Geoff, partner since 2008 (Kingston, Ontario)
November 17th marked the 15th anniversary of the launch of the original four EdgePoint Portfolios. Thank you for your trust over this time. We will continue to work hard every day to be worthy of it.
The return of the EdgePoint holiday gift list
Internal partners submitted some of their favourite gift ideas to help anyone looking for something to give to their friends and family. Comfy sweaters, books and, of course, earbuds.
We also brought back some of our holiday favourites on the EdgePoint store:
This week in charts
Company updates
U.S. small-caps
U.S. bonds
It is fairly well-known among security researchers that quantum computers, once they are powerful enough, will be able to crack the existing encryption technologies. In other words, powerful quantum computers will be able to unlock phones and crack passwords within minutes by 2048-bit RSA encryption, a standard that is used in almost everything smart tech that we have in our life. But the powerful quantum computers don't exist yet. Now, a few Chinese researchers claim that they do not need a powerful quantum computer to crack 2048-bit RSA. The existing quantum computers can do it well enough. A group of Chinese researchers have recently published a scientific paper titled "Factoring integers with sublinear resources on a superconducting quantum processor." In the paper, they have claimed that it is possible to break into the 2048-bit RSA encryption using existing quantum computers. The news comes as a shock to the entire scientific community as the existing quantum computers were never thought to be capable enough of such a move.
An excerpt from the paper reads, "We demonstrate the algorithm experimentally by factoring integers up to 48 bits with 10 superconducting qubits, the largest integer factored on a quantum device. We estimate that a quantum circuit with 372 physical qubits and a depth of thousands is necessary to challenge RSA-2048 using our algorithm. Our study shows great promise in expediting the application of current noisy quantum computers, and paves the way to factor large integers of realistic cryptographic significance."
Given that the claim is so startling, most security researchers are sceptical.
"It might not be correct, but it's not obviously wrong," writes renowned security technologist Bruce Scheiner on his blog. He further adds that the Chinese researchers claimed in their paper that they were able to "factor 48-bit numbers using a 10-qbit quantum computer. And while there are always potential problems when scaling something like this up by a factor of 50, there are no obvious barriers."
However, the researchers haven't demonstrated their theory on any device larger than 48-bits, which, as per experts, is a major red flag.
Where Have All the Foreign Buyers Gone for U.S. Treasury Debt?
Foreigners no longer have an insatiable appetite for U.S. government debt. That’s bad news for Washington.
The U.S. Treasury market is in the midst of major supply and demand changes. The Federal Reserve is shedding its portfolio at a rate of about $60 billion a month. Overseas buyers who were once important sources of demand—China and Japan in particular—have become less reliable lately.
Meanwhile, supply has exploded. The U.S. Treasury has issued a net $2 trillion in new debt this year, a record when excluding the pandemic borrowing spree of 2020.
“U.S. issuance is way up, and foreign demand hasn’t gone up,” said Brad Setser, senior fellow at the Council on Foreign Relations. “And in some key categories—notably Japan and China—they don’t seem likely to be net buyers going forward.”
Foreigners, including private investors and central banks, now own about 30% of all outstanding U.S. Treasury securities, down from roughly 43% a decade ago, according to data from the Securities Industry and Financial Markets Association.
The makeup of overseas demand has shifted. European investors bought $214 billion in Treasurys over the past 12 months, according to Goldman Sachs data. Latin America and the Middle East, flush with oil profits, also added to holdings. That has helped offset a $182 billion decline in holdings from Japan and China.
This week’s fun finds
Internet Sleuths Want to Track Down This Mystery Pop Song. They Only Have 17 Seconds of It
The file is labeled “Pop – English,” indicating the genre and language. “Mid 80s, Bad quality. (Everyone Knows That),” wrote carl92, offering an estimate of when the song might have been recorded. “Everyone Knows That” is an interpretation of a lyric heard in the clip. “I rediscover[ed] this sample between a bunch of very old files in a DVD backup,” carl92 explained in a followup comment. “Probably I was simply learning how to capture audio and this was a left over.”
The grainy recording, just 17 seconds long, captures what indeed sounds like the catchy hook to an upbeat 1980s New Wave tune, though most of the words are hard to make out. It didn’t attract much interest at first. Yet as the months passed without an identification, each proposal of a potential artist being ruled out one after another, a cultish fascination began to take hold. Two years later, it’s the most-commented thread in WatZatSong history, and there’s a 5,000-strong subreddit devoted to theories about the song. Fans have recorded remixes and covers imagining the missing verses, generated longer versions with AI, and perpetrated successful hoaxes about where the original came from. But the fact remains: no one knows the band behind “Everyone Knows That.”
The lack of leads is itself intriguing, he says, comparing “Everyone Knows That” to another popular piece of so-called “lost media,” widely known as “Like the Wind” or “The Most Mysterious Song on the Internet.” This was recorded sometime in the 1980s from a German radio broadcast and has likewise thwarted years of investigation into who produced it. (Such artifacts are sometimes given the genre tag of “lostwave.”) But, notes cotton–underground, people researching “Like the Wind” have a full, three-minute audio file of decent quality to work from. The existing short fragment of “Everyone Knows That,” whose precise lyrics are still a subject of debate (some hear the words “ulterior motives” where others hear “fear of emotions,” for example) presents a greater degree of difficulty for audio detectives. Some even believe that carl92, who left WatZatSong after uploading it, pulled off some kind of maddening prank. There’s no end to the list of the potential sources suggested for carl92’s garbled snippet of “Everyone Knows That.” Some believe he got it off an MTV broadcast in the 1990s, while others are convinced it was a commercial jingle. It could be an unreleased demo by a group that never hit the big time. Or it might be from a compilation of muzak created by a Japanese company and played in McDonald’s locations in Eastern Europe — except that one investigator called the distributor and confirmed they have no such track in their databases. These dead ends have only multiplied.
“It was fun to have hope, but as of late, the hoaxes have gotten so common, it’s becoming increasingly more and more disruptive to the search,” [Reddit user] sodapopyarn laments. Still, it often appears as if creative inspiration — not the dogged quest for cold, hard truth — is what keeps the discussion going.
As one YouTube commenter wrote on a recent music video that convincingly fleshes out the song in polished form, complete with suitably neon 1980s visuals: “Even if we find the original, it’s probably not gonna be as good as this.”
