Numlock News: November 5, 2019 • Timber, Diamonds, Libraries
By Walt Hickey
Extended Warranty
Two researchers analyzed 45,000 electronics transactions from a major retailer from 1998 to 2004 related to prices and returns. An extended warranty on an electronic product cost 24 percent of the price, and consumers paid for them 20 percent to 40 percent of the time. Zeroing in on televisions, it’s not particularly clear that this is a good idea: the TVs failed 5 percent to 8 percent of the time, giving the retailers a 62 percent to 73 percent profit margin on the warranty. Basically, people got a television that would fail 5 percent of the time, but were buying warranties like they would fail 13 percent of the time.
Norwegian Wood (This Bird Has Flown)
Timber is a perfectly viable material to use to build buildings, as you can probably tell based on the track record of 97 percent of humans’ time on earth. Thanks to new design and material processing, it’s possible to build larger and larger structures out of timber, which not only avoids using environmentally costly concrete or steel but also manages to sequester carbon. Today, wood is manufactured into glulam and cross-laminated timber (CLT) to give it superior strength, resistance to flame, and overall utility. Norway is poised to capitalize on this: 40 percent of the country is forested following successful reforestation after the Second World War, and they just built a new factory for CLT. The effect is huge: one cubic meter of spruce can store 0.8 tons of carbon, meaning that you can hypothetically construct a building with a negative carbon footprint.
Voyager 2
Voyager 2, a space probe launched in the 1970s, is still communicating with earth with a 22.4 watt transmitter that requires as much power as a light inside a refrigerator. Last year, the spacecraft exited the heliosphere, a “cosmic weather front” which is the area around the sun where the solar wind prevails over the interstellar wind that flows toward the solar system from the rest of the galaxy. The data from that crossing is back, and was analyzed across five papers published Monday. Comparing it to similar readouts from when Voyager 1 exited the heliosphere, we have a much better idea of what’s going on at the boundary. The two probes crossed the plane at similar distances, Voyager 1 at 121.6 astronomical units and Voyager 2 at 119 AU, indicating that the shape may be like a sphere or a windsock.
Hannah Devlin, The Guardian and Ryan F. Mandelbaum, Gizmodo
Libraries
As of October 1, Chicago became the largest city in the U.S. to forgo overdue fines and erase all current fees for its library system, a decision made after administrators concluded that the fees were disproportionately impacting the financially disadvantaged. According to an official, the result has been a smashing success: the libraries saw a 240 percent increase in the number of books returned since the fines were eliminated, and patrons are coming back. The 2020 budget will also include $18 million to add Sunday hours at the 81 libraries in the city.
Trust
After the financial crisis, Americans’ trust in financial institutions stood at just 22 percent, and in the years since it’s barely budged, rising to a paltry 28 percent. Another study found the distrust to be even more substantial among younger people with 45.3 percent of those 18 to 35 disputing the statement that they “trust banks to be fair and honest.” This is one reason why new consumer-facing financial brands are naming themselves after people, in an attempt to come off as more personable and trustworthy when they’re cutting the APR on your high-yield savings account by 0.2 percentage points. It’s the oldest trick in the book — for a while it worked for Charles Schwab, Fannie Mae and Freddie Mac — but now apps like Dave, Brigit, Marcus, student loan app Frank, insurance apps Clyde and Oscar, and investment app Albert are here to play off the side of your brain that wants to believe other people want to help you. This is why I’m launching my new app, Louis XVI, which at the touch of a button sends a push notification to your awful banking app’s CEO to remind them that branding will only get them so far.
Work Week
A trial run of reducing the 40-hour work week at Microsoft in Japan shut down offices every Friday in the month of August and gave employees an extra day off each week. More than 90 percent of the company’s 2,280 employees in Japan participated in the pilot project, which attempted to determine the financial benefits of reducing hours. Productivity, as measured by sales per employee, was up 40 percent compared to the same period the previous year, according to the company. Furthermore, meetings were cut to no longer than 30 minutes, which in my experience is exactly how long it takes to dislodge someone from the reserved conference room and get the teleconferencing system operational on both ends.
Michele Toh and Yoko Wakatsuki, CNN
Diamonds
International diamond producer De Beers lowered prices by 5 percent at its most recent sale in November, a move made with the goal of improving profits for the industry middlemen who are stuck between a very expensive rock and the hardest possible place. Margins are low across the diamond business now given an oversupply of gems, with the open market price for rough diamonds down 9 percent this year. Ten times per year, De Beers sells stones to an elite and private set of buyers in Gaborone, Botswana. January through October 2016, De Beers sold $4.689 billion worth of diamonds. In 2019, that was down to $3.216 billion over the same period.
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