My afternoon train reads:

• Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion (Blooomberg)
• Need help with money? Play a game. (The Christian Science Monitor) see also Are You Brilliant, or Lucky? (WSJ)
• Bloomberg Weighs Making Bid for The Financial Times (NYT)
• On Understanding the History of Technological Change (Economic Principals)
• U.S. Apartment, Condominium Markets Remains Strong in 3Q, Says NAHB (World Property Channel)
• The robot economy and the new rentier class (FT Alphaville) see also Why Workers Are Losing the War Against Machines (The Atlantic)
• U.S. Intelligence Agencies See a Different World in 2030 (Bloomberg)
• Sagan vs Hawking on transmission of messages into outer space to aliens  (REDDIT) see also Evolution, Creationism, Intelligent Design (Gallup)
• Lights Out For China’s Solar Power Industry? (The Diplomat) see also Move Over, Michigan, China Is The World’s Next Rust Belt (Forbes)
• “Everyone has filters to select information that receives attention.” (Farnam Street)

What are you reading?


Charting Chinese Unemployment, Inequality

Source: Real Time Economics

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

37 Responses to “10 Monday PM Reads”

  1. metphd23 says:

    Warm November assures 2012 will be warmest year in U.S. history.

  2. VennData says:

    On the AIG sale.

    …They made a total of $15B as of the last tranche they sold in September. Stock is about where it was so they will make a bunch more, plus they still have warrants. I’m guessing $40-50B profit

    A negative way to spin it is to say they only made $5-10B a year on a 100B-plus investment. But since they printed the money…

    The idea that swaps should not be sold on exchanges where you have a margin account with the exchange and there is no counterparty risk is still being fought tooth and nail as one of those “horrible” Dodd-Frank calamities. LOL. Chicago has never had a fail. How are swaps an different than pork bellies, T-Bond futures or Emini futures? They aren’t. They banks just don’t want to give up that tiny profit to the CME.

    Markets work on exchanges. Why have all this interdealer BS when no one knows the aggregate posiitons? Let markets work.

    They did a movie about selling equity with no regulation over the sale, no exchange, all the counter party risk is with the investors, its called ‘The Producers.’

  3. PeterR says:

    PS — Interview starts at time stamp 4:00.

  4. rd says:

    Interesting article here on teaching kids to program code in middle and high school:

    I agree with him but for a somewhat different reason. Computer programming is an excellent tool for teaching logic, organization, completeness, and writing (code needs a beginning, middle, and end; not unlike a story). It is essentially self-grading as it is something that has very few opinions associated with what is good or bad code at the beginning level. It either has no syntax errors (grammar and spelling) or it does. It is either complete or it sin’t. It can either do the functions or it can’t. It is either written so that you can figure out how to correct or modify it or it isn’t. You don’t get an A by arm-waving or making it look flashy if it still can’t add 2+2 and get 4.

  5. Molesworth says:

    What companies are leading in robotics? I can’t make them, but I can invest them and then maybe become part of that rentier class.
    ABB is into robotics but less than 20% of their income. (Good company though)
    Who else? Any ideas?

  6. old trader says:

    Re: Different World in 2030

    According to what I heard on CNN radio news, there were actually 2 studies done. The one mentioned in Bloomberg, and another “bullish” one. The news item didn’t mention just who did each study.

  7. S Brennan says:

    What’s with the ROBOT meme? What “conventional wisdom” nonsense, yes, automation is happening, but to a lessor degree than in the past decade. Statistically insignificant compared to:


    Then there is the H-1B L-1, H-2B & TN-1 visas ~ 500-700,000/yr

    FYI, the number of L-1 visa holders in the USA is estimated to be about six or seven times the number of H-1B’s.

    From NAFTA we got TN Visas which are unlimited “professional” Visas from Mexico and Canada…and yeah, they only work for Canadian and Mexican professionals, every US job seeker in Canada must prove that nobody in Canada wants the job…good luck with that.

    Then there’s is the endemic age discrimination in hi-tech, legalized by the Supremes re-writing congressional law into unenforceable gibberish.

    ROBOTS? My shiny cheeks.

    REF: The robot economy and the new rentier class (FT Alphaville) see also Why Workers Are Losing the War Against Machines (The Atlantic)

  8. rd,

    toward your 19:07-Post..

    yon’ QOTD..

    “Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.”

    -Albert Einstein


    • Bloomberg Weighs Making Bid for The Financial Times (NYT)

    obviously, there is much to recommend such a move..

    and, BBerg has done good job with “Businessweek”..

    to say nothing of the, long, growing ‘disenchantment’ with the WSJ..

    though, BBerg would definitely have to pay attention to growing the Home Delivery(AM) “footprint”, and

    it’s efficacy/efficiency..

    differently, in many areas, the WSJ is the only ‘choice’..

  9. Lyle says:

    On the china as future rust belt: Most clothes I buy say Pakistan now. It is clear that Chinese labor is now to expensive for garment manufacture, so they move down the asian food chain: I do note in the article how some are moving to central american locations, which cut the transit time and costs drastically compared to Asia (both ways in many cases if american grown cotton is used). Once garment making has moved to subsaharan Africa, then we will see it automated. I wonder today if the tech is there to scan ones body, do some computer editing of the scan and have clothes made by a robot. If not today, its likely just a matter of some development work, to do move to automated clothes making.

  10. Mike in Nola says:

    I suspect we have a multifamily bubble in the making. Several of the more prescient type like Gary Shilling have been recommending multifamily, which made some sense. But, here in Houston, it looks like if something is worth doing, it’s worth overdoing. Reminds me of the Apple trade with everyone crowding in with luxury apartments and condos going up all over the place.

    Meanwhile there are vacant lots appearing all over as builders buy houses to tear them down and hope for new suckers who will provide their own financing in the McMansion Market. I passed one several block stretch on an upscale street today that had six properties for sale: one smaller, Frank Lloyd Wright type, a vacant lot with a sign saying reduced and the rest McMansions.

    I still wonder who’s going to live in these places. Things are tough in the Medical Center with hiring freezes and the Houston Episcopal Diocese looking to sell it’s big hospital because it’s a drain. The Medical Center is one of, if not the, biggest employer around here. And if a recession causes oil to drop substantially, there will be a bloodbath like in the 1980′s.

  11. Mike in Nola says:

    @Mark in Htown

    Still haven’t seen the Lumia 920 in person. The Guardian just gave it a glowing review with a statement to the effect that it might be the most advance smartphone out there. I suspect the Europeans are less concerned about something slim and light that you have to keep in a case all the time. On my trip back to NOLA I stopped in at a VZW store and looked at the HTC 8X and 822(?). The 822 is pretty clunky, but was pretty impressed with Nokia Drive. Had to find a nearby bank: tapped the tile, started typing the name and it was giving me voice directions in under 15 seconds.

    Do any of the non-Nokia’s have voice guided navigation? If not, why not. My 3 year old Windows Mobile had Bing that had voice search and voice guided navigation that worked very well until MSFT discontinued support when Windows Phone 7 came out. Would be just like MSFT to leave out a freebie like that. I did fall in love with the HTC; it’s beautiful and feels good in the hand. If it had Nokia drive, I’d buy it in a second.

  12. willid3 says:

    maybe we are make some if limited progrress?
    The thing about Too Big to Fail financial firms is that they tend to be Too Big to Fail in several countries at once. Hence, the “shared strategy” laid out in a new joint paper from of the FDIC and the Bank of England that aims to protect taxpayers from paying for the rescue of gigantic multinational corporations.

    Even if it’s just a set of principles, any sort of action on cross-border resolution has been a long time coming. As Simon Johnson has pointed out, the IMF has been pushing for at least a decade for some method of unwinding international financial firms.

    The new strategy, summarized in this FT op-ed, has some clear improvements over crisis-era handling of TBTF firms. The company’s home regulator would take control of the firm (lucky them), shareholders and unsecured creditors would be forced to take losses (slow clap), and senior management would be removed (rousing applause). Liquidity would be parceled out by regulators to newly spun-off divisions and any taxpayer losses could be recovered from the financial sector — though it’s not quite clear how.

    The FDIC-BoE approach — like this 2010 IMF proposal — also calls for something like a Pause button for derivatives contracts; a “stay of termination rights” would temporarily prevent counterparties from being paid out after a TBTF firm fails.

    Regulators are taking another welcome step to protect taxpayers from TBTF: enforcing existing regulations on foreign companies. Shahien Nasiripour and Brooke Masters pick up on a recent speech by the Fed’s Daniel Tarullo which suggests regulators may soon force foreign subsidiaries to actually obey local capital requirements. The idea is to keep banks’ subsidiaries from posing a risk to domestic taxpayers. Larry Fink, the CEO of BlackRock, apparently isn’t happy about this:

    “If that is the new strategy among regulators, it really throws into question this whole globalisation of these firms,” he said at a conference last week. “It also means each country for themselves. I wouldn’t call it a trade war, but I would certainly call it a high level of protectionism.”

    None of this is going to be easy, especially if more than one TBTF firm fails at once. As one former Fed regulator said last year: “Citibank is a $1.8 trillion company, in 171 countries with 550 clearance and settlement systems”. Try resolving that in the middle of a crisis. — Ryan McCarthy

  13. Master Shake says:

    Regarding robots and mechanization replacing human workers, Kurt Vonnegut had this pegged back in 1952 with his first novel, Player Piano.

  14. Petey Wheatstraw says:

    RE: Evolution, Creationism, Intelligent Design (Gallup):

    We are doomed.

  15. 873450 says:

    Treasury Department press release parses truth and language

    Treasury Announces Public Offering for All of Its Remaining AIG Common Stock Holdings

    “WASHINGTON – Today, the U.S. Department of the Treasury announced that it has launched an underwritten public offering for all of its remaining 234,169,156 shares of American International Group, Inc. (AIG) common stock. If the offering is completed, Treasury would continue to hold warrants to purchase AIG’s common stock that were also issued as part of AIG’s participation in Treasury programs. — BofA Merrill Lynch, Citigroup, Deutsche Bank Securities Inc., Goldman, Sachs & Co. and J.P. Morgan Securities LLC have been retained as joint bookrunners for the offering.”

    No mention of Troubled Asset Relief Program (TARP)
    No mention of Capital Purchase Program (CPP)
    No grand proclamation claiming AIG bailout is a smart “investment” earning profit for taxpayers

    Instead, a shameful misappropriation of our nation’s treasure to rescue a disgraced, bankrupt bookie as a means to shovel additional bailouts for TBTF through a back door is innocuously referred to as “AIG’s participation in Treasury programs.”

    And look who gets to administer the offering – BofA Merrill Lynch, Citigroup, Deutsche Bank Securities Inc., Goldman, Sachs & Co. and J.P. Morgan Securities LLC.

    Who says crime doesn’t pay?

  16. Greg0658 says:

    Evolution, Creationism, Intelligent Design .. they missed my blend -ie space aliens aquarium/terrarium experiment .. I give you space travel intuition as proof

    my ears have been ringing in 2 tones this week – the pyramid people are getting closer – or is it the worm hole is aligning .. both :-)

  17. S Brennan says:

    Do Robots feel Fire?

    Certified Safe, at least 262 workers die in Pakistan factory fire.

    At 37.00 US dollars a month it’s hard to see a robots replacing these dead workers? Do you really think you could manufacture, program, market, distribute, install and maintain robots for that kinda money?

  18. 873450 says:

    @ Lyle Says:
    ” I wonder today if the tech is there to scan ones body, do some computer editing of the scan and have clothes made by a robot. If not today, its likely just a matter of some development work, to do move to automated clothes making.”

    ” … people will go to either a Fitted Fashion store or a partner location, where they will go through a digital tailoring process … it takes about three minutes, with the scan itself taking only about 30 seconds. … these devices capture over 400 measurements of a client’s entire body. … Once the company has a client’s data, it will be run through custom software, to create clothing patterns … clients can stipulate variables such as style, rise, tightness and wash. The jeans will then be cut and sewn at a central facility, and mailed to the client. Should clients want other items of clothing down the road, their measurements will still be on file.”

    It’s all about jobs, jobs, jobs.

    American consumers go to a local tailor shop equipped with a dozen body scanning devices operated by 1-2 technicians. In less than 10 minutes the customer’s measurements are transmitted to a 3rd world sweatshop factory where laborers working 12 hours/day, 365 days/year and paid next to nothing can whip up custom fit jeans in less than 10 minutes. The finished jeans are shipped to the U.S. where the American consumer happily pays $180 for them.

  19. Mike in H-town,

    yes, that’s good point ~about ‘Nokia Maps’..

    needless to say, someone at Cupertino should have suggested buying NOK, merely, for their Maps/Telemetry expertise..

    also, good to hear that you have putting some of those ‘Phones’ under hoof..

    ‘Reviewers’ have their own (or, ones delivered to them) Opinion..

  20. S Brennan says:

    Do Robots feel Fire? continued….

    On the other hand if you had a factory full of robots, you’d have better fire safety…the robots would cost more and take longer to replace than humans…so you’d protect them better.

  21. Lyle says:

    Re 873450: its a step, the4 question I have is when can the clothes be constructed untouched by carbon based human hands. Economics still allow the sewing as wages are low enough somewhere, but if wages in Pakistan go up enough, then perhaps a fully de-humanized (automated) clothes plant can exist. It is really the back end step that needs the work here.

  22. leonid says:

    Re: Molesworth

    see Fanuc (6954 JP/ FANUY US) – the leading manufacturer of inducstrial robots (notoriously sectretive, meh corp gov but the product is without a doubt #1 in the world)

    Also there’s Saisun (300024 CH) – but its not investable for most ppl at the moment as it only has A-shares.

  23. Jojo says:

    # S Brennan Says:
    December 11th, 2012 at 12:39 am

    Do Robots feel Fire? continued….

    On the other hand if you had a factory full of robots, you’d have better fire safety…the robots would cost more and take longer to replace than humans…so you’d protect them better.
    Robots seems to be getting you all worked up! But yes, they are appearing EVERYWHERE, even in low wage countries. Some reading for you:

    The March of Robots Into Chinese Factories
    By Dexter Roberts on November 29, 2012

    Step into the factory of Chinese SUV and truck maker Great Wall Motors, and it’s easy to forget you’re in the world’s most populous country. Swiss-made robots pivot and plunge, stamping metal door frames and soldering them to the skeletal vehicle bodies of a mini-SUV called the Haval M4. The blue-smocked workers in yellow hard hats are few and far between here in Great Wall’s largest factory complex, located in Baoding, some 90 miles southwest of Beijing.

    “With automation, we can reduce our head count and save money,” says Hao Jianjun, Great Wall’s general manager, who has invested $161 million into mechanizing four plants with 1,200 robots. The average price of a factory-floor robot is around $50,000 before installation. “Within three years, this cost will be completely paid for in savings from reduced worker wages,” says Hao. After the robots were added, the number of welders at Great Wall dropped from 1,300 to around 400.

    This Burger Was Made Entirely by a Robot
    Posted: 11/19/2012

    Posted: 11/26/12
    Automation Reaches French Vineyards With A Vine-Pruning Robot

    August 18, 2012
    Skilled Work, Without the Worker

    DRACHTEN, the Netherlands — At the Philips Electronics factory on the coast of China, hundreds of workers use their hands and specialized tools to assemble electric shavers. That is the old way.

    At a sister factory here in the Dutch countryside, 128 robot arms do the same work with yoga-like flexibility. Video cameras guide them through feats well beyond the capability of the most dexterous human.

    One robot arm endlessly forms three perfect bends in two connector wires and slips them into holes almost too small for the eye to see. The arms work so fast that they must be enclosed in glass cages to prevent the people supervising them from being injured. And they do it all without a coffee break — three shifts a day, 365 days a year.

    All told, the factory here has several dozen workers per shift, about a tenth as many as the plant in the Chinese city of Zhuhai.

    This is the future. A new wave of robots, far more adept than those now commonly used by automakers and other heavy manufacturers, are replacing workers around the world in both manufacturing and distribution. Factories like the one here in the Netherlands are a striking counterpoint to those used by Apple and other consumer electronics giants, which employ hundreds of thousands of low-skilled workers.

  24. mathman says:

    Watch what you say on your ride home via public transportation:

  25. mathman says:

    And you might want to go a bit more vegan now:

  26. Chad says:

    FT Alphaville’s Robot and Rentier article is dead on. Sure, there will always be certain manufacturing jobs that have to be done by humans, but those will be few and far between. Robots will steadily drop in price like every technological item ever invented, which means at some point it will be viable for for almost all industries to invest in something that will work 24/7 without complaint, no health insurance, no pension, fewer mistakes, and it will make manufacturing geographically neutral.

    This article also ties in nicely with the Forbes article on China becoming the next rust belt.

  27. “…Robots will steadily drop in price…”

    “…“Unlike other manufacturers’ recently introduced two-armed robots, ST Robotics’ Tandem R125 is a real industrial system with real industrial programming, and at a fraction of the price,” said David Sands, President and CEO of ST Robotics. “This really does bring two-armed robotics into the realm of small industry”.

    Customer Francois Auden of Effinov in France agrees: “This product is just amazing!”

    Including the programmable carousel, ST Robotics’ Tandem R125 robot has a total of 11 axes. The entire system is available for less than $20,000 and includes everything to get up and running: the two R12 five-axis robot arms mounted on the carousel, two K11R controllers, RoboForth II software, intuitive teach pad, simple interfacing with other equipment, cables, manuals, a two-year warranty and unlimited free technical support.

    A video of the Tandem R125 robot system used in an industrial deburring application can be found at: . Other models and variations of ST’s Tandem Robots offer two six-axis R12s for a total of 13 axes with a maximum reach up to 1000 mm; an R19 cylindrical format; and linear tracks up to 3m.

    ST Robotics, widely known for ‘robotics within reach’, has offices in Princeton, New Jersey and Cambridge, England. One of the first manufacturers of bench-top robot arms, ST Robotics has been providing affordable, easy-to-use, ready-to-go, boxed robots for nearly 30 years. ST’s robots are utilized the world over by companies and institutions such as Lockheed-Martin, Amazon, Motorola, Honeywell, MIT, NASA, Pfizer and Sony, to name a few. The numerous applications for ST’s robots benefit the manufacturing, nuclear, pharmaceutical, laboratory and semiconductor industries…”$20000/content_id/3757
    “…Last week’s splashiest product announcement was the iPhone 5, introduced by Apple in San Francisco. But this week’s could very well be a humanoid robot that a Boston company is unveiling on Tuesday. Its name is Baxter, and though it will cost north of $20,000, the Boston company that developed it, Rethink Robotics, asserts it could change manufacturing in the same radical way the iPhone changed the mobile phone business.

    A big part of Rethink’s pitch is that Baxter will be a friendly robot, one that won’t obliterate manufacturing jobs here but make it economical for manufacturing sent offshore to be done domestically once again. To which I must say: Really?

    No start-up in Boston has a pedigree that can match Rethink’s. The company was founded by Rodney Brooks, a renowned robotics researcher who was one of the three founders of iRobot Corp., the publicly traded maker of robots that roam the battlefield and the living room floor. Rethink’s first investor was founder Jeff Bezos. Rethink’s chief executive Scott Eckert was responsible for launching the e-commerce business at Dell Inc., the Texas computer maker, in the mid-1990s.

    What the company has developed over the past four years is a robot with a camera for a head, two arms, and a torso, but no legs. (Baxter perches on a mobile stand, but can’t move around on its own.) Three things make it unique. First, says Frank Tobe, editor of the industry newsletter The Robot Report, it can be trained to do tasks by having a human move its arms through the desired motions, similar to how a golf pro might teach a student to swing. No complex programming required…”

  28. DeDude says:

    At least the economist appear to be waking up to the fact that in the real world there are no guarantee that workers will always be able to find work as long as they lower their expectation for wages enough. That part of their model is absurd and has been in need of a reality check since it was invented. Before demand for workers comes demand for products and services. Without sufficient distribution of income to the working/consumer class there will not be sufficient demand for products and services and there will be no jobs regardless of how little workers are willing to take in pay. Go back 40 years and compare north to south America – predatory capitalism simply does not work to produce a strong economy.

  29. Julia Chestnut says:

    I’m just going to work under the assumption that the Gallup poll you posted is an artifact of who still has a land line and answers said land line of an evening when the caller id says “unknown.”

    Because otherwise, I weep.

  30. hue says:

    Religion and tax cuts are the opiate of the masses.

    Lemony Snicket does Prince (26 minute mark)

  31. S Brennan says:

    As breathlessly reported the:

    “ST Robotics’ Tandem R125 robot has a total of 11 axes [and] is available for less than $20,000″

    Assuming no interest, it would take 45 years of seamless operation to surpass an 11 axis Pakistani.

    Even if you cut the machines cost to 5,000.00, the Pakistani is cheaper…automation comes in when labor rates rise…and automation depresses wages.

    Low wage is; and has been historically, the enemy of innovation, science and progress. Want a better life for yourself, raise the wage of those beneath you.


    China has used aggressive tariff regimes to bring manufacturing to it’s shores. Apparently those Mandarins know American history better than American businessman do, as we the same thing with tariffs.

  32. Chad says:

    We both know the equation for where to manufacture something is more than “machine costs X and worker makes Y.” You have to factor in how much the machine produces to how much the person produces, defects, necessary management oversight, cost of oil for shipping, tariffs, can a completely uneducated person even make the item, etc.

    Then you have to ask if these manufacturing costs are spread out over the millions of widgets made does the difference in manufacturing costs even matter?

    In some cases the answer will be overseas (clothes) and in other cases it will be here with the robots (GE). This is too complex of an issue to just spout one stat and say it’s decided.

  33. JackH says:

    The only possibly positive value in Gallup’s conclusion that 44% of some population believes in Creationism within the last 10,000 years is that it was Gallup picking the samples. They have not been at their best lately with that – the 2012 election springs immediately to mind.