Driverless Cars on UK Public Streets Starting January; Transforming Personal Mobility; Taxi and Truck-Drivers Targeted
by ilene - July 31st, 2014 4:04 pm
Courtesy of Mish.
The march for fully autonomous driverless cars marches on. In May, Google announced the Next Phase in Driverless Cars: No Steering Wheel or Brake Pedals.
Google’s prototype for its new cars will limit them to a top speed of 25 miles per hour. The cars are intended for driving in urban and suburban settings, not on highways. The low speed will probably keep the cars out of more restrictive regulatory categories for vehicles, giving them more design flexibility.
Google is having 100 cars built by a manufacturer in the Detroit area, which it declined to name. Nor would it say how much the prototype vehicles cost. They will have a range of about 100 miles, powered by an electric motor that is roughly equivalent to the one used by Fiat’s 500e, Dr. Urmson said. They should be road-ready by early next year, Google said.
Google hopes to persuade regulators that the cars can operate safely without driver, steering wheel, brake or accelerator pedal. Those cars would rely entirely on Google sensors and software to control them.
Google’s cars come equipped with elaborate sensors that can see 600 feet in every direction, are fully electric, and have a range of about 100 miles, perfect for city use, especially driverless taxi cabs. Google plans for 2017 operation.
Last year, Lawrence D. Burns, former vice president for research and development at General Motors and now a Google consultant, led a study at the Earth Institute at Columbia University on transforming personal mobility.
The researchers found that Manhattan’s 13,000 taxis made 470,000 trips a day. Their average speed was 10 to 11 m.p.h., carrying an average of 1.4 passengers per trip with an average wait time of five minutes.
In comparison, the report said, it is possible for a futuristic robot fleet of 9,000 shared automated vehicles hailed by smartphone to match that capacity with a wait time of less than one minute. Assuming a 15 percent profit, the current cost of taxi service would be about $4 per trip mile, while in contrast, it was estimated, a Manhattan-based driverless vehicle fleet would cost about 50 cents per mile.
Driverless Cars on UK Public Streets Starting January
The BBC reports UK to Allow Driverless
by ilene - July 31st, 2014 3:10 pm
Watch Phil's TV spot yesterday. Phil discusses the stock market, his expectations for the near future, and how he protects his portfolio from selloffs. Phil also outlines some option trade ideas. Click here to watch this excellent interview on Money Talk with host Kim Parlee of Business News Network.
Here are some photographic highlights of the show.
by ilene - July 31st, 2014 2:40 pm
According to Reuters: “U.S. labor costs recorded their largest increase in more than 5-1/2 years in the second quarter, a sign that a long-awaited acceleration in wage growth was imminent. The Employment Cost Index, the broadest measure of labor costs, rose 0.7 percent after increasing 0.3 percent in the first quarter, the Labor Department said on Thursday. That was the largest gain since the third quarter of 2008.”
Labor costs are up 2 percent year-over-year as of June. This is not an outrageous, inflationary rate of growth, it’s normal for a recovery.
What may be abnormal, however, is the Fed’s continued pressure on the gas pedal in light of these conditions. Peter Boockvar, whohas been critical of the Fed’s largesse for awhile, is pointing toward continuing claims as evidence that the Fed is too easy at this stage in the game. “Initial Jobless Claims totaled 302k, 2k more than expected but last week was revised down by 5k to 279k. This brings the 4 week average to below 300k for the first time since 2006 at 297k. Register that for a moment, the lowest 4 week average in claims since 2006 and we have the fed funds rate at zero.”
By the way, if you wanted to know whether or not peak corporate profit margins would be sustainable forever, you’re probably going to get your answer soon if this keeps up.
In the meantime, the bond market remains in denial. Yields on the ten-year Treasury don’t seem to want to lift in a meaningful way, regardless of the meaningful improvements in the labor market (and its confirmation from Q2′s GDP report yesterday). Even with the Fed pulling back fixed income market purchases steadily (they’re down to just $25 billion in QE this month), every bond sell-off is quickly bought.
by ilene - July 31st, 2014 2:27 pm
Courtesy of Mish.
As I have said on numerous occasions, sanctions are a lose-lose game. So it is not surprising in the least to discover Russian Crisis Already Taking Toll on Western Businesses.
- Shares in Adidas, the world’s second-largest sportswear group, dropped 15 per cent after the company issued a profit warning and said it would accelerate the closure of stores in Russia because of increasing risks to consumer spending in the region.
- Volkswagen, Europe’s biggest carmaker by sales, reported an 8 per cent decline in sales in Russia in the first half of the year, compared to the same period a year earlier.
- Joe Kaeser, chief executive of Siemens, warned geopolitical tensions including those in Ukraine posed “serious risks” for Europe’s growth this year and next.
- Metro, the eurozone’s second-largest retailer, said events in Russia were creating risks for the group as it revealed sales had declined sharply in Ukraine.
- Royal Dutch Shell’s chief executive Ben van Beurden said that along with other western oil majors he was assessing the impact of tightening sanctions on Russia’s energy sector imposed by the US and EU.
- Erste Group, the third-largest lender in emerging Europe, warned the turmoil could impact banks in eastern Europe. “I can’t exclude any nasty surprises in the region due to political decisions or developments,” said Erste chief executive Andreas Treichl. “If the crisis accelerates of course we will have to revise our forecast for all over Europe in 2015 and 2016.”
- The German machinery association, VDMA, lowered its forecast for growth in the industry this year as it said the Russian situation was starting to affect bilateral trade and weigh on demand in important sales markets.
- Last week, Visa cut its fourth-quarter sales guidance, partially because of lower than expected cross-border transactions in Russia and Ukraine.
- Bank of America has almost halved its exposure to Russia this year to $3.9bn.
- ExxonMobil, which is developing a large liquefied natural gas export facility at Sakhalin in Russia’s far east, said it was awaiting further details to understand the effect of sanctions designed in part to prevent the transfer of new technology to Russia’s oil and gas industry.
- In the City of London, bankers warned it was not feasible for Russian companies to list on the London Stock Exchange until a de-escalation of the crisis.
by ilene - July 31st, 2014 2:18 pm
Courtesy of Charles Hugh-Smith of Of Two Minds
The Fed's substitution of debt for income has only doomed the nation to a deeper, more painful realignment of real income and expenses.
The economic "recovery" has been based on a simple premise: debt can be substituted for income with no ill effects. As real household incomes have declined, the legitimate foundation of additional spending--more income--has eroded for the bottom 90%.
Even the ephemeral foundation of additional debt-based spending--the Fed's beloved wealth effect--has eroded for all but the thin layer at the very top of the wealth pyramid.
To replace this diminished income, the Status Quo has substituted debt as the source of additional spending: household debt, corporate debt and government debt.
But debt is not income. Rather, debt requires income to be diverted to pay interest and principal. So substituting debt for income ends up further depleting declining income.
This scheme of keeping a bloated, inefficient Status Quo afloat with debt is not a success--it's a failure on an epic scale.
Let's start by reviewing household income, which has declined in real (adjusted for inflation) terms. The drop in real income is across the board; those in the top rungs have experienced a smaller relative decline than their lower-income brethren, but they still has less purchasing power than they did six years ago.
Here's another look at the same basic data:
Here's real median household income:
Some apologists claim median income doesn't reflect how well most households are doing in the New Normal. As researchers Piketty and Saez found, the gains in income have all accrued to the top 10%. So while this might be good news for Porsche dealerships in wealthy enclaves, it doesn't follow that the economy is healthy because a relative handful of households are doing very well for themselves.
Senate Bombshell Testimony Today: Citigroup and Bank of America Stock Worthless Without Implied Government Guarantees
by ilene - July 31st, 2014 10:43 am
Courtesy of Pam Martens.
Senator Sherrod Brown, Chairman of the Senate Banking Subcommittee on Financial Institutions and Consumer Protection, will take testimony at 2 p.m. today on market subsidies enjoyed by implied future government bailouts of the too-big-to-fail status of Wall Street’s bloated and serially malfeasant banks. The hearing is set to coincide with a new report from the Government Accountability Office (GAO).
An early peek at written testimony by three separate professors set to testify guarantees a belated July 4 fireworks display — one that is not likely to enjoy a welcome reception within the Wall Street corridors of power. Expect the phone lines of lobbyists and congressional campaign managers to be lighting up all over the nation’s capitol this afternoon.
Edward J. Kane, Professor of Finance at Boston College will get things off to a rousing start by telling the Subcommittee that any suggestion that the Dodd-Frank financial reform legislation ended the implied government guarantees “is a dangerous pipe dream.”
A powerful argument made by Kane (see full text of testimony linked below) is that these too-big-to-fail banks enjoy not just a market subsidy on their debt but on their equity as well. Kane writes:
“Being TBTF [too-big-to-fail] lowers both the cost of debt and the cost of equity. This is because TBTF guarantees lower the risk that flows through to the holders of both kinds of contracts. The lower discount rate on TBTF equity means that, period by period, a TBTF institution’s incremental reduction in interest payments on outstanding bonds, deposits, and repos is only part of the subsidy its stockholders enjoy. The other part is the increase in its stock price that comes from having investors discount all of the firm’s current and future cash flows at an artificially low risk-adjusted cost of equity. This intangible benefit generates capital gains for stockholders and shows up in the ratio of TBTF firms’ stock price to book value. Other things equal (including the threat of closure), a TBTF firm’s price-to-book ratio increases with firm size…”
Muppet Slaughter: Goldman Removes Adidas From Its “Conviction Buy” List Minutes After Its Biggest Drop In History
by ilene - July 31st, 2014 10:39 am
Ouch. See that disturbing picture at the bottom of the post. I don't want to be a muppet.
Muppet Slaughter: Goldman Removes Adidas From Its "Conviction Buy" List Minutes After Its Biggest Drop In History
Courtesy of ZeroHedge
As reported earlier, following some horrifying guidance German sportswear titan Adidas tumbled by the most ever, blaming not the weather, or the World Cup, but Russia (leading some to wonder just who will be shouldering all those "costs" Obama refers to during every teleprompted appearance).
What we didn't mention is that today's record massacre of Adidas longs happened minutes before Goldman decided, after the fact to remove the company from its "Conviction Buy" list (but still kept the stock that has lost 18% in the past year at a Buy).
To wit: "We remove adidas from the Conviction List following the company reducing FY14 net income guidance (to €650mn from €830mn), resulting in 33%/40%/46% cuts to our FY14-16 earnings estimates. Our new 12-month price target is €77.5. Since being added to the Conviction List on October 18, 2013, the shares are -16.1% vs. FTSE World Europe index +6.7%. We also remove the stock from the Directors of Research Focus List."
What can one possibly add here to the following well-known image which says it all.
by ilene - July 31st, 2014 10:32 am
Courtesy of The Automatic Earth.
DPC Ghosts in train concourse, Union Station, Washington DC 1910
Is the age of stimulus over? It may well be. That would expose global markets as the naked emperors they always were. From the point of view of America, it makes sense to taper. Not because of invented jobless and GDP growth data, though they do make it harder for the Fed not to quit QE. No, it makes sense because the negative impacts will be hugely outweighed by the positive ones. Or, to put it in different terms, the death of the bubble will hurt the US too, and probably badly, but it will hurt others much more. And that can be – seen as – a good thing.
Emerging economies, smaller and larger ones, have grown themselves over the past few years by gobbling up dollar-denominated debt, and using it as the foundation for highly leveraged credit instruments. Much of this (short-term) foundation needs to be rolled over on a regular basis. And that’s where the taper will start to bite something bad, soon. Because everybody on the planet is in the same predicament. Except the US.
Moreover, most commodities are traded in dollars. Countries may sign the occasional bilateral deal in other currencies, but that’s hardly relevant. The world’s life-blood, fossil fuels, will easily remain 90-95% traded in US dollars. And that at a point in time when everyone will at least start to fear a permanent shrinkage of supplies.
Shell, like its peers, announced large profits today. But Shell knows, as do Exxon and BP, that those profits look to be a fluke. And that’s before they’ve even considered their fresh Russian sanctions problems. The simple fact is, they’re running out of reserves, and they apparently have little hope more will be found anytime soon, even if they’ll never say it out loud. Look what they do, not what they say. The Guardian:
Shell has committed itself to spending over $30 billion buying back its shares and handing out higher dividends over two years. The promise came as the Anglo-Dutch business more than doubled second quarter profits to $5.1 billion as measured on a current cost of supplies basis. The company has
by ilene - July 31st, 2014 9:40 am
Courtesy of Larry Doyle.
Not a day goes by in which the citizens of our nation are not forced to continue to wade through a financial-political-regulatory cesspool of real cronyism and corruption.
The stench from this menage-a-trois is overpowering. Transparency is the only real disinfectant.
Who provides that transparency? Whistleblowers.
We owe immeasurable thanks to our fellow brethren who have taken immeasurable personal and professional risks to expose real waste, fraud, and abuse emanating from that cesspool. In honor of these true patriots a resolution was passed earlier this week designating July 30, 2014 as National Whistleblower Appreciation Day.
Designating July 30, 2014, as “National Whistleblower Appreciation Day”.
Whereas, in 1777, before the passage of the Bill of Rights, 10 sailors and marines blew the whistle on fraud and misconduct harmful to the United States;
Whereas the Founding Fathers unanimously supported the whistleblowers in words and deeds, including by releasing government records and providing monetary assistance for reasonable legal expenses necessary to prevent retaliation against the whistleblowers;
Whereas, on July 30, 1778, in demonstration of their full support for whistleblowers, the members of the Continental Congress unanimously enacted the first whistleblower legislation in the United States that read: “Resolved, That it is the duty of all persons in the service of the United States, as well as all other the inhabitants thereof, to give the earliest information to Congress or other proper authority of any misconduct, frauds or misdemeanors committed by any officers or persons in the service of these states, which may come to their knowledge” (legislation of July 30, 1778, reprinted in Journals of the Continental Congress, 1774–1789, ed. Worthington C. Ford et al. (Washington, D.C., 1904-37), 11:732);
Whereas whistleblowers risk their careers, jobs, and reputations by reporting waste, fraud, and abuse to the proper authorities;
Whereas, when providing proper authorities with lawful disclosures, whistleblowers save taxpayers in the United States billions of dollars each year and serve the public interest by ensuring that the United States remains an ethical and safe place; and
by ilene - July 31st, 2014 3:06 am
Courtesy of Tim Richards at the PsyFi Blog
A common reaction to pointing out to investors (or indeed, anyone) that they're as biased as a Fox reporter at a convention of transgender liberal pacifists is for them to respond, not unreasonably, by asking what they should do about it (that's the investors, not the reporters). It turns out that it's a lot easier to say what's wrong than to actually do anything about it.
The A to Z of Behavioral Bias is an attempt to address that issue, but it does rather show that there's no such thing as a common source of biases; bad behavior comes from many sources and requires many solutions. Or does it?
Toxic Arms Races
To generalize, perhaps beyond the point of reason, there are two sorts of bad behavior amongst investors. The first kind occurs because the modern investing industry is designed to be toxic for creatures like ourselves who evolved methods to deal with risk and uncertainty and duplicity in a completely different world. The same argument can be made more generally about the world outside investing, of course.
In addition, the creation of our consumerist society has led to a psychological arms race, as corporations vie with themselves to create redundancy in their products by magicking up a demand that isn't predicated on a genuine shortage of supply. In investing, as in other areas where services or goods have to be sold, techniques have been evolved, by trial and error, that persuade us into parting with our money by exploiting our biases.
To Choose or Not To Choose
For many of us our problem is not the one that's afflicted humanity for most of its history: it's not that we have too little choice, but that we have too much. Choice overload, as it's known (see Jam Today, Tyranny Tomorrow), has been exploited by the securities industry, amongst others, to keep prices high and reduce competition. History suggests this hasn't been a deliberate attempt to manipulate us, but has developed by trial and error as corporations seek to maximize profits.