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  1. Mugabe Orders Arrest Of "Rats We Call Athletes" After Zimbabwe Wins No Olympic Medals

    kalenjin shared this story from Zero Hedge.

    It appears Zimbabwe President Robert Mugabe was banking on a precious metal inflow from Rio to fix his nation's ailing economy as he hasordered the arrestof all 31 Zimbabwean Olympic athletes arrested and detained for daring to return home with no medals.

    Zimbabwe which is one of the countries in the Olympics without a medal presented a team of 31 athletes. The closest any of the athletes came to win a contest was at the 8th position.

    As PMNews Nigeria NaijaLoaded.com reports, Mr. Mugabe who is incensed with the team’s performance told the Police Chief to arrest all the team members and detain them.

    “We have wasted the country’s money on these rats we call athletes. If you are not ready to sacrifice and win even copper or brass medals (referring the 4th and 5th positions) as our neighbors Botswana did, then why do you go to waste our money”he said.

    If we needed people to just go to Brazil to sing our national anthem and hoist our flag, we would have sent some of the beautiful girls and handsome guys from University of Zimbabwe to represent us.”

    He added that,the money invested in the team to represent the country could have been used to provide amenities and build schools.

    This situation is like an impotent man who is married to five women, what is the essence? I will make sure we share the cost across board for all of them to pay back to government chest even if it takes 10 years to recoup, now it turns out to be a soft loan we have given them to go and visit Brazil as tourist, they are useless” he concluded.

    While we doubt Mugabe ever cared much for the Olympic spirit, with this one act (and we are still having trouble believing Mugabe actually did this) Zimbabwe's dictator has doomed his country to having no future olympians at all.

    Now that's the Olympic spirit!!

    When (or if) any of these Zimbabwean athletes get out of jail, maybe it's time to emigrate to Singapore?

    Infographic: Some Athletes Are Chasing Huge Gold Medal Bonuses | Statista

  2. Blockchains? Where we’re going, we don’t need blockchains

    kalenjin shared this story from FT Alphaville.

    In today’s daily blockchain bulletin we bring you news that next big thing in financial back-office technology isn’t actually the blockchain. Apparently it’s something called a “distributed concurrence ledger”.

    We’re not yet convinced that’s a thing, but the white paper outlining the DisLedger DCL concept does at least provide a refreshingly honest account of the core problems with blockchains.

    Continue reading: Blockchains? Where we’re going, we don’t need blockchains
  3. Recession Probabilities

    kalenjin shared this story from The Big Picture.

    Recession Probabilities O. Emre Ergungor Federal Reserve Bank of Cleveland, 08.23.16       Statistical models that estimate 12-month-ahead recession probabilities using the term spread have been around for many years. However, the reliability of the term spread as a predictor may have been affected by short-term interest rates being at zero. At the zero…

    Read More

    The post Recession Probabilities appeared first on The Big Picture.

  4. As an investment strategy grows more popular, the probability of a comparison involving Marxism apparently approaches 1

    kalenjin shared this story from FT Alphaville.

    Is there a Godwin’s Law equivalent for Marxism? Do we need one since the Law basically means that the longer an argument goes on the more likely we are to reach for extreme examples while in attack or in defence? So, you know, this kind of thing is already covered?

    Continue reading: As an investment strategy grows more popular, the probability of a comparison involving Marxism apparently approaches 1
  5. Explaining the Surging Demand for Lithium-Ion Batteries

    kalenjin shared this story from Visual Capitalist.

    The Battery Series
    Part 3: Explaining the Surging Demand for Lithium-Ion Batteries

    The Battery Series is a five-part infographic series that explores what investors need to know about modern battery technology, including raw material supply, demand, and future applications.

    Presented by: Nevada Energy Metals, eCobalt Solutions Inc., and Great Lakes Graphite

    The Battery Series - Part 1The Battery Series - Part 2The Battery Series - Part 3The Battery Series - Part 4The Battery Series - Part 5

    The Battery Series: Explaining the Surging Demand for Lithium-Ion Batteries

    The Battery Series - Part 1The Battery Series - Part 2The Battery Series - Part 3The Battery Series - Part 4The Battery Series - Part 5

    Explaining the Surging Demand for Lithium-Ion Batteries

    In Parts 1 and 2, we examined the evolution of battery technology as well as what batteries can and cannot do. In this part, we will tackle demand in the rechargeable battery market, with a major focus on the rapidly growing lithium-ion segment.

    For many decades, lead-acid batteries have been the most important rechargeable batteries in our lives.

    Even in 2014, about 64.5% of all revenues in the rechargeable battery market were from lead-acid sales, mainly to be used for automotive starters.

    Sponsors
    Nevada Energy Metals
    eCobalt Solutions Inc.
    Great Lakes Graphite

    Why?

    Despite not being the most energy dense batteries, lead-acids are proven and can supply high surge currents. They are also extremely cheap to manufacture, costing around $150 per kWh of energy capacity.

    Enter Lithium-Ion

    The first lithium-ions were not cheap. In fact, early batteries produced commercially in the mid-90s typically costed upwards of $3,000 per kWh of energy.

    Luckily, the cost of lithium-ion batteries has come down dramatically, making it the battery of choice for consumer electronics throughout the 2000s. And recently, scientists have made even more progress, opening the lithium-ion to many more applications, namely in electric vehicles.

    In 2008, analysts estimated that lithium-ion battery packs costed $600-$1,200 per kWh, but this range would drop to $500-800 per kWh over the following four years. Tesla now claims that a Tesla Model S battery cost is $240 per kWh and that the expected cost for a Model 3 is $190 per kWh.

    At $240 kWh, lithium-ions become competitive with $3/gallon gas. At $150, they are even competitive with $2 gas.

    Giant megafactories such as Tesla’s Gigifactory 1 will also help bring economies of scale to lithium-ion production, making them even less cost-prohibitive. Soon battery packs will cost closer to $100 per kWh, which will make them essentially cheaper than all gas-powered vehicles.

    Demand for Lithium-Ion Batteries

    Major advancements in lithium-ion battery technology have been a game-changer. Cheaper, more-effective lithium-ions are now taking over the battery market.

    In 2014, lithium-ions made up 33.4% of the rechargeable battery market worldwide, worth $49 billion. By 2025, it is estimated by Bernstein that the rechargeable battery market will more than double in size to $112 billion, while lithium-ion’s market share will more than double to 70.0%.

    The key driver? The automotive segment.

    In 2010, the automotive sector was a drop in the bucket for lithium-ion battery sales. Five years later, automotive made up more than $5 billion of sales in a sector worth nearly $16 billion.

    The EV Goes Mainstream

    In 2015, almost half a million cars were sold in the US with an electric drive component.

    14% of these sales were battery electric vehicles (BEVs):

    • 71,000 Battery EVs (14%)
    • 43,000 plug-in hybrids (9%)
    • 384,000 hybrids (77%)

    = 498,000 electric drive vehicles

    But as a part of total US auto sales, BEVs still made up less than 1% of sales:

    • 71,000 battery EVs (0.4%)
    • 43,000 plug-in hybrids (0.3%)
    • 384,000 hybrids (2.3%)
    • 16,900,000 gas/diesel sales (97%)

    However, in the near future, this is expected to change fast. By 2040, approximately 35% of all global sales will be BEVs. battery EVs.

    This will put electric vehicle sales at close to 40 million per year globally, meaning a lot of energy will need to be stored by batteries. Bloomberg New Energy Finance expects that at this point, that electric vehicles will be pulling more than 1,900 TWh from the grid each year.

    How much is 1,900 TWh? It’s enough to power the entire United States for 160 days.

    And to meet this demand for lithium-ion powered vehicles, a massive amount of battery packs will need to be manufactured.

    Part 4 of The Battery Series looks at which materials will be needed to make this possible.

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    The post Explaining the Surging Demand for Lithium-Ion Batteries appeared first on Visual Capitalist.

  6. America’s Brewing Debt Crisis

    kalenjin shared this story from CFR.org - Foreign Affairs.

    What Dodd-Frank Didn’t Fix

  7. Managed Futures: Understanding a Misunderstood Diversification Tool.

    kalenjin shared this story from Alpha Architect.

    In my two previous blog posts (here and here), I analyze the performance of bonds during really bad months for US stocks (“Crisis Alpha” months), and I analyze the performance of US stocks during really bad months for US bonds.  A quick summary of the results from those prior studies:

    • Bonds have historically provided some diversification benefit during bad months for stocks. Bonds have historically had a positive return in excess of cash of about 0.12%, on average.  The excess return has historically been positive about 55% of the time.  However, most of that performance has been driven by the income return component of bonds, and not their price appreciation.  This might make future diversification benefits harder to come by for bonds.
    • Stocks have historically provided “meh” diversification benefit for bonds when bond returns have been bad. Stocks, historically and on average, have provided negative returns in excess of cash during the worst 50 months for bonds.  In addition, stocks have provided positive returns in excess of cash only about 40% of the time.

    One key takeaway point from the previous posts is that investors may need to look beyond traditional stock/bond portfolios in an attempt to increase the diversification of their portfolios. Among the more compelling “outside the box” diversification options are managed futures, which Wes briefly mentions in an older post here on crisis alpha.

    What in the heck are managed futures?

    Managed futures is a catch-all term for strategies that trade futures contracts. In many respects the label “managed futures” is similar to “equity investor”–the label doesn’t really narrow things down. That being said, futures-based trading strategies have typically been pursued by hedge funds and commodity trading advisors (CTAs) and many of these strategies are based on some sort of trend-following rule(s).

    Trend following (or absolute momentum investing) can be best described as going long assets that are going up in price and selling (shorting) assets that are declining in price.  The managers of managed future strategies apply this trend following investing on many (thirty or more) liquid and exchange traded future contracts across commodities, equity indices, currencies and government bonds.

    To learn more about Managed Futures, please check out the following links:

    How do Managed Futures Work in a Portfolio?

    Data

    For the time period 1/1926 through 12/2012, we use Ibbotson Associates US Large Cap TR index for US Stocks, Ibbotson Associates Long-Term US Government Bond TR index for US Bonds, Ibbotson Associates 30 Day T-Bill TR for Cash and the data from the AQR paper “A Century of Evidence on Trend-Following Investing” net of the paper’s estimate of fees and transaction costs (which are estimated net excess returns) for the Managed Futures return stream.  We do an additional robustness check with additional data, as described below.

    To extend the analysis on Managed Futures, we also use the Barclays Top 50 Index (BTop50) which is a net of fees index created by Barclays Hedge, Ltd. to represent the Managed Futures industry.  It is not possible to invest in the index, but in order for a manager to be included in the index they must be open to new investments (among several other requirements).  The Barclays Top 50 index is used as a proxy for net of fee, live and out of sample performance of the Managed Futures strategy.  The BTop50 has data going back to 1987.

    Unless otherwise noted, all returns will be excess returns (total returns less the return on cash) and all averages are arithmetic.

    Correlations

    First, to determine if a Managed Futures allocation might diversify a portfolio of traditional stocks and bonds we use the traditional tool, correlation analysis. The results are as follows:

    1 - Correlation Table

    The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

    The correlation table, above, shows that US Stocks and US bonds have had very little correlation with one another over time (as expected).  In addition, Managed Futures (ManFut) shows very little correlation to US Stocks and US Bonds.  This indicates that they have the potential to be a great diversifier to a portfolio of US Stocks and US Bonds.

    However, as the two previous blog posts have shown, one must also look past summary correlations and also look at how assets have performed during “crisis” periods in order to determine if the diversification is helpful (i.e., the returns aren’t all bad at the same time) or if it is pseudo-diversification (i.e., the cross correlations are low but the returns are bad at the same time).

    Performance When Stock Returns Are Bad (“Crisis Alpha” months)

    As in my previous blog post, we will divide history into two categories 1) US stock total returns are -5% or worse (“Crisis Alpha” months) and 2) US Stock total returns are greater than -5% (“Normal” months).  We will then study the historical returns of US Stocks, US Bonds, Cash and Managed Futures during those time periods.  I have summarized the return data in the table below:

    2 - ManFut Crisis Table

    The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

    And a visual summary of the data:

    3 - ManFut Crisis Graph

    The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

    As you can see from the table and graphs, most of the time (90%) US stocks have had total returns that were greater than -5% in a month.  During those 90% of months, US stocks averaged total returns of 2.08%.  However, during “Crisis Alpha” months, stocks have averaged total returns of -9.05%.

    In order to provide attractive diversification for stocks, an investment doesn’t only need to have low correlation, but it must deliver attractive returns (on average) during those “Crisis Alpha” months…and do so with some consistency.

    As we look at the performance of US Bonds, we see that they did in fact provide positive excess returns, on average, of 0.12% and did so with some consistency (positive excess returns in 55% of “Crisis Alpha” months).

    However, given the difference in magnitude between US stock returns during “Crisis Alpha” months (-9.05% total return) and US bond returns (0.12% excess return), it is a drop in (the diversification) bucket.

    As we study the Managed Future return series during “Crisis Alpha” months we see that it has provided an excess return of 1.30%, which is more than 10X the performance of bonds during “Crisis Alpha” months!  In addition, the Managed Futures return series has provided positive excess returns in “Crisis Alpha” months 67% of the time.

    So to summarize so far – Bonds have been an OK diversifier for stocks (low correlation and small positive excess returns during “Crisis Alpha” months), but Managed Futures have the potential for offering much better diversification (low correlation with larger and more consistent positive excess returns during “Crisis Alpha” months).

    This finding isn’t new, but confirms the findings of researchers like Dr. Kathyrn Kamisky and Dr. Alex Greyserman that managed futures tend to provide positive excess returns during periods when US stocks perform unusually poorly.

    Performance when Bond Returns Are Bad

    To analyze the performance of how US stocks and Managed Futures perform during bad months for bonds, we look at the 50 worst months of excess returns for bonds over the period 1/1926 through 12/1926.  A summary table of the data is below:

    4 - Bad Bond Table

    The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

    And visually:

    5 - Bad Bond Graph

    The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

    As you can see from the data, above, US Bonds have historically averaged a -5.35% excess return during their 50 worst months.  During these tough months for US bonds, US stocks have also struggled with an average excess return of -1.47%.  In addition, during the 50 worst months for US bonds, US stocks have only generated a positive excess return in 38% of those months.

    Said another way – when US bonds struggle, US stocks haven’t historically provided much help for portfolios.

    As we look at the performance of Managed Futures (ManFut) during the 50 worst months for US bonds, however, we see that they have averaged a 0.96% excess return.  In addition, Managed Futures have generated a positive excess return in 30 of the 50 worst months for bonds.

    This finding seems to be a less discussed attribute of Managed Futures – they are an investment (or investment strategy) that has historically provided a positive long-term return and also provides diversification for both US stocks AND US bonds.

    Robustness Check

    There is always a chance that the findings discussed above are due to chance or data mining or other issues that might make the Managed Futures strategy appear more attractive.  To help address that concern, we do a robustness check on the findings by using the Barclays Top 50 Index (BTop50) and repeating the analysis using data from 1/1987 through 12/2015.

    For US stocks the data table is below:

    6 - BTop Crisis Alpha

    The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

    As you can see in the graph, US stocks since 1987 have about the same ratio of “Normal” months at about 90% and “Crisis Alpha” months at about 10% as they do in the longer data sample (1/1926 through 12/2012).  In addition, the returns during “Normal” months is very similar at a positive 1.53% excess return and the return during “Crisis Alpha” months is also very similar to the longer sample at -8.55%.

    As we look at the Btop50 excess return performance since 1/1987 we can see some items that are different from the AQR data and some consistencies:

    I notice two main differences between the BTop50 performance and the AQR performance:

    1. Frequency of positive excess returns – The AQR data shows that excess returns are positive about 66% of the time. However, the BTop50 shows that excess returns are positive only about 52% of the time.  These are obviously over different time periods, but it shows that perhaps some of the returns from the Managed Futures strategy have been eroded away.
    1. Average Returns are less during All Months and “Normal” Months – The notion that returns are less for the Managed Futures strategy is further supported by the data in that the average excess return during all months is about 0.4% less in the BTop50 data than it is in the AQR data. In addition, the returns during “Normal” times is also about 0.4% less in the BTop50 data than in the AQR data.

    Despite the differences, one striking and very important similarity remains:

    1. Returns during “Crisis Alpha” months – The average excess return during “Crisis Alpha” months is 1.64% which is about the same as the excess return in the AQR data (although over different time periods). In addition, the frequency of positive excess returns is about the same in the BTop50 data (about 65%) as in the AQR data (about 67%).

    This robustness check on Managed Futures helps strengthen the case that Managed Futures are capable of delivering attractive diversification benefits for stocks.

    For the 50 worst months for US Bonds since 1/1987, the data table is below:

    7 - Btop Bad Bond

    The results are hypothetical results and are NOT an indicator of future results and do NOT represent returns that any investor actually attained. Indexes are unmanaged, do not reflect management or trading fees, and one cannot invest directly in an index. Additional information regarding the construction of these results is available upon request.

    As we can see from the table, above, US bonds have averaged an excess return of about -4% during their worst 50 months between 1/1987 and 12/2015.  This is largely consistent with the performance during the worst 50 months for bonds between 1/1926 and 12/2012.

    One notable difference between the AQR data and the BTop50 data is that the BTop50 hasn’t provided a positive excess return during bad months for bonds.  There could be any number of reasons for this and it might be the subject of a future blog post.

    A Poor Man’s Method to Attain Managed Futures Exposure?

    Ok, enough with the theory…how do you add Managed Futures exposure to your portfolio?  There are a couple of choices in varying degrees of complexity, fees, etc.  I’d revisit Wes’s great article on FACTS to determine where you feel most comfortable in the spectrum of the FACTS framework.

    • Option 1 – Direct exposure to CTA hedge funds: This might be the route preferred by most institutional investors, but this isn’t an option for most individual investors.
    • Option 2 – Invest in a mutual fund that uses a Managed Futures strategy: There has been a large increase in the offering of mutual funds that pursue a managed futures strategy.  However, there can be added complexity due to choices about how the fund is managed (does it invest directly or is it pursuing a fund of funds type strategy, etc.)
    • Option 3 – Replicate a Managed Futures type strategy in your own portfolio: One could identify a group of ETFs that approximate exposures available via futures (e.g., equity, fixed income, commodities, and FX) and run a simple trend-following model to determine long/short exposures. If the short side is too complicated, a long/flat (go long or go to cash, but never short) approach could potentially work (see the RAA system for an example). The DIY approach is potentially cheaper, but one also risks diluting the performance of a more pure managed futures exposure.

    Summary

    Studying bond returns during tough times for stocks (and vice versa) shows that correlation might overstate the diversification benefits of stocks and bonds.  This post introduces a new investment strategy, Managed Futures, and shows that Managed Futures have promising diversification benefits for stocks AND bonds using one data set.

    Using another data set for the Managed Futures strategy shows that Managed Futures have been a great diversifier for stocks but a mixed bag diversifier for bonds.

    Hopefully, this post serves as a good starting point in understanding some of the diversification benefits Managed Futures may provide.

    ***

    Please remember that past performance is not an indicator of future results. Please read our full disclaimer. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Alpha Architect, its affiliates or its employees. This material has been provided to you solely for information and educational purposes and does not constitute an offer or solicitation of an offer or any advice or recommendation to purchase any securities or other financial instruments and may not be construed as such. The factual information set forth herein has been obtained or derived from sources believed by the author and Alpha Architect to be reliable but it is not necessarily all-inclusive and is not guaranteed as to its accuracy and is not to be regarded as a representation or warranty, express or implied, as to the information’s accuracy or completeness, nor should the attached information serve as the basis of any investment decision. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission from Alpha Architect.

    ***

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    The post Managed Futures: Understanding a Misunderstood Diversification Tool. appeared first on Alpha Architect.

  8. Tactical Asset Allocation Software

    kalenjin shared this story from Meb Faber Research – Stock Market and Investing Blog.

    I used to update an old post on free data sources and stock screeners for investors. I thought I’d summarize a handful of websites that focus on tactical asset allocation software, tools, and backtesters.  For a long time I was going to build this on tacticalassetallocation.com, but there are now lots of resources here so we just … Continued

    The post Tactical Asset Allocation Software appeared first on Meb Faber Research - Stock Market and Investing Blog.

  9. Increasing Number Of Americans Are "Microdosing" On Psychedelics To Enhance Mental Performance

    kalenjin shared this story from Zero Hedge.

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    Whenever an irrational and inhumane law remains on the books far longer than any thinking person would consider appropriate, there’s usually one reason behind it: money.

     

    Unsurprisingly, the continued federal prohibition on marijuana and its absurd classification as a Schedule 1 drug is no exception. Thankfully, a recent study published in the journal Health Affairs shows us exactly why pharmaceutical companies are one of the leading voices against medical marijuana. It has nothing to do with healthcare and everything to do with corporate greed.

     

    – From last month’s article: The Real Reason Pharma Companies Hate Medical Marijuana (It Works)

    This isn’t my typical kind of article. Normally, I’d include something like this in my links post, but as I continued reading this piece it became apparent this is one of the most fascinating things I’ve read all year.

    What follows are excepts from the Wired article, Would You Take LSD to Give You a Boost at Work? WIRED Takes a Trip Inside the World of Microdosing. I strongly suggest reading the entire thing.

    It’s 7am on a sunny Friday in a shared house in the sleepy San Francisco neighbourhood of Richmond. Flatmates buzz in and out of the kitchen as Lily (not her real name), a publicist for several startups, sits down with cup of tea and a credit-card-sized bag of dried magic mushrooms.

     

    The 28-year-old breaks up the caps and stems and places them into a herb grinder. She then scoops the pulverised mixture into empty gel pill capsules, weighing each one on a tiny scale. Once finished, she pops one of the capsules into her mouth and washes its down with PG Tips. She’s now ready to start her working day.

     

    “It helps me think more creatively and stay focused,” she says. “I manage my stress with ease and am able to keep my perspective healthy in a way that I was unable to before.”

     

    Lily is one of many young professionals in San Francisco and beyond experimenting with “microdosing”: taking small quantities of psychedelic drugs – typically LSD or psilocybin mushrooms – every few days in the hope of improving their performance at work. In small amounts, say, a tenth of a full dose, users don’t experience a consciousness-altering “trip”, but instead report improvements in concentration and problem solving, as well as a reduction in anxiety.

     

    Proponents WIRED has spoken to – including software engineers, biologists and mathematicians – say that it induces a “flow state”, aids lateral thinking and encourages more empathetic interpersonal relations.

     

    Albert Hoffman, who synthesised lysergic acid diethylamide (LSD’s full title) in 1938, and who took what is considered the first intentional LSD trip in 1943, microdosed throughout the last couple of his decades of his life (he died in 2008). The father of psychedelics, who lived to be 102, found consuming LSD in small amounts clarified his thinking, according to Dr James Fadiman, a long-time friend.

     

    A Reddit forum dedicated to the practice has grown its subscriber base from 1,600 at the start of 2015 to almost 7,500 in mid-June 2016. Google search volumes for the term “microdosing” have grown at a similar rate. Although WIRED found no completed clinical studies looking specifically at microdoses, Fadiman has been carrying out his own research by collecting anecdotal reports from volunteers who self-administer the drugs.

     

    Fadiman offers guidance to participants on how often to dose and, in return, asks them to keep a journal of observations. He started collecting these reports in 2010, following the advice of friend Albert Hoffman, who described microdosing as the most under-researched area of psychedelics.

     

    The high-pressure startup culture of the Bay Area leads many participants to view their bodies and brains as machines to be optimised using all of the tools available – meditation, yoga, Soylent, intermittent fasting, so-called “smart drugs” (including off-label ADHD and narcolepsy meds), microdosed psychedelics and legal nootropics.

     

    The trend for using “smart drugs” can be traced back to schools, where Ritalin and Adderall prescriptions are rife, explains Anjan Chatterjee, a professor of neurology at the University of Pennsylvania. Children even at preschool age find themselves in competitive environments with dense schedules of study, tutoring, music lessons and sport.

     

    Those who aren’t already prescribed ADHD medication can buy it with ease; a series of surveys suggest that around 20 per cent of US college students have abused prescription stimulants. It’s something Lily, who has been prescribed ADHD medication since she was six, can relate to. At university she would share her prescription with friends seeking help focusing on assignments – something that she continued when she entered the working world. “It’s what fuels not just the tech community but any millennial trying to work really hard and make it,” she says.

     

    At the start of her career working in a tech startup, she found Adderall useful. “It helped me launch a company. We went from three cities to over 30 in six months. I felt like a rockstar but I was being an asshole,” she says. Lily started to research microdosing psychedelics after experiencing unpleasant side effects from the amphetamine-based drug. “My heart would be racing when I took it, and when I didn’t I’d experience withdrawal and feel really dumb – like my brain was slowing down.”

     

    Even though magic mushrooms and LSD are illegal in many countries, Lily views them as safer than her legal meds. Not only are the doses small and infrequent, she has found no evidence that psychedelics are physically addictive. “I don’t think we’re going to find out that microdosing fucks up your liver,” she says.

     

    Lily still takes her ADHD medication, but microdosing magic mushrooms has allowed her to substantially reduce her dose. “In a perfect world I don’t want to take Adderall at all,” she says. Lily’s case highlights how inconsistent policymaking around drugs can be. It’s fine for six-year-olds to be prescribed amphetamines, but it’s illegal for adults to turn on, tune in and drop out.

    Well yeah, one of them makes drug companies a lot of money, and the other doesn’t.

    As a society, we’re medieval in how we classify substances,” says Woo. “Some compounds are prescription-only, some are readily available, and some are illegal. And the classification is pretty arbitrary if we really dig into their potency, addictive potential and harm risks to self and society.”

    As a society, we are medieval in all sorts of ways. The global financial system also comes to mind.

    In London, 34-year-old Blake (not his real name) works at a mobile startup as a software developer. He has been microdosing on and off since October 2015. He takes tabs of LSD, also bought on the Dark Net, from an online dispensary known as Nucleus Market for around £5 per tab. He divides each tab into ten, taking one dose in the morning, once or twice a week.

     

    “It makes me work in such a focused way,” he says. “It gets your brain out of its regular grooves and helps you snap out of unproductive trains of thought.” It’s part of a range of techniques he uses to optimise his mental prowess, including playing instruments, exercising and brain games. “I try to get as good as I can at everything I do. It’s a natural attribute of many software engineers, especially when it comes to optimising mental activities,” he says.

     

    When he was preparing a proposal for his masters thesis he set aside time to take the larger dose and try and visualise ideas. “My mind became a supercomputer. It allowed me to visualise ideas, shuffle them, put them into multiple combinations,” he explains. Alex says that he’s noticed a marked improvement in the feedback from his supervisor, who is none the wiser. “Maybe I could have got to the same result on my own, but it comes faster with the drug.” The benefits aren’t restricted to work, but spill out into the rest of his life. “It makes me more happy and social,” he says.

     

    Blake agrees: “I listen to people more, I have an appreciation for simple things, and an inability to eat unhealthy food. Looking at fried stuff can be repulsive.”

    Of course, like with everything else in life, moderation is probably an intelligent strategy.

    Fadiman’s research revealed other side effects: “Several people reported uncomfortable sweating on dose day, but they continued dosing. And two subjects reported increased anxiety. One person reported more migraines.”

     

    Furthermore, we don’t really understand the long-term impact of taking these drugs every few days. David Nichols carried out an experiment in 2011 in which he gave rats doses of 0.08 to 0.16mg/kg of LSD every other day for three months. Over time the animals became aggressive and hyperactive, showing behaviours that resemble psychosis in humans, brought about by changes in the circuitry to the brain.

     

    “Using these drugs once a month is one thing. Using them every day, I’m not sure they are innocuous,” Nichols says. “They may bring about subtle behavioural and hormonal changes that we don’t yet fully understand.”

     

    Fadiman dismisses this study, arguing that no-one ever takes psychedelics daily for three months and that if individuals don’t feel as though their microdose is beneficial, they should stop. However, drug charities are more cautious. Although there’s currently no evidence that LSD and magic mushrooms do any long-term damage to the body or directly cause long-term psychological damage, in large doses they can lead to unpleasant hallucinations, flashbacks and exacerbate pre-existing mental health problems.

    Now here’s where things get really interesting…

    The study that has captured the attention of today’s microdosers is one that took place in the summer of 1966, at a research facility in Menlo Park, led by a then 27-year-old Jim Fadiman.

     

    The question he set out to answer was whether psychedelic drugs could help solve hard science problems. Volunteers for the study had to be dealing with a problem – something that could be measured, built, proven or manufactured – that they’d been stuck on for at least three months. Twenty-seven men, including engineers, architects, mathematicians, a psychologist and a furniture designer, signed up.

     

    Each participant was given 200 milligrams of mescaline – the equivalent of 100 micrograms of LSD – and left to listen to classical music with their eyes closed for a couple of hours while the drug kicked in. Then, they were let loose on their problems.

     

    The results were startling. There were breakthroughs or partial solutions to 40 out of the 44 problems the volunteers were collectively grappling with.

     

    “It’s hard to estimate how long this problem might have taken without the psychedelic agent,” reported one scientist who took part in the trial. “But it was the type of problem that might have never been solved. It would have taken a great deal of effort and racking of brains to arrive at what seemed to come more easily during the session.”

     

    Tangible innovations to emerge shortly after the psychedelic experience include a mathematical theorem for NOR gate circuits; a new design for a vibratory microtome; a space probe experiment to measure solar properties; a technical improvement to the magnetic recorder; a new conceptual model of a photon; and a linear electron accelerator beam-steering device.

     

    Research came to a standstill as the US government classified psychedelic drugs as Schedule 1 substances, the most tightly controlled. Nixon’s subsequent war on drugs whipped up moral outrage among the socially conservative. This stigmatised psychedelics, causing funding for research to dry up, leading to a 40-year interruption to scientific advancement in the field.

     

    “This is the worst censorship of science in the history of the world… since the dark ages. It’s worse than the Catholic Church banning the telescope in 1616,” says David Nutt, who is widely known in the UK for being sacked from his role as the government’s chief drug advisor in 2009, after claiming ecstasy was safer than horse riding.

    The U.S. government. Protecting the American people from creativity and scientific progress. Why am I not surprised.

    The article ends by getting to the crux of the issue.

    The logistics of researching microdoses are more challenging. With full-dose experiments, human participants are kept in a controlled environment with access to medical professionals and a sitter who stays with them at all times. A study on microdosing would involve, in theory, administering a Schedule 1 drug to volunteers before sending them home – a tough challenge for risk-averse institutional review boards.

     

    Compounding the issue is the fact that LSD was discovered so long ago that it’s off-patent. If it were to be commercialised today, it would be a less profitable, generic drug.

     

    “A pharma company needs to figure out how to make an obscene profit – that’s what gets their attention. The problem is that these drugs are not addicting and you don’t need to take them very often,” Fadiman says.

    If this article isn’t enough to convince you of the monumental stupidity of the failed “war on drugs,”I suggest you read the following:

    Federal Judge of 17 Years Repents – Compares Damage Done by “War on Drugs” to Destruction of World War II

    The Real Reason Pharma Companies Hate Medical Marijuana (It Works)

    How NSA Surveillance Was Birthed from the Drug War – The DEA Tracked Billions of Phone Calls Pre 9/11

    Meanwhile, over at the FDA…

    NYU Professor Uncovers How the FDA Systematically Covers Up Fraud and Misconduct in Drug Trials

    Fraud Alert: FDA Allowed Drugs with Fraudulent Testing to Remain on the Market

    The FDA is Caught Spying on its Employees and Creating an “Enemies List”

    And you wonder why society is so completely messed up.

  10. Economic Trends: The Housing Market Is Finally Starting to Look Healthy

    kalenjin shared this story from NYT > The Upshot.

    Millennials are in the mood to buy, and homebuilders are starting to produce more of the starter houses they demand.