During the Great Nastiness of aught-eight I would refer to Professor Perry as "the Happy Economist" because he relentlessly focused on the green shoots.
Today, not so much, at least for the information gate-keepers/toll-takers.
From Carpe Diem:
For
the last several years, I’ve been regularly posting charts like the one
above showing the history of US newspaper advertising revenue back to
1950, based on data from the Newspaper Association of America. Those charts have been noteworthy for several reasons.
First,
more than any of the hundreds of charts and graphs that I’ve created
and posted on Carpe Diem over the last seven years, the newspaper ad
revenue charts have received the most attention by far. Those charts
have been featured on so many other blogs and websites that a recent
Reuters article referred to a recent version as a “much-reproduced chart.” If you do a Google image search for “newspaper ad revenue,”
you’ll see many versions of the CD chart above. I hope this is a
testament to how powerful and compelling the graphical representation of
data can be!
Second, it’s possible that the attention the ad revenue charts were
generating on the Internet may have contributed to the decision by the
Newspaper Association of America (NAA) in 2013 to suddenly stop its
long-standing practice of reporting quarterly advertising revenue data,
and switch to releasing only annual data (not yet available from NAA for
2014, but available here from BIA/Kelsey). In a 2013 interview, NAA CEO Caroline Little was quoted as saying that she and the organization’s board decided it was “time to stop beating themselves up four times a year with the negative numbers.”
The updated chart above shows annual data from 1950 to 2014 in inflation-adjusted (2014) dollars. The blue line represents total annual print newspaper advertising revenue (for the three categories national, retail, and classified), and appear in the chart as billions of constant 2014 dollars....MORE
...Bitcoins are like “tulips you can send anywhere in the world in arbitrary quantities”.
-Andreessen Horowitz partner Balaji Srinivasan
Mr.Srinivasan may not be aware that, since ca. 1637 or so, tulips have not had the best connotation in the world of finance.
From FT Alphaville:
The Manhattan Project-type secrecy surrounding a company called 21 Inc — hitherto known as 21e6 — has been stupendous, even by Silicon Valley standards.
Not that this has stopped cryptocurrency friendly journalists like Michael J. Casey at the WSJ (co-author of the Age of Cryptocurrency) and Coindesk’s Pete Rizzo from propagating 21 Inc’s claims about bitcoin being bigger than Google.
All we do know is that the company, headed by Matthew Pauker, has
raised more than $116m worth of venture funding, a record for the
sector, and claims to be developing technology that they believe will
help to mainstream bitcoin.
Leading investors include Andreessen Horowitz, RRE Ventures, a
Chinese PE firm called Yuan Capital and Qualcomm. But, Casey reports,
the wider investor list includes everyone from PayPal co-founders Peter
Thiel and Max Levchin, to eBay co-founder Jeff Skoll and Dropbox Inc CEO
Drew Houston, to Expedia Inc. CEO Dara Khosrowshahi and Zynga Inc
co-founder Mark Pincus.
To date, the only worthwhile snippets of info as to what 21 Inc might
actually do have come by way of Balaji Srinivasan, Andreessen Horowitz
partner and 21′s chairman. At a recent event Srinivasan claimed things like
… “payments are now packets. Bitcoin is here to stay” and that Bitcoins
are like “tulips you can send anywhere in the world in arbitrary
quantities”....MUCH MORE
Yikes! Putin Will Soon Have Superhuman Robo-Soldiers!
It may not be sharks with frickin’ laser beams attached to their heads,
but for a leader bent on expanding his global sphere of influence, an
army of soldiers equipped with mind-controlled robotic exoskeletons may
be the next best thing. According to Russian media, that’s just what
President Vladimir Putin’s army has in the pipeline.
On Wednesday, the headline on the government-run Sputnik News website was, “Lock and Load: Russian Hybrid Robo-Soldiers Could Be Just Five Years Away.” Russia Today,
the equally servile outlet aimed at English speakers led with “Iron Man
mass production? Russian army may get combat exoskeletons by 2020.”
Even the more independent Moscow Times trumpeted, Russian Army May Have Superhuman Mind-Controlled Exoskeletons in 5 Years.
None of this, of course, means
that a Russian army of Terminator-like super-soldiers is around the
corner. But that wasn’t stopping speculation.
“The Russian Army is set
to receive mind-controlled exoskeletons,” Sputnik reported. “The
wearable robots will be controlled by brain waves and will increase the
strength and endurance of the serviceman wearing it by several times.”
Russian soldiers equipped with
the new gear, according to Sputnik, would be able to carry more than 600
pounds of gear. Their endurance, it added, would also be greatly
increased....MORE
When I published a working paper in 1992 at MIT called “The Fog of
Commerce: The Failure of Long-Term Oil Market Forecasting,” many thought
the lesson was that forecasting the long-term price of oil couldn’t be
done. My actual point had been that bad theories and bad models lead to
bad forecasts, specifically the belief that resource economics proved
that fossil fuel prices had to rise exponentially.
Recently, I opened a talk with a slide showing the early-2014 survey
of long-term oil price forecasts published by the Department of Energy,
in which my forecast of $50 a barrel was far below all the others. But
in the next slide, previous forecasts in which I had called for lower
prices for the past ten years were included, in part, because I don’t
want to cherry-pick my record (the way some peak oil advocates do), but
also to focus the discussion on pertinent lessons from forecasting, not
just the accuracy of any given prediction.
This is important because too many of late have been drawing
superficial conclusions about forecasting, whether it is that it can’t
be done (as many do) or Al Gore’s triumphant note that predictions of
the failure of renewables have proved wrong, therefore the energy
transition is under way. (Technology predictions will be addressed in a
later post.)
The lesson to be drawn from the many oil company “Titans”
that were convinced lower prices were unlikely or incredible is that
they tend to let wishful thinking dominate their expectations, an all
too human failing. T. Boone Pickens,
claiming “…because I know more about it than they do,” shows that he
hasn’t learned from the ancient Greeks about hybris, or pride, to say
nothing of his own mistakes. Anyone who has been in the business of
predicting oil markets should be pretty humble, because we’ve all gotten
it wrong many times, sometimes spectacularly....MORE
It’s not that I don’t appreciate good coffee—I consider it a
delicacy. But at the end and the beginning of the day, coffee mostly
functions as a caffeine delivery system. But not tea. Tea must be
savored, and it must be good. Americans’ enthusiasm for tea does not
come naturally. What passes for tea in the U.S. is best described by
Christopher Hitchens as “a cup or pot of water, well off the boil, with
the tea bags lying on an adjacent cold plate.” (See his January 2011 piece in Slate
called “How to Make a Decent Cup of Tea.”) If this doesn’t sound wrong,
he elaborates, setting up his endorsement of George Orwell’s methodical
instructions for proper tea:
Then comes the ridiculous business of pouring the
tepid water, dunking the bag until some change in color occurs, and
eventually finding some way of disposing of the resulting and
dispiriting tampon surrogate. The drink itself is then best thrown away,
though if swallowed it will have about the same effect on morale as a
reading of the memoirs of President James Earl Carter.
I like Jimmy Carter. I haven’t read his memoirs, and this does indeed
sound awful. And before I had learned anything at all about drinking
tea, it was all I knew. I tried. I cribbed a few notes here and there,
wrote in tea shops, read the rough-hewn formalism of Sen no Rikyu, and looked to the East. I did not look to Britain and her former Commonwealth.
Perhaps I should. George Orwell would probably say so. Hitchens as
well, though they don’t perfectly agree with each other. “Tea,” wrote
Orwell in his famous 1946 essay “A Nice Cup of Tea,”
“is one of the mainstays of civilization in this country, as well as in
Eire, Australia and New Zealand, but… the manner of making it is the
subject of violent disputes.” The only disagreement Hitchens musters
against Orwell is that some of his rules, “(always use Indian or
Ceylonese—i.e. Sri Lankan—tea; make tea only in small quantities; avoid
silverware pots) may be considered optional or outmoded.”
Many old restraints may be loosened. But make no mistake, for
Hitchens, as for Orwell, making a good cup of tea is not about
mindfulness, patience, impermanence, or meditation. It is about rules.
Orwell had 11. The “essential ones are easily committed to memory, and
they are simple to put into practice.” What are they? Hitchens has his
own succinct paraphrase, which you can read over at Slate. Orwell’s rather baroque list we reprint, in part, below for your edification. Read the complete essay here.
Hitchens recommends you straighten out your next barista on some tea
essentials. Imagine, however, presenting such an unfortunate person with
this list of demands:...MORE
The Wall Street vet analyzes how big changes in population and productivity will affect investments.
We were all lucky to be born at the right
time. Over the past fifty years, world gross domestic product growth has
been averaging 3.6%, driven by employment increases and productivity
improvements in roughly equal proportions. An exhaustive and important
study by the McKinsey Global Institute concludes that over the next 50
years population growth will decline to 0.3% annually. If productivity
continues to contribute 1.8%, overall growth will decline to 2.1%, a
rate 40% less than during the past half-century. The implications of
this slowdown on global changes in the standard of living and investment
opportunities could be enormous.
The
developing world can improve its growth potential by adopting
operational practices and technology used by the advanced countries
(that is, by catching up), but the United States, Europe and Japan will
continue to depend heavily on innovation to approach anything like their
historical rate of growth. Those subscribing to Mohamed El-Erian’s
concept of “the new normal” or Harvard Professor Alvin Hansen’s “secular
stagnation” may turn out to be right, but for reasons somewhat
different than they originally thought. I have been worried about a lack
of demand causing a slowdown in growth. I had not thought that the main
problem might be that there aren’t enough people out there to do the
buying.
The global economy grew sixfold in the past
50 years. Taking into account the projections above, it is only expected
to grow threefold in the next 50. Population growth rose because of
high fertility rates, declining infant mortality and longer life
expectancy. Also, the number of people of working age (15-64) grew from
58% of the population in 1964 to 68% in 2014. The productivity
improvement resulted from a shift from agriculture to manufacturing and
services. Technology obviously played an important role. According to
the McKinsey study, the average world employee today generates 2.4 times
the output of his counterpart in 1964. Because Europe and the United
States were relatively efficient in 1964, their productivity only rose
1.5% and 1.9% annually respectively, while South Korea and Japan rose
4.6% and 2.8% respectively. As expected, China’s productivity grew at
5.7% annually, but Mexico and Saudi Arabia experienced less than 1%
annual productivity growth. The study notes that the productivity gap
between the developed and the developing economies remains wide, at
almost five times, providing a significant opportunity for emerging
markets going forward.
The big change in
the future will be the slow growth in population. Fertility rates are
declining, and the average age of the population in Europe, China and
Japan is rising. China’s peak employment is expected to occur in 2024.
The working age population in the G19 countries plus Nigeria is expected
to decline from 68% to 61% over the next 50 years. By 2064 India’s
employment could expand by 54%, while China’s could shrink by 20%. The
number of employees in the United States is expected to continue to
rise, but at a slower rate than in the past. By employing more women and
encouraging people to stay at their jobs beyond age 64, the expected
0.3% rate of working population growth could double, but that would
still be well below the pace of the last 50 years.
The
McKinsey estimates of annual population growth seem low to me, but the
concept of slower growth in the number of people in the world appears
sound. A somewhat less pessimistic study of population growth was
prepared for me by Dick Hokenson, the demographic analyst at Evercore
ISI. He points out that the G19 plus Nigeria universe includes Germany,
Russia, Japan, China and South Korea, all of which will experience
overall declines in their populations and labor forces over the next
fifty years....MUCH MORE
Wien is vice chairman of
Blackstone Advisory Partners LP, where he acts as a senior advisor to
both Blackstone and its clients in analyzing economic, social and
political trends.
To judge whether their theories are based in reality.
If someone purporting to practice a science says they don't make predictions they aren't doing science but rather something faith-based i.e. more akin to a religion.
From Real Time Economics:
The U.S. economy’s sharp slowdown in the first three months of the
year may have caught almost all Wall Street forecasters off guard. But
it didn’t surprise the Federal Reserve Bank of Atlanta.
The regional Fed bank’s frequently updated GDPNow forecast proved to be one of the most reliable indications of where first-quarter growth would stand. The Commerce Department reported Wednesday
that the economy grew at a mere 0.2% annual rate, against Wall Street
expectations of a 1% gain. When most private sector forecasters were
overestimating growth, the Atlanta Fed gauge, last updated on Friday,
had growth in gross domestic product pegged at 0.1% for the quarter.
The GDPNow gauge has been warning of weakness in the first quarter
for some time. That notion was not by itself controversial, as most
forecasters and Fed officials saw a weak 2015 kickoff. But the Atlanta
Fed proved to be standout when it came to accurately quantifying how
much trouble the economy had on its hands.
The Atlanta Fed “certainly nailed it this time,” said J.P. Morgan Chase chief U.S. economist Michael Feroli....MORE
This
is a post about Tim Draper. Tim Draper is a billionaire tech investor
of no particular importance who has decided that he wants to disrupt
geography....
Here's the latest from the Mercury-News' tech blog, SiliconBeat: Tim Draper launches a contest for fixing California
He tried and failed to divide California into six states.
Now Tim Draper, the venture capitalist, is at it again trying to upend state government. This time he has launched a contest on FixCal.org inviting others to submit their ideas for fixing the state. He announced it on YouTube:...
...“My idea was six Californias,” he says. “What’s yours?”
The site works somewhat like Product Hunt, which I wrote
about earlier this year, with ideas voted up or down. A panel of judges
will decide the best ideas based on criteria such as “transformation,”
“representation” and “accountability,” according to the site.
As for winners? They “receive the opportunity to seek financial and
strategic support from a select group of ‘investors’ for the purpose of
proposing and enacting the proposal as law, by the enactment of
legislation or by the initiative process.,” says Innovate Your State, the non-profit behind the endeavor....MORE
Enviva Partners LP, a wood pellets provider to large
power generations, has raised $200 million for its IPO after pricing
its 10 million shares at $20 per share. The stock began trading
Wednesday on the NYSE under the ticker symbol “EVA.” Barclays Capital Inc, Goldman, Sachs & Co, RBC Capital Markets LLC and Citigroup Global Markets Inc are the lead underwriters. Enviva Partners is backed by Riverstone/Carlyle Renewable Energy Partners.
PRESS RELEASE
BETHESDA, Md.–(BUSINESS WIRE)–Enviva Partners, LP (“Enviva Partners”
or the “Partnership”) today announced the pricing of its initial public
offering of 10,000,000 common units representing limited partner
interests at $20.00 per common unit. The common units are expected to
begin trading on the New York Stock Exchange on April 29, 2015 under the
ticker symbol “EVA.” In addition, the Partnership has granted the
underwriters a 30-day option to purchase up to an additional 1,500,000
common units at the initial public offering price. The offering is
expected to close on May 4, 2015, subject to customary closing
conditions.
Upon the consummation of the offering, the public will own common
units representing a 42.0% limited partner interest in the Partnership
(or 48.3% if the underwriters exercise in full their option to purchase
additional common units). Enviva Holdings, LP (the “Sponsor”) will own
common units and subordinated units representing a 58.0% limited partner
interest in the Partnership (or 51.7% if the underwriters exercise in
full their option to purchase additional common units).
The Partnership intends to use the net proceeds from the offering to
pay, together with borrowings under its new term loan facility, a
distribution to the Sponsor, to repay intercompany indebtedness related
to the acquisition of the Partnership’s Cottondale wood pellet
production plant and for general partnership purposes....MORE
A quick look at the risk factors shows the gigantic (3960 MW) Drax power plant as one of Enviva's three customers:
Our contracts with
Drax, GDF and E.ON represented substantially all of our sales for 2014.
Although probably not for long, Drax Biomass is an up-and-comer.
Here are Enviva's SEC filings.
June WTI $58.09 up $1.03, high for the day (and year) $58.19.
From ZeroHedge:
For the first time since November 2014, Cushing saw an inventory decline (-514k) last week.
This has promopted a spike up to yesterday's highs in WTI Crude. The
total inventgory build was 1.9mm bbl (less than the expected 3.2mm bbl)
but continues the record streak to 16 weeks.
Cushing "Draw"...
But total inventories rose for the 16th week in a row...
The Guardian has gone into full "Do as I say" mode.
On Monday FT Alphaville (very) bravely dipped a toe into the muck that is the 2°/stranded asset/divestment argument in the run up to the Paris climate shindig later this year. One of these days I'll get around to the story of how was 2° chosen. And maybe tell the tale of what happened when the pressure groups went to the SEC.
You’ve got to hand it to Alan Rusbridger: he’s a great contrarian indicator. The editor of The Guardian launched his valedictory campaign to demand divestment from fossil fuels with a wrap-around promotion and the paper’s full moral force.
This was terribly nice of Mr Rusbridger. Investors, he explained,
should sell their shares in oil, coal and others digging up nasty
carbon-based fuels, because they weren’t really worth as much as
everyone thought; they would never be allowed to use all their reserves,
because it would cause the end of the world (or serious global warming,
anyway).
The usually left-wing Guardian was going out of its way to help the
plutocrats make money, a job usually reserved for us here at the FT.
By supporting these companies, investors not only
continue to fund unsustainable business models that are bound to make
climate change worse, but they also risk their financial assets becoming
worthless if international agreements on climate change are met.
Investors should have listened, thanked Mr Rusbridger, and done the
exact opposite. It turned out he was a perfect contrarian indicator. He
picked a six-year bottom in the US benchmark oil price, West Texas
Intermediate. He lit a carbon-based bonfire under crude prices: WTI’s
now up 30 per cent, the biggest rally over such a short period since
2009 (and before that, 2002)....MUCH MORE
As it turns out, The Guardian itself has not divested any hydrocarbons from its pension plans and has in all probability been adding to the position (as a function of re-balancing). Here's a Guardian podcast transcript via MyTranscriptBox:
Aleks Krotoski: Broadcaster, presenter of Guardian podcast Tech Weekly
Bill McKibben: Environmentalist, author and journalist
Amanda Michel: Open editor, the Guardian US
James Randerson: Assistant national news edior, the Guardian
Alan Rusbridger: Editor-in-chief, the Guardian
Adam Vaughan: Editor, the Guardian environment site
"...Amanda Michel: You know, there are big questions about asking people to do something that we ourselves have not done.
Aleks Krotoski: What Amanda is talking about is sorting out the Guardian's own pots of money, their investments.
Amanda Michel: It will seem like hypocrisy.
Alan Rusbridger:
We have about £600 million invested at the moment, and I don't think
our fund managers could say exactly how much was invested in fossil
fuel. But it is there, we haven't said that it shouldn't be, so we have
got money invested. And so, if we're going to be calling on people to
divest, people are bound to ask "Well, is that what the Guardian's
going to do?"..."
The above is good for a tee-hee but that's about all.
Whether or not any of this makes any difference to the earth is the question, and the question that should be asked to separate out actions that will actually make a difference from those that are just posturing is:
"How much will this policy prescription lower the temperature of the planet?"
Many consider smart beta to be a revolution in the asset management industry. For example, Bloomberg ran an article, “Funds Run by Robots Now Accounts for $400 Billion,” which caught our attention. According to this article, “Smart beta,”
is one of the fastest growing segments of ETFs, accounting for nearly
20% of all assets in domestic ETFs as of the end of 2014.
The “secret sauce” of smart beta is its use of alternative weighting
schemes to capture premiums associated with factors such as size, value,
momentum, low volatility, and so on.
Unfortunately, academic researchers are having difficulty finding the
secret sauce associated with smart beta. For us, this finding is
unsurprising, since other researchers have already highlighted
that many so-called factors are likely false. Nonetheless, we highlight
a new research paper by Denys Glushkov, which dives deep into the data
and concludes that the benefits of smart beta are questionable.
A quote from Denys:
Using a comprehensive sample of 164 domestic equity Smart
Beta (SB) ETFs during 2003-2014 period…I find no evidence that SB ETFs
significantly outperform their risk-adjusted passive benchmarks.
Ouch…
How Smart are “Smart Beta” ETFs?
Denys Glushkov conducts a comprehensive analysis of relative
performance and factor timing of “Smart Beta” ETFs. A version of the
paper can be found here.
In order to see how smart “Smart Beta” really is, this paper uses 164 domestic equity “Smart Beta” ETFs from 2003 to 2014 as the test sample. It categorizes each ETF into 15 category portfolios based on common factors, and then compares them with passive index benchmarks.
This paper use 3 types of benchmarks:
Self-declared benchmark by the ETF provider;
Risk-adjusted version of the self-declared benchmark;
A blended benchmark constructed as an annually rebalanced
combination of passive existing funds representing the broad stock
market and various factor exposures (size and value).
Finding 1: Performance isn’t great
60%of “Smart Beta” categories (9 out of 15) outperformed their raw declared benchmarks from 2003 to 2014.
Only one category (Value) significantly outperformed its risk-adjusted benchmark as measured by Jensen’s alpha.
None of the “Smart Beta” categories significantly outperformed the blended benchmark.
One of the most popular categories, dividend-oriented ETFs, significantly underperformed the benchmark by an annualized -3.81% (t=1.73)
The housing market recovery continues, and the ongoing rise in home
prices is going to be adding to official inflation statistics over the
next year or two.
As the chart above shows, nationwide housing prices are only about 8%
below their 2006-2007 highs, and prices are up 4-5% over the past year.
It won't be long before housing prices reach new nominal highs.
Housing prices feed into the CPI via "Owner's Equivalent Rent," which is
the BLS's estimate of how much homeowners would be paying to rent the
house they own. Rents don't always track home prices, of course, but
over time there is a strong tendency for rents to track prices. As the
chart above shows, prices have outpaced rents since 1987 by about 30%.
With prices rising 4-5% a year, it's a good bet that rents are going to
keep rising, and probably at a faster pace than we've seen in recent
years....MORE
Federal Reserve Chairwoman Janet Yellen, second from left, at a welding demonstration at Chicago’s Daley
College in March 2014.
The fast-changing technological infrastructure of financial
transactions, including nonbank finance, digital currencies,
peer-to-peer lending and crowd-funding present a challenge to the
monetary policies of the Federal Reserve and other top central banks, says Randall Kroszner, a former Fed board governor.
In a paper presented at the Atlanta Fed’s 20th
annual conference on financial markets, Mr. Kroszner explores the
implications of technological shifts for commercial banks, whose
lending-on-deposits model underpins the ability of interest-rate policy
to be transmitted to the real economy.
“From a macroeconomic perspective, commercial banks–and possibly
central banks–face the potential for disruptive competition in the
payments system that could affect the traditional channels of monetary
policy transmission,” writes Mr. Kroszner, who was a Fed governor from
2006 through 2009, through the worst of the financial crisis.
For years, the Fed has loosened or tightened credit by adjusting the
amount of banks’ excess reserves, the money they park at the central
bank. When the Fed added reserves to the system, interest rates fell,
encouraging borrowing and spurring economic activity. When the Fed
removed reserves, rates rose and the economy cooled. But now, Mr.
Kroszner says, new funding sources could reduce the Fed’s control of the
supply of money, rates and inflation.
“Digital currencies, mobile-phone banking, crowd-funding,
peer-to-peer lending could diminish the role that traditional commercial
banks play in the standard ‘money multiplier’ process through which
changes in bank reserve affect the money supply and the price level,”
says Mr. Kroszner, a professor at the University of Chicago Booth School
of Business.
If lending is taking place increasingly outside the traditional banking system, then the Fed and other central banks would have a harder time influencing the economy....MORE
The European Union is investigating whether Google has abused its 90%
market share in search to illegally promote its other products and
services. News is not directly affected by this investigation. However,
publishers have complained for years about the impact of Google’s use of
their content.
In the new partnership with eight publishers, including the Guardian,
Google is to establish a working group to focus on product development
as well as providing a €150m (£107m) innovation fund over three years,
alongside additional training and research. Publishers are keenest to
explore the product development which Google promises will aim to
“increase revenue, traffic and audience engagement”.
In a speech in London on Tuesday morning, Carlo D’Asaro
Biondo, head of Google’s strategic relationships in Europe, is expected
to say: “We recognise that technology companies and news organisations
are part of the same information ecosystem and we want to play our part
in the common fight to find more sustainable models for news.
“We firmly believe Google has always aimed to be friend and
partner to the news industry, but we also accept we’ve made some
mistakes along the way.
“We are determined to play our part in ongoing dialogue and
business partnership with the aim of building something more
sustainable.”
Company insiders downplayed the suggestion that the exercise
was an attempt at garnering good publicity soon after the announcement
of the anti-trust probe. Talks with the publishers – which include the Financial Times,
Les Echos in France, NRC Media in the Netherlands, El Pais in Spain and
La Stampa in Italy, Faz and Die Zeit in Germany as well as the Guardian
– started as long ago as last summer....MORE
Me too.
The problem is, nobody knows, although there are clues.
From the Los Angeles Times:
In a cameras-everywhere culture, science fiction becomes reality
Science fiction writer David Brin calls it "a tsunami of lights" — a
future where tiny cameras are everywhere, lighting up everything we do,
and even predicting what we'll do next.
Unlike George Orwell's
novel "1984," where only Big Brother controlled the cameras, in 2015,
cheap, mobile technology has turned everyone into a watcher.
A
snowboarder with a GoPro can post a YouTube video of a friend's
540-degree McTwist in the halfpipe. But also — as happened recently — a
Penn State fraternity can upload Facebook photos of partially naked,
sleeping college women.
A San Jose homeowner cowers behind a
locked door while she watches an intruder stroll through her home on a
surveillance video. A man launches a drone to spy on his neighbor
tanning by her pool. Pet owners monitor their dogs.
With each technological advance, more of our lives — from the humdrum to the hyper-dramatic — is being caught on camera.
That includes the police, whose actions can be recorded by anyone with a camera phone. In South Carolina,
a cellphone video released last week showed a police officer firing
eight shots at a fleeing man's back. In San Bernardino County, news
choppers captured footage of deputies punching and kicking a man as he lay face-down on the ground with his hands behind his back.
"Painting
a picture that cameras are everywhere and anywhere is pretty
provocative," said Ryan Martin, a technology analyst at 451 Research,
but it can also present opportunities to increase accountability and
improve safety.
There are 245 million surveillance cameras installed worldwide,
according to research firm IHS, and the number increases by 15% a year.
Surveillance
technologies are evolving in fascinating ways. Google researchers are
developing a camera small enough to fit on a contact lens.
That may be years off, but other cutting-edge ideas are hitting the market now.
ParaShoot
is selling a $199 HD camera that's light enough to wear on a necklace
or stick to a wall or car dashboard. "Never miss the meaningful moments
again," the company touts.
Another company, Bounce Imaging, is
manufacturing a throwable camera shaped like a ball, with police
departments as the target customer. The omni-directional cameras can
literally take pictures on the fly and instantly transmit pictures to a
smartphone.
"You can throw a security camera into it and as it
flies through the air it's taking pictures," said Bounce chief executive
Francisco Aguilar. It's like "a bunch of security cameras facing all
directions in the room."
It's
the size of a softball, but the company is working on shrinking it to
golf-ball dimensions. The ball can also be mounted inconspicuously atop a
pole for 360-degree surveillance.
A company called Axiom is
making body cameras for police. In the near future, says general manager
Marcus Womack,videos could be instantly uploaded to the Internet over
Wi-Fi or cellular networks for live streaming.
The camera is the easy part, he said. "It's dependent on mobile networks being able to support the streaming media."
As
surveillance spreads, huge volumes of video data are growing beyond the
ability of humans to sift through it all. Technologists are turning to
artificial intelligence to take over the grunt work....MORE
This week Uber is launching its food delivery service, UberEats, in New York City and Chicago. The company has already piloted the program in Los Angeles and Barcelona.
UberEats will be accessible from within Uber's existing app, although
the food option only shows up when consumers are in the coverage area.
The service promises dishes from "popular, iconic restaurants" delivered
curbside — not to your door — "faster than it takes to boil water."
An Uber representative told The Verge that UberEats has its
own dedicated drivers. Lunch options will range from $9 to $12, while
dinner options will range from $10 to $15. The Uber rep said meals come
with a $3 delivery fee ($4 in New York City), regardless of the number
of meals you order.
In a blog post about the expansion, Uber says it plans to "curate"
menus, which will change daily, just like any other artisanal app
experience....MORE
Reuters
DUBAI: Saudi-owned Al Arabiya television said an Iranian "force" seized a U.S. cargo ship in the Gulf on Tuesday and directed it to the Iranian port of Bandar Abbas.
The channel said the force had "opened fire" on the U.S. ship, which had 34 U.S. sailors aboard. It gave no further details. The U.S. Fifth Fleet in the Gulf Arab kingdom of Bahrain had no immediate comment on the report.
First Craigslist destroyed the newspaper industry by upending the classified ad business that had sustained the biz and then they made the "gig" economy a thing, and now this.
Pretty impressive.
From Fusion:
The stars of Silicon Valley’s on-demand economy—Uber, Lyft,
Postmates, and their ilk—are known for sleek apps designed with extreme
attention to detail, and focused on creating a seamless experience for
their customers. But these companies wouldn’t exist—at least not in the
forms we know them today—without the existence of a janky, hard-to-use
20-year-old classifieds site that looks like it was last updated in the
MS-DOS era.
I’m talking, of course, about Craigslist. The Web 1.0 clearinghouse
for jobs, goods, and services has been critical to the growth of
companies like Uber and Lyft, which use it to recruit drivers at the
staggering rate needed to keep up with passenger demand. Without
Craigslist, on-demand companies would have to pound the pavement looking
for more people to provide their services. And there’s no guarantee
they would find them.
Yesterday, Zen99, a company that provides information for so-called
“1099 workers,” released a study of Craigslist’s effects on the
on-demand economy (and vice versa). The study
scraped Craigslist for listings posted by the largest on-demand
companies in Silicon Valley on a random day in March, in 10 major U.S.
cities including New York, Los Angeles, and San Francisco. The findings
were staggering.
According to Zen99’s estimates, Uber, Lyft, Instacart, and Postmates
will spend a combined $8 million annually just on Craigslist ads. (Most
Craigslist postings are free, but the site charges companies $25 per
listing for jobs posted in major U.S. cities.) On March 15 alone, Zen99
estimates that Uber spent $7,225 to place driver ads on Craigslist—which
isn’t surprising, considering how many listings a cursory search of San
Francisco’s site turned up.
Despite trouncing other on-demand companies when it comes to money in
the bank, Uber actually wasn’t the biggest spender in the study. That
was Postmates, the deliver-anything app, which spent $5,325 on
Craigslist ads in San Francisco, and $8,375 in the ten-city group. On an
annual basis, that adds up to more than $3 million spent just to
recruit delivery couriers on a single site. (One explanation may be
that, since Uber is far better-known than Postmates, more of its
recruiting happens by word-of-mouth, or through its referral program.)
In addition to studying Craigslist data, Zen99 measured the change in
cost of Google AdWords ads for certain popular search terms like
“delivery driver” and “uber driver job.” Most of the keyword searches
had gotten at least 50 percent more expensive since March of last year;
one search, “part time jobs sf,” had increased in price by 250 percent
in a year, indicating that many more companies are trying to advertise
against those terms....MORE
Not a new technology (South Africa is still producing liquid fuels from coal using F-T) but definitely interesting in the use of CO2 as the carbon feedstock.
From IFL Science:
It’s the holy grail in energy production: produce a fuel
that is both carbon neutral and can be poured directly into our current
cars without the need to retrofit. There are scores of companies out
there trying to do just that using vegetable oil, algae, and even the
microbes found in panda poop to turn bamboo into fuel.
This week, German car manufacturer Audi has declared that they have been able to create an "e-diesel,"
or diesel containing ethanol, by using renewable energy to produce a
liquid fuel from nothing more than water and carbon dioxide. After a
commissioning phase of just four months, the plant in Dresden operated
by clean tech company Sunfire has managed to produce its first batch of
what they’re calling “blue crude.” The product liquid is composed of
long-chain hydrocarbon compounds, similar to fossil fuels, but free from
sulfur and aromatics and therefore burns soot-free.
The first step in the process involves harnessing renewable energy
through solar, wind or hydropower. This energy is then used to heat
water to temperatures in excess of 800oC (1472oF). The steam is then broken down into oxygen and hydrogen through high temperature electrolysis, a process where an electric current is passed through a solution.
The hydrogen is then removed and mixed with carbon monoxide under
high heat and pressure, creating a hydrocarbon product they’re calling
"blue crude." Sunfire claim that the synthetic fuel is not only more
environmentally friendly than fossil fuel, but that the efficiency of
the overall process—from renewable power to liquid hydrocarbon—is very
high at around 70%. The e-diesel can then be either mixed with regular
diesel, or used as a fuel in its own right.
But all may not be as it seems. The process used by Audi is actually called the Fischer-Tropsch
process and has been known by scientists since the 1920s. It was even
used by the Germans to turn coal into diesel during the Second World War
when fuel supplies ran short. The process is currently used by many
different companies all around the world, especially in countries where
reserves of oil are low but reserves of other fossils fuels, such as gas
and coal, are high....MORE
Since the first Earth Day in April 1970 and more importantly since the
establishment of the EPA in December of that year, folks have been
trying to make money out of water in the U.S..
Put simply, the returns have not been market-beating.
Because so much of the opportunity was my-little-crony stuff, at the
whim of politicians, there was no consistency of growth at a time when
other portfolio investments offered very competitive comparisons.
The alternative was to own the cash flow, private equity style, but
unless one felt a passion for grit chambers and sludge pans it was
pretty pedestrian, utility type ROI.
In fact the most reliable water investment in the U.S. has probably been York Water Company of York PA.
They've been paying dividends for 199 consecutive years and just announced their 575th divi.
The announcement carries the boilerplate "This release contains forward-looking statements"....
From Barron's:
Water Asset Management: Hunting Liquid Assets
Water Asset Management managers Disque Deane
Jr., Matt Diserio, and Marc Robert are betting that water prices will
float higher still.
Water wasn’t an obvious investment theme
when Matt Diserio and Disque Deane Jr. launched their hedge fund 10
years ago. Now, every day brings news of a water shortage or drought. So
have the water stocks targeted by their Manhattan-based Water Asset
Management enjoyed a panicky rerating?
Not
yet. Drought-parched headlines still get upstaged by the latest dot-com
initial public offering, so water remains mispriced by consumers and
investors. That’s good for the half-billion dollars that Water Asset has
in an equity hedge fund and a newer long-only fund focused on regulated
water services, water resources, and the suppliers of pipes, meters,
and treatment technologies. Upside remains.
“It is an old industry,” says Diserio, who
manages the firm’s stock portfolio, “but it is just becoming a
recognized asset class.”
Water
investing’s upside is ensured by the urgency of our water needs and the
fact that this resource remains very cheap in an absolute sense—compared
with natural resources like timber or farmland, oil or gold. The
average American family’s water bill is under $40 a month, notes Deane,
giving the industry room to charge more to cover hundreds of billions of
dollars in deferred maintenance and upgrading.
There’s
no shortage of dire news. California just imposed the first statewide
water restrictions in its history. Brazil’s megacity São Paulo may run
dry this year. At Davos, the World Economic Forum declared that water
crises will be the decade’s biggest social and economic risks. Yet, the
two money managers believe that the world’s water problems are solvable.
“There is no reason why any place in the world should not have water
and wastewater services,” says Diserio. “The technology is there. The
capital will be there. It is just a question of being implemented.”
Diserio,
55, ran portfolios at several long/short hedge funds before starting
WAM in 2005 with college chum Deane, also 55, who had spent a couple of
decades working and investing in water businesses. As they launched
their long/short fund, they were joined by WAM’s Chief Operating Officer
Marc Robert, who had run equity research sales at Morgan Stanley. Now
they’ve got a crew of analysts and advisors with expertise in
water-utility operation, resources, regulation, economics, and
technology.
While dowsing for long and short
opportunities in water stocks, WAM has acquired water rights directly,
waged activist campaigns, and even taken private a water utility. From
the long/short fund’s start in 2006 though 2014, it averaged a
compounded 7.79% annual return (after fees)—a bit less than the 7.98% of
the Standard & Poor’s 500 but ahead of the MSCI All Country World
Index’s 5.63%. The fund’s shorts let it outperform those benchmarks in
down markets but have been a drag as markets have hit new highs. Hence
the new long-only fund, where WAM hopes to extend the performance of its
long portfolio, which averaged an 11.61% return from 2006 through 2014,
comfortably ahead of benchmarks, such as the 9.49% of the S&P
Global Water Index. The long/short fund has a traditional “2% and 20%”
fee structure, while the long-only fund’s investors can choose to pay a
1.25% management fee and nothing for performance.
Sustainable
water investments squarely fit within mandates for environmental,
social, and governance investing. A supply of clean water prevents the
spread of disease and frees women from the burden of water carrying.
“The first rung to social stability,” says Robert, “is the ability to
have access to clean water and sanitation.”
Some
of the greatest need for infrastructure spending is, ironically, in
developed places like Spain, Italy, and parts of the U.S., where water
has been priced too cheaply and capital investment deferred on systems
that are 50 to 100 years old.
AMONG THE SEVERAL DOZEN long holdings in WAM’s portfolios, one of their favorites is the global water utility
Suez Environnement
(ticker: SEV.France). The company provides drinking water and
wastewater treatment in France, Spain, and a bunch of other countries
including the U.S., where its United Water subsidiary is growing by
striking deals to manage municipally-owned water plants, such as a
recent one to run the sewage treatment plants of Nassau County, on New
York’s Long Island.
Diserio notes that
at the current price of 17.82 euros ($19.30), Suez trades at about 10
times free cash flow and has a 4% dividend yield. He and his colleagues
think that Suez is worth €20. “They are an example of a company that is
well positioned to generate returns in the wave of privatization
activity that is unfolding,” says Diserio.
Another utility with predictable earnings growth is
Aqua America
(WTR), a company with service territories and assets in states
like Pennsylvania and New Jersey, where governments are interested in
upgrading water infrastructure and have authorized the company to earn
returns on equity between 9% and 10%. Recent regulatory proceedings will
allow Aqua to raise its rates....MORE
As Churchill's detective/bodyguard was reputed to have commented on meeting a certain American "He has the whiff of the parvenu about him".
From Pacific Standard:
Dispatches From the Russian River: Pioneers and Profiteers Like the '49ers before them, modern-day techies arrive with a dream and feel as if they deserve to realize it.
San Francisco harbor during the Gold Rush. (Photo: Public Domain)
The
man-child standing before me in the coffee shop was wearing a faded
Facebook hoodie, which means something very specific in San Francisco.
He wanted people to know that he was an early employee of
Facebook, and that in 2012, when the company went public, he became a
millionaire. He looked to be in his late 20s, and since it was 11
o’clock in the morning on a Tuesday, it was clear that employment was
optional. He could do as he pleased, and being told “no” wasn’t to his
liking.
When I first moved to San Francisco from
New York, I hadn’t been aware of these kinds of men. Wall Street frat
guy? Neurotic comedian? Nathaniel P. Brooklyn writer? Of course. But
these guys are different. I had to learn that I wasn’t just turning down
his offer of coffee; I was embodying B.M. (Before Money), his personal
dark age. It’s a period he would rather forget, and from which he, like
so many young men like him, seemed permanently scarred.
“Do you realize that I could charter a helicopter right now, and we could be having dinner in Napa?”
I
knew all this, so I went out of my way to thank him kindly, and with a
sweeping gesture, pointed to my reasons: My own cup of coffee was filled
to the brim, still too hot to drink. I was guest teaching, and had
stacks of student’s papers piled up in front of me. I was holding a red
pen. I excused myself and turned back to my work, which is when I saw
his fingers drumming on my table, as if I had acted out in his
classroom.
“Do you realize,” he sneered, “that I could charter a helicopter right now, and we could be having dinner in Napa?”
The
techies are only the most recent wave of newly wealthy men with big
appetites and a fathomless sense of privilege; their kind has been
around since my beloved state’s inception. San Francisco’s modern day
techies have more in common with the '49ers than just their demographic
profile, which is overwhelmingly young, single, and male: They arrive
with a dream, and they feel as if they deserve to realize that
dream—very quickly. Mining, panning, and coding are hard work, but no
one intends to do it for a long time. A flash in the pan, a gold nugget
in a sluice, or a successful iPhone app is all they need to expand or
cash out and move on. That’s the pioneer spirit.
Women
have always been a hot commodity in San Francisco. There were 50 men to
a single woman in San Francisco in the 1850s, and that lopsided ratio
grew as wide as 300 to one in Gold Country. Early settler Mary Jane
Megquier wrote that women put on “aprons full of gold” when they
arrived, enjoying the rare opportunity to make money and, by extension,
gain some freedom. They were laundresses, teachers, prostitutes, cooks,
merchants, and entertainers....MORE
The US dollar
finished the week on seemingly fragile footing.The
question investors are asking is if the steady drum beat of disappointing US
economic data turns the dollar's bull case on it head. The Europe
and Japanese side of the divergence have
not changed, but the US side has.
On the other
hand, theminus 20 bp
deposit rate is not the floor for short-term rates in the euro area. A resolution of the Greek issues
continues to prove elusive. The outcome of the UK election on May 7 also
poses substantial risk. We suspect
there can be a dramatic response if the US Congress fails to grant the
President trade promotion authority (fast-track). The US April
employment report on May 8 will be more important than usual, especially after
the disappointing March report.
The euro, sterling, and the yen haven largely range-bound
for at least the past month. Our
reading of the technicals suggests there
is more room before the dollar's lower bound is
met. For the euro, that is found in the $1.1000-50 area.
Against the yen, the lower end of the dollar's range is near JPY118.00,
but there is technical support in the JPY118.30-50 area.
Sterling is
the most interesting of the three from a technical perspective. Leveraged
accounts reportedly have begun positioning for a post-election sterling
recovery, and this appears to have help push cable to its 100-day average
($1.5185) for the first time since late February, when it was turned back from
that average. It has not been above its 100-day average since last
August. A break above it would target the $1.5250 area immediately and
bring the top of this year's range (~$1.5500-50) into view.
The upside
momentum carried sterling past the top of its Bollinger Band (~$1.5120), as
stops were triggered. The
market is stretched, and some near-term
consolidation is likely. The risk is that it is short-lived and that the
market uses a constructive Q1 GDP report on Tuesday (expected 0.5% quarter over
quarter) to extend sterling's gains. However, we will be attentive for a
reversal pattern the on daily charts, and more inclined to see this rally as a better selling opportunity....
Yikes. Shut it down, shut it down, Ōm shanti shanti shanti, Ōm.
From NPR:
"Thoughts Can Fuel Some Deadly Brain Cancers"
The simple act of thinking can accelerate the growth of many brain tumors.
That's the conclusion of a paper in Cell published Thursday that showed how activity in the cerebral cortex affected high-grade gliomas, which represent about 80 percent of all malignant brain tumors in people.
"This tumor is utilizing the core function of the brain, thinking, to promote its own growth," says Michelle Monje, a researcher and neurologist at Stanford who is the paper's senior author.
In
theory, doctors could slow the growth of these tumors by using
sedatives or other drugs to reduce mental activity, Monje says. But
that's not a viable option because it wouldn't eliminate the tumor and
"we don't want to stop people with brain tumors from thinking or
learning or being active."
Even so, the discovery suggests other ways to slow down some of the most difficult brain tumors, says Tracy Batchelor, who directs the neuro-oncology program at Massachusetts General Hospital and was not involved in the research.
"We really don't have any curative treatments for high-grade
gliomas," Batchelor says. The discovery of a link between tumor growth
and brain activity "has opened up a window into potential therapeutic
interventions," he says.
The discovery came from a team of
scientists who studied human glioma tumors implanted in mouse brains.
The scientists used a technique called optogenetics, which uses light to
control brain cells, to increase the activity of cells near the tumors.
The
team wanted to know whether this high level of activity would make the
glioma grow more quickly. "And it turns out that it did,"...MORE
From the Federal Reserve Bank of New York's Liberty Street Economics blog:
There is no consensus among economists as to what drove the rise of U.S.
house prices and household debt in the period leading up to the recent
financial crisis. In this post, we argue that the fundamental factor
behind that boom was an increase in the supply of mortgage credit, which
was brought about by securitization and shadow banking, along with a
surge in capital inflows from abroad. This argument is based on the
interpretation of four macroeconomic developments between 2000 and 2006
provided by a general equilibrium model of housing and credit.
The financial crisis precipitated the worst recession since the Great
Depression. The spectacular rise in house prices and household debt
during the first half of the 2000s, which is illustrated in the first
two charts, was a crucial factor behind these events. Yet, economists
disagree on the fundamental causes of this credit and housing boom.
A common narrative attributes the surge in debt and house prices to a
loosening of collateral requirements for mortgages, associated with
higher initial loan-to-value (LTV) ratios, multiple mortgages on the
same property, and expansive home equity lines of credit....MORE
In our little corner of the investing universe there is too much money chasing too few energy deals.
In everything from solar yieldcos to oil & gas to midstream, there's an awful lot of money sloshing around.
From Barron's Penta:
Blackstone Group, the giant private-equity fund manager, is increasingly
targeting wealthy individuals to invest in its offerings. Big
institutional investors still provide the vast majority of capital for
these alternative investments, but their commitments haven’t kept pace
with fund-raising needs. That has prompted firms like Blackstone to go
after well-heeled investors and their financial advisors to help fill
the gap.
The shortfall has opened an opportunity for wealthy investors
interested in diversifying their portfolios to include buyout,
venture-capital, real estate, and various hedge funds. Account minimums
have come down considerably to accommodate individuals, though the fees
still make the funds pricey investments.
Blackstone’s (ticker: BX)
efforts already are bearing fruit. The company says that roughly 12% of
its $310 billion in assets under management comes from high-net worth
investors, more than twice the 5% they provided in 2008. Carlyle Group (CG) and KKR & Co. (KKR)
also are hunting for individuals’ money.
Overall, high-net-worth
investors made up 10% of the money raised for private-equity funds
closed between 2012 and 2014, versus 3% in 2009 to 2011, according to
private-equity tracker Preqin. In contrast, public pension funds’ total
contributions dropped from 28% to 22%. “I expect you’ll see a lot more
coming in from individual investors,” said David Rubenstein, co-founder
of Carlyle Group, on a recent conference call.
Blackstone reportedly raised a hefty $14.5 billion from institutional
investors in less than four months for a popular real estate fund. But
it also wants to sell an additional $1.3 billion of the fund to
high-net-worth investors. It’s just the latest example of Blackstone’s
efforts. Last year, it raised a total of $57 billion, with $11 billion
coming from high-net-worth investors.
The strategy of reaching out to the wealthy began during the
financial crisis when private equity stumbled, losing an estimated 30%
to 40% in certain categories. Money raised for private-equity funds
industrywide fell 57% between 2008 and 2010, according to Preqin. Even last year’s $539 billion in funds raised fell well short of the precrisis high of $688 billion....MORE
...MORE
