Monday, December 5, 2016

Space Oddity: U.S. Astronaut Buzz Aldrin Evacuated From South Pole, Being Treated in New Zealand

From Reuters:
In what can only be described as a space oddity, former astronaut Buzz Aldrin is being cared for in a New Zealand hospital by Dr David Bowie after being evacuated from the South Pole.
In a truly remarkable coincidence, Aldrin's doctor shares the name of the late British singer whose greatest hits included songs such as "Starman" and others about space travel that could easily have been penned for the great American astronaut.

The coincidence certainly tickled Aldrin's manager, Christina Korp, who posted a photo on Twitter of Aldrin and Dr Bowie together in a Christchurch hospital.

"Thank heaven @TheRealBuzz's doctor is David Bowie," Korp said on Twitter. "You can't make this stuff up."

Bowie, the singer and actor, released his smash hit "Space Oddity" about a fictional astronaut who loses communication with ground control in 1969, just days before Neil Armstrong and Aldrin became the first humans to set foot on the moon.

Their moonwalk, part of the Apollo 11 lunar landing, was watched by a then-record television audience of 600 million people worldwide....MORE
Here's a tweet from @TheRealBuzz:
Here's the Official vid:

The cover by Commander Chris Hadfield on board the International Space Station:

And Commander Hadfield's thoughts on Bowie's passing:

What Happens Next In Italy: Here Is Goldman's Take

Sorry, that may not be the correct flow chart.
I'll try again. From ZeroHedge:
While the market overcame its initial scare following yesterday's counter-establishment Italian referendum vote, and European stocks proceeded to not only make up all losses, but soar in the overnight session by the most since Trump's presidential victory, what happens next in Italy is largely unknown. What follows are Goldman's snap thoughts on the Italian next steps. 
First, a quick recap of what has happened in yesterday's referendum in which many more Italians than expected turned up to reject the proposed reforms, leading PM Renzi to announce his resignation later today. The odds of a general election have risen from one-in-five to one-in four, according to Goldman. Despite yesterday's outcome, Renzi remains the most popular politician on the centre-left. More importantly, the outcome of the vote lowers the chances of a market-driven solution for the ailing Italian banks, and in turn increases the likelihood of a State-led restructuring Goldman notes 
Here are the details:
In a national confirmative referendum held yesterday, Italian voters rejected a Constitutional reform bill sponsored by the coalition government of Mr Renzi and passed by Parliament in April. The referendum was called because the bill had failed to receive the quorum of 2/3 of MPs in its final reading.
The outcome of the referendum was in line with opinion polls in the run-up to the vote. These had been suggesting that the ‘Vote No’ side would win by some distance. Two elements are new, however (all numbers based on quasi-final vote count):
At 59.1%, the percentage of voters rejecting the reform bill was 5 percentage points higher than projected by opinion polls going into the referendum (55%). This outcome represents a much starker victory for the ‘Vote No’ camp than generally envisaged. Goldman assumed that the odds favoured a ‘Vote No’ win only marginally (55%), and that the gap between the two sides would be small, within 10 percentage points rather than the realised 20. 
The voter turnout was 10 percentage points higher than projected by pollsters (65.5% vs. 55%), with close to 33 million people casting their vote (19.4 million voted ‘No’ and 13.4 million ‘Yes’). By comparison, the turnout in the UK Brexit vote was 72.2% (corresponding to 33.6 million people) while in the Italian 2006 referendum on Constitutional reforms, which also saw the amendments being rejected, the turnout was 52.3%.
A first analysis of the vote breakdown suggests that the electorate largely acted on political priors. Specifically:
  • In polling districts where opposition right-wing parties and the 5 Star Movement gathered higher consensus back in 2013 (Southern Italy, alongside some areas in the North), the ‘Vote No’ camp has achieved its best results, reaching as much as 70% of the vote share.
  • In the South, the ‘No’ vote outnumbered the ‘Yes’ by a remarkably ample margin (more than 40%) in Sicily and Sardinia, where the 5 Star Movement managed to outperform the Democratic Party in the 2013 general election.
  • The constitutional reform has been largely rejected also in the North-East of the country, a stronghold of the Euro-sceptical Northern League. The 'Vote No' camp, for instance, obtained 62% of the vote in Veneto, where Lega won roughly one-third of opposition votes in the 2013 general election.
  • Conversely, the regions where the Democratic Party performed better at the 2013 elections – such as Emilia Romagna and Tuscany, where it won more than 40% of votes – were those experiencing a victory of the 'Vote Yes’ camp.
  • The relationship between the share of youth unemployment by polling region and No share of the vote is strikingly positive (see Exhibit 2). This is a result that will carry a large weight in the next general elections, as well as those in other European countries. The general impression here is that the youth and the disadvantaged are rebelling against the establishment, even when its policies bring economic benefits, albeit unequally distributed (incidentally, the protests against the ECB policies of low rates and QE go in the same direction).
Exhibit 1: The percentage of voters rejecting the reform bill was 5% higher than projected by opinion polls 

Here's Google's Sidewalk Labs' Pitch To Insert Itself Into America’s Urban Transportation Infrastructure (GOOG)

From Buzzfeed, Oct. 7:

Here’s Alphabet’s Pitch To “Smart”-ify Your City
Google’s sister company Sidewalk Labs wants to insert itself into America’s urban transportation infrastructure. Here are the documents that show how it could happen. 
In April, a team of representatives from Sidewalk Labs — a subsidiary of Alphabet, which is also Google’s parent company — visited Columbus, Ohio, to pitch city officials on a sprawling, ambitious plan to overhaul the city’s transportation infrastructure.

Sidewalk proposed managing and expanding the city’s transportation data on transit routes, passengers, parking spaces, cars, and more. In the process, Sidewalk promised to give the city “new superpowers” and make it more accessible.

By mid-year, Sidewalk Labs had pitched at least six other tech-hungry cities — San Francisco, Austin, Pittsburgh, Denver, Kansas City, and Portland — on the same bold proposal.

In Columbus, the company’s representatives said, two systems called Flow and Link could “pinpoint the causes of congestion,” reduce the “emissions and distracted driving that results from circling for parking,” “encourage ride-sharing,” and provide “ultra-fast gigabit WiFi.” That could be a significant improvement in a city where an estimated 82% of commuters drive to work. And though Sidewalk’s presentation does not name the final cost of the systems — it’d depend on a range of factors — it claims that the new approach could ultimately return a profit to Columbus.

But outsourcing these traditionally municipal concerns to a private company — and a high-profile technological innovator, at that — would be a stark change that could have implications well beyond central Ohio.

Those promises and more are detailed in a set of documents BuzzFeed News obtained through a freedom-of-information request to Columbus. Among the contents:
  • Sidewalk Labs’ slide decks presented to Columbus in the April meeting.
  • A proposed “memorandum of understanding” that Sidewalk sent to city officials.
  • A spreadsheet that Sidewalk shared to help the city estimate potential revenues and costs associated with the company’s proposal.
Some excerpts from these documents have been published by other outlets, including The Guardian and Recode. But until now the documents have not been reproduced in full. You can find them at the bottom of this post.

Sidewalk Labs targeted its pitch to cities competing for the Department of Transportation’s Smart City Challenge. In June the DOT named Columbus the competition’s winner, beating the six other finalists for the $40 million prize.

Columbus and Sidewalk Labs haven’t reached any formal agreements, according to Jeff Ortega, assistant director for the city’s Department of Public Service.

“At this point, discussions are centered around whether or not the company’s ‘Flow’ platform can help link health providers and residents in disadvantaged neighborhoods to facilitate transportation options,” Ortega told BuzzFeed News this week. “At this point, if Sidewalk Labs were to be engaged, the engagement would only be specific to this purpose.”

Sidewalk Labs declined to comment specifically on its pitch to Columbus. But in an op-ed published this summer, Daniel Doctoroff, the company’s CEO, wrote that its “conversations with city officials and urban planners” around the country “taught us many important lessons.” He continued: “Our role during these talks was to learn what the public sector is already trying, and discuss ways to help those trials become successful.”

The pitch
Transportation is rapidly becoming consumerized,” the pitch deck begins. To keep pace, “cities must innovate with the private sector.”

At the heart of the proposed collaboration is Sidewalk’s data platform, which would integrate data from city records, digital sensors, and “third-party data providers” such as Google Maps, Waze (the navigation app acquired by Google in 2013), Uber, and Lyft....

Private Equity Embraces the Return of the Quick Flip

For some reason I still see Warren Buffet's 2008 Shareholders Letter when someone mentions the term "Private Equity":
...Some years back our competitors were known as “leveraged-buyout operators.” But LBO became a bad name. So in Orwellian fashion, the buyout firms decided to change their moniker. What they did not change, though, were the essential ingredients of their previous operations, including their cherished fee structures and love of leverage.

Their new label became “private equity,” a name that turns the facts upside-down: A purchase of a business by these firms almost invariably results in dramatic reductions in the equity portion of the acquiree’s capital structure compared to that previously existing. A number of these acquirees, purchased only two to three years ago, are now in mortal danger because of the debt piled on them by their private-equity buyers. Much of the bank debt is selling below 70¢ on the dollar, and the public debt has taken a far greater beating. The private- equity firms, it should be noted, are not rushing in to inject the equity their wards now desperately need. Instead, they’re keeping their remaining funds very private...
From Forbes:
When private equity giant Blackstone sold luxury hotel group Strategic Hotels & Resorts to Chinese insurance group Anbang for around $6.5 billion earlier this year, many observers took the deal as further evidence of China’s mad scramble for foreign assets, especially US real estate.

But the deal was also the start of another scramble that investment bankers across all sectors stateside have begun to notice: the return of the quick flip.

In Strategic Hotels’ case, Blackstone took the company private in December 2015 for about $6 billion, and then sold the group again in March – meaning the firm cleared about $500 million in something close to 12 weeks.

Private equity has long battled the caricature that they are mere speculators. As the industry has matured there has been ever more talk of more farsighted investment strategies. In February, for instance, The Carlyle Group announced it had raised more than $3.6 billion for a special long-dated fund aimed at holding companies for at least double the length of the rest of its conventional funds.
But Mergermarket data show the current market environment is making it hard to resist the option of a speedy – and relatively juicy -- exit.

So far this year, 24 private equity firms have exited platforms after holding them for less than two years. In 2015, there were 46 such exits, a nearly 50% increase from 2014, when there were 33. Frequently, the portfolio companies in question were traded to other sponsors....MORE

'Fake News' Site Threatens Washington Post With Real Lawsuit

From Naked Capitalism:

We Demand That The Washington Post Retract Its Propaganda Story Defaming Naked Capitalism and Other Sites and Issue an Apology
As the lawyers like to say, res ipsa loquitur. Please tweet and circulate this letter widely. You will notice that our attorney Jim Moody is a seasoned litigator who has won cases before the Supreme Court. He has considerable experience in First Amendment and defamation actions. Past high profile representations include Westomoreland v. CBS and defending Linda Tripp.

I also hope, particularly for those of you who don’t regularly visit Naked Capitalism, that you’ll check out our related pieces that give more color to how the fact the Washington Post was taken for a ride by inept propagandists, particularly our introduction to our spoof site, which uses the PropOrNot project as an example of sorely deficient propaganda and shows where it went wrong, or the humor site itself. Be sure not to miss its FAQ.

We have another post today that describes how the few things that are verifiable on the PropOrNot site don’t pan out, as in the organization is not simply a group of inept propagandists but also appears to deal solely in fabrications. If the site is flagrantly false with respect to things that can be checked, why pray tell did the Washington Post and its fellow useful idiots in the mainstream media validate and amplify its message? Strong claims demand strong proofs, yet the Post appeared content to give a megaphone to people who make stuff up with abandon. No wonder the members of PropOrNot hide as much as they can about what they are up to; more transparency would expose their work to be a tissue of lies...MORE 
Also at Naked Capitalism:

We Launch PropOrNot.Org To Identify Inept Propagandists and School Amplifiers Like The Washington Post on How to Spot Them

PropOrNot’s Grandiose Fabrications

Thanks SO MUCH For a Speedy and Very Successful Emergency Fundraiser to Fight Independent News Site Blacklists

And apologies to Naked Capitalism for the "Fake News Site" in the headline, I think I was channeling the New York Post's style.
Or something. 

Media: Politico Co-founder’s New Media Startup is Eyeing $10,000 Subscriptions — Eventually

Some people will be able to afford the news and some won't.
It's a model that's been talked about for a while.
From re/code:
We still don’t know a lot about Axios, the yet-to-launch media startup founded by Politico co-founder and former CEO Jim VandeHei. But we do know it’ll be expensive.

VandeHei is envisioning subscribers paying $10,000 or more for some of the startup’s news and analysis, he told Kara Swisher onstage at Recode’s Evening with Code Media on Wednesday night in New York City.

The one-time Washington Post journalist said he can’t imagine being “super intrigued with a subscription less than $10,000.” He declined to offer more specifics. 

The company’s coverage will center on business, technology, politics and media. It will also focus, as many media companies do, on putting content in front of readers on the social networks where they are already spending a lot of time. Specifically, VandeHei spoke highly of Snapchat’s media platform, called Discover.

VandeHei also stressed that Axios will value brevity in its coverage over length for length’s sake.
“Journalists are writing for journalists. That’s the biggest problem in media right now,” he said.
“People don’t want the pieces we’re writing,” he added. “They’re too damn long.”

At launch, Axios will be free to readers and supported by advertising. Two to three years down the line, VandeHei is targeting around 50 percent of revenue from advertising, and the other half from subscriptions and events. That’s a ratio he accomplished in his 10-year run at Politico, where some Politico news is free while some falls under expensive Politico Pro subscriptions....MORE

BlackRock: "What we talk about when we talk about TIPS"

BlackRock owns the iShares brand of ETF's including the largest TIPS ETF.

From the BlackRock blog:
Matt explains why investors should look at Treasury Inflation Protected Securities (TIPS) and TIPS ETFs now, and what the differences are between the two. 

Inflation expectations have been on the rise since before the U.S. election, but markets are now more convinced of higher inflation to come due to President-elect Trump’s talk of fiscal stimulus and tax cuts. Measured by breakevens in the Treasury Inflation Protected Securities (TIPS) market, inflation expectations for the next 10 years rose to 1.93%, the highest level since the summer of 2015 (source: Bloomberg data, as of 11/18/2016). The long decline in inflation seems to be turning, as the Consumer Price Index (CPI) climbed 1.6% year-over-year, the most in two years (source: Bureau of Labor Statistics, as of 11/18/2016). This changing environment has piqued investor interest in TIPS, and in turn, TIPS ETFs.

As the name implies, Treasury Inflation Protected Securities can help protect investors against inflation, while also providing the potential for income. The payments on TIPS are adjusted according to changes in the CPI. That means the coupon and principal payments of TIPS increase with inflation and fall with deflation.

TIPS are also valued by investors for their historically low correlation with other asset classes, which can make them a good addition to a diversified portfolio.

Among the ways to buy exposure to TIPS is directly through the government (the government sells them on or through an ETF. But here are two key points to understand before deciding whether TIPS or TIPS ETFs are right for you:

Tax implications
For a taxable U.S. investor, both the bond coupon and the inflation adjustment of TIPS are taxed as income. But the majority of the inflation adjustment is paid when TIPS mature. This creates what has been coined “phantom income”, income that is taxed in the current period but not received until a later period.

iShares offers two ETFs that invest in the U.S. TIPS market: iShares TIPS Bond ETF (TIP) and iShares 0-5 Year TIPS Bond ETF (STIP). These funds address the phantom income issue by paying out a monthly distribution that includes both the coupon income coming from the underlying TIPS held in the funds, as well as the principal adjustment for inflation. The income that an investor is taxed on in the current period is received in the current period. But paying out both coupon income and realized inflation has an interesting impact on the amount of income a TIPS ETF distributes, which leads me to my second point.

Distributions will vary
Coupon income on TIPS is generally positive, but the inflation adjustment can be positive or negative depending upon changes in the CPI. Investors should be aware that during periods of high inflation, the distribution on a TIPS ETF will likely rise, but during periods of deflation, the distribution will likely fall. It can even fall to zero if deflation is strong enough—this happened in November 2016 with the iShares TIPS Bond ETF. It is important to keep in mind that the distributions will fluctuate over time.

Below is a chart that shows the historical CPI levels and distribution yields for the iShares TIPS Bond ETF (TIP). A change in CPI doesn’t impact the inflation accrual for a TIPS bond until two months later....MORE

Sunday, December 4, 2016

No, Google's Sidewalk Labs Doesn't Want To Take Over Urban Transit. Yet. (GOOG)

No, they have bigger plans.
There is big money and big politics behind this stuff and this June 2016 article is a good primer on what's coming.

From CityLab:
No, Alphabet Isn't Conspiring to Take Over Public Transit in Columbus
Contrary to a recent article, “smart” transportation technologies like those from Sidewalk Labs aren’t really a big secret. Plus, cities want them.

Google drives about a third of all internet traffic and has the best digital map of the world. Every day, its databases process billions of thoughts and queries, secret and banal, typed into search engines and email subject lines. Among other things, Alphabet Inc., Google’s holding company, builds robots of formidable intelligence. Its technologies will soon be chauffeuring us from points A to B.
Reading about Alphabet’s hush-hush projects, interconnected products, and disruptions both welcome and unwelcome, wary minds may well wonder if its ambitions might include world domination. An article published Monday in the Guardian, about an Alphabet subsidiary’s work with the finalists of the U.S. DOT’s $50 million Smart Cities Challenge, seemed to lean toward that suspicion, starting with a fairly alarmist headline and opening sentence:
Sidewalk Labs, a secretive subsidiary of Alphabet, wants to radically overhaul public parking and transportation in American cities, emails and documents obtained by the Guardian reveal.
It goes on to describe some of the services which would usher in this “radical overhaul,” as gleaned from the obtained documents: a platform that allows low-income bus riders to apply public subsidies to ride-sharing services; an app that unifies payment and service information for all modes of transit; public wi-fi kiosks with remote sensing capabilities; and “virtualized parking,” which would use camera-equipped vehicles to scan for empty spaces cities could sell on a virtual parking market.
As the article explains, all of the functions described here are proposed elements of Flow, the transportation-data collection and analysis platform. Flow is one of Sidewalk Labs’ two current, public products (the other is the aforementioned line of kiosks, some of which are in use now in New York City). Flow is currently being offered first to Columbus, Ohio, which won the U.S. DOT’s Smart Cities Challenge last week. The Guardian article goes on to examine a sample contract that describes the terms and conditions required of Columbus by Sidewalk Labs:
Cities like Columbus would be obliged to bring parking signs up to date, re-train enforcement officers and share parking and ridership information with Sidewalk in real time. The company also wants cities to share public transport data with ride-sharing companies, allowing Uber to direct cars to overcrowded bus stops.
All these conditions could mean expensive upgrades to existing technology. “Not every city would be ready to do that,” says [Alexei Pozdnoukhov, director of the Smart Cities Research Center at the University of California at Berkeley]. “Plus, you’ve got a variety of transit operators. Small ones might have to change their entire payment systems.”
Overall, the article gives the impression that Flow is some kind of top-down planning regime, conceived in secret by Sidewalk Labs and foisted on cities like Columbus. It makes it sound conspiratorial. But that isn’t really the case.

First, the Guardian article does not mention that Flow was announced in March, in partnership with the U.S. Department of Transportation, as technology offered for free by Sidewalk Labs to the Smart Cities Challenge victor. The exclusive documents obtained by the Guardian were, according to Sidewalk Labs, pitch materials shared with finalist cities that modeled some of the possible functions of Flow. Since the platform has still yet to be deployed in any city, the specific elements of Flow remain a work in progress.

This is not to say that the Guardian’s facts and images came out of nowhere. Flow will, in fact, aim to “increase the efficiency of roads, parking, and transit use,” says Anand Babu, COO of Sidewalk Labs. It will provide real-time transportation information to cities, and it “could be used to improve and plan public transportation, guide drivers directly to parking, or point commuters to shared mobility options they can use when public transportation is not an option.”

But the final product will ultimately be a result of a back-and-forth process with whatever city adopts it first—not a grand transit “fix,” ordained in the shadows. Sidewalk Labs’ CEO Dan Doctoroff writes in Co.Design that the company worked with the Smart Cities finalists to refine the functions of Flow. According to a number of officials from those cities, that is true. Sidewalk Labs reps flew to meet with each of the seven finalist cities to discuss how their services might work there. According to attendees, those meetings resembled meetings with any other vendor angling to sell young technology to a government: There was give and take....MORE

"Social Media Is Killing Discourse Because It’s Too Much Like TV"

From MIT's Technology Review, Nov. 29:
If I say that social media aided Donald Trump’s election, you might think of fake news on Facebook. But even if Facebook fixes the algorithms that elevate phony stories, there’s something else going on: social media represents the ultimate ascendance of television over other media.

I've been warning about this since November 2014, when I was freed from six years of incarceration in Tehran, a punishment I received for my online activism in Iran. Before I went to prison, I blogged frequently on what I now call the open Web: it was decentralized, text-centered, and abundant with hyperlinks to source material and rich background. It nurtured varying opinions. It was related to the world of books.

Then for six years I got disconnected; when I left prison and came back online, I was confronted by a brave new world. Facebook and Twitter had replaced blogging and had made the Internet like TV: centralized and image-centered, with content embedded in pictures, without links.
Like TV it now increasingly entertains us, and even more so than television it amplifies our existing beliefs and habits. It makes us feel more than think, and it comforts more than challenges. The result is a deeply fragmented society, driven by emotions, and radicalized by lack of contact and challenge from outside. This is why Oxford Dictionaries designated “post-truth” as the word of 2016: an adjective "relating to circumstances in which objective facts are less influential in shaping public opinion than emotional appeals."

Neil Postman provided some clues about this in his illuminating 1985 book, Amusing Ourselves to Death: Public Discourse in the Age of Show Business. The media scholar at New York University saw then how television transformed public discourse into an exchange of volatile emotions that are usually mistaken by pollsters as opinion. One of the scariest outcomes of this transition, Postman wrote, is that television essentially turns all news into disinformation. "Disinformation does not mean false information. It means misleading information—misplaced, irrelevant, fragmented or superficial information—information that creates the illusion of knowing something but which in fact leads one away from knowing ... The problem is not that television presents us with entertaining subject matter but that all subject matter is presented as entertaining.” (Emphasis added.) And, Postman argued, when news is constructed as a form of entertainment, it inevitably loses its function for a healthy democracy. "I am saying something far more serious than that we are being deprived of authentic information. I am saying we are losing our sense of what it means to be well informed. Ignorance is always correctable. But what shall we do if we take ignorance to be knowledge?"

The problem with today’s Internet, driven less by text and hypertext (hyperlink-enriched text), is that it not only shares many of TV’s ills but also creates new ones. The difference between traditional television and the form of TV that has reincarnated as social media is that the latter is a personalized medium. Traditional television still entails some degree of surprise. What you see on television news is still picked by human curators, and even though it must be entertaining to qualify as worthy of expensive production, it is still likely to challenge some of our opinions (emotions, that is).

Social media, in contrast, uses algorithms to encourage comfort and complaisance, since its entire business model is built upon maximizing the time users spend inside of it....MORE

"Inside the weirdly calming world of farming and truck simulators"

From NewScientist:
Harvesting takes me an hour. That’s an hour in which I drive at little more than walking pace from one end of a field to the other and back again 20 or 30 times. It’s not the most fun I’ve had in a video game, but then I do need the money.

Farming Simulator 17, released on 25 October, is the latest game in a series made by Giants Software in Schlieren, Switzerland. Players start out with little land and few machines and must plant, tend and harvest crops – or raise livestock – to earn money to buy more land and more machines.
Running a successful farm can get your goat. You need to carefully manage your spending on fields, fuel and fertiliser to make a profit. You have to decide when trading in your beaten up tractor for a new one makes more sense than paying for repairs. There are loans to consider and investments to monitor. But at its heart, Farming Simulator is a game about driving heavy machinery up and down in straight lines. And there’s a zen-like buzz to the monotony.

For many, that’s a bigger draw than the frantic action of a shooter. Most games are all about winning or losing, says Mason, who plays to unwind. “When I play Farming Simulator there is no losing – it’s just me driving a tractor.”

Farming Simulator games often top sales charts in the US and Europe. And they are not the only popular video games about farming. Games like Harvest Moon and Stardew Valley give players idyllic cartoon farmsteads to run. And at its peak, Zynga’s 2009 Facebook hit FarmVille hooked several million people into a daily routine of tending their crops of carrots, albino pineapples and watermelon babies. But FarmVille never let you spend hours behind the wheel of a Holmer Terra Felis 2 eco sugar-beet loader.

Racing games often let you cruise around in pixel-perfect replicas of real-life vehicles, boasting licensing deals with car makers. Last year’s Forza Motorsport featured hundreds of virtual rides, including supercars like the Aston Martin V12 Zagato and the Lamborghini Veneno.
 Down on the farm
Farming Simulator is no different. The Holmer Terra Felis 2 is just one of around 250 licensed farm machines you can take for a spin – from the Massey Ferguson 7726 with Joskin Betimax RDS 7500 trailer (capacity: nine pigs) to the Ponsse Buffalo forwarder, a forestry vehicle used for thinning trees.

It’s not always about speed, though. Truck-driving sims such as Euro Truck Simulator and American Truck Simulator have even more fans that Farming Simulator. There are driving sims for everyone, whether buses, trains, tanks or diggers float your boat. All drop you into the cab of a large vehicle and simply let you drive....MORE
HT: Marginal Revolution

Previously (yes, there was a previously):
Apparently A Farming Simulator Has Sold One Million Copies
Who knew?
And its gone through 15 iterations.... 

The Farming Simulation Competition Is About to Heat Up
Can you feel the excitement?... 

HBR: Golf is evil (from an investor's perspective)

That's the Professor's headline, not the Harvard Business Review.

From Professor Bainbridge:

The HBR reports:
A year before Bear Stearns failed during the financial crisis, there were signs that the Wall Street firm was in trouble. During July 2007, two of Bear Stearns’ large hedge funds were failing. What was CEO James Cayne doing at the time? That month, he spent ten “working” days either playing golf or the card game bridge. ...

Separate tests focusing on operating performance and stock market valuations both suggest that high levels of CEO leisure are associated with underperforming firms. The average return on assets (ROA) is over 100 basis points lower for the CEOs in our sample who were in the top 25% of most-frequent golfers. A similar relation exists between CEO leisure consumption and firm market capitalization, which suggests that shareholder wealth is also negatively affected by the time CEOs spent on the fairways and greens.
Go read the whole thing, it's quite interesting.

There Appears To Be a Lovefest Going On at Ft Alphaville

Keep in mind these are Financial Times readers, not Teen Beat or J-17 or Sugar or somesuch.

Just look at these comments:
senatus populusque 3 days ago
Kudos to this newspaper for allowing your work to flourish. We need antidotes to group-think 

Izabella Kaminska FT 3 days ago
 @senatus populusque

CThwaites 3 days ago
@Izabella Kaminska @senatus populusque
Yes, keep at it. 

HDA 3days ago
Hear Hear. IK at her best and her best is very good indeed. Thank you 

No. 5011348 3 days ago
Great piece. Great work by NC also.

ResilienceEconomist 3 days ago
Your unashamedly intelligent and independent-minded writing keeps my faith in journalism alive.

Lemmy 3 days ago
Thought-provoking as ever. 

willosaurus 3 days ago

Ubique 3 days ago
Outstanding journalism. Detailed, fact based reporting informed by political reality and human empathy. Thank you Ms Kaminska 

Anon 3 days ago
This is a great piece. Brilliant work. 

Olibee 3 days ago
Fantastic article - thank you so much (also for the link to Naked Capitalism). Keep it up!

LoggedOut 3 days ago
As a middle-ager, I've always hated being disrupted and fail to understand how now it's seen as a positive term. Great article!

lxduende 3 days ago
Kudos to linking to Naked Capitalism.

HisDudeness 3 days ago
Great stuff IK. Thanks. 

Grant 1 day ago
Finally, somebody is doing their job in calling out the unicorns for what they are: all style and no substance. Thank you

I've never seen anything like it. There were maybe four negative leavings among the 70 or so listed.

And this is a post about a taxicab unicorn.
The taxi unicorn’s new clothes

It got to be so overwhelming going through the comments, one after another that, I'm a bit embarrassed to say, I thought of this from one of our posts a year ago:
The internet has some odd offerings when you ask it for "Unicorn orgy". 

Saturday, December 3, 2016

Turkey's Erdoğan Backs Down In Battle Of Wills With Putin

Following up on Kremlin Unsure How to Take Erdogan's Vow to Topple Assad.*

From Hurriyat Daily News (since they're still publishing we can assume they speak for the government), Dec. 1: 

Operation in Syria only targets terror, Erdoğan clarifies 
Turkey’s military operation in Syria is not against any country or person but terror groups in general, President Recep Tayyip Erdoğan has said, in contrast to earlier remarks that Turkey’s objective was to topple Syrian President Bashar al-Assad following.

“The aim of the Euphrates Shield Operation is no country or person but only terror organizations. No one should doubt this issue that we have uttered over and over, and no one should comment on it in another fashion or try to [misrepresent its meaning],” Erdoğan said at a 30th gathering with village chiefs at the Presidential Palace in Ankara on Dec. 1.

On Nov. 29, Erdoğan sought to explain the reason for Ankara’s military offensive into Syria, saying: “We entered there to end the rule of the tyrant al-Assad who terrorizes with state terror. [We didn’t enter] for any other reason.”

Erdoğan referred to the ongoing Euphrates Shield Operation that was launched on Aug. 24, after Ankara and Moscow began new dialogue over the course of developments in Syria. Turkey said its aim was to secure the border from the Islamic State of Iraq and the Levant (ISIL) and to stop People’s Protection Unit (YPG) efforts to link its cantons in northern Syria.

Erdoğan’s remarks on Nov. 29 created unease in Moscow, as senior officials publicly criticized the Turkish government and expressed their demand for an explanation. The issue was also raised by Vladimir Putin, who talked to Erdoğan on the phone on Nov. 30 while the latter was chairing a National Security Council (MGK) meeting....MORE 
*The precedent is already established, the one used in "Reply of the Zaporozhian Cossacks", see below....
... And back to the Cossacks. A couple weeks ago we posted "Little Has Changed Between Turkey, Russia Despite Reconciliation" with this introduction:
Whenever I think about Turkish-Russian relations I think of this painting:
... That's "Reply of the Zaporozhian Cossacks" by Repin, hanging in the State Russian Museum, St. Petersburg.

As the story goes, in 1676 the Turkish Sultan, despite being beaten by the Cossacks when he tried to invade what is now southern Ukraine, demanded these guys surrender and submit to Turkish rule.

As can be seen, the Cossacks thought this was the funniest thing they had ever heard and wrote a letter in response.
A very profane, very defiant, very vulgar, very contemptuous letter.

These old boys just cracked themselves up with their letter.
And that's what I think of when I think of Russians and Turks.

Police State Investing: The Companies that Could Join China’s Orwellian Behavior Grading Scheme

From Fortune via VentureBeat:
A year after China’s central government proposed a far-sweeping social credit system to turn citizens’ mundane online activities into a record of creditworthiness, local governments are beginning to compile records in the system critics dismiss as Orwellian.

Cities like Hangzhou, home to Alibaba, are beginning to track citizens’ utility bills, criminal record, online shopping habits, and public transportation use, among other factors, to generate a social credit score, the Wall Street Journal reports. The paper said three dozen cities are beginning to compile records.

The news reflects the unease existing in China today.

China’s ruling Communist Party is nervous about the prospects of social unrest as economic growth slows and millions of eligible workers are laid off amid reforms to the country’s heavy industry sector. The social credit score program, which the government hopes will combine disparate big data on its citizens for the first time, will likely make it easier to monitor and reward citizens who act suitably while punishing those who don’t. It’s a program China’s government can’t do alone, so it is enlisting some of the country’s best-known companies to help create it.

Alibaba’s Alipay payment system is one of eight companies involved in the first experiments around China’s social credit scoring system, the WSJ said. Alipay compiles scores based upon a user’s smartphone brand and what they buy online, before offering users perks for high scores.
“We want people to be aware of” their online behavior having an influence on their online credit score “so they know to behave themselves better,” the WSJ quoted Joe Tsai, Alibaba’s executive vice chairman, as saying.

Tencent is another obvious candidate to join the government’s efforts. Tencent’s WeChat social network, which has a scrolling “moments” feed and messenger service similar to Facebook’s offerings, has 800 million monthly users....MORE

"Equity Analysts Join the Gig Economy"

From Bloomberg Gadfly:
The gig economy has arrived in banking.
French lender Societe Generale SA announced Thursday that it had struck a deal to provide Asian equity research to its clients from online financial research syndication platform Smartkarma. According to the release:
"Societe Generale is the first global investment bank to have an agreement with an emerging fintech company to provide equity research that is compliant with evolving research unbundling requirements, such as MiFID II."
If the letter soup in that sentence went above your head, here's a summary: Europe's proposed new investment regulation, the Markets in Financial Instruments Directive, will require equity research to be paid for independently, instead of bundled together with trading commissions. As they start looking into how to separate the areas, banks are finding that research can't always pay for itself, partly because of the competitive nature of the business.

Enter third-party providers, such as Smartkarma . The platform has found a niche aggregating and distributing research produced by small brokerages and, more often, by independent analysts who may use it as a venue to retain visibility and land consulting work after leaving positions at big banks or funds.

Until now, such services had been gaining subscribers but had not replaced in-house research desks. Societe Generale's announcement may indicate a bigger shakeup is coming. It makes sense under the new European rules so expect more such notices. With many jurisdictions considering emulating MiFID, it could even become the norm.
The bad news for employees is that if banks are using syndicated research, they will need fewer in-house analysts....MORE
Well, at least it's not the robots.
As noted in last Sunday's "The automation of creativity: scary but inevitable"
First they came for the journalists and I did not speak out-
Because I was not a journalist.

Then they came for the ad agency creatives and I did not speak out-
Because I was not an ad agency creative. (see below)

Then they came for the financial analysts and I
said 'hang on one effin minute'....

"Winton Capital’s David Harding on making millions through maths"

This article was at FT Weekend a week ago and got set aside in our queue of links. It should have gotten wider attention.
It's a very solid look at one of the smarter and more intellectually flexible people in fund management.
As an example, despite personally backing 'remain' on the Brexit vote to the tune of $5 mil., he was one of the few managers to make money off the 'Leave' result.
See the FT's "Hedge funds win big from Brexit bets".

Plus, the last time I looked he had just over $100 million worth of NVIDIA,what more needs to be said?
(just kidding, I'm  not really that arrogant)

Here's Winton's performance vs. the S&P and the BarclayHedge index (BTOP50):
From FT Magazine:

The founder of the $32bn hedge fund talks about physics, philanthrophy and why he believes in tax
In 1994 the Philosophical Transactions of the Royal Society, a leading scientific journal, published an unusual paper. Entitled “Making money from mathematical models”, it was authored by a young financial trader in London. His name was David Harding, he was a Cambridge physics graduate and he used the paper to lay out what he saw as the “intellectual front line” of investment research. Harding’s idea was that finance could use science to identify and exploit inefficiencies in the markets.

He was right. Today Harding is worth about £1.3bn and, in the course of putting those initial ideas profitably into action, has become one of Europe’s leading financial entrepreneurs. His privately owned investment company Winton Capital (for which he reluctantly accepts the “hedge fund” label) manages $32bn of assets. When I take a copy of his Royal Society publication out of my briefcase, his face breaks into a slightly mischievous smile. “I’m terribly impressed that you have a copy of my one and only scientific paper,” he says.

Harding’s tale begins with a mathematically minded boy, who became interested in investing while helping his civil servant father manage a modest share portfolio. Today, he is based at Winton Capital’s headquarters in Hammersmith — well west of the districts favoured by London’s financial community. On the approach from the Tube station, the long, low-rise building, originally constructed in the mid-20th century, looks underwhelming. A queue of people stretches outside the Job Centre that occupies the first section of the shared block.

Once through Winton’s doors, however, the ground floor opens up into a spacious waiting area, its curvaceous reception desk illuminated with recessed red lights. Much of the art on display has a scientific theme, including a series of large Raoul Dufy prints from 1937, celebrating science and technology.

Harding’s career is founded on the relentless pursuit of mathematical and scientific methods to predict movements in markets. This is a never-ending process because predictive tools lose their power as markets change; new ones are always needed. “We have 450 people in the company, of whom 250 are involved in research, data collection or technology,” he says. That is equivalent to a medium-sized university physics department.

After graduating, Harding began work as a financial trader. Over five years he began to see potential profit in adopting a more mathematical approach — and, in 1987, he co-founded AHL as a commodities trading firm with two other young physicists, Michael Adam and Martin Lueck. Their success, using quantitative methods, led to AHL’s purchase by Man Group in 1994. Harding struck out on his own in 1997, setting up Winton (he gave the company his middle name) with the aim of building a more substantial investment business on the back of empirical scientific research.

In his 1994 paper, Harding wrote that the methods with which conventional banks and brokers make money from trading have “all the intellectual purity of selling vegetables”, a phrase he uses again during our interview. As well as taking clients’ fees, these methods consist essentially of selling complex derivatives at marked-up prices and of arbitrage (taking advantage of small differences in the price of financial instruments on different markets).

Harding has a different approach. He exploits failures in efficient market theory — “the idea that markets are always rational, that they perfectly reflect all knowable information and always produce in some sense the ‘right’ price”. This theory still has a grip on western economic thinking, he says, despite much evidence that it is wrong. “It treats economics like a physical science when, in fact, it is a human or social science. Humans are prone to unpredictable behaviour, to overreaction or slumbering inaction, to mania and panic.”

The Winton investment system is based instead on “the belief that scientific methods provide a good means of extracting meaning from noisy market data. We don’t make assumptions about how markets should work, rather we use advanced statistical techniques to seek patterns in huge data sets and base all our investment strategies on the analysis of empirical evidence. We conduct our research in the manner of a science experiment — collecting and organising data, making observations and developing hypotheses and then testing these hypotheses against empirical evidence.”

Harding emphasises the breadth and volume of investments involved, covering bonds, currencies, commodities, market indices and individual equities. The aim is to exploit a large number of weak predictive signals, he says: “We don’t expect to find any strong relationships between data and the price of the market. That may sound counter-intuitive but if there are strong relationships, someone else is going to be exploiting those. Weak relationships are where we have a competitive advantage.”...MUCH MORE
As the author of the piece, the FT's science writer   points out, the approach is similar to that of Renaissance Technologies.

No kidding.
Compare the paragraph immediately above with this from Nov. 21's "Inside Renaissance Technologies' Medallion Fund: A Moneymaking Machine Like No Other (and President-elect Trump's Sharpe ratio)";
...At the 2013 conference, Brown referenced an example they once shared with outside Medallion investors: By studying cloud cover data, they found a correlation between sunny days and rising markets from New York to Tokyo. “It turns out that when it’s cloudy in Paris, the French market is less likely to go up than when it’s sunny in Paris,” he said. It wasn’t a big moneymaker, though, because it was true only slightly more than 50 percent of the time. Brown continued: “The point is that, if there were signals that made a lot of sense that were very strong, they would have long ago been traded out. ... What we do is look for lots and lots, and we have, I don’t know, like 90 Ph.D.s in math and physics, who just sit there looking for these signals all day long. We have 10,000 processors in there that are constantly grinding away looking for signals.”... 
Brown is Peter Brown, Co-Chief Executive Officer of RenTech.
I'd say Cookson got the money quote, so to speak.

Friday, December 2, 2016

Uber Is Now Tracking You After Your Trip

From TechCrunch:

Uber begins background collection of rider location data:
Imagine you’re on your way to a therapy appointment in a downtown high-rise. You hail an Uber and enter a nearby coffee shop as your destination so you can grab a snack before the appointment. In the car, you scroll through Instagram and check your email. You get out, buy your coffee, and walk around the corner to your therapist’s office.

If you installed the latest app update, Uber has been tracking your location the entire time.
The app update (it’s 3.222.4, for those keeping track) changes the way Uber collects location data from its users. Previously, Uber only collected location information while a user had the app open – now, Uber asks users to always share their location with the ride-hailing company.

Uber says that, even though it can harvest your location constantly while its app is running in the background on your phone, it won’t use that capability. Instead, Uber claims it just needs a little bit more location data to improve its service, and it has to ask for constant access because of the way device-level permissions are structured.

Specifically, Uber wants access to a rider’s location from the moment she requests a ride until five minutes after the driver drops her off, even if the app is not in the foreground of her phone. Previously, Uber would not collect a rider’s background location during the trip, or her location after drop-off.

The company will use this information to improve drop-offs and pick-ups, which have consistently been a pain point for Uber and other ride-hailing services. The most common reason for riders and drivers to contact each other is to communicate their location when the app does not provide an accurate pinpoint, and Uber hopes to cut down on confusion during pick-up.

Uber also wants to track how often riders cross the street directly after a drop-off, which the company believes could indicate a safety hazard. Riders shouldn’t have to dart through traffic to get to their destination, a spokesperson explained, and tracking a user after drop-off can help the company detect whether the driver dropped their passenger off in a risky place.

“We’re always thinking about ways we can improve the rider experience from sharpening our ETA estimates to identifying the best pick up location on any given street. Location is at the heart of the Uber experience, and we’re asking riders to provide us with more information to achieve these goals,” an Uber spokesperson said in a statement....MORE

June 2015 
Corrected--Starting July 15 Uber Will Track Your Location Whether You're Using the App Or Not
...An Uber spokesperson has clarified to Engadget that tracking passengers in real time and accessing users' address books are merely "potential new use cases." The company has no solid plans to roll those features out at the moment "We are not currently collecting this data and have no plans to start on July 15,"

November, 2014
UPDATED--Here's the Real Problem With Uber: You Can't Trust Them

"Tesla's Shares Are On A Slippery Slope" (TSLA)

The stock is at $180.32 down $1.56 (-0.86%) after trading down to $180.00.

From Forbes:
In the space of two months early this year Tesla’s shares almost doubled from $141.05 on February 9th to $269.34 on April 7th. However from a technical perspective they did not trade higher than the September 2014 intra-day high of $291.42 or July 2015’s $286.65. As can be seen in the chart below this was the start of an eight month downward movement of lower highs and lower lows.

I believe the combination of Tesla buying SolarCity and overall news flow turning negative on the company has led to the steady march downwards. The company’s stock dropped from $219.61 on June 21, the day the proposed merger was announced, to $196.66 the next day. It rallied until early August when it hit $236.63 but as can be seen in the chart that has formed a downward trend line from its early April peak.

Additionally recent news items such as the SEC saying that Tesla used “tailored accounting” in its August earnings release to Consumer Reports writing that the company was “showboating” and that “One of the things that frustrates us about the Model X is that Tesla went for needless flash over function.” are definitely not helping the shares.  Also having groups asking Telsa to stop using Autopilot in its marketing (I agree that it is not Autopilot) is another negative story.

It would not surprise me to see Elon Musk leverage the faith investors have in him or the company go on the positive spin offensive. Just yesterday Tesla sent invites to some investors for a January 4 tour of the Gigafactory and Musk makes off the cuff (but I’m sure planned) remarks such as another major announcement for the Model 3 will be in three or four months (said at the shareholder meeting on the SolarCity merger).

Stock needs to hold the $177 level
Excluding the stock market downdraft in early 2016 there is a key technical level at $177 (reached on May 9, 2014) and to a degree $181.40 (low on March 27, 2015) that the stock needs to stay above. If the shares start to trade below these prices and don’t stage a rebound the next support level is in the high $130’s to low $140’s....MORE
A Short-Seller Talks Tesla (TSLA)

Climateer Line of the Day: Oil Realpolitik Edition

Today's winner of the prestigious CLoD is former Saudi Oil Minister Ali al-Naimi:
"The only tool they have is to constrain production," the 22-year Saudi oil minister Ibrahim Al-Naimi told an audience in Washington at the Center for Strategic and International Studies think tank. "The unfortunate part is, we tend to cheat," he said.
-Washington Examiner, Dec. 2, 2016 

The futures are trading 'heavy', here's Brent but the pattern is similar in WTI:


Brent is trading at $54.09 up 15 cents, WTI $51.35 up 29 cents.

Ahead Of This Weekend's Votes In Italy and Austria: Is Doom Bad For The Stock Market?


Unless it's doom like getting caught on the wrong side of the Denarius/Shekel pair in A.D. 70 where it wasn't just the FX guys but the real estate developers out at the "Future site of Masada Manor" who got hammered.
Then it's a problem and you should probably brush up on your Latin.

From CXO Advisory:
Is proximity to doom good or bad for the stock market?
To measure proximity to doom, we use the Doomsday Clock “Minutes-to-Midnight” metric, revised occasionally via the Bulletin of the Atomic Scientists, which “conveys how close we are to destroying our civilization with dangerous technologies of our own making. First and foremost among these are nuclear weapons, but the dangers include climate-changing technologies, emerging biotechnologies, and cybertechnology that could inflict irrevocable harm, whether by intention, miscalculation, or by accident, to our way of life and to the planet.” Using the timeline for the Doomsday Clock since inception and contemporaneous annual returns for the Dow Jones Industrial Average (DJIA) during 1947 through most of 2016 (23 doom proximity judgments), we find that:
The following chart relates annual DJIA return (2016 partial) to same-year “Minutes to Midnight” judgment as available over the sample period based on two assumptions:
  1. Changes in “Minutes to Midnight” occur near the beginning of years. For example, the 3-minute proximity to doom for 2015 relates to the 2015 DJIA return of -2.2%.
  2. When there is no change for a given year, “Minutes to Midnight” is that same as the most recently issued judgment. For example, the proximity to doom for 2013 and 2014 is the same as that for 2012.
The Pearson correlation between these two series is -0.04 and the R-squared statistic 0.001, indicating practically no relationship between proximity to doom and annual DJIA return.

Might there be a lag between proximity to doom and stock market return?
The next chart summarizes annual correlations between “Minutes to Midnight” and DJIA annual return for lead-lag relationships ranging from DJIA return leads proximity to doom by five years (-5) to proximity to doom leads DJIA return by five years (5). All correlations are too small to indicate any relationship....MORE

"Economists React to the November Jobs Report: ‘Paves the Way for Fed Rate Hikes’"

From Real Time Economics:
The Labor Department on Friday reported that U.S. nonfarm employers added a seasonally adjusted 178,000 jobs in November and the unemployment rate fell to 4.6%, its lowest level since August 2007. The workforce-participation rate edged lower and average hourly earnings for private-sector workers softened. Here’s how economists and analysts reacted to the news.

Today’s jobs report sets a baseline for the Trump administration. Jobs gains were solid, led by professional and business services and construction. But manufacturing jobs fell yet again in November. The president-elect faces strong headwinds in bringing those jobs back. And recent wage gains and unemployment declines make this a tough economy to improve on.” —Jed Kolko, Indeed
“The decline in the unemployment rate to a new cyclical low of 4.6% last month, from 4.9%, was due to a combination of a 160,000 increase in the household survey measure of employment together with a 226,000 decline in the labor force….The upshot is that the labor market appears to be approaching full employment.” —Paul Ashworth, Capital Economics

This jobs report paves the way for Fed rate hikes. It also tops off a recent run of continually positive economic data.” —Jason Schenker, Prestige Economics

“In our view, this report easily clears the bar for a December rate hike and represents some of the continued progress towards the dual mandate that the committee desires. Of course, it could decide that the tightening of financial conditions since September is sufficiently large to forestall a hike, but we consider that to be very unlikely at this point.” —Michael Gapen and Rob Martin, Barclays
“Overall, the report shows modest job gains, which is not totally unexpected given the uncertainty surrounding the election.” —Joe Carson, AllianceBernstein

“Perhaps the most surprising development was the sharp decline in the unemployment rate, which fell to 4.6%—a nine-year low. Economists had respected it to remain steady at 4.9%. Positive job creation certainly contributed to that drop, but unanticipated declines in the civilian labor force and the labor-force participation rate reduced the estimated rolls of the unemployed by 387,000. It’s quite likely that both of those factors will move higher in the coming months. As such, it’s possible that the jobless rate could edge higher in the coming months—even if the recent trend in job creation remains positive—before resuming its downward trend.” —Jim Baird, Plante Moran Financial Advisors

This was the last hurdle on the path to a December hike, and it has been cleared convincingly. It is now incredibly hard to imagine what would stop the Fed from going. The debate now is all about what rates will do next year and beyond.” —Luke Bartholomew, Aberdeen Asset Management

"Atlanta Fed Raises Q4 GDP Forecast to 2.9%"

From Barron's Income Investing:
With some stronger economic news this week, the Atlanta Federal Reserve’s real-time gross domestic product tracker, known as GDPNow, raised its estimate for fourth quarter growth to 2.9% from 2.4% on November 30.

The model was above 3% most of November. The latest estimate for growth in the third quarter was 3.2%.

Here’s what the model was reacting to Thursday for the fourth quarter reading:
After this morning’s construction spending report from the U.S. Census Bureau, the forecasts of fourth-quarter real residential investment growth and real government spending growth increased from 7.1 percent to 12.4 percent and 0.1 to 0.6 percent, respectively. The forecast of real nonresidential structures investment growth fell from 1.4 percent to -3.4 percent after the same report....MORE

Tesla's European Gigafactory to Produce Cars, Batteries (TSLA)

Of course this doesn't happen unless the company can raise some serious money.
$3 to $12 billion serious.

From ElecTrek, Nov. 8:

Tesla plans to choose location for ‘Gigafactory 2’ in Europe next year, will produce both batteries and cars
Tesla CEO Elon Musk and CTO JB Straubel are in Germany today to announce the acquisition of a German engineering group, Grohmann Engineering. Following the announcement, they held a press conference during which Musk emphasised that Tesla is planning “significant investments” in Germany and the conversation quickly moved to Tesla not only investing in engineering in Europe, but also in production.

Musk confirmed that Tesla plans to choose a location for ‘Gigafactory 2’ in Europe next year and he added that the factory will combine both the production of batteries and complete cars.

It’s an interesting development considering the Gigafactory concept was originally only supposed to manufacture battery cells and packs, but we recently learned that Tesla is planning drive system production lines at the Gigafactory 1 in Nevada.

Now it looks like Tesla will take it a step further and vertically integrate the entire production process in one plant – for the ‘Gigafactory 2’ at least.

During the call early this morning, Musk made it clear that Tesla’s current focus is to bring the Model 3 to production, but he also said that through that process, the company is trying to reinvent their manufacturing strategy now referred to as “the machine that builds the machine”. The acquisition of Grohmann Engineering is part of Tesla’s effort to design that “machine” which will first come alive at Tesla’s Fremont plant, but he added that it will also eventually be deployed in Europe:
“This is something that we plan on exploring quite seriously with different locations for very large scale Tesla vehicles, and battery and powertrain production – essentially an integrated ‘Gigafactory 2’.”
He later referred to the plant as a “combined vehicle and Gigafactory”.
Musk clarified the timing of the new project and said that it will be once Tesla has “a clear handle on Model 3 production next year”. Tesla plans to start Model 3 production in “mid-2017” with volume production in “late-2017”.

Interestingly, he continued by saying:
“It is quite a significant scaling up of the rate because we are going from 100,000 cars a year to 600,000 cars a year in a very short period of time.”...

Also at ElecTrek:
Tesla Gigafactory 2: several countries launch efforts to attract Tesla’s new electric car & battery plant

Tesla acquires German engineering firm to create ‘Tesla Advanced Automation Germany’

"Now You Can Cruise Up To Your Aston Martin Condo In Your Aston Martin Powerboat"

From Forbes:
Now the 99-plus percent can do more than envy the owners of Aston Martin cars. We can envy the owner of Aston Martin powerboats, condos, and clothing.

The British brand synonymous with automotive opulence is in the midst of a huge spasm of brand extension as it seeks to create an Aston Martin "lifestyle" across all sorts of haute categories.
Rebecca Robins, global director of Interbrand, the global branding consultancy based in New York, told me that Aston Martin is among luxury businesses that "are acutely aware of the shift in what we value and why, in an economy that's revolving less around what we own and more around what we share and experience."

So in addition to fine Aston Martin automobiles that may have been inspired by James Bond, these days there's also an Aston Martin "design masterclass" about how the company fashions the cars, ice-driving outings in snowy climes, Aston Martin Residences high above the Miami River, 37-foot Aston Martin powerboats, and a new range of "luxurious clothing" with U.K. menswear retailer Hackett that "reflects the coming together of two stylish brands.

The London-based brand also just revealed a "portfolio of experiences" that it will offer in 2017 by its Art of Living program, which takes customers beyond sports cars and provides them with "the opportunity to live the brand's lifestyle," as the company puts it...

Who on earth are they marketing this to?
Oh wait the boat does look sharp:

Sort of a Chris-Craft throwback, what with the wood decking, but powered at 1040 bhp.
For a 12 meter long boat?

Here's Quintessence Yachts AM37 page.

The King of Zinc Watches and Waits (GLEN)

I'm not sure what they are waiting for at this point. Here's Kitco spot for the last year:
From Bloomberg Gadfly, Nov. 30:
The year's craziest industrial metal just got crazier.

Shanghai zinc futures hit their highest level in nine years on Tuesday, surging as much as 5.8 percent intraday. On Wednesday, after traders closing out positions pushed three-month contracts on the London Metal Exchange down 6.9 percent overnight, they posted a record drop, giving away all the gains made since last week.

The dog that hasn't barked here is Glencore Plc. The commodity trader is the king of zinc, accounting for more than 10 percent of global output in a good year. But it's been holding back since late last year, after the slump in prices reduced the profitability of its mines.

How Glencore chooses to dispose of its 500,000 metric tons of mothballed capacity -- equivalent to about 3.7 percent of global zinc output last year -- will be crucial in deciding whether the current run of high prices continues or sputters. If the company promises to continue its policy of watching and waiting in an investor update on Thursday, zinc bulls might do well to cut their positions.
Despite a bumper year for zinc in 2016, there's good reason to be cautious about the outlook. Much of the buoyant pricing has come as a result of withdrawn supply -- not just from Glencore's mines in Australia, Kazakhstan, and Peru, but also from sites like Vedanta Resources Plc's pits in India and Ireland.

Still Short
The world will still not have enough zinc next year, even if mine output rises sharply...MORE
"Goldman Overweights Commodities for First Time in Four Years"
...“The recent re-acceleration in global PMIs suggests commodity markets are entering a cyclically stronger environment,” Goldman analysts led by Jeff Currie wrote in a report e-mailed Monday. “Supply restrictions from policy actions should benefit oil, coking coal and nickel in the near term while economic reductions should boost natural gas and zinc.”...MORE
Just to hammer the point home, here's Kitco's 5-year chart:


Thursday, December 1, 2016

21st Century Headlines

I delude myself that I am reasonably up-to-speed on the zeitgeist and on technology but twenty or so times a day things are brought to my attention about which I was heretofore clueless.

Here's a headline from VentureBeat:
Bot-making service now supports Node.js
And all I can think of is a scene from Friends eighteen years ago:

Phoebe: They don't know we know they know we know. And Joey, you can't say anything.

Joey:      Couldn't if I wanted to.

And this one, also VentureBeat:
Super Evil Megacorp starts team-franchise program to energize Vainglory...
I would expect nothing less from SEMC.

According to CrunchBase Super Evil Megacorp has raised $42 million in three venture rounds.
I'd buy it just for the name. But wasn't invited.

Finally Quartz almost made the Questions America Wants Answered series with:
What Nike’s $720 self-lacing sneaker, releasing today, signals about Nike’s future
until I realized I didn't care what Nike's $720 self-lacing sneakers signaled about Nike's future.

And this happens every day.
I just nod my head and try to change the subject to something simpler.