Tuesday, October 31, 2017
Transformational Technologies - Aging: Patrick Cox's Tech Digest | Mauldin Economics
Patrick Cox's Tech Digest | Mauldin Economics
...The most important discovery in gerontology thus far is that aging is reversible.
...The most important discovery in gerontology thus far is that aging is reversible.
Monday, October 30, 2017
What keeps you up at night - The Age of Transformation
http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/171029_TFTF.pdf
... “What’s on the top of your mind? What are you thinking about?” The
previous night we had a small group of about 15 people in my living room after dinner, and the
question was similar, “What keeps you up at night?”...
... In 1820 some 94% of the world’s population lived in extreme
poverty. By 1990 the figure was 35%, and in 2015 it was just 9.6%. Forty percent of those who
remain impoverished live in just two countries, Nigeria and India,...
... Let’s be clear: The Industrial Age and free-market capitalism, for all
of its bumps and warts, has lifted more people out of poverty and extended more lives than has any
other single development.
... There are oilfield operators here in Dallas running around with pro formas, raising
money, talking about how they can do very well at $40 and even $30 per barrel. And with oil at
$54 and looking as though it could well go to $60, they are raising money and punching holes. Just
with fewer workers.
... In the US, the most-cited estimate is the loss of half of all existing jobs by the early 2030s....
...RethinkX, in a 77-page report, concludes that 90% of all driving in the US will be TaaS (transportation as a service) by 2030, although that will utilize only 60% of the cars....
...Dr. Ray Takigiku, chief executive and chief scientist of Bexion Pharmaceuticals. The company is now 15 months into a phase I trial to determine the safety of a drug called BXQ-350, which is basically a full-on silver bullet for mass-tumor cancers.
... In the case of Bexion’s drug, treatment will (hopefully) amount to a few months or less of three visits per week, no side effects, and your cancer goes away. That is the extrapolation from mouse studies. We’ll know more after phase II studies are underway sometime next year. Since it is now public information, I can mention that John McCain will be given access to this drug at the University of New Mexico Comprehensive Cancer Center. Randomly, McCain has one of the types of cancer that the phase 1 trial has focused on.
...at least $500 billion of market cap in big Pharma will be destroyed by a cure for cancer.
...whole job classifications that are endangered species. These changes are going to disrupt our lives and the social cohesion of our country. And of course these shifts are coming not just in the US, but in the entire developed world. And even technology centers in the developing world are going to find themselves at risk of employment dislocations....
...
... “What’s on the top of your mind? What are you thinking about?” The
previous night we had a small group of about 15 people in my living room after dinner, and the
question was similar, “What keeps you up at night?”...
... In 1820 some 94% of the world’s population lived in extreme
poverty. By 1990 the figure was 35%, and in 2015 it was just 9.6%. Forty percent of those who
remain impoverished live in just two countries, Nigeria and India,...
... Let’s be clear: The Industrial Age and free-market capitalism, for all
of its bumps and warts, has lifted more people out of poverty and extended more lives than has any
other single development.
We live in the developed markets; and here, some of the outcomes of the Age of Transformation will not be so comfortable. Let’s start with this chart (hat tip, Downtown Josh Brown).
Obviously, the rig count in US oilfields is rising rapidly – no surprise there. But distressingly, the number of oilfield workers is continuing to fall. How can this be?
... There are oilfield operators here in Dallas running around with pro formas, raising
money, talking about how they can do very well at $40 and even $30 per barrel. And with oil at
$54 and looking as though it could well go to $60, they are raising money and punching holes. Just
with fewer workers.
... In the US, the most-cited estimate is the loss of half of all existing jobs by the early 2030s....
...RethinkX, in a 77-page report, concludes that 90% of all driving in the US will be TaaS (transportation as a service) by 2030, although that will utilize only 60% of the cars....
...Dr. Ray Takigiku, chief executive and chief scientist of Bexion Pharmaceuticals. The company is now 15 months into a phase I trial to determine the safety of a drug called BXQ-350, which is basically a full-on silver bullet for mass-tumor cancers.
... In the case of Bexion’s drug, treatment will (hopefully) amount to a few months or less of three visits per week, no side effects, and your cancer goes away. That is the extrapolation from mouse studies. We’ll know more after phase II studies are underway sometime next year. Since it is now public information, I can mention that John McCain will be given access to this drug at the University of New Mexico Comprehensive Cancer Center. Randomly, McCain has one of the types of cancer that the phase 1 trial has focused on.
...at least $500 billion of market cap in big Pharma will be destroyed by a cure for cancer.
...whole job classifications that are endangered species. These changes are going to disrupt our lives and the social cohesion of our country. And of course these shifts are coming not just in the US, but in the entire developed world. And even technology centers in the developing world are going to find themselves at risk of employment dislocations....
...
this trend will continue. More production, with fewer workers. Just like we see in the oilfields.  ... The problem is not the happy ending. The problem is the transition, which is going to be bumpy and frustrating and potentially divisive. I’m going to show you three graphs from Pew Research. Analysts have been conducting studies (see people-press.org/interactives/    ...The middle ground is much smaller, and to my eye it looks like the Democratic group is somewhat bigger than the Republican. ... the internet, social media, and the media we consume on TV have allowed us to live in echo chambers where we are not really hearing much from the other side. We talk to people who think like we do and who tend to confirm that we are correct in our beliefs. That constant cycle of reinforcement makes our positions even more hardline...... fewer than 30% of Millennials think that democracy is clearly the superior system of government. And that is where we are today. Where are we going to be when unemployment is well over 12% and rising to 15%, the government is routinely running multitrillion-dollar budget deficits, state and local pensions are defaulting, and taxes are high and still rising? And so, yes, when people ask what is in my worry closet, it is the fragmentation of society. As a country, we are going to have to begin to think the unthinkable. We really don’t know how to accurately measure GDP or inflation, and we certainly don’t have any way to statistically measure the improvements in lifestyle over the years. And we will need those tools. As conservatives and Republicans, we are going to have to think about something like universal basic employment, as opposed to universal basic income. ... Voters are going to want politicians to solve their problems. Politicians can’t really solve the problems we already have, let alone the problems of the future, so I expect we are going to see shifts from one political extreme to the other. Let’s be clear, these problems are not all going to show up next year, and most won’t even start to be understood until the early 2020s. |
Sunday, October 29, 2017
Rise of the Creative Class Worked a Little Too Well - Bloomberg
Rise of the Creative Class Worked a Little Too Well - Bloomberg
In his 2002 book, “The Rise of the Creative Class,” Florida both anticipated and helped promote the trends that would come to define the U.S. urban revival in the decade that followed. The basic premise was that by creating a good environment for knowledge workers -- both the science and engineering types and the creative artistic types -- cities could attract the human capital that would bring in businesses and ultimately re-invigorate their economies.
The strategy worked. New tech clusters like Austin, Texas, and aging post-industrial cities like Pittsburgh were able to use the Florida strategy to good effect. Urban economist Enrico Moretti has documented the dramatic economic and social outperformance of U.S. cities and regions that have managed to attract knowledge workers.
Now Florida thinks the strategy might have worked a bit too well. In a new book titled “The New Urban Crisis,” Florida reverses much of his earlier optimism about the potential of knowledge-hub cities. These metropolises, he contends, have now become engines of inequality and exclusion.
... it looks like other countries are doing something different.
New Seed Funds Pursue AI, Hard Tech, And The Midwest - Crunchbase News
New Seed Funds Pursue AI, Hard Tech, And The Midwest - Crunchbase News
...Crunchbase Newsculled through this year’s new fund data to unearth more than 30 interesting new U.S. and Canada-based funds. We identified some areas particularly in vogue with seed-stage newcomers, most of whom share a sense that the window for backing early movers in select areas will only be open a short time.
...The Engine and McCune are two out of several seed investors that’s raised a first-time fund in the past year. We put together a list of several here.
...Crunchbase Newsculled through this year’s new fund data to unearth more than 30 interesting new U.S. and Canada-based funds. We identified some areas particularly in vogue with seed-stage newcomers, most of whom share a sense that the window for backing early movers in select areas will only be open a short time.
...The Engine and McCune are two out of several seed investors that’s raised a first-time fund in the past year. We put together a list of several here.
Friday, October 27, 2017
China’s crackdown on grey rhinos won’t reduce its debt burden, it will only redistribute it | South China Morning Post
China’s crackdown on grey rhinos won’t reduce its debt burden, it will only redistribute it | South China Morning Post
...China is putting grey rhinos – business empires that inflate through debt-fuelled asset acquisitions – on a financial diet.
...The elephant in the room is really China’s annual monetary and credit growth targets that consistently exceed the nominal GDP growth rate. The debt bubble is a consequence of this policy.
...Only people who don’t intend to repay want to borrow again and again.
...By making credit easily available and suppressing household disposable income, monetary expansion is channelled into speculation in asset markets.
...If we benchmark China’s performance against other East Asian economies that have pursued an investment and export development model, China has underperformed both in terms of per capita income and household disposable income share. We should keep in mind that China’s economy is based on sacrificing people’s living standards.
...China is putting grey rhinos – business empires that inflate through debt-fuelled asset acquisitions – on a financial diet.
...The elephant in the room is really China’s annual monetary and credit growth targets that consistently exceed the nominal GDP growth rate. The debt bubble is a consequence of this policy.
...Only people who don’t intend to repay want to borrow again and again.
...By making credit easily available and suppressing household disposable income, monetary expansion is channelled into speculation in asset markets.
...If we benchmark China’s performance against other East Asian economies that have pursued an investment and export development model, China has underperformed both in terms of per capita income and household disposable income share. We should keep in mind that China’s economy is based on sacrificing people’s living standards.
China’s dinosaur, its vast state sector, exists to secure political stability, and stability of the political system is its top priority. The economy, the financial system and everything else must serve the aim of maintaining stability.
Thursday, October 26, 2017
Is the Bubble Economy Set to Burst? | Outside the Box Investment Newsletter | Mauldin Economics
Is the Bubble Economy Set to Burst? | Outside the Box Investment Newsletter | Mauldin Economics
...The Swiss National Bank owns almost 2% of Apple. How much more do they have to buy before they want a board seat? [That’s a joke, gentle reader.] But it does take 66 pages to print a list of all the stocks the SNB owns.)
...The loss of competitiveness changes how macro policy works. Japan has been losing competitiveness against its Asian neighbours. As its population is small, relative to the regional total, lower wages in the region have exerted gravity on its labour market. This is the fundamental reason for the decoupling between the unemployment rate and wage trend.
The mistaken stimulus has the unintended consequences of dissipating real wealth and increasing inequality. American household net worth is at an all-time high of five times GDP, significantly higher than the bubble peaks of 4.1 times in 2000 and 4.7 in 2007, and far higher than the historical norm of three times GDP. On the other hand, US capital formation has stagnated for decades. The outlandish paper wealth is just the same asset at ever higher prices
...While Western central bankers can stop making things worse, only China can restore stability in the global economy. Consider that 800 million Chinese workers have become as productive as their Western counterparts, but are not even close in terms of consumption. This is the fundamental reason for the global imbalance.
...The Swiss National Bank owns almost 2% of Apple. How much more do they have to buy before they want a board seat? [That’s a joke, gentle reader.] But it does take 66 pages to print a list of all the stocks the SNB owns.)
...The loss of competitiveness changes how macro policy works. Japan has been losing competitiveness against its Asian neighbours. As its population is small, relative to the regional total, lower wages in the region have exerted gravity on its labour market. This is the fundamental reason for the decoupling between the unemployment rate and wage trend.
The mistaken stimulus has the unintended consequences of dissipating real wealth and increasing inequality. American household net worth is at an all-time high of five times GDP, significantly higher than the bubble peaks of 4.1 times in 2000 and 4.7 in 2007, and far higher than the historical norm of three times GDP. On the other hand, US capital formation has stagnated for decades. The outlandish paper wealth is just the same asset at ever higher prices
...While Western central bankers can stop making things worse, only China can restore stability in the global economy. Consider that 800 million Chinese workers have become as productive as their Western counterparts, but are not even close in terms of consumption. This is the fundamental reason for the global imbalance.
China’s model is to subsidise investment. The resulting overcapacity inevitably devalues whatever its workers produce. That slows down wage rises and prolongs the deflationary pull...
...Overinvestment means destroying capital. The model can only be sustained through taxing the household sector to fill the gap.
Wednesday, October 25, 2017
Monday, October 23, 2017
Masayoshi Son and his monster $100 billion Vision Fund.- The Term Sheet | Newsletters
The Term Sheet | Newsletters
...
...
| "Those who rule chips will rule the entire world. Those who rule data will rule the entire world," Son said. "That's what people of the future will say." |
| Here's where this gets interesting. Son seems to be industry agnostic, betting on information and data instead. In the deck, there's a slide that outlines the market cap of companies during the Industrial Revolution, including the Pennsylvania Railroad, U.S. Steel, and Standard Oil. The next frontier, he believes, is the data revolution. As people like Andrew Carnegie and John D. Rockefeller were able to drastically accelerate innovation by having a very large ownership over the inputs of the Industrial Revolution, it looks like Son is trying to do something similar. The difference being he's betting on the notion that data is one of the most valuable digital resources of modern day. As Adam Lashinsky noted in this morning's Data Sheet, a $200 billion bet on a single investment theme around Big Data could be entirely crazy ... or brilliant. |
Sunday, October 22, 2017
Is Vladimir Putin Losing His Grip?
https://www.project-syndicate.org/commentary/putin-russia-presidential-election-navalny-by-anders-aslund-2017-10?utm_source=Project+Syndicate+Newsletter&utm_campaign=1931c2f657-sunday_newsletter_22_10_2017&utm_medium=email&utm_term=0_73bad5b7d8-1931c2f657-93854061
...In 2003, Russia’s private sector produced 70% of the country’s GDP. Today, the state sector generates most of the country’s output, squeezing out small and medium-size enterprises, and five big state banks dominate the financial market....
...In the State Duma elections in September 2016, only 47.8% of registered voters turned out. In local elections last month, even fewer bothered to participate, with Vladivostok reporting just 13% turnout...
...Last March, for example, Navalny produced a 50-minute documentary on corruption, revealing that Prime Minister Dmitri Medvedev had used $1.3 billion in bribes to purchase six palaces and two vineyards. The film, watched on YouTube by some 25 million people, effectively killed Medvedev’s political career....
...In 2003, Russia’s private sector produced 70% of the country’s GDP. Today, the state sector generates most of the country’s output, squeezing out small and medium-size enterprises, and five big state banks dominate the financial market....
...In the State Duma elections in September 2016, only 47.8% of registered voters turned out. In local elections last month, even fewer bothered to participate, with Vladivostok reporting just 13% turnout...
...Last March, for example, Navalny produced a 50-minute documentary on corruption, revealing that Prime Minister Dmitri Medvedev had used $1.3 billion in bribes to purchase six palaces and two vineyards. The film, watched on YouTube by some 25 million people, effectively killed Medvedev’s political career....
Saturday, October 21, 2017
Renewable Energy Threatens the World’s Biggest Science Project - Bloomberg
Renewable Energy Threatens the World’s Biggest Science Project - Bloomberg
...“The concept of the need for baseload generation is fading away,”...
...“The concept of the need for baseload generation is fading away,”...
Talking North Korea and Iran With Israel's Rocket Man - Bloomberg
Talking North Korea and Iran With Israel's Rocket Man - Bloomberg ...
...Many involve investment in education. For example, in 2010, there wasn’t a single university in the world where you could get a bachelor’s degree in cybersecurity. Today, almost every Israeli university offers one. High school students can now major in cybersecurity and enter the army with a high level of knowledge.
...Israel’s share of the global market in cyber products and services has reached 10 percent -- a five-fold increase over the past five years. And I read an article in Bloomberg about six months ago estimating our share of global cyber R&D at around 20 percent. So evidently we are doing something right....
...Many involve investment in education. For example, in 2010, there wasn’t a single university in the world where you could get a bachelor’s degree in cybersecurity. Today, almost every Israeli university offers one. High school students can now major in cybersecurity and enter the army with a high level of knowledge.
...Israel’s share of the global market in cyber products and services has reached 10 percent -- a five-fold increase over the past five years. And I read an article in Bloomberg about six months ago estimating our share of global cyber R&D at around 20 percent. So evidently we are doing something right....
Friday, October 20, 2017
Thursday, October 19, 2017
The Staggering Impact of China’s 'Belt and Road' Initiative - The Atlantic
The Staggering Impact of China’s 'Belt and Road' Initiative - The Atlantic
...Unlike the United States and Europe, China uses aid, trade, and foreign direct investment strategically to build goodwill, expand its political sway, and secure the natural resources it needs to grow. ....
...Most of its funding will come in the form of loans, not grants, and Chinese state-owned enterprises will also be encouraged to invest. This means, for example, that if Pakistan can’t pay back its loans, China could own many of its coal mines, oil pipelines, and power plants, and thus have enormous leverage over the Pakistani government. In the meantime, China has the rights to operate the Gwadar port for 40 years.
...For one thing, China is too dependent on its eastern seaboard and the narrow Malacca Strait near Singapore to get goods in and out of its vast territory; for example, over 80 percent of its oil goes through the Strait. So building trade routes through Pakistan and Central Asia makes sense. Belt and Road also helps China invest its huge currency reserves and put its many idling state-owned enterprises to work....
...Scholars who looked at Chinese investment in Africa 1991 to 2010 found that Chinese assistance does not appear to help economic growth, and that inexpensive Chinese imports often displace African local firms, and thus hurt employment in small enterprises. China usually requires donee countries to use Chinese firms to build roads and ports, and so doesn’t employ local firms or train local workers.
In Pakistan, for example, 7,000 Chinese nationals are working on the economic corridor—they bring their own cooks, have separate housing, and don’t interact much with the locals. Relatively few Pakistanis are working on the actual road and rail-building (and thus developing skills)—but Pakistan has deployed nearly 15,000 security personnelto guard the Chinese. Soldiering is not a skill Pakistan needs more of.
... Chinese loans used to have low interest rates around 2.5 percent, they are now creeping up to near 5 percent or more...
...explained that he likes Chinese investment because they “don’t ask too many questions,” and “come with … big money, not small money.”...
...Unlike the United States and Europe, China uses aid, trade, and foreign direct investment strategically to build goodwill, expand its political sway, and secure the natural resources it needs to grow. ....
...Most of its funding will come in the form of loans, not grants, and Chinese state-owned enterprises will also be encouraged to invest. This means, for example, that if Pakistan can’t pay back its loans, China could own many of its coal mines, oil pipelines, and power plants, and thus have enormous leverage over the Pakistani government. In the meantime, China has the rights to operate the Gwadar port for 40 years.
...For one thing, China is too dependent on its eastern seaboard and the narrow Malacca Strait near Singapore to get goods in and out of its vast territory; for example, over 80 percent of its oil goes through the Strait. So building trade routes through Pakistan and Central Asia makes sense. Belt and Road also helps China invest its huge currency reserves and put its many idling state-owned enterprises to work....
...Scholars who looked at Chinese investment in Africa 1991 to 2010 found that Chinese assistance does not appear to help economic growth, and that inexpensive Chinese imports often displace African local firms, and thus hurt employment in small enterprises. China usually requires donee countries to use Chinese firms to build roads and ports, and so doesn’t employ local firms or train local workers.
In Pakistan, for example, 7,000 Chinese nationals are working on the economic corridor—they bring their own cooks, have separate housing, and don’t interact much with the locals. Relatively few Pakistanis are working on the actual road and rail-building (and thus developing skills)—but Pakistan has deployed nearly 15,000 security personnelto guard the Chinese. Soldiering is not a skill Pakistan needs more of.
... Chinese loans used to have low interest rates around 2.5 percent, they are now creeping up to near 5 percent or more...
...explained that he likes Chinese investment because they “don’t ask too many questions,” and “come with … big money, not small money.”...
Wednesday, October 18, 2017
Foxconn and IDG Seeking $1.5 Billion for Car Tech Fund - Bloomberg
Foxconn and IDG Seeking $1.5 Billion for Car Tech Fund - Bloomberg
Foxconn Technology Group and venture firm IDG Capital are seeking to raise a 10 billion yuan ($1.5 billion) fund to seed startups in automotive technologies from self-driving AI to battery development, according to a presentation for investors....
...Chinese internet giants from ride-hailing giant Didi Chuxing to Alibaba Group Holding Ltd. are also getting in on the act, keen to grab a slice of the future market for services and systems, from in-car apps to smart devices that take voice commands in-transit. Baidu Inc., which is racing to get its self-driving cars onto roads by 2021, aims also to amass a 10 billion yuan fund to invest in self-driving projects over the next three years ...
...Beyond robot cars, China has identified new-energy vehicles as a strategic emerging industry and aims to boost annual sales of plug-in hybrids and fully electric cars 10-fold in the next decade.
Foxconn Technology Group and venture firm IDG Capital are seeking to raise a 10 billion yuan ($1.5 billion) fund to seed startups in automotive technologies from self-driving AI to battery development, according to a presentation for investors....
...Chinese internet giants from ride-hailing giant Didi Chuxing to Alibaba Group Holding Ltd. are also getting in on the act, keen to grab a slice of the future market for services and systems, from in-car apps to smart devices that take voice commands in-transit. Baidu Inc., which is racing to get its self-driving cars onto roads by 2021, aims also to amass a 10 billion yuan fund to invest in self-driving projects over the next three years ...
...Beyond robot cars, China has identified new-energy vehicles as a strategic emerging industry and aims to boost annual sales of plug-in hybrids and fully electric cars 10-fold in the next decade.
Tuesday, October 17, 2017
Connecting the Dots - Unemployment Is a Geography Lesson - btbirkett@gmail.com - Gmail
Connecting the Dots - Unemployment Is a Geography Lesson - btbirkett@gmail.com - Gmail
In September—the same month we had 4.2% national unemployment—the US had 6.8 million unemployed people. Of those, 1.7 million had been unemployed for 27 weeks or longer.
An additional 5.1 million Americans were working “part-time for economic reasons.” In other words, they couldn’t find the full-time job they wanted, so they were forced to work part-time.
Add to that the 1.6 million “marginally attached” workers who were available to work, but hadn’t actively looked for a job in the last four weeks.
That means 13.5 million Americans were in some kind of employment distress last month.
https://www.bls.gov/web/metro/twmcort.gif
https://www.bls.gov/web/metro/mmartcr1.gif
Here is the web link: http://www.mauldineconomics.com/connecting-the-dots/unemployment-is-a-geography-lesson
Softbank - Crunchbase Daily: BlueVine, Feedzai, LimeBike, Digital Asset, Spotahome, Appear Here - October 17, 2017 - btbirkett@gmail.com - Gmail
Crunchbase Daily: BlueVine, Feedzai, LimeBike, Digital Asset, Spotahome, Appear Here - October 17, 2017 - btbirkett@gmail.com - Gmail
SoftBank may raise new fundSoftBank, which is already upending Silicon Valley with its existing $93 billion Vision Fund, is in early talks to raise a second and possibly larger fund, according to a Recode report citing unnamed sources. SoftBank CEO Masayoshi Son reportedly wants to raise a supplemental technology investing pool that would complement its existing massive fund. |
Xi Jinping’s quest to revive Stalin’s communist ideology - The Washington Post
Xi Jinping’s quest to revive Stalin’s communist ideology - The Washington Post
...Central to Stalin’s teaching is the idea that the creation of enemies is essential for sustaining the rule of a revolutionary party....
...Xi’s campaign against Western freedoms was revealed in 2013 with the leakingof Document No. 9. The document directed party officials to wage “intense struggle” to root out the “false trends” of Western constitutional democracy, universal values of human rights, civil society, and the Western concept of a free press among other evil weeds....
...It’s more that the creation of an endless field of ideological villains is considered by Xi to be key to the party’s success. Crushing them and others like them give the revolution its meaning....
...Central to Stalin’s teaching is the idea that the creation of enemies is essential for sustaining the rule of a revolutionary party....
...Xi’s campaign against Western freedoms was revealed in 2013 with the leakingof Document No. 9. The document directed party officials to wage “intense struggle” to root out the “false trends” of Western constitutional democracy, universal values of human rights, civil society, and the Western concept of a free press among other evil weeds....
...It’s more that the creation of an endless field of ideological villains is considered by Xi to be key to the party’s success. Crushing them and others like them give the revolution its meaning....
Sunday, October 15, 2017
Puerto Rico's Death Spiral - Patrick Cox's Tech Digest | Mauldin Economics
Patrick Cox's Tech Digest | Mauldin Economics
Puerto Rico was already in an economic death spiral. Hurricane Maria adds energy to that vortex.
Pharmaceutical companies were attracted to Puerto Rico at first by tax incentives for US-based drug manufacturers. But those incentives expired long ago. Taxes are sure to go up as the island struggles to pay pensions it can’t afford and recover from the storm. At the same time, skilled tax-paying labor is shrinking due to out-migration.
I don’t think that pharmaceutical production levels will be restored to pre-hurricane levels. This will further reduce tax revenues, making the pension crisis worse.
All of this was foreseeable. Much of this was preventable. It was no surprise that a big hurricane would hit Puerto Rico. We knew it was coming even if we didn’t know when it would arrive. We also knew that the island’s demographic and political problems would result in a pension crisis.
Puerto Rico is not unique in this. It’s just ahead of the curve. Most American states are headed for the same demographic cliff. California, Illinois, New Jersey, and Kentucky are leading the charge.
The World Turned Upside Down - Maudlin VIX
http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/171014_TFTF.pdf
...Doug warns that a 2% or 3% move down in the markets could cause short covering in the VIX that could quickly spiral out of control. Not unlike the “portfolio protection” trade that brought about the 1987 crash.
...could lead to an end of the virtuous cycle – if ETFs start to sell, who is left to buy?
...Doug warns that a 2% or 3% move down in the markets could cause short covering in the VIX that could quickly spiral out of control. Not unlike the “portfolio protection” trade that brought about the 1987 crash.
...could lead to an end of the virtuous cycle – if ETFs start to sell, who is left to buy?
FDI to Zimbabwe down 30 percent to US$295 million in 2016 | The Financial Gazette
FDI to Zimbabwe down 30 percent to US$295 million in 2016 | The Financial Gazette
...Most investors experienced delays of up to three or four weeks in the remittance of proceeds by banks despite the fact that the settlement of dividends and investment proceeds is on Priority List 1 of the Reserve Bank of Zimbabwe’s foreign payments plan. FinX
...Most investors experienced delays of up to three or four weeks in the remittance of proceeds by banks despite the fact that the settlement of dividends and investment proceeds is on Priority List 1 of the Reserve Bank of Zimbabwe’s foreign payments plan. FinX
Friday, October 13, 2017
New food production technologies - Maudlin
http://www.mauldineconomics.com/connecting-the-dots/souped-up-food-production-the-next-big-thing#
Outside the Box - Hoisington Quarterly Review and Outlook, Third Quarter 2017 - btbirkett@gmail.com - Gmail
Outside the Box - Hoisington Quarterly Review and Outlook, Third Quarter 2017 - btbirkett@gmail.com
...What is this fetish about limiting immigration?”
I mean, let’s face it, you actually have to have workers working productively for the economy to grow; but oops, our fertility rate has dropped below replacement rate and we’re a decade away from becoming Europe and then Japan, demographically. One shining characteristic that sets the US apart from the rest of the world is that talented people want to come here, and we should be trying to figure out how to get more of them. The numbers of jobs and businesses that immigrants create in this society is huge and thoroughly documented. And while clamping down on immigration may be politically expedient, it is awful economics and terrible for future growth. And without growth, the United States does not stand a snowball’s chance in Hades of even remotely coming close to balancing its future budgets.- Gmail
...What is this fetish about limiting immigration?”
I mean, let’s face it, you actually have to have workers working productively for the economy to grow; but oops, our fertility rate has dropped below replacement rate and we’re a decade away from becoming Europe and then Japan, demographically. One shining characteristic that sets the US apart from the rest of the world is that talented people want to come here, and we should be trying to figure out how to get more of them. The numbers of jobs and businesses that immigrants create in this society is huge and thoroughly documented. And while clamping down on immigration may be politically expedient, it is awful economics and terrible for future growth. And without growth, the United States does not stand a snowball’s chance in Hades of even remotely coming close to balancing its future budgets.- Gmail
Trump Moves to Undo Obamacare After Repeal Drive Fails on Hill - Bloomberg
Trump Moves to Undo Obamacare After Repeal Drive Fails on Hill - Bloomberg
...About 83 percent of the 12.2 million people in the Obamacare marketplace receive subsidies, according to the Centers for Medicare and Medicaid Services. Insurers have told many states they will need to charge higher premiums next year to offset uncertainty around the subsidy payments.
...About 83 percent of the 12.2 million people in the Obamacare marketplace receive subsidies, according to the Centers for Medicare and Medicaid Services. Insurers have told many states they will need to charge higher premiums next year to offset uncertainty around the subsidy payments.
Costs have also climbed for those who don’t qualify for assistance. The average monthly premium not including subsidies for a family of four with $60,000 in annual income was $1,090, or $13,080 a year for a midlevel “silver” plan, according to a 2016 report from the U.S. Department of Health and Human Services...
Thursday, October 12, 2017
Monday, October 9, 2017
Sunday, October 8, 2017
Jobs Report: Where Did All the Restaurant Workers Go? - Bloomberg
Jobs Report: Where Did All the Restaurant Workers Go? - Bloomberg
...TGI Fridays and Applebee’s and their ilk are struggling as the American middle class and its enormous purchasing power withers away in real time, with the country’s population dividing into a vast class of low-wage earners who cannot afford the indulgence of sit-down meal of Chili’s Mix & Match Fajitas and a Coke, and a smaller cluster of high-income households for whom a Jack Daniel’s sampler platter at Fridays is no longer good enough...
...TGI Fridays and Applebee’s and their ilk are struggling as the American middle class and its enormous purchasing power withers away in real time, with the country’s population dividing into a vast class of low-wage earners who cannot afford the indulgence of sit-down meal of Chili’s Mix & Match Fajitas and a Coke, and a smaller cluster of high-income households for whom a Jack Daniel’s sampler platter at Fridays is no longer good enough...
Friday, October 6, 2017
The millennial Walt Disney wants to turn empty stores into Instagram playgrounds
| The millennial Walt Disney wants to turn empty stores into Instagram playgrounds |
| Maryellis Bunn, the 25-year-old co-founder of the Museum of Ice Cream, says retail is dead and experiences are the future. |
| By Anna Wiener and Jake Stangel | New York Magazine • Read more » |
Monday, October 2, 2017
This Week in Geopolitics - The Odd Calm of EU Officials - btbirkett@gmail.com - Gmail
This Week in Geopolitics - The Odd Calm of EU Officials - btbirkett@gmail.com - Gmail
The Odd Calm of EU Officials
Imagine the following scenario: Texas votes to secede from the United States, sparking bitter negotiations between Austin and Washington. A neo-Nazi party wins seats in the California legislature. Cook County, home to Chicago, threatens to break away from Illinois to form its own state, while government officials, worried about losing such an economically vibrant region, furiously try to prevent the election from taking place. The federal government, meanwhile, vows to suspend North Carolina’s voting rights in Congress simply because it didn’t approve of its behavior. It considers doing likewise for Arizona.
In such a scenario, one might rightly conclude that something is terribly wrong with the United States.
The thing is, this is pretty much what is happening in Europe. The United Kingdom has voted to leave the European Union, and the negotiations over its departure are unpleasant, to put it mildly. Alternative for Germany, a party whose members have been compared to neo-Nazis, has won a surprising number of seats in Germany’s parliament. Catalonia, which is home to Barcelona, a large and economically vital city in Spain, held an independence referendum Oct. 1, something the government in Madrid has tried to stop. (Early reports indicate physical altercations between regional and national forces.) And the European Commission has threated to suspend Poland’s voting rights over actions taken by the Polish government, and has previously attacked the Hungarian government.
Putting Europe in Perspective
This is not meant to diminish the problems of the United States, nor is it meant to imply that these problems are perfectly analogous to Europe’s. The EU is a treaty organization; the US is a closely knit federation. Disintegration would hurt a singular country like the US more than it would a collection of singular states. Still, the degree of fragmentation, the mutual anger between member states and the central apparatus, and the separatism in Spain (the most significant of several such movements) seemed extremely serious to me.
I simply want to put Europe in perspective. For all its problems, the United States isn’t about to lose its second-largest economy. It isn’t revoking voting rights from state legislatures. It isn’t grappling with a legitimate secessionist movement. It doesn’t have bona fide neo-Nazis winning seats in its largest and most prosperous state. It may be a tough time to be American, but it is an especially tough time to be European.
But as discovered last week in Europe, this is not how European officials see the situation. They regard the problems as serious but not existential. They believe these problems can be managed… and point to economic growth in several of its member states as evidence of their management.
...European officials don’t answer to constituencies. They are insulated from the pressure applied to a member state’s national representative. Their insulation can calm and clarify matters for them, but it can just as easily detach them from reality. Either way, their tranquility over serious issues—secession and dissolution—seems odd.
Sunday, October 1, 2017
Global Retirement Reality (Europe) - Maudlin
http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/170930_TFTF.pdf
...keep an old trader’s slogan in mind: “That which cannot go on forever, won’t.” Or we could say it differently: An unsustainable trend must eventually stop...
...This week the spotlight will be on Europe....
...keep an old trader’s slogan in mind: “That which cannot go on forever, won’t.” Or we could say it differently: An unsustainable trend must eventually stop...
...This week the spotlight will be on Europe....
UK Time Bomb
The WEF study shows that the United Kingdom presently has a $4 trillion retirement savings shortfall, which is projected to rise 4% a year and reach $33 trillion by 2050.... 2015 OECD study (mentioned here) found that across the developed world, workers could, on average, expect governmental programs to replace 63% of their working-age incomes. Not so bad. But in the UK that figure is only 38%, the lowest in all OECD countries....
...(Sidebar: low or negative rates in those countries [Switzerland and the UK ... Denmark, the Netherlands, Sweden, Poland, and Hungary] make it almost impossible for their private pension funds to come anywhere close to meeting their mandates. And many of the funds are by law are required to invest in government bonds, which pay either negligible or negative returns.)
...Pay-As-You-Go Woes
The European nations noted above have nowhere near the crisis potential that the next group does: France, Belgium, Germany, Austria, and Spain are all pay-as-you-go countries (PAYG). That means they have nothing saved in the public coffers for future pension obligations, and the money has to come out of the general budget each year. The crisis for these countries is quite predictable, because the number of retirees is growing even as the number of workers paying into the national coffers is falling.
... for the US, because we control our own currency and can debase it as necessary to keep the government afloat. Social Security checks will always clear, but they may not buy as much. Spain’s version of Social Security doesn’t have that advantage as long as the country stays tied to the euro. That’s one reason we must recognize the potential for the Eurozone to eventually spin apart. ...
...The problem that the European economies have is that for the most part they are already massively in debt and have high tax rates. And they can’t print their own currencies.
...In this next chart, note the line running through each of the countries, showing their debt as a percentage of GDP. Italy’s is already over 150%. And this is a chart based mostly on 2006 and earlier data. A newer chart would be much uglier.
... when Franklin Roosevelt created Social Security for people over 65 years old, US life expectancy was about 56 years. If the retirement age had kept up with the increase in life expectancy, the retirement age in the US would now be 82.
...When the children’s books written by Dr. Seuss are considered by some to have been written by a white racist and are therefore deemed unacceptable to be in a public library, you know the quality of civil discourse has spiraled downward.
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