learn to acknowledge it.

Chinese Suicide | Learning by Proxy

China's days of economic ascendance are falling prey to one man's ego!

Every great empire that has ever existed in the world has eventually fallen prey to the ego of one man who was handed a fully formed country. The one thing that we can be certain of is that history repeats itself. China earned its place in the world through the sacrifice of billions. That sacrifice is going to be squandered to sate the ego of one man.

Chinese Suicide

Mao Zedong oversaw the Cultural Revolution during his 33-year reign in China. It was a complete disaster. After his death, Deng Xiaoping took over as the Chairman of the Chinese Communist Party (CCP). He was the one who insisted on ensuring that every Chairman has a 3 year limit as the Chairman of CCP. China does not have elections, they do not follow democracy. But the CCP used to follow a system through which people were promoted from within the party to rise up to Chairman.

That was until in 2018,

The decision announced on February 25th to scrap term limits for China’s president, Xi Jinping, pierces the veil of Chinese politics. It reveals that, at a time when the ruling Communist Party is presenting China to the world as a modern, reliable and responsible state, capable of defending globalisation, the internal political system that the party monopolises is premodern, treacherous, inward-looking and brutal. It also shows that Chinese leaders’ own attempts to make the party otherwise have not got far.

Source: Economist

When you have the ultimate power within an organisation or a country, you start to feel unshakeable. This in turn results in very poor decisions being made and that results in something akin to the Cultural Resolution cited above.

The clampdown on Hong Kong over the past few years is a classic example of a poor decision by someone who cannot believe that his power is being questioned.

One of the things that supported the rapid rise of China over the last 20 years was the free run of capitalism and the promotion of businesses at all costs. As a result, there were businessmen who grew more and more powerful and that does not portend well for an authoritarian. Last year, Alibaba’s financial arm was on the verge of being listed in Hong Kong, when the Chinese government went after them and killed their IPO. Jack Ma has all but disappeared from the scene in the meantime.

Now, the qualifying factor for a company to be pulled up seems to be a listing on stock markets overseas.

Chinese regulators have gained a reputation for aggressive action, but even hardened investors were shocked by the announcement of a probe into ride-hailing firm Didi (DIDI.N) just two days after its $4.4 billion New York stock market debut.

While Didi's initial public offering (IPO) prospectus did mention some of the regulatory risks to its operations, there was no indication that the Cyberspace Administration of China (CAC) would begin investigating the company and ban it from accepting new users during the review. read more

Source: Reuters

Didi is the Uber of China and a ban from accepting new users can be crippling to their business. China has been a place that was always hostile to international companies. They chased Google and Facebook out of the country. It is indeed surprising that they are going after their own!

In the year 2000, China was not a very affluent economy but as the years progressed their wealth has grown. It is projected that in the next 10 years, China might even surpass the USA to become the largest economy in the world. Having said that, they do not exist in a void and shunning international capital is not going to do them a lot of good.

The measures could have far-reaching implications for a raft of China’s tech giants that are planning IPOs offshore, and for the global investment firms that hold stakes in them. Many investors bought into fast-growing Chinese startups expecting to cash out after the companies list on global exchanges.

In the U.S., IPO bankers scrambled over the holiday weekend and into Tuesday to understand the directives coming out of China, according to people familiar with the matter. Some fielded calls from furious fund managers who had purchased shares of Didi in its IPO last week, only to watch the company lose a huge chunk of its value—as of midday Tuesday, Didi’s stock was 12% below its IPO price.

A big question on those investors’ minds: Who knew what, when? Didi has said it wasn’t aware of Chinese regulators’ plans to put it under cybersecurity review and ban new downloads of its app ahead of its IPO.

Source: WSJ

The investors in the US are going to get vary of investing in any future IPO given how arbitrary and sudden decisions in China can be. Many of these companies have invested in other startups overseas and that might also come under question with several of these startups wanting the Chinese investors out. They would want their structure and ownership to be clear rather than hanging by a thread once such actions are taken.

On Monday, China's cybersecurity watchdog announced probes into truck-hailing platforms Yunmanman and Huochebang, as well as job listing site Boss Zhipin. New users cannot register for these three apps during the investigation.

Yunmanman and Huochebang are China's two major truck-hailing apps and label themselves as "Uber for trucks." They merged in 2017 to create a new firm — Full Truck Alliance, which listed on the New York Stock Exchange last month, and is currently valued at $21 billion.

Source: CNN Philippines

Didi is in focus because it is one of the better-known companies but it is not the only one in trouble with the Chinese authorities.

You don't want foreigners to own your company, you don't want foreigners to invest. But you want them to take loans from you and keep buying from you. How long will that party last?

Xi Jinping is probably going to remain, chairman, till he dies. He is bound to make missteps and his ego will ensure that he puts more resources behind those mistakes.

Shorting is a term used in the stock market where you sell a share when it is high and then buy it later after it falls. How do we 'short' China?


Transportation is one of the biggest contributors to global emissions and therefore global warming. While industry contributes just as much, transportation also happens to be the most visible. This augured well for Elon Musk and helped him turn a bad investment in a high-speed electric car company into at least a legitimate one.

The one thing perhaps the entire industry and the world agrees on is that oil HAS to go. Countries in Europe were the first to take steps towards it, but Belgium has taken by far the boldest step.

The regional Brussels government announced on June 25 a new ban on fossil fuel-powered cars in region that will come into effect over the next 14 years. New sales of diesel cars will be prohibited 2030, and new gasoline car sales will be illegal in 2035. The move is in accordance with existing efforts in Brussels to reduce pollution, and the EU goal of achieving net-zero carbon emissions 2050.

In order to meet these timelines, government leaders have rolled out a broader plan called the “Low Emission Mobility Brussels” roadmap that encourages use of public transportation and will build infrastructure for electric vehicles. Under the plan there will be 22,000 charging stations in the region by 2035. The hopes to reduce total transport emissions by around 70% by 2030.

Source: Quartz

Not too far from the continent, London has decided to take a slightly different approach from that of the rest of the world towards cleaning up with public transport. Hydrogen Fuel Cell powered buses.

London’s iconic red double-decker buses are getting a bit greener. London mayor Sadiq Khan announced city will add to its fleet hydrogen fuel-cell double-decker buses that produce no pollution.

The 20 new buses join the 500 electric and 3800 hybrid buses already in service as part of efforts to improve the city’s air quality, as well as to make all of London buses zero emission by 2030.

Source: Quartz

There is a philosophical battle when it comes to clean transportation. Battery based transportation requires batteries to be charged, often involves chemicals that are harmful to the environment and a very difficult recycling process for the batteries once they are exhausted. Hydrogen Fuel Cells by comparison just combine hydrogen and oxygen to produce water and some energy. You refuel the vehicle with hydrogen instead of petrol.

The main argument against hydrogen fuel cells has been safety which Elon Musk is the first to point out. He does not tell you that he straps on the same hydrogen to his rockets and sends them to space, then it magically becomes safer! He has set the research in Hydrogen fuel cells back by decades single-handedly.

I am glad to see countries adopting it nevertheless. Reminds me of Edison (D.C.) versus Tesla (A.C.). Edison did everything in his power to bring down alternating current and his argument against it was that it was not safe! All of us use AC and not DC today. It is ironic that Elon Musk who is the modern-day Edison is running a company called Tesla.

Meanwhile, on the other side of the pond, Americans are still struggling to figure out how to get heavy-duty vehicles to run on electricity (battery).

While some trucks cover over a thousand miles in a day, others operate at short range. These vehicles are more feasible for electrification in the near term, according to Brennan Borlaug, a researcher at the US National Renewable Energy Laboratory and the lead author of a recent Nature Energy study on electric-truck charging infrastructure.“We see this as being probably the first step on the path to heavy-duty-truck electrification,” Borlaug says. Because these trucks usually drive relatively short distances and return to the same place every day, they don’t need high-capacity batteries and ultra-fast public charging infrastructure—requirements that manufacturers are still working to meet for long-range vehicles.

However, the researchers weren’t sure if the grid could handle many electric trucks simultaneously charging in one place. Unlike electric cars, which have relatively low power requirements and would be distributed through neighborhoods, fleets of electric trucks might strain electricity distribution systems.

Source: MIT Technology Review

Throwing more money and research behind a bad technology. That is the greatest achievement of Elon Musk.

Playing with Fire

In 10 days from that tweet, cases have doubled in America. In the meantime, across the English speaking world in the Northern Hemisphere there is an incredible experiment underway!

Baseball and Basketball seasons are in full swing in America with full capacity crowds. Across the country, people have gotten rid of masks. Especially those who are not vaccinated. Cases numbers are shooting up in middle America which is a predominantly right-wing bastion where there is a lot of vaccine hesitancy. The sporting events are the oil needed to catalyse the spread of the virus.

Across the pond, the blond mop (read Boris Johnson) has decided that all restrictions are to come off on the 19th of July. In the meantime, COVID went from the May lows of 1000 cases a day to 34000 cases a day in Britain.

Source: Worldmeters

To make Indian leaders look like novices, England went ahead with Cricket at Lords, Tennis at Wimbledon and Football at the Wembly - all with full capacity crowds. And now, the restrictions will be removed.

Roughly 60,000 fans packed Wembley Stadium on Sunday to watch Italy defeat England in the final of the Euro 2020 football tournament. The same weekend, Wimbledon’s Centre Court was full: 15,000 people witnessed Novak Djokovic and Ashleigh Barty win their singles titles. And on Saturday, 23,000 spectators filled Lord’s Cricket Ground, where England played Pakistan.

Now England waits, with anxious anticipation, to see how many of these sports devotees fall ill with Covid-19.

All three events were part of England’s move towards July 19, when the economy reopens completely following the coronavirus pandemic. At Lord’s and Wimbledon, there were no limits on attendance; Wembley was two-thirds full, as it was during the Euro semi-finals earlier in the week. As the first major sporting contests permitted to play to such massive crowds since the pandemic began, they were also trials. The goal: to help the government understand not only if such fixtures are safe, but also the kinds of protocols that full-capacity events will need in the near future.

Source: Quartz

This August will be interesting to watch. I think the people who should be most worried are not the ones who might get infected by COVID and perhaps even die. The people who should be worried are the ones in leadership positions at Pfizer, Moderna and AstraZeneca. The impatience amongst leaders to make it seem like they have moved mountains has resulted in these events.

By August we will know how well these vaccines really work in the real world where new strains are being born by the week!

In the meantime - Japan - "Hold my beer! Watch me put together the Olympics".


When you are the RICHEST person in the world but also petty!

That is not a phoenix, it’s Mount Etna erupting!

Loading more posts…