Monday, October 31, 2016

The Morning Download: Goldman Sachs Tech Platform Borrows Business Model from Silicon Valley - btbirkett@gmail.com - Gmail

The Morning Download: Goldman Sachs Tech Platform Borrows Business Model from Silicon Valley - btbirkett@gmail.com - Gmail



The Morning Download: Goldman Sachs Tech Platform Borrows Business Model from Silicon Valley

By Steve Rosenbush
Good morning. Goldman Sachs Group Inc., facing financial pressure on its debt-trading desk, is using technology to develop new business models that take the bank in a far more open direction. Goldman, which once fiercely guarded the secrecy of its technology, is allowing rivals to sell their own investment products through a Goldman web app, much as Apple Inc. allows users to use apps from rivals such as Alphabet Inc.'s Google on their iPhones. The WSJ's Telis Demos and Liz Hoffman have the story.
The company has been an aggressive adopter of new technology under CIO R. Martin Chavez. The new app, known as Simon, is part of a family of apps called Marquee, a play on the name of Goldman's CIO, the WSJ says. Goldman CEO Lloyd Blankfein said four years ago he wanted the company to become a low-cost provider of banking services, using technology to expand revenue that has been eroded by a new wave of regulation, according to the WSJ.
The focus on the platform, in which outside developers create applications that form an ecosystem of companies, rivals, customers and partners in an ever-expanding supply chain, is key to business in the digital era. The concept, which emerged from Silicon Valley, is spreading deeper into the mainstream. Peter Sondergaard, director of research at Gartner Inc. last year told CIO Journal: "The battle for emerging ecosystems ... is going to be really interesting ... It is a battle between suppliers in an ecosystem ... vertical industries are being redefined as a result of this." How are platforms redefining your market and business?

Banks Are Hoarding $2.4 Trillion of Bonds - Bloomberg

Banks Are Hoarding $2.4 Trillion of Bonds - Bloomberg



...In the past year, more loan officers at large and midsize banks have tightened credit to businesses than at any time since 2009,...



...with banks finding fewer opportunities to lend, it’s raising deeper questions about the prospects for future economic growth....



...A big reason banks are funneling so much money into safe assets is that deposit growth is outstripping loan demand.

China as Factory to World Mulls the Unthinkable: Price Hikes - Bloomberg

China as Factory to World Mulls the Unthinkable: Price Hikes - Bloomberg



...That push to recover lost margins -- even as demand remains muted -- was shared by exporters of everything from clocks to jacuzzis interviewed in Guangzhou last week at the Canton Fair, a biannual gathering where 25,000 exhibitors and 180,000 mostly foreign buyers ink export deals in booths spanning exhibition space equivalent to about 3,400 tennis courts....



...To be decided is whether China, the factory to the world, swings from becoming a drag on consumer prices to a source of pressure nudging them higher....



...the country’s top five markets: the U.S., Hong Kong, Japan, South Korea and Mexico...

China will probably let inflation run to overcome a high debt burden, as it has done in the past, ...
... a depreciating currency is offering a buffer, helping exporters preserve some margin in local currency terms even if they keep prices for their goods unchanged in dollars. That may slow any transmission to export prices

Sunday, October 30, 2016

Outside the Box - Hoisington Management Quarterly Review and Outlook, 3Q 2016 - btbirkett@gmail.com - Gmail

Hoisington Management Quarterly Review and Outlook, 3Q 2016

By Dr. Lacy Hunt and Van Hoisington

Deficit and Debt

The Congressional Budget Office has estimated that in the fiscal year ending September 30, 2016, the U.S. budget deficit jumped to $590 billion, compared with $438 billion in the prior fiscal year. However, over the same time period the change in total gross federal debt surged upward by $1.4 trillion, more than twice the annual budget deficit measure.
This difference between the increase in the deficit and debt is not a one-off fiscal policy event but instead part of an historical pattern. From 1956 until the mid-1980s, the change in gross federal debt was always very close to the deficit (Chart 1). However, over the past thirty years the change in debt has exceeded the deficit in 27 of those years, which served to conceal the degree to which the federal fiscal situation has actually deteriorated. The extremely large deviation between the deficit and debt in 2016 illustrates the complex nature of the government accounting.
To better understand why there is a gap between the increase in the deficit with the change in gross federal debt, we examine a recently available breakdown and analysis of data on the federal budget deficit from Louis Crandall of Wrightson ICAP, which consists of the year- over-year change ending June 30, 2016. 
The increase in debt for that period was over $1.2 trillion while the deficit was $524 billion, a near $700 billion difference. The discrepancy between these two can be broken down as follows (Table 1): 
(a) $109 billion (line 2) was due to the change in the treasury cash balance, a common and well understood variable item; 
(b) $270 billion (line 3) reflects various accounting gimmicks used in fiscal 2015 to limit the size of debt in order to postpone hitting the Debt Limit. Thus, debt was artificially suppressed relative to the deficit in 2015, and the $270 billion in line 3 is merely a reversal of those transactions, a one-off, non-recurring event; 
(c) $93 billion (line 4) was borrowed by the treasury to make student loans, and this is where it gets interesting. Student loans are considered an investment and therefore are not included in the deficit calculation. Nevertheless, money has to be borrowed to fund the loans, and total debt rises; 
(d) In the same vein, $70 billion (line 5) was money borrowed by the treasury to increase spending on highways and mass transit. It is not included in the deficit calculation even though the debt increases;
(e) $75 billion (line 6) was borrowed because payments to Social Security, Medicare and Affordable Care Act recipients along with the government’s civilian and military retirees were greater during this time frame than the FICA and other tax collections, a demographic development destined to get worse; 
(f) Finally, the residual $82 billion (line 9) is made up of various unidentifiable expenditures including “funny money securities stuffed in various trust funds”.
As noted, these last four items discussed above (lines 4, 5, 6 and 9), which total $320 billion, fund activities and raise debt, but they are not in the deficit. Instead they are categorized as something else. Under the principles of economics, they are in fact cash expenditures that raise federal debt.
The future does not look any better. In January 2015, the nonpartisan Congressional Budget Office (CBO) said that the cumulative ten- year U.S. budget deficit (2015 to 2025) would total $8.1 trillion. In their August 2016 projection, the CBO places the current ten-year deficit at a much higher $9.2 trillion. If history is any indicator, the actual increase in debt is likely to be much greater than $9.2 trillion. In the past ten years, the cumulative budget deficit was “only” $7.9 trillion, but the increase in debt was $10.9 trillion, a 38% difference. Using the same math, by 2025 the debt increase will be in the neighborhood of $13 trillion, based on the $9.2 trillion deficit increase projected by the CBO. Additionally, the CBO’s economic projections rely on acceleration in economic growth from the pace thus far in this expansion, without adequate support for their forecast.

A Global Trend

The deteriorating U.S. fiscal situation is duplicated in Europe, the United Kingdom, Australia, Canada, Japan and China. Moreover, calls for more “fiscal stimulus” in the U.S., the EU and Japan have increased. In The Wall Street Journal article “Let’s Get Fiscal” published August 10, 2016, well-respected journalist and economics editor Mike Bird wrote, “After years of austerity, governments in the developed world are becoming more relaxed about loosening their purse-strings and engaging in a bit of fiscal stimulus.” And in an article entitled “Monetary Policy in a Low R-star World”, John C. Williams, President of the Federal Reserve Bank of San Francisco, published in the bank’s Economic Letter of August 15, 2016 wrote “... fiscal and other policies must also take on some of the burden to help sustain economic growth.”
The exceedingly ironic aspect is that such prominent figures think government spending has been constrained. According to the latest tabulations from the Organization for Economic Cooperation and Development (OECD), government debt-to-GDP ratios are at record highs in the U.S., the EU, the UK, Japan and a large number of other countries. No austerity has occurred, and consequently, even higher debt-to- GDP ratios will continue to be the norm in the ensuing years.

Counterproductive Fiscal Actions

If new fiscal measures are enacted, debt- to-GDP ratios will be increased and will further depress growth, thereby causing interest rates to move lower, not higher. In a highly incongruous development, governments will therefore be able to finance their new debt offerings at lower costs. While this may seem to be a good thing for the individual governments, the great majority of their constituents will be harmed. 
The higher debt will set off a chain reaction of unintended consequences. The 70-75% of the households that receive the bulk of their investment income from interest bearing accounts will have fewer funds for retirement. 
This, in turn, will cause older members of the workforce to work longer and save more, blocking job opportunities for new entrants into the labor force. Thus, fiscal decisions, which result in higher deficits, are likely to perpetuate and intensify our underlying economic problems.

Textbooks Versus Reality

Textbooks have historically hypothesized that government expenditures lift economic growth by some multiple of every dollar spent through a positive government expenditure multiplier. As such, deficit spending has long been considered to be a positive for economic expansion. If the expansion lasts long and generates faster actual and expected inflation, bond yields should rise via Irving Fisher’s equation (Theory of Interest, 1930).
Impressive scholarly research has demonstrated that the government spending multiplier is in fact negative, meaning that a dollar of deficit spending slows economic output. The fundamental rationale is that the government has to withdraw funds, via taxes or borrowing, from the private sector, to spend their dollars. When that happens, the more productive private sector of the economy has fewer funds to use to make productive investments. Thus the economy slows along with productivity when government spending increases. 
Further, studies show that government debt-to-GDP as low as 50% can begin to have a negative impact on growth. More substantial deleterious consequences are seen when government debt-to-GDP reaches the 70%- 90% range, and the negative effects become non- linear above that level.
 As an economy becomes more over-indebted, additional government spending slows growth even more due to “non- interest economic costs” such as misallocation of saving, reduced productive investment, weaker productivity growth and eventually a deterioration in demographics. Slower growth will cause underutilized resources to build, bringing down inflation and subsequently interest rates. Therefore, increasing deficits have, and will continue to result in lower, not higher, interest rates.

The Government Expenditure Multiplier

Just completed scholarly studies strengthen our conviction that deficit spending and elevated government debt levels are a force for weaker economic activity. Although the statistical evidence against the positive government spending, or Keynesian, multiplier has been overwhelming for a long time, the possibility did exist that these estimates were picking up a reverse correlation or a feedback bias due to the possibility that government spending increased in a recession causing a positive correlation to the business cycle. 
In technical terms this is called the endogeneity bias, a point strongly rejected by this latest research. William Dupor and Rodrigo Guerrero (“Government Spending Might Not Create Jobs, Even in Recessions”, The Regional Economist, July 2016) tackled this issue very creatively. They were able to use data developed by Michael T. Owyang, Valerie Ramey and Sarah Zubairy (“Government Spending Multipliers in Good Times and in Bad: Evidence from U.S. Historical Data”, Working Paper, 2016).
Dupor and Guerrero, of the Federal Reserve Bank of St. Louis, examined the efficacy of government spending at increasing employment in relation to over 120 years of U.S. military spending. Defense spending has the advantage of eliminating feedback loops because it is likely to be determined primarily by international geopolitical factors rather than the nation's business cycle.
To control for potential “anticipation effects”, Owyang, Ramey and Zubairy used historical documents to construct a time series of military spending news shocks. Economics professors Ramey and Zubairy (University of California-San Diego) and Owyang (Texas A&M), were thus able to disentangle the time of military spending from when the public learned that military spending was going to change in the future. The output response to the spending shocks was minimal and the outcome did not depend on whether the economy was slack. Employing a similar methodology, Dupor and Guerrero found that military spending shocks had a small impact on civilian employment. Following a policy change that began when the unemployment rate was high, if military spending increased by one percent of GDP, then total employment increased by between zero percent and 0.15 percent. Following a policy change that began when the unemployment rate was low, the effect on employment was even smaller. As such, countercyclical government spending may not be very effective, even when the economy has substantial slack.
Other rigorous new research by Alberto Alesina, Carlo Favero and Francesco Giavazzi corroborates that the tax and government expenditure multipliers are both negative, with the tax multiplier more negative. A negative tax multiplier means that a dollar decrease in the marginal tax rate will result in higher GDP growth and vice versa. These conclusions are supported by domestic as well as international data. The study entitled, “The output effect of fiscal consolidation plans”, is forthcoming in the peer reviewed Journal of International Economics, but the working paper is available on the internet. Alesina is a Professor at Harvard while Favero and Giavazzi are professors at IGIER-Bocconi.

Decelerating Economic Growth

From a fiscal and Keynesian perspective, 2016 should have been a year of accelerating economic activity. There was no crisis in passing the 2016 budget. There was a nonpartisan deal to accelerate military and civilian spending as well as a deal to hike outlays for highways. The increased expenditures and debt were going to occur after two years of slower growth in nominal GDP, which according to its advocates meant that the timing was right. Nevertheless, the economy sputtered (Table 2). This once again confirms the existence of a negative government spending multiplier.
The outward evidence indicates that this “stimulus” was, at best, extremely fleeting, if it was beneficial at all, since the economy’s real growth rate is on track to slow significantly in 2016 versus 2015. A $1.4 trillion jump in federal debt was paired with both weaker economic growth and falling treasury yields.
Unfortunately, the 2017 economic horizon is clouded by the rising likelihood of further increases in government spending and debt. The inevitable result will be slower economic growth and declining interest rates, a pattern similar to the 2016 experience.
     Van R. Hoisington
     Lacy H. Hunt, Ph.D.

Tesla’s Powerwall 2 packs over twice the energy storage | TechCrunch

Tesla’s Powerwall 2 packs over twice the energy storage | TechCrunch



Musk said that the Powerwall 2 has enough power to charge lights, sockets and refrigerator for a standard 4 bedroom home for an entire day

Saturday, October 29, 2016

Elon Musk Reveals Solar Roof Made of Glass Tiles in L.A. - Bloomberg

Elon Musk Reveals Solar Roof Made of Glass Tiles in L.A. - Bloomberg



The solar roof will be offered in four styles: Textured Glass Tile, Slate Glass Tile, Tuscan Glass Tile, and Smooth Glass Tile -- due to a variety of architectural choices. SolarCity’s website says production will begin in mid-2017 and that the tempered glass is as "tough as steel."

Friday, October 28, 2016

Wall Street’s Frantic Push to Hire Coders - Bloomberg

Wall Street’s Frantic Push to Hire Coders - Bloomberg



...By using algorithms to spot talented coders, HackerRank and competitors with names like Codility claim they’ve essentially increased the world’s supply of developers.

Data Rigor

“This is purely about skill,” said 28-year-old Vivek Ravisankar, a HackerRank co-founder who used to work for Amazon.com Inc. “Most really good programmers learn on their own and just continue to build their skills. Probably the really good programmers are college dropouts.”
The service is part of a broader trend among U.S. corporations to bring data rigor into recruitment, instead of relying only on resumes and interviews. ...
...JPMorgan, with more than 40,000 technology workers, hires thousands annually just to replace those who depart....
...“Things have changed so much,” Furlong said. “There’s much more opportunity for people to break through and change their lives.”

Americans Are Dying Faster. Millennials, Too - Bloomberg

Americans Are Dying Faster. Millennials, Too - Bloomberg



... The latest, best guesses for U.S. lifespans come from a study (PDF) released this month by the Society of Actuaries: The average 65-year-old American man should die a few months short of his 86th birthday, while the average 65-year-old woman gets an additional two years, barely missing age 88.

This new data turns out to be a disappointment. Over the past several years, the health of Americans has deteriorated—particularly that of middle-aged non-Hispanic whites. Among the culprits are drug overdoses, suicide, alcohol poisoning, and liver disease, according to a Princeton University study issued in December. 
Partly as a result, the life expectancy for 65-year-olds is now six months shorter than in last year’s actuarial study. Longevity for younger Americans was also affected: A 25-year-old woman last year had a 50/50 chance of reaching age 90. This year, she is projected to fall about six months short. (The average 25-year-old man is expected to live to 86 years and 11 months, down from 87 years and 8 months in last year's estimates.) Baby boomers, Generation X, and yes, millennials, are all doing worse.

Wednesday, October 26, 2016

The availability rate on Fifth Avenue is through the roof - Bloomberg

The availability rate on Fifth Avenue is through the roof - Bloomberg





...“Property trades are being based on achieving ever-higher rents, and nobody ever really looks at what retailers can afford to pay,” Hodos said. “In some cases, rents need to come down 30 percent or more for rents to be at levels where retailers are able to make sense of them again.”...



...Green Street Advisors LLC, estimates that several hundred malls around the country will cease operations over the next decade...



...To justify paying record prices for buildings -- and the debt that financed the acquisitions -- owners are under pressure to get the highest rents possible, according to Patrick Smith, a vice chairman of the retail brokerage at Jones Lang LaSalle Inc.

“Typically, a building that has been capitalized over the past three years is very rent-sensitive,” he said

Tuesday, October 25, 2016

Maudlin - The Reinvention of the Democratic and Republican Parties - btbirkett@gmail.com - Gmail

This Week In Geopolitics - The Reinvention of the Democratic and Republican Parties -



The Reinvention of the Democratic and Republican Parties
October 24, 2016
 
The election is far from over, and given the pattern of this election, nothing can be taken for granted. So while at the moment Hillary Clinton appears to be winning, two weeks remain. Nevertheless, whoever wins the election, certain massive shifts in the party structure of the United States have become visible and need to be considered.
My focus, in general, is on the broad geopolitical forces shaping and reshaping the world. Politics (or which individual has what job) is of little interest to me. But in this case, there are two reasons to be interested in the American election. First, this is the United States, and shifts in the behavior of the US affect geopolitics globally. Second, this election (regardless of who wins) has revealed some profound changes in the underlying dynamics of American politics.

The New Deal Kicks Off a New Era

The frame for thinking about this issue lies with the two major political parties. I want to begin with the Democrats because it is the party that has undergone the most profound change, and the party in which change is least discussed.
The framework of the Democratic Party was set in the New Deal. It was a coalition of Southern whites, Northeastern industrial workers, and African Americans. There were other elements, but this was the core. It was an unlikely coalition. In dominating the American South, it included white supremacists and African Americans in the same coalition, and then threw Catholic and Jewish Northeastern and Midwestern urbanites into the mix.
The foundation of this coalition was poverty. The Civil War had ended 67 years before the New Deal, and the South remained impoverished compared to the rest of the country. The ethnic Northern industrial class (many of whom were just a generation or two away from immigration) had been devastated by the Great Depression, as had African Americans who had migrated north since the Civil War.
The Democratic Party won the election of 1932 because it cast itself against the economic and social disruption of the Depression. It created a coalition of those who had been most affected by the Depression and the Civil War.
The Republican coalition was focused on small businesses, small towns, the more prosperous farmers, professionals, and the upper class. It was the party of the previous generation, in terms of both wealth and culture. It retained the Republican disdain for the South, dating back to slavery, and felt unease regarding both the waves of Eastern and Southern European immigrants and massive industrial urbanization. This was in many ways the coalition that had ruled the country since the Civil War. But its power had been broken by the Depression.
The Republicans argued that the Depression was caused by the irresponsible consumption and lifestyle of the 1920s and that the solution was a dose of austerity. The Democrats’ view was that this was a systemic failure of capitalism that could only be corrected by state intervention.

Goldwater Crashes the Party

The two coalitions lasted until 1964 when Barry Goldwater took the South away from the Democrats. Goldwater was crushed in the election, but the coalition shift he heralded reshaped American politics.
While the Democrats retained Northeastern ethnic workers and a growing black voting bloc, the Republicans retained the wealthy, the professionals, farmers, and a shrinking small town base. But the shift of Southern Democrats to the Republicans is what elected Richard Nixon, Ronald Reagan, and the Bushes. Since 1932, the party coalitions had remained stable, with the exception of the white South revolting against integration, which the Democrats championed. This shift to the Republicans resulted in 28 years of Republican presidents in the 48 years between 1968 and 2016.

In those years, a new section of the population emerged: the suburbanites. This group was relatively well-to-do and tended to be better educated. The suburbs were founded by the VA loans to World War II veterans and the interstate highway system that made the land around cities accessible. The pre-World War II suburbs were Republican, but this shifted as the Depression-WWII generation moved in. Then their children, the Baby Boomers, moved on, and what had been a stable coalition became far more unpredictable.

The Boomers had a general tendency to be socially liberal and, over time, more economically conservative. They were better off and so were drawn toward the Republicans. But this group had been forged in the 1960s, and their social perspective was far more flexible.

Increasingly, the Republicans sought to hold and expand their coalition with two strategies. One was the need for tax cuts. The other was the culture wars: opposing abortion and gay marriage, supporting prayer in schools, and the like. During this time, the Democrats remained wedded to the New Deal strategy. Then they added abortion rights, gay rights, and opposition to prayer in schools to their strategy. Cultural issues became at least the equal of economic issues (which had been the center of the New Deal Democrats).

The white South remained attached to the Republicans. African Americans remained attached to the Democrats. The children of the ethnic industrial workers were split. They now lived in the suburbs, and the suburbs were divided by a majority that was socially liberal and a large minority that was socially conservative. Both of these groups shared a general tendency to be economically conservative.

The Divide Becomes Cultural

The issue became increasingly about social mores, with an accelerating movement to normalize what had been considered deviant behavior. The children of the Boomers, the Millennials, were strikingly like their parents. They had their own cool name, they thought they were completely unlike their parents, and they tended to reinforce their parent’s views.

The country remained rooted in a culture war, while there was a general consensus over more conservative economics. But beneath the surface, a massive shift was taking place.

The foundation of the New Deal coalition was that the Democratic Party was the party of the workers and the Republican Party was the party of the upper-middle class. But the culture wars had cut the Democrats’ ties to blue collar workers without college degrees. This class also tended to be the most socially conservative. This was true not only in the South—where it was intense—but broadly around the country. Opposition to social evolution was present in all classes but most heavily in this class.

The Democrats had already willingly given up Southern conservatives. Now, given the culture wars, they were prepared to give up social conservatives everywhere. The problem though was that the social conservatives were to a large extent the non-college-educated workers that had once been the core of the New Deal coalition.

President Barack Obama sought, not entirely successfully, to keep this group in the coalition. Then, Hillary Clinton decided to use them to discredit Donald Trump. She painted Trump (and he painted himself) as the spokesman for those who were not college educated, white, socially conservative workers. Clinton understood that this group was not simply no longer favored by the Democratic Party—it was repulsive to the Democratic Party.

There is a constant argument that soon the United States will cease to be a predominantly white country, and that this group is increasingly irrelevant. A reasonable argument, it is posed in such a way as to create both a sense of desperate embattlement among white workers (particularly male) and a sense of loathing toward this group in the rest of the country.

There are two baskets. One is the “deplorables” who should have been expelled from the Democratic Party back in 1964 with the South. The second is the impoverished and hopeless. 

But the key here is that Clinton did not try to split Trump’s hold over this second group, as Lyndon Johnson or Harry Truman would have. Rather, she treated them as alien and unimportant.

The Democrats basically gave up this core constituency of the New Deal—the white, undereducated working class, committed to strict social values. Clinton’s calculation was that the price of retaining them was to accept strict social values. If she did that, she would lose heavily with the Democrats’ new base… the socially liberal in all classes.

Look at this another way. Since 1932, American politics were driven by economic issues. Now, they are driven by social issues. From the Democrats’ point of view, the working class was on the wrong side of these social issues, so Clinton gave up on them.

The Future of the Parties

The Democrats created chaos in their base, but in an orderly fashion. The Republicans created it in a disorderly way. Trump drew the white working class to him and engaged in what proved to be the losing side of the social values debate. While he had support in other classes, he did not own them as he owned white, non-college-educated workers. The Republican Party lost the culture wars in 2016: they added the white working class (as Reagan had in part) but united them on social issues that simply didn’t have the votes.

The issue, at present, is this: What is the Democratic Party about now, if it has already won on gay rights, abortion, and prayer in schools? What is the reason to vote Democrat in 2020? If there is a recession and 2020 is a tough economic year, what is the coalition that will flock to the Democratic Party?

The major political battles on the cultural issues have been won. And while the battle may continue, a massive reversal on these issues would require a massive reversal in the political structure of the United States. The issue at this point is the fate of those earning below the median income. These are the people in the second basket of Trump supporters… and the former core of the Democratic Party. But because of the Democrats’ shift on cultural issues, they are now more aligned with the classes who earn above the median income. If they focus on those below, they must shift their cultural views. If they focus on those above, they alienate their old base.

If the Republicans now have the South and the white working class, what do they do with it once the culture wars subside? Both parties tossed out historical coalitions to fight the culture wars. When they are done, there is no clear hold the Democrats have on any group for primarily economic reasons—the Democrats’ old foundation. The Republicans actually have more currency there now. But these groups and the traditional Republican base don’t live well with each other.

It is tempting to say that the Republicans are a permanent opposition party now, but that would be wrong. For the moment, they have the possibility of owning the emerging challenge in the US—the ability of the middle class (and those below) to afford a decent standard of living. This was one of Reagan’s issues, and Trump resurrected it. The question is what the Republicans will do with the issue.

Nevertheless, I will argue that when we look back at this year, the Republicans will have lost the election, but they have been handed an opportunity to build a new coalition. The US may or may not find that whites are a minority, but it is not clear that all non-whites have common interests. Franklin Roosevelt had white urban workers. And Nixon offended white suburbanites. The Republicans’ acquisition of white non-college educated males, plus the South, is not trivial. This is a vital but not sufficient base. And we will see that when hard times come, as they always do.

Tying this base together with a winning coalition will not be easy, as it challenges what the Republican Party has become for the last generation. But then, Trump has ended that phase of Republican history.

Super-Cheap Driverless Taxis May Kick Mass Transit to the Curb - Bloomberg

Super-Cheap Driverless Taxis May Kick Mass Transit to the Curb - Bloomberg



  • Computers replacing drivers faster than industry expected
  • Autonomous taxis one-quarter the price of New York cab ride
More than 150,000 people earn their living driving taxis and limousines in New York City, accounting for 4 percent of employment.



...Once companies work out the kinks, they say driverless technology may make traffic accidents nearly nonexistent. Computers don’t fall asleep at the wheel, get drunk or text while driving. Electric automated vehicles could reduce smog and greenhouse gases. Lower-priced taxis, meanwhile could make bus and train stations more accessible for suburban commuters, boosting mass transit ridership. ...




Monday, October 24, 2016

Visa Introduces International B2B Payment Solution Built on Chain’s Blockchain Technology | Business Wire

Visa Introduces International B2B Payment Solution Built on Chain’s Blockchain Technology | Business Wire



(Graphic: Business Wire)
(Graphic: Business Wire)
With Visa B2B Connect, Visa aims to significantly improve the way international B2B payments are made today by offering clear costs, improved delivery time and visibility into the transaction process – ultimately reducing the investment and resources required by banks and their corporate clients to send and receive business payments.

Visa B2B Connect, which Visa plans to pilot in 2017, is designed to improve B2B payments by providing a system that is:
  • Predictable and transparent: Banks and their corporate clients receive near real-time notification and finality of payment
  • Secure: Signed and cryptographically linked transactions are designed to ensure an immutable system of record
  • Trusted: All parties in the network are known participants on a permissioned private blockchain architecture that is operated by Visa

Major banks mark first-ever international trade using blockchain tech | Reuters

Major banks mark first-ever international trade using blockchain tech | Reuters



Australian cotton trader Brighann Cotton Marketing bought the shipment bound for the port city Qingdao from U.S. division Brighann Cotton in Texas, the companies and their banks said in a joint statement. The blockchain trade, for 88 bales, totaled $35,000, Commonwealth Bank told Reuters.


Blockchain is a web-based transaction-processing and settlement system whose efficiency banks say could slash costs. It creates a "golden record" of any given set of data that is automatically replicated for all parties in a secure network, eliminating any need for third-party verification....
the traditional banking industry which at first shied away from the technology, partly because it makes money flows harder for law enforcement agencies to track.
Led by a consortium of over 70 of the world's biggest financial institutions - called R3 - the banking industry has been researching ways to harness the speed, accuracy and efficiency afforded by blockchain.
One of its benefits is removing people from transaction processing. That has been seen as especially appealing for cross-border trades, which are typically held up by duplication of payment processing and time zone differences....
...include "smart contracts", or payments triggered when certain conditions are met. The cotton transaction, for instance, involved automatically making payments when the shipment reached certain geographic locations, the statement showed....
...R3 - of which it and Wells Fargo are members - did not play a part in the trade.

Chinese Firm Says Its Cameras Were Used to Take Down Internet - Bloomberg

Chinese Firm Says Its Cameras Were Used to Take Down Internet - Bloomberg



A Chinese security camera maker said its products were used to launch a cyber-attack that severed internet access for millions of users, highlighting the threat posed by the global proliferation of connected devices.
The attackers hijacked CCTV cameras made by Hangzhou Xiongmai Technology Co.using malware known as Mirai, the company said in an e-mailed statement. While Xiongmai didn’t say how many of its products had been infiltrated, all cameras made before September 2015 were potentially vulnerable....

Sunday, October 23, 2016

The Tech Bubble Didn’t Burst This Year. Just Wait - Bloomberg

The Tech Bubble Didn’t Burst This Year. Just Wait - Bloomberg



...while there are candidates to succeed the iPhone as the next revolutionary computing platform (wearable gadgets, virtual reality), none has made a compelling must-have argument to the mainstream.

That means fewer opportunities for entrepreneurs, at least in the short term. ...
...Since 2015, researcher CB Insights has counted 80 “down rounds,”

Glassdoor will now tell you if you’re being underpaid | TechCrunch

Glassdoor will now tell you if you’re being underpaid | TechCrunch

Rites of the Scythians - Archaeology Magazine

Rites of the Scythians - Archaeology Magazine



Spectacular new discoveries from the Caucasus set the stage for a dramatic hilltop ritual
Monday, June 13, 2016
Russia Scythian Golden Bowl Griffins Attack Stags
(Courtesy Andrey Belinski)
One of two 2,400-year-old gold vessels found under a mound at the site of Sengileevskoe-2 in southern Russia depicts griffins attacking a stag.





Russian archaeologist Andrey Belinski wasn’t sure what to expect when he found himself facing a small mound in a farmer’s field at the foot of the Caucasus Mountains. To the untrained eye, the 12-foot feature looked like little more than a hillock. To Belinski, who was charged with excavating the area to make way for new power lines, it looked like a type of ancient burial mound called a kurgan. He considered the job of excavating and analyzing the kurgan, which might be damaged by the construction work, fairly routine. “Basically, we planned to dig so we could understand how it was built,” Belinski says. As he and his team began to slice into the mound, located 30 miles east of Stavropol, it became apparent that they weren’t the first people to take an interest. In fact, looters had long ago ravaged some sections. “The central part was destroyed, probably in the nineteenth century,” Belinski says. Hopes of finding a burial chamber or artifacts inside began to fade.

It took nearly a month of digging to reach the bottom. There, Belinski ran into a layer of thick clay that, at first glance, looked like a natural feature of the landscape, not the result of human activity. He uncovered a stone box, a foot or so deep, containing a few finger and rib bones from a teenager. But that wasn’t all. Nested one inside the other in the box were two gold vessels of unsurpassed workmanship. Beneath these lay three gold armbands, a heavy ring, and three smaller bell-shaped gold cups. “It was a huge surprise for us,” Belinski says. “Somehow, the people who plundered the rest didn’t locate these artifacts.”
 Scythians Sengileevskoe Gold Armbands
(Courtesy Andrey Belinski)
Beneath the pair of gold vessels, archaeologists also discovered gold armbands at Sengileevskoe-2, thought to be a ritual site associated with the Scythian culture.
As he continued to excavate the area surrounding the kurgan, he spotted postholes near the stone box, as though tree trunks had once been sunk in the earth to support a pavilion or roof. Belinski and Anton Gass of the Prussian Cultural Heritage Foundation in Berlin, whom Belinski had invited to participate in the excavation, realized that they had found something far beyond a simple burial mound. In fact, some scholars think the site may have been the location of an intense ritual and subsequent burial rite performed by some of the ancient world’s most fearsome warriors.

From about 900 to 100 B.C., nomadic tribes dominated the steppes and grasslands of Eurasia, from what is today western China all the way east to the Danube. All across this vast expanse, archaeological evidence shows that people shared core cultural practices. “They were all nomads, they were heavily socially stratified, they had monumental burial structures and rich grave goods,” says Hermann Parzinger, head of Berlin’s Prussian Cultural Heritage Foundation and former head of the German Archaeological Institute. Today, archaeologists refer to the members of this interconnected world as Scythians, a name used by the Greek historian Herodotus.

Scythians Sengileevskoe Gold Ring
(Courtesy Andrey Belinski)
Gold ring unearthed at Sengileevskoe-2Although the Scythians were united by their nomadic, horse-centered lifestyle, historians and archaeologists do not think they were ever a single political entity. Based on regional differences in their art, artifacts, and burial practices, scholars posit that they were, rather, a collection of tribes who spoke related languages and had a broadly shared artistic and material culture. They had no written language and their nomadic lifestyle has left relatively little in terms of settlements for archaeologists to uncover. Thus, modern scholars have had to rely heavily on the accounts of ancient historians to interpret the archaeological evidence. “Archaeological finds are, by their nature, mute,” says Askold Ivantchik, director of the Centre for Comparative Studies of Ancient Civilizations at the Russian Academy of Sciences in Moscow. “The main source we have is texts from other cultures, primarily the Greeks and Romans.” 

The historians’ accounts are rarely complimentary. The ancient Greeks dismissed their neighbors to the west as “mare milkers” and drunks, and the Scythians’ nomadic lifestyle must have seemed strange and threatening in contrast to their own settled urban one. And the Greeks weren’t the only ancient power the steppe nomads encountered—and sometimes clashed with. The Scythians periodically crossed the Caucasus Mountains to terrorize the mighty Assyrians and Medes to the south. There is even textual evidence from Persian and Egyptian sources that they vanquished Assyria, pushed west into modern-day Syria, plundered Palestine, and made it as far south as Egypt’s borders, where a cowed pharaoh paid them to back off in the sixth century B.C.

Scythians Persepolis Relief
(SEF/Art Resource, NY)
Images of Scythians can be found on monumental architecture, including this relief from a wall in the Apadana, or audience hall, of the Persian ruler Darius I at the site of Persepolis in modern Iran. 
Though the Caucasus is dotted with Scythian burial mounds, the region has long been ignored in favor of more monumental kurgans farther west, or better-preserved tombs many hundreds of miles to the east. In fact, over the last few decades, Parzinger and others have uncovered Scythian tombs in the Altai Mountains, where Russia, China, Mongolia, and Kazakhstan meet today, preserved by permafrost and ice. The bodies and grave goods in these burials have added to what was already known about Scythian culture from earlier excavations in western Russia and Ukraine, some of which yielded fantastic gold artifacts. But the site excavated by Belinski, dubbed Sengileevskoe-2, is the first such golden treasure to be uncovered in the Caucasus. “This is one of the most outstanding archaeological discoveries of Scythian artifacts in recent years,” says Parzinger. “They are sensational.”

Scythians Sengileevskoe Gold Comb
(HIP/Art Resource, NY)
Scythians, who were known as great horsemen and warriors, are portrayed on a variety of artifacts, including this gold comb dating to the late 5th to early 4th century B.C. found in a royal tomb at Solokha, eastern Ukraine.
The find was so remarkable, Belinski says, that when he showed the objects to Scythian experts in St. Petersburg, they initially suspected foul play. “Some scientists from the Hermitage said that it was unbelievable,” he says. “At first, they claimed it was fake, until they heard that everything was found in situ, at an excavation. If the artifacts had emerged from the black market, they would certainly have been dismissed as modern forgeries.” Adds Gass, “This sort of thing comes along once every 50 years. The quality of these objects, their craftsmanship, is nearly unique.”

Though undeniably authentic, the discovery still raises other questions about the objects and what they can tell archaeologists about the warrior-nomads who left them behind. The vessels are likely not the product of the Scythians themselves, but of ancient Greek craftsmen working on commission somewhere close, such as on the northern Black Sea coast. “It’s not only solid gold,” says Gass. “It took the highest art of the Greek world to produce work like this.”

Scythian Sengileevskoe Gold Vessels Pierced Bottom
(Igor Kozhevnikov/Courtesy Andrey Belinski)
Both vessels from Sengileevskoe-2 are pierced, a common feature of similar artifacts found in graves across the Scythian world, though most other examples are made of bronze and none are as ornately decorated.

The first mystery is what the artifacts might have been used for. Small cup- or bell-shaped vessels with holes in the bottom (or top) are common in Scythian graves. They are often made of bronze and, rarely, of gold or silver. Archaeologists have suggested they functioned as decorative ornaments, originally hung from horses’ bridles. At first, Belinski thought the two large, elaborately decorated artifacts from Sengileevskoe-2, each of which also has a hole, were simply oversized examples of these common horse trappings. But there was something odd about the vessels. When he pulled them out of the ground 2,400 years after they had been buried, he noticed crusty patches of sticky black residue on both. Before cleaning the gold, Belinski asked the crime lab in Stavropol to take samples for analysis. The results came back positive for opium. Looking at the residue under a microscope, experts identified cannabis particles as well. The residue seems to confirm stories told by ancient authors, Herodotus among them, that the Scythians marked important occasions with drug-fueled rituals. “A dish is placed upon the ground, into which they put a number of red-hot stones, and then add some hemp-seed,” the Greek historian writes. “Immediately it smokes, and gives out such a vapor as no Grecian vapor-bath can exceed; the Scyths, delighted, shout for joy.” Hemp seeds and small metal pipes have been found in frozen tombs far to the east, but it was never clear how they were used, and some archaeologists have argued the plants were medicinal. The residue on these gold vessels appears to be evidence of a more meaningful ritual. There’s no sign of charring or burning, so Belinski thinks the opium was consumed as a concentrated drink, perhaps while cannabis was burning nearby. “That both drugs were being used simultaneously is beyond doubt,” he says.

The results of the residue analysis provide more than just titillating evidence that the ancient Scyths were enthusiastic about the mind-bending power of certain plants. It has long been known that in cultures around the world, drugs were—and often still are—at the center of religious rituals. The drink itself may have had a holy aspect, like an embodiment of the divine.

Both Gass and Belinski suggest that the small cups, which are not much bigger than a thimble, were worn or carried the way Christians wear crosses today. If they’re correct, it could help explain ritual practices all across the Scythian world. “These conical objects with holes are known from other assemblages, but interpretation has always been a problem,” says Ivantchik. “We now know the purpose was preparation of opium or a narcotic substance for sacred rites. Cultic connections with such rare substances are very important. That Belinski detected the use of these substances is another proof the objects have cultic character.”

 Scythians Sengileevskoe Griffins Assault Horse
(Igor Kozhevnikov/Courtes Andrey Belinski)
Griffins assault a horse (left) and trees are shown dead and bare (right) in two artfully rendered scenes hammered into the pail-like gold vessel from Sengileevskoe-2.

The collection of this very particular type of artifact in this location may also provide a strong clue as to what may have been happening on that hilltop with its majestic view of the valley below in 400 B.C. If the vessels were holy chalices for a powerful narcotic, were the stunning decorations on their outsides packed with meaning as well? Do their motifs, as Belinski and Gass wonder, reveal insights into the Scythian worldview—and perhaps provide even more confirmation of Herodotus’ histories?