1—Here we go again
An energy crisis, inflation and governments making the same mistakes. Sound familiar? It should:
"The government of the United Kingdom will cap energy prices paid by households, which have jumped following the reduction of supplies from Russia. Apparently, one goal, if not the goal (since households could have been simply subsidized to dampen the shock), is to reduce the rate of inflation.
The error is that tapping one (relative) price—for example, the price of natural gas—will do nothing to reduce inflation, which is an increase in all prices irrespective of the movement of prices relative to each other."
That's from Pierre Lemieux, who must be banging his head against the table as the 1970s comes back to bite. But Pierre's biggest issue is not "that price caps will merely hide inflation", but that they:
"...interfere with the change in relative prices, which is essential to the transmission of price signals regarding relative scarcities in the economy and, thus, essential to economic efficiency. Capping a price (say, gas) whose increase would have signalled an increased scarcity of the related good will have two effects: it will modify the statistical estimate of inflation, but without changing the underlying inflation at all; and it will mess with the price of gas relative to other goods."
Gas use is thus subsidised, increasing demand, while price caps discourage any increase in supply, making the energy crisis even worse the longer it goes on. You can read Lemieux's full post here (~3 minute read).
2—Napoleon Bonaparte and Russia's woes
Independent military history author and researcher, ChrisO, explored "some possible deeper reasons for Ukraine's stunning successes in recent days", drawing insights from French military and political leader Napoleon Bonaparte:
"In 1808, Napoleon wrote: 'In war, three-quarters turns on personal character and relations; the balance of manpower and materials counts only for the remaining quarter.'
Such insights reveal that the Russian army is not in a happy place, even before its latest setbacks. Morale is low, training is poor, food is awful, equipment is inadequate, welfare and training is neglected, and commanders are seen as dishonest, uncaring and incompetent.
These factors have already led thousands of Russian soldiers to quit their contracts and return to Russia (which they can do, as they have that right in what's still officially a peacetime establishment - it's a 'special military operation', not a war)."
There's plenty more in the full twitter thread here (~11 minute read), including how Russia's "shifting, confused and unclear" goals are further undermining troop morale – as Napoleon wrote, "A man does not have himself killed for a half pence a day or for a petty distinction."
3—Supply chains are still recovering
4—Draw your own conclusions
The chess world remains mired in controversy following last week's accusations of cheating against American newcomer Hans Niemann. For those who need a refresher, Niemann defeated world champion Magnus Carlsen, who then withdrew from a major tournament for the first time in his career and has since said nothing other than posting a tweet accompanied with a Mourinho meme stating "if I speak I am in big trouble".
Now internet sleuths have crunched some numbers showing that Niemann performs a lot better during live tournaments, with the insinuation being that live broadcasts are enabling him to cheat, i.e. someone watching may be feeding him information.
All speculation, of course. But Niemann's rapid rise from a 2,400-rated player to 2,700 at the top of the GM mountain is unprecedented.
A full timeline of events (if you missed it last week) is available here (~10 minute read).
🦑 The vampire squid, Goldman Sachs, "is preparing to make its first round of layoffs since the outbreak of the pandemic... amid a dramatic slump in revenue".
🔌 "Electric car giant Tesla is evaluating the feasibility of a lithium hydroxide refining facility on the gulf coast of Texas."
🛣️ Belt, road debt and default: "China has doled out tens of billions of dollars in secretive 'emergency loans' to countries at risk of financial crises in recent years, turning Beijing into a formidable competitor of the western-led IMF."
👩🏫 China's dynamic zero-COVID "is taking a shocking toll on teachers".