From Zero Hedge:
We have long argued that auto manufacturers have been channel-stuffing (and subprime-lending) themselves back into a disaster and as such class-action lawsuits have begun. Recently we also pointed out the epidemic of dealer-inventory-stuffing in China (and again this morning the Chinese luxury car market's over-stuffing). So today's report from Reuters that German auto manufacturers have been stuffing dealer channels just like the rest of the world as Europe's largest car market is in recession even if few outside of the industry would know it. "Essentially, the carmakers are deceiving their shareholders, since they make it look as if the vehicles were actually sold. They want to pull the wool over their eyes," as three in every ten new vehicles in Germany are sold not to customers, but to carmakers and their dealers - a type of automotive industry pump priming known as "self-registration". At nearly half a million such registrations in the six months through June, the total is greater than the entire new car market in Spain. Is Germany's economy really what it is reported to be given all this fake demand pull-forward - or is it a total fraud?
http://www.zerohedge.com/news/gms-channel-stuffing-goes-germany-europes-largest-economy-fraud
Tuesday, July 31, 2012
Monday, July 30, 2012
Mark Spitznagel: The Grand Shi Strategy of Ron Paul
From Forbes:
To some, Paul’s stubborn persistence in the campaign has been just that: a stubborn unwillingness to lie down and die despite evidence of sure defeat. But what they have missed is a common misperception of a subtle yet powerful age-old strategy at play.
The strategy of the Paul campaign, explicit or not, is the archetypal shi (pronounced “sure”) strategy expounded and employed by Chinese philosophers and military strategists for thousands of years.
More than anything else, we can see Paul’s greatest shi advantage in his outsized support among the young.
In this society of immediate gratification and winning right now at all cost we need to ask ourselves: why should future elections and platforms matter so much less than the current ones? There are powerful cognitive biases at work—among them the temporal myopia of hyperbolic discounting, or excessively undervaluing the future, while focusing on the nearer term—which make fuzzy in our minds the importance of victories in the years ahead (a view that is promulgated by the media).
The ultimate war is against intrusive, burgeoning government, in the ongoing insurgencies of the battles yet to come—Ron Paul’s grand shi strategy.
http://www.forbes.com/sites/realspin/2012/07/29/the-grand-shi-strategy-of-ron-paul/
To some, Paul’s stubborn persistence in the campaign has been just that: a stubborn unwillingness to lie down and die despite evidence of sure defeat. But what they have missed is a common misperception of a subtle yet powerful age-old strategy at play.
The strategy of the Paul campaign, explicit or not, is the archetypal shi (pronounced “sure”) strategy expounded and employed by Chinese philosophers and military strategists for thousands of years.
More than anything else, we can see Paul’s greatest shi advantage in his outsized support among the young.
In this society of immediate gratification and winning right now at all cost we need to ask ourselves: why should future elections and platforms matter so much less than the current ones? There are powerful cognitive biases at work—among them the temporal myopia of hyperbolic discounting, or excessively undervaluing the future, while focusing on the nearer term—which make fuzzy in our minds the importance of victories in the years ahead (a view that is promulgated by the media).
The ultimate war is against intrusive, burgeoning government, in the ongoing insurgencies of the battles yet to come—Ron Paul’s grand shi strategy.
http://www.forbes.com/sites/realspin/2012/07/29/the-grand-shi-strategy-of-ron-paul/
The Unbearable 'Factual' Lightness of the Chinese Economy
From Zero Hedge:
Factual data point after factual data point is indicating more than a little stress in the Chinese economy (and the Asian engine of growth in general). Whether it is bank loan losses escalating, shadow-banking stress, real-estate corruption, dismal retail spending, the shrinking textile industry, the artificial production in the crushingly slow metals industry , the construction industry's contraction, or the massive '50%-above-demand' channel-stuffing now occurring in the Chinese auto market, Diapason Commodity's Sean Corrigan succinctly notes: "China bulls will not heed any of this, of course, for they are prisoners of the nested illusion that all increases in outlay represent genuine growth (cf, Occidental property bubbles) and that higher growth must imply greater profitability. They will also argue, on any uptick in the macro numbers, that the worst is not only behind us, but that it has been more than fully priced in." Given a picture paints a thousand words, Asian trade volumes have ended their rebound and are exhausted.
http://www.zerohedge.com/news/unbearable-factual-lightness-chinese-economy
Factual data point after factual data point is indicating more than a little stress in the Chinese economy (and the Asian engine of growth in general). Whether it is bank loan losses escalating, shadow-banking stress, real-estate corruption, dismal retail spending, the shrinking textile industry, the artificial production in the crushingly slow metals industry , the construction industry's contraction, or the massive '50%-above-demand' channel-stuffing now occurring in the Chinese auto market, Diapason Commodity's Sean Corrigan succinctly notes: "China bulls will not heed any of this, of course, for they are prisoners of the nested illusion that all increases in outlay represent genuine growth (cf, Occidental property bubbles) and that higher growth must imply greater profitability. They will also argue, on any uptick in the macro numbers, that the worst is not only behind us, but that it has been more than fully priced in." Given a picture paints a thousand words, Asian trade volumes have ended their rebound and are exhausted.
http://www.zerohedge.com/news/unbearable-factual-lightness-chinese-economy
September: Crunchtime For Europe And Germany
From Zero Hedge:
"September will undoubtedly be the crunch time," one senior euro zone policymaker said. "In nearly 20 years of dealing with EU issues, I've never known a state of affairs like we are in now," one euro zone diplomat said this week. "It really is a very, very difficult fix and it's far from certain that we'll be able to find the right way out of it."
http://www.zerohedge.com/news/september-crunchtime-europe-and-germany
"September will undoubtedly be the crunch time," one senior euro zone policymaker said. "In nearly 20 years of dealing with EU issues, I've never known a state of affairs like we are in now," one euro zone diplomat said this week. "It really is a very, very difficult fix and it's far from certain that we'll be able to find the right way out of it."
http://www.zerohedge.com/news/september-crunchtime-europe-and-germany
Sunday, July 29, 2012
Friday, July 27, 2012
Chris Hedges: The Careerists and the Banality of Evil
From Jesse's Cafe:
The greatest crimes of human history are made possible by the most colorless human beings. They are the careerists. The bureaucrats. The cynics. They do the little chores that make vast, complicated systems of exploitation and death a reality. They collect and read the personal data gathered on tens of millions of us by the security and surveillance state. They keep the accounts of ExxonMobil, BP and Goldman Sachs. They build or pilot aerial drones. They work in corporate advertising and public relations. They issue the forms. They process the papers. They deny food stamps to some and unemployment benefits or medical coverage to others. They enforce the laws and the regulations. And they do not ask questions.
Good. Evil. These words do not mean anything to them. They are beyond morality. They are there to make corporate systems function. If insurance companies abandon tens of millions of sick to suffer and die, so be it. If banks and sheriff departments toss families out of their homes, so be it. If financial firms rob citizens of their savings, so be it. If the government shuts down schools and libraries, so be it. If the military murders children in Pakistan or Afghanistan, so be it. If commodity speculators drive up the cost of rice and corn and wheat so that they are unaffordable for hundreds of millions of poor across the planet, so be it. If Congress and the courts strip citizens of basic civil liberties, so be it. If the fossil fuel industry turns the earth into a broiler of greenhouse gases that doom us, so be it. They serve the system. The god of profit and exploitation. The most dangerous force in the industrialized world does not come from those who wield radical creeds, whether Islamic radicalism or Christian fundamentalism, but from legions of faceless bureaucrats who claw their way up layered corporate and governmental machines. They serve any system that meets their pathetic quota of needs.
These systems managers believe nothing. They have no loyalty. They are rootless. They do not think beyond their tiny, insignificant roles. They are blind and deaf. They are, at least regarding the great ideas and patterns of human civilization and history, utterly illiterate. And we churn them out of universities. Lawyers. Technocrats. Business majors. Financial managers. IT specialists. Consultants. Petroleum engineers. “Positive psychologists.” Communications majors. Cadets. Sales representatives. Computer programmers. Men and women who know no history, know no ideas. They live and think in an intellectual vacuum, a world of stultifying minutia. They are T.S. Eliot’s “the hollow men,” “the stuffed men.” “Shape without form, shade without colour,” the poet wrote. “Paralysed force, gesture without motion.”
It was the careerists who made possible the genocides, from the extermination of Native Americans to the Turkish slaughter of the Armenians to the Nazi Holocaust to Stalin’s liquidations. They were the ones who kept the trains running. They filled out the forms and presided over the property confiscations. They rationed the food while children starved. They manufactured the guns. They ran the prisons. They enforced travel bans, confiscated passports, seized bank accounts and carried out segregation. They enforced the law. They did their jobs.
Political and military careerists, backed by war profiteers, have led us into useless wars, including World War I, Vietnam, Iraq and Afghanistan. And millions followed them. Duty. Honor. Country. Carnivals of death. They sacrifice us all. In the futile battles of Verdun and the Somme in World War I, 1.8 million on both sides were killed, wounded or never found. In July of 1917 British Field Marshal Douglas Haig, despite the seas of dead, doomed even more in the mud of Passchendaele. By November, when it was clear his promised breakthrough at Passchendaele had failed, he jettisoned the initial goal—as we did in Iraq when it turned out there were no weapons of mass destruction and in Afghanistan when al-Qaida left the country—and opted for a simple war of attrition. Haig “won” if more Germans than allied troops died. Death as score card. Passchendaele took 600,000 more lives on both sides of the line before it ended. It is not a new story. Generals are almost always buffoons. Soldiers followed John the Blind, who had lost his eyesight a decade earlier, to resounding defeat at the Battle of Crécy in 1337 during the Hundred Years War. We discover that leaders are mediocrities only when it is too late.
David Lloyd George, who was the British prime minister during the Passchendaele campaign, wrote in his memoirs: “[Before the battle of Passchendaele] the Tanks Corps Staff prepared maps to show how a bombardment which obliterated the drainage would inevitably lead to a series of pools, and they located the exact spots where the waters would gather. The only reply was a peremptory order that they were to ‘Send no more of these ridiculous maps.’ Maps must conform to plans and not plans to maps. Facts that interfered with plans were impertinencies.”
Here you have the explanation of why our ruling elites do nothing about climate change, refuse to respond rationally to economic meltdown and are incapable of coping with the collapse of globalization and empire. These are circumstances that interfere with the very viability and sustainability of the system. And bureaucrats know only how to serve the system. They know only the managerial skills they ingested at West Point or Harvard Business School. They cannot think on their own. They cannot challenge assumptions or structures. They cannot intellectually or emotionally recognize that the system might implode. And so they do what Napoleon warned was the worst mistake a general could make—paint an imaginary picture of a situation and accept it as real. But we blithely ignore reality along with them. The mania for a happy ending blinds us. We do not want to believe what we see. It is too depressing. So we all retreat into collective self-delusion.
In Claude Lanzmann’s monumental documentary film “Shoah,” on the Holocaust, he interviews Filip Müller, a Czech Jew who survived the liquidations in Auschwitz as a member of the “special detail.” Müller relates this story:
The greatest crimes of human history are made possible by the most colorless human beings. They are the careerists. The bureaucrats. The cynics. They do the little chores that make vast, complicated systems of exploitation and death a reality. They collect and read the personal data gathered on tens of millions of us by the security and surveillance state. They keep the accounts of ExxonMobil, BP and Goldman Sachs. They build or pilot aerial drones. They work in corporate advertising and public relations. They issue the forms. They process the papers. They deny food stamps to some and unemployment benefits or medical coverage to others. They enforce the laws and the regulations. And they do not ask questions.
Good. Evil. These words do not mean anything to them. They are beyond morality. They are there to make corporate systems function. If insurance companies abandon tens of millions of sick to suffer and die, so be it. If banks and sheriff departments toss families out of their homes, so be it. If financial firms rob citizens of their savings, so be it. If the government shuts down schools and libraries, so be it. If the military murders children in Pakistan or Afghanistan, so be it. If commodity speculators drive up the cost of rice and corn and wheat so that they are unaffordable for hundreds of millions of poor across the planet, so be it. If Congress and the courts strip citizens of basic civil liberties, so be it. If the fossil fuel industry turns the earth into a broiler of greenhouse gases that doom us, so be it. They serve the system. The god of profit and exploitation. The most dangerous force in the industrialized world does not come from those who wield radical creeds, whether Islamic radicalism or Christian fundamentalism, but from legions of faceless bureaucrats who claw their way up layered corporate and governmental machines. They serve any system that meets their pathetic quota of needs.
These systems managers believe nothing. They have no loyalty. They are rootless. They do not think beyond their tiny, insignificant roles. They are blind and deaf. They are, at least regarding the great ideas and patterns of human civilization and history, utterly illiterate. And we churn them out of universities. Lawyers. Technocrats. Business majors. Financial managers. IT specialists. Consultants. Petroleum engineers. “Positive psychologists.” Communications majors. Cadets. Sales representatives. Computer programmers. Men and women who know no history, know no ideas. They live and think in an intellectual vacuum, a world of stultifying minutia. They are T.S. Eliot’s “the hollow men,” “the stuffed men.” “Shape without form, shade without colour,” the poet wrote. “Paralysed force, gesture without motion.”
It was the careerists who made possible the genocides, from the extermination of Native Americans to the Turkish slaughter of the Armenians to the Nazi Holocaust to Stalin’s liquidations. They were the ones who kept the trains running. They filled out the forms and presided over the property confiscations. They rationed the food while children starved. They manufactured the guns. They ran the prisons. They enforced travel bans, confiscated passports, seized bank accounts and carried out segregation. They enforced the law. They did their jobs.
Political and military careerists, backed by war profiteers, have led us into useless wars, including World War I, Vietnam, Iraq and Afghanistan. And millions followed them. Duty. Honor. Country. Carnivals of death. They sacrifice us all. In the futile battles of Verdun and the Somme in World War I, 1.8 million on both sides were killed, wounded or never found. In July of 1917 British Field Marshal Douglas Haig, despite the seas of dead, doomed even more in the mud of Passchendaele. By November, when it was clear his promised breakthrough at Passchendaele had failed, he jettisoned the initial goal—as we did in Iraq when it turned out there were no weapons of mass destruction and in Afghanistan when al-Qaida left the country—and opted for a simple war of attrition. Haig “won” if more Germans than allied troops died. Death as score card. Passchendaele took 600,000 more lives on both sides of the line before it ended. It is not a new story. Generals are almost always buffoons. Soldiers followed John the Blind, who had lost his eyesight a decade earlier, to resounding defeat at the Battle of Crécy in 1337 during the Hundred Years War. We discover that leaders are mediocrities only when it is too late.
David Lloyd George, who was the British prime minister during the Passchendaele campaign, wrote in his memoirs: “[Before the battle of Passchendaele] the Tanks Corps Staff prepared maps to show how a bombardment which obliterated the drainage would inevitably lead to a series of pools, and they located the exact spots where the waters would gather. The only reply was a peremptory order that they were to ‘Send no more of these ridiculous maps.’ Maps must conform to plans and not plans to maps. Facts that interfered with plans were impertinencies.”
Here you have the explanation of why our ruling elites do nothing about climate change, refuse to respond rationally to economic meltdown and are incapable of coping with the collapse of globalization and empire. These are circumstances that interfere with the very viability and sustainability of the system. And bureaucrats know only how to serve the system. They know only the managerial skills they ingested at West Point or Harvard Business School. They cannot think on their own. They cannot challenge assumptions or structures. They cannot intellectually or emotionally recognize that the system might implode. And so they do what Napoleon warned was the worst mistake a general could make—paint an imaginary picture of a situation and accept it as real. But we blithely ignore reality along with them. The mania for a happy ending blinds us. We do not want to believe what we see. It is too depressing. So we all retreat into collective self-delusion.
In Claude Lanzmann’s monumental documentary film “Shoah,” on the Holocaust, he interviews Filip Müller, a Czech Jew who survived the liquidations in Auschwitz as a member of the “special detail.” Müller relates this story:
“One day in 1943 when I was already in Crematorium 5, a train from Bialystok arrived. A prisoner on the ‘special detail’ saw a woman in the ‘undressing room’ who was the wife of a friend of his. He came right out and told her: ‘You are going to be exterminated. In three hours you’ll be ashes.’ The woman believed him because she knew him. She ran all over and warned to the other women. ‘We’re going to be killed. We’re going to be gassed.’ Mothers carrying their children on their shoulders didn’t want to hear that. They decided the woman was crazy. They chased her away. So she went to the men. To no avail. Not that they didn’t believe her. They’d heard rumors in the Bialystok ghetto, or in Grodno, and elsewhere. But who wanted to hear that? When she saw that no one would listen, she scratched her whole face. Out of despair. In shock. And she started to scream..."http://jessescrossroadscafe.blogspot.kr/2012/07/chris-hedges-careerists-and-banality-of.html
Pater Tenebrarum: Central Banks Are Chomping At The Bit
From Zero Hedge:
Will the Fed then just keep printing forever and ever? As an aside, financial markets are already trained to adjust their expectations regarding central bank policy according to their perceptions about economic conditions. There is a feedback loop between central bank policy and market behavior. This can easily be seen in the behavior of the US stock market: recent evidence of economic conditions worsening at a fairly fast pace has not led to a big decline in stock prices, as people already speculate on the next 'QE' type bailout. This strategy is of course self-defeating, as it is politically difficult for the Fed to justify more money printing while the stock market remains at a lofty level. Of course the stock market's level is officially not part of the Fed's mandate, but the central bank clearly keeps a close eye on market conditions. Besides, the 'success' of 'QE2' according to Ben Bernanke was inter alia proved by a big rally in stocks. But what does printing money do? And how does the self-defeating idea of perpetual QE fit with the Credit Cycle relative to Government Directed Inflation (or inability to direct inflation where they want it in the case of the ECB and BoE)?
http://www.zerohedge.com/news/guest-post-central-banks-are-chomping-bit
Will the Fed then just keep printing forever and ever? As an aside, financial markets are already trained to adjust their expectations regarding central bank policy according to their perceptions about economic conditions. There is a feedback loop between central bank policy and market behavior. This can easily be seen in the behavior of the US stock market: recent evidence of economic conditions worsening at a fairly fast pace has not led to a big decline in stock prices, as people already speculate on the next 'QE' type bailout. This strategy is of course self-defeating, as it is politically difficult for the Fed to justify more money printing while the stock market remains at a lofty level. Of course the stock market's level is officially not part of the Fed's mandate, but the central bank clearly keeps a close eye on market conditions. Besides, the 'success' of 'QE2' according to Ben Bernanke was inter alia proved by a big rally in stocks. But what does printing money do? And how does the self-defeating idea of perpetual QE fit with the Credit Cycle relative to Government Directed Inflation (or inability to direct inflation where they want it in the case of the ECB and BoE)?
http://www.zerohedge.com/news/guest-post-central-banks-are-chomping-bit
Thursday, July 26, 2012
Kyle Bass Vindication Imminent? Largest Japanese Pension Fund Begins To Sell JGBs
From Zero Hedge:
Sayonara internal funding. In what we suspect will become a major issue (and warned in April of last year), Bloomberg reports that Japan’s public pension fund, the world’s largest, said it has been selling domestic government bonds as the number of people eligible for retirement payments increases. "Payouts are getting bigger than insurance revenue, so we need to sell Japanese government bonds to raise cash." It would appear the Ponzi has reached it's Tipping Point. Japan’s population is aging, and baby boomers born in the wake of World War II are beginning to reach 65 and eligible for pensions. That’s putting GPIF under pressure to sell JGBs so it can cover the increase in payouts. The fund needs to raise about 8.87 trillion yen this fiscal year. GPIF is historically one of the biggest buyers of Japanese debt and held 71.9 trillion yen, or 63 percent of its assets, in domestic bonds as of March.
http://www.zerohedge.com/news/kyle-bass-vindication-imminent-largest-japanese-pension-fund-begins-sell-jgbs
Sayonara internal funding. In what we suspect will become a major issue (and warned in April of last year), Bloomberg reports that Japan’s public pension fund, the world’s largest, said it has been selling domestic government bonds as the number of people eligible for retirement payments increases. "Payouts are getting bigger than insurance revenue, so we need to sell Japanese government bonds to raise cash." It would appear the Ponzi has reached it's Tipping Point. Japan’s population is aging, and baby boomers born in the wake of World War II are beginning to reach 65 and eligible for pensions. That’s putting GPIF under pressure to sell JGBs so it can cover the increase in payouts. The fund needs to raise about 8.87 trillion yen this fiscal year. GPIF is historically one of the biggest buyers of Japanese debt and held 71.9 trillion yen, or 63 percent of its assets, in domestic bonds as of March.
http://www.zerohedge.com/news/kyle-bass-vindication-imminent-largest-japanese-pension-fund-begins-sell-jgbs
Wednesday, July 25, 2012
Brandon Smith: CFR Globalists Say Don’t Worry - “Your Guns Are In Safe Hands”
From Zero Hedge:
It’s funny, I was worried about my Second Amendment rights just a moment ago, but now that the Council On Foreign Relations, a global governance think tank and inbred cesspool of despotic elitism, has explained the situation to me, I suddenly feel at ease… In preparation for the fast approaching UN summit on “international conventional arms trade” in New York, the CFR has published yet another disinformation piece skewing the facts and twisting reality to lull Americans into a state of apathy. Am I surprised that the CFR would rehash the talking points of the UN and declare uninhibited support for their worldwide gun grabbing bid? Of course not. The CFR and the UN are part and parcel of the same nefarious sea monster; each tentacle does its duty to rend sovereign ships asunder. However, such propaganda articles from establishment organizations do give us an opportunity to dissect and annihilate a host of lies and misdirections in one fell swoop. There may not be much sport in pulling apart the CFR’s poorly composed arguments, but, it has to be done…
http://www.zerohedge.com/news/guest-post-cfr-globalists-say-don%E2%80%99t-worry-%E2%80%9Cyour-guns-are-safe-hands%E2%80%9D
It’s funny, I was worried about my Second Amendment rights just a moment ago, but now that the Council On Foreign Relations, a global governance think tank and inbred cesspool of despotic elitism, has explained the situation to me, I suddenly feel at ease… In preparation for the fast approaching UN summit on “international conventional arms trade” in New York, the CFR has published yet another disinformation piece skewing the facts and twisting reality to lull Americans into a state of apathy. Am I surprised that the CFR would rehash the talking points of the UN and declare uninhibited support for their worldwide gun grabbing bid? Of course not. The CFR and the UN are part and parcel of the same nefarious sea monster; each tentacle does its duty to rend sovereign ships asunder. However, such propaganda articles from establishment organizations do give us an opportunity to dissect and annihilate a host of lies and misdirections in one fell swoop. There may not be much sport in pulling apart the CFR’s poorly composed arguments, but, it has to be done…
http://www.zerohedge.com/news/guest-post-cfr-globalists-say-don%E2%80%99t-worry-%E2%80%9Cyour-guns-are-safe-hands%E2%80%9D
British Double Dip Accelerates Following "Terrible" GDP Data
From Zero Hedge:
If the UK was desperately hoping for a "terrible" economic print, it got it this morning after preliminary Q2 GDP printed 0.7% on expectations of a -0.2% decline, following a -0.3% drop in Q1, cementing the country's double dip collapse. Reuters explains: "The Office for National Statistics said Britain's gross domestic product fell 0.7 percent in the second quarter, the sharpest fall since early 2009 and a bigger drop than any of the economists surveyed in a Reuters poll last week had expected. The figures confirmed that Britain is mired in its second recession since the financial crisis, with the economy shrinking for a third consecutive quarter. It will add pressure on Osborne to get the economy growing again after a crisis that has left many Britons poorer as rising prices and higher taxes ate up meager wage increases. Sterling hit its lowest in nearly two weeks against the dollar after the data, and government bond prices rallied on speculation that the Bank of England may have to provide more economic stimulus than expected. Earlier this month the BoE has announced another 50 billion pound program of gilt purchases with newly created money to soften a grim economic outlook, but Wednesday's data is likely to add to market speculation that it may cut interest rates later this year. "This is terrible data. Frankly there's nothing good that comes out of these numbers at all," said Peter Dixon, an economist at Commerzbank. "The economy looks to be badly holed below the water line at this stage. It's a far worse period of activity than we'd expected."" Amusingly, according to Goldman "It is difficult to reconcile the weakness of today’s official GDP data with any other indicator of economic or labour market activity." We knew the peripherals were doing all they can to sabotage their economies and be eligible for more aid and bailouts. But the UK?
http://www.zerohedge.com/news/british-double-dip-accelerates-following-terrible-gdp-data
If the UK was desperately hoping for a "terrible" economic print, it got it this morning after preliminary Q2 GDP printed 0.7% on expectations of a -0.2% decline, following a -0.3% drop in Q1, cementing the country's double dip collapse. Reuters explains: "The Office for National Statistics said Britain's gross domestic product fell 0.7 percent in the second quarter, the sharpest fall since early 2009 and a bigger drop than any of the economists surveyed in a Reuters poll last week had expected. The figures confirmed that Britain is mired in its second recession since the financial crisis, with the economy shrinking for a third consecutive quarter. It will add pressure on Osborne to get the economy growing again after a crisis that has left many Britons poorer as rising prices and higher taxes ate up meager wage increases. Sterling hit its lowest in nearly two weeks against the dollar after the data, and government bond prices rallied on speculation that the Bank of England may have to provide more economic stimulus than expected. Earlier this month the BoE has announced another 50 billion pound program of gilt purchases with newly created money to soften a grim economic outlook, but Wednesday's data is likely to add to market speculation that it may cut interest rates later this year. "This is terrible data. Frankly there's nothing good that comes out of these numbers at all," said Peter Dixon, an economist at Commerzbank. "The economy looks to be badly holed below the water line at this stage. It's a far worse period of activity than we'd expected."" Amusingly, according to Goldman "It is difficult to reconcile the weakness of today’s official GDP data with any other indicator of economic or labour market activity." We knew the peripherals were doing all they can to sabotage their economies and be eligible for more aid and bailouts. But the UK?
http://www.zerohedge.com/news/british-double-dip-accelerates-following-terrible-gdp-data
Tuesday, July 24, 2012
David Stockman: "The Capital Markets Are Simply A Branch Casino Of The Central Bank"
From Zero Hedge:
"This market isn't real. The two percent on the ten-year, the ninety basis points on the five-year, thirty basis points on a one-year – those are medicated, pegged rates created by the Fed and which fast-money traders trade against as long as they are confident the Fed can keep the whole market rigged. Nobody in their right mind wants to own the ten-year bond at a two percent interest rate. But they're doing it because they can borrow overnight money for free, ten basis points, put it on repo, collect 190 basis points a spread, and laugh all the way to the bank. And they will keep laughing all the way to the bank on Wall Street until they lose confidence in the Fed's ability to keep the yield curve pegged where it is today. If the bond ever starts falling in price, they unwind the carry trade. Then you get a message, "Do not pass go." Sell your bonds, unwind your overnight debt, your repo positions. And the system then begins to contract... The Fed has destroyed the money market. It has destroyed the capital markets. They have something that you can see on the screen called an "interest rate." That isn't a market price of money or a market price of five-year debt capital. That is an administered price that the Fed has set and that every trader watches by the minute to make sure that he's still in a positive spread. And you can't have capitalism if the capital markets are dead, if the capital markets are simply a branch office – branch casino – of the central bank. That's essentially what we have today."
http://www.zerohedge.com/news/david-stockman-capital-markets-are-simply-branch-casino-central-bank
"This market isn't real. The two percent on the ten-year, the ninety basis points on the five-year, thirty basis points on a one-year – those are medicated, pegged rates created by the Fed and which fast-money traders trade against as long as they are confident the Fed can keep the whole market rigged. Nobody in their right mind wants to own the ten-year bond at a two percent interest rate. But they're doing it because they can borrow overnight money for free, ten basis points, put it on repo, collect 190 basis points a spread, and laugh all the way to the bank. And they will keep laughing all the way to the bank on Wall Street until they lose confidence in the Fed's ability to keep the yield curve pegged where it is today. If the bond ever starts falling in price, they unwind the carry trade. Then you get a message, "Do not pass go." Sell your bonds, unwind your overnight debt, your repo positions. And the system then begins to contract... The Fed has destroyed the money market. It has destroyed the capital markets. They have something that you can see on the screen called an "interest rate." That isn't a market price of money or a market price of five-year debt capital. That is an administered price that the Fed has set and that every trader watches by the minute to make sure that he's still in a positive spread. And you can't have capitalism if the capital markets are dead, if the capital markets are simply a branch office – branch casino – of the central bank. That's essentially what we have today."
http://www.zerohedge.com/news/david-stockman-capital-markets-are-simply-branch-casino-central-bank
Charles Hugh Smith: Before You "Buy the Dip," Look at These Two Charts
From Of Two Minds:
The first is a long-term chart of the Dow Jones Industrial Average (DJIA). The recent price history has traced out a pattern that looks remarkably similar to the one that presaged the crash of 2008, with one difference: massive quantitative easing and Eurozone bailouts pushed the B leg into an overextension. If this pattern is valid, the C leg down could be a real doozy.
http://www.oftwominds.com/blogjuly12/buy-the-dip7-12.html
The first is a long-term chart of the Dow Jones Industrial Average (DJIA). The recent price history has traced out a pattern that looks remarkably similar to the one that presaged the crash of 2008, with one difference: massive quantitative easing and Eurozone bailouts pushed the B leg into an overextension. If this pattern is valid, the C leg down could be a real doozy.
http://www.oftwominds.com/blogjuly12/buy-the-dip7-12.html
Chris Hedges with Reminiscences of a War Correspondent
Chris Hedge is a journalist and author. I have posted a couple of posting on him because he offers some interesting perspectives. He went to Harvard Divinity School before he became a war correspondent for the New York Times. I have seen some brilliant journalists who have devoted themselves to journalism while they could have chosen some other lucrative careers. I did my graduate work in journalism in the States.
From Jesse's Cafe:
Here is a slightly different look at Chris Hedges, as he discusses literature, journalism, and his memories as a war correspondent.
It has some remarkably good, sometimes poignant, moments and is well worth watching.
He has some hard words for Wall Street and the elite academic institutions that serve them en passant starting around minute 38.
I have also added a second appearance by Chris on the Bill Moyers show in which he discusses his more recent visits to American 'sacrifice zones.'
http://jessescrossroadscafe.blogspot.kr/2012/07/chris-hedges-remniscences-of-war.html
From Jesse's Cafe:
Here is a slightly different look at Chris Hedges, as he discusses literature, journalism, and his memories as a war correspondent.
It has some remarkably good, sometimes poignant, moments and is well worth watching.
He has some hard words for Wall Street and the elite academic institutions that serve them en passant starting around minute 38.
I have also added a second appearance by Chris on the Bill Moyers show in which he discusses his more recent visits to American 'sacrifice zones.'
http://jessescrossroadscafe.blogspot.kr/2012/07/chris-hedges-remniscences-of-war.html
Apple Falls
From Zero Hedge:
Major misses everywhere, and this for the second quarter in a row - from the Q3 earnings report:
http://www.zerohedge.com/news/apple-falls
Major misses everywhere, and this for the second quarter in a row - from the Q3 earnings report:
- APPLE 3Q REV. $35.02B, EST. $37.25B
- APPLE 3Q EPS $9.32, EXP. $10.37
- APPLE 3Q NET PROFIT $8.8B
- APPLE SEES 4Q REV. ABOUT $34B, EST. $38.01B
- AAPLE 3Q GROSS MARGIN 42.8%, EST. 43.8%
- APPLE SOLD 17.0 MILLION IPADS DURING QTR, UNIT EST. 15.4M
- APPLE 3Q IPOD UNITS SOLD 6.8MLN , DOWN 10%
- APPLE SOLD 4.0 MILLION MACS DURING QTR, UNIT EST. 4.3M
- APPLE SOLD 6.8 MILLION IPODS IN QTR, UNIT EST. 6.6M
http://www.zerohedge.com/news/apple-falls
Europe Smashes All Market Records On Its Way To Total Insolvency
From Zero Hedge:
Spain's IBEX equity index closed at Euro-era lows today having dropped over 10% in the last 3 days (crushing the hopes of the afternoon post-short-sale-ban squeeze yesterday). This leaves IBEX down over 30% for the year (and Italy down over 18% YTD). Add to that; inverted long-end curves in Spain (and almost Italy), all-time record high short- and long-term spreads for Spanish debt and euro-era record high yields, record wide CDS-Cash basis, dramatic short-end weakness in Italy, new low negative rates in Switzerland (-46bps) and Germany (-7bps), and EURUSD at its lowest since June 2010 at 1.2059. But apart from that, the EU Summit seems to have done the trick nicely. Financials have been crushed in credit-land as subs notably underperform seniors and HY and IG credit continues to lead the equity markets lower in reality. Meanwhile, remember Greece? 30Y GGBs have dropped almost 20% in price in the last few days and have closed at all-time record low closing price at just EUR11.55!! S'all good though - where's Whitney?
http://www.zerohedge.com/news/europe-smashes-all-market-records-its-way-total-insolvency
Spain's IBEX equity index closed at Euro-era lows today having dropped over 10% in the last 3 days (crushing the hopes of the afternoon post-short-sale-ban squeeze yesterday). This leaves IBEX down over 30% for the year (and Italy down over 18% YTD). Add to that; inverted long-end curves in Spain (and almost Italy), all-time record high short- and long-term spreads for Spanish debt and euro-era record high yields, record wide CDS-Cash basis, dramatic short-end weakness in Italy, new low negative rates in Switzerland (-46bps) and Germany (-7bps), and EURUSD at its lowest since June 2010 at 1.2059. But apart from that, the EU Summit seems to have done the trick nicely. Financials have been crushed in credit-land as subs notably underperform seniors and HY and IG credit continues to lead the equity markets lower in reality. Meanwhile, remember Greece? 30Y GGBs have dropped almost 20% in price in the last few days and have closed at all-time record low closing price at just EUR11.55!! S'all good though - where's Whitney?
http://www.zerohedge.com/news/europe-smashes-all-market-records-its-way-total-insolvency
Sunday, July 22, 2012
Tim Noah: The Great Divergence
From Jesse's Cafe:
So that’s why growing inequality isn’t necessary. Why is it worrisome?
Because it creates alienation. I worry less about the 99 percent (which, let’s face it, includes a lot of pretty affluent people) than about the bottom 60 or 50 percent. Income earners at the median have not shared in America’s prosperity. They’ve actually seen their incomes go down (after inflation) during the past decade, and over the past three decades their increases seem pitiful compared both with people earning top incomes (and here I mean not just the top 1 percent but the top 10 and even 20 percent) and with people at the median during the postwar era. For a long time economists said: Wait until productivity rebounds. Then working families will get their share. But when productivity rebounded like crazy in the aughts, working families saw no reward.
What this means is that if you’re at the median you have no positive reason to care how the economy does. Your only motivation is fear—if the economy does really badly you may lose your job. But there’s no upside.
I think this situation has a lot to do with why there’s so much suspicion of institutions that knit the country together—Congress, the media, etc. Logically the suspicion should be directed at the rich, but nobody knows what Lloyd Blankfein looks like. Everybody knows what Barack Obama and John Boehner look like. So people rage against Washington, and government, and you get both the Tea Party and Occupy Wall Street. These groups are quite different in their political orientation, but both groups express contempt for democratic processes.
I also think that the social deterioration of the working class described in Charles Murray’s recent book Coming Apart—out-of-wedlock births, dwindling church attendance, etc.—is largely attributable to the Great Divergence. Murray perversely insists that it’s entirely cultural, but if you ignore that then his book does a pretty good job describing what happens to a society in which people lose their sense of common purpose.
http://jessescrossroadscafe.blogspot.kr/2012/07/tim-noah-great-divergence.html
So that’s why growing inequality isn’t necessary. Why is it worrisome?
Because it creates alienation. I worry less about the 99 percent (which, let’s face it, includes a lot of pretty affluent people) than about the bottom 60 or 50 percent. Income earners at the median have not shared in America’s prosperity. They’ve actually seen their incomes go down (after inflation) during the past decade, and over the past three decades their increases seem pitiful compared both with people earning top incomes (and here I mean not just the top 1 percent but the top 10 and even 20 percent) and with people at the median during the postwar era. For a long time economists said: Wait until productivity rebounds. Then working families will get their share. But when productivity rebounded like crazy in the aughts, working families saw no reward.
What this means is that if you’re at the median you have no positive reason to care how the economy does. Your only motivation is fear—if the economy does really badly you may lose your job. But there’s no upside.
I think this situation has a lot to do with why there’s so much suspicion of institutions that knit the country together—Congress, the media, etc. Logically the suspicion should be directed at the rich, but nobody knows what Lloyd Blankfein looks like. Everybody knows what Barack Obama and John Boehner look like. So people rage against Washington, and government, and you get both the Tea Party and Occupy Wall Street. These groups are quite different in their political orientation, but both groups express contempt for democratic processes.
I also think that the social deterioration of the working class described in Charles Murray’s recent book Coming Apart—out-of-wedlock births, dwindling church attendance, etc.—is largely attributable to the Great Divergence. Murray perversely insists that it’s entirely cultural, but if you ignore that then his book does a pretty good job describing what happens to a society in which people lose their sense of common purpose.
http://jessescrossroadscafe.blogspot.kr/2012/07/tim-noah-great-divergence.html
Departing IMF Senior Economist: "Ashamed To Have Had Any Association With Fund At All"
From Naked Capitalism:
From Zero Hedge:
The rats everywhere are now jumping furiously off the titanic, but few had taken the time to write a letter explaining in detail just how cracked and broken the hull really was. This has now changed, with the departure of Peter Doyle, formerly a division chief in the IMF’s European Department responsible for non-crisis countries and currently an adviser to the Fund. Not content with quietly slinking off the scandal ridden organization which has become the butt of all jokes in the international community, where humor about Lagarde's Louis Vuitton panhandling bag is as pervasive as punchlines about just how incompetent the organization is at actually doing its duty, Doyle has penned the following scathing letter which tears down every myth about the IMF: from its impartiality, to the selection process of its head, to its effectiveness. The letter also contains the following gem: "After twenty years of service, I am ashamed to have had any association with the Fund at all." Pretty much says it all. This is a scandal in the making, and one which may shake to the core the credibility of the IMF in the context of international organization.
http://www.zerohedge.com/news/scandal-imf-senior-economist-resigns-says-ashamed-have-had-any-association-fund-all
From Zero Hedge:
The rats everywhere are now jumping furiously off the titanic, but few had taken the time to write a letter explaining in detail just how cracked and broken the hull really was. This has now changed, with the departure of Peter Doyle, formerly a division chief in the IMF’s European Department responsible for non-crisis countries and currently an adviser to the Fund. Not content with quietly slinking off the scandal ridden organization which has become the butt of all jokes in the international community, where humor about Lagarde's Louis Vuitton panhandling bag is as pervasive as punchlines about just how incompetent the organization is at actually doing its duty, Doyle has penned the following scathing letter which tears down every myth about the IMF: from its impartiality, to the selection process of its head, to its effectiveness. The letter also contains the following gem: "After twenty years of service, I am ashamed to have had any association with the Fund at all." Pretty much says it all. This is a scandal in the making, and one which may shake to the core the credibility of the IMF in the context of international organization.
http://www.zerohedge.com/news/scandal-imf-senior-economist-resigns-says-ashamed-have-had-any-association-fund-all
Lance Roberts: Corporate Profits Surge At Expense Of Workers
From Zero Hedge:
Furthermore, over the past decade the demand on businesses to increase profits, from shareholders and Wall Street, has driven productivity higher and wages lower. Real wages are well below the long term trend due to the large, and available, labor pool which keeps wages and salary levels suppressed. Lower wages are double edged sword for businesses. In the short run lower wages increase profitability. In the longer term, as wages fail to keep pace with inflation, consumers struggle to maintain their standard living which forces them to cut back on consumption eroding end demand on businesses. The cycle, which is deflationary in nature, is very difficult to break.
While it is enticing to want to force corporations to deploy the cash and create jobs - the unfortunate situation is that it is the very demands to maintain profitability that keeps them on the defensive. Secondarily, let's not forget that we live in a free market economy and businesses are in the "business" of making profits.
As Bernanke stated, in his recent testimony to Congress, it is imperative that Congress acts with fiscal policy changes that promotes real, organic, economic growth. Corporations will not increase hiring, and ultimately wages, until end demand substantially increases. Consumers can not increase demand until they have more money to spend. This "chicken and egg" syndrome is indicative of the problem that faces an economy trapped in a deflationary cycle. Fiscal policy that leads to productive investment, removes uncertainty about future regulatory and tax implications, and provides an environment that allows cash to be invested at profitable rates of return will ultimately break the blockade the economy currently faces. However, until then, businesses have no incentive to release their "cash hoards" as long as "poor sales", as shown in the recent NFIB report, remain their primary concern.
For investors, the continued increases in profitability, at the expense of wages, is very finite. It is revenue that matters in the long term - without subsequent increases at the top line; bottom line profitability is severely at risk. The stock market is not cheap, especially in an environment where interest rates are artificially suppressed and earnings are inflated due to "accounting magic." This increases the risk of a significant market correction particularly with a market driven by "hopes" of further central bank interventions. This reeks of a risky environment, which can remain irrational longer than expected, that will eventually revert when expectations and reality collide.
Charles Ferguson : Predator Nation
From Jesse's Cafe:
Chapter 1 (an excerpt)
WHERE WE ARE NOW
MANY BOOKS HAVE ALREADY been written about the financial crisis, but there are two reasons why I decided that it was still important to write this one.
The first reason is that the bad guys got away with it, and there has been stunningly little public debate about this fact. When I received the Oscar for best documentary in 2011, I said: “Three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail. And that’s wrong.” When asked afterward about the absence of prosecutions, senior Obama administration officials gave evasive nonanswers, suggesting that nothing illegal occurred, or that investigations were continuing. None of the major Republican presidential candidates have raised the issue at all.
As of early 2012 there has still not been a single criminal prosecution of a senior financial executive related to the financial crisis. Nor has there been any serious attempt by the federal government to use civil suits, asset seizures, or restraining orders to extract fines or restitution from the people responsible for plunging the world economy into recession. This is not because we have no evidence of criminal behavior. Since the release of my film, a large amount of new material has emerged, especially from private lawsuits, that reveals, through e-mail trails and other evidence, that many bankers, including senior management, knew exactly what was going on, and that it was highly fraudulent.
But even leaving this crisis aside, there is now abundant evidence of widespread, unpunished criminal behavior in the financial sector. Later in this book, I go through the list of what we already know, which is a lot. In addition to the behavior that caused the crisis, major U.S. and European banks have been caught assisting corporate fraud by Enron and others, laundering money for drug cartels and the Iranian military, aiding tax evasion, hiding the assets of corrupt dictators, colluding in order to fix prices, and committing many forms of financial fraud. The evidence is now overwhelming that over the last thirty years, the U.S. financial sector has become a rogue industry. As its wealth and power grew, it subverted America’s political system (including both political parties), government, and academic institutions in order to free itself from regulation. As deregulation progressed, the industry became ever more unethical and dangerous, producing ever larger financial crises and ever more blatant criminality. Since the 1990s, its power has been sufficient to insulate bankers not only from effective regulation but even from criminal law enforcement. The financial sector is now a parasitic and destabilizing industry that constitutes a major drag on American economic growth.
This means that criminal prosecution is not just a matter of vengeance or even justice. Real punishment for large-scale financial criminality is a vital element of the financial re-regulation that is, in turn, essential to America’s (and the world’s) economic health and stability. Regulation is nice, but the threat of prison focuses the mind. A noted expert, the gangster Al Capone, once said, “You can get much further in life with a kind word and a gun than with a kind word alone.” If financial executives know that they will go to jail if they commit major frauds that endanger the world economy, and that their illegal wealth will be confiscated, then they will be considerably less likely to commit such frauds and cause global financial crises. So one reason for writing this book is to lay out in painfully clear detail the case for criminal prosecutions. In this book, I demonstrate that much of the behavior underlying the bubble and crisis was quite literally criminal, and that the lack of prosecution is nearly as outrageous as the financial sector’s original conduct.
The second reason that I decided to write this book is that the rise of predatory finance is both a cause and a symptom of an even broader, and even more disturbing, change in America’s economy and political system. The financial sector is the core of a new oligarchy that has risen to power over the past thirty years, and that has profoundly changed American life. The later chapters of this book are devoted to analyzing how this happened and what it means.
Wednesday, July 18, 2012
UBS Issues Hyperinflation Warning For US And UK, Calls It Purely "A Fiscal Phenomenon"
From Zero Hedge:
From UBS: "We think that a creditor nation is less at risk of hyperinflation than a debtor nation, as a debtor nation relies not only on the confidence of domestic creditors, but also of foreign creditors. We therefore think that the hyperinflation risk to global investors is largest in the US and the UK. The more the fiscal situation deteriorates and the more central banks debase their currencies, the higher the risk of a loss of confidence in the future purchasing power of money. Indicators to watch in order to determine the risk of hyperinflation therefore pertain to the fiscal situation and monetary policy stance in high-deficit countries. Note that current government deficits and the current size of central bank balance sheets are not sufficient to indicate the sustainability of the fiscal or monetary policy stance and thus, the risk of hyperinflation. The fiscal situation can worsen without affecting the current fiscal deficit, for example when governments assume contingent liabilities of the banking system or when the economic outlook worsens unexpectedly. Similarly, the monetary policy stance can expand without affecting the size of the central bank balance sheet. This happens for example when central banks lower collateral requirements or monetary policy rates, in particular the interest rate paid on reserves deposited with the central bank. A significant deterioration of the fiscal situation or a significant expansion of the monetary policy stance in the large-deficit countries could lead us to increase the probability we assign to the risk of hyperinflation."
http://www.zerohedge.com/news/ubs-issues-hyperinflation-warning-us-and-uk-calls-it-purely-fiscal-phenomenon
From UBS: "We think that a creditor nation is less at risk of hyperinflation than a debtor nation, as a debtor nation relies not only on the confidence of domestic creditors, but also of foreign creditors. We therefore think that the hyperinflation risk to global investors is largest in the US and the UK. The more the fiscal situation deteriorates and the more central banks debase their currencies, the higher the risk of a loss of confidence in the future purchasing power of money. Indicators to watch in order to determine the risk of hyperinflation therefore pertain to the fiscal situation and monetary policy stance in high-deficit countries. Note that current government deficits and the current size of central bank balance sheets are not sufficient to indicate the sustainability of the fiscal or monetary policy stance and thus, the risk of hyperinflation. The fiscal situation can worsen without affecting the current fiscal deficit, for example when governments assume contingent liabilities of the banking system or when the economic outlook worsens unexpectedly. Similarly, the monetary policy stance can expand without affecting the size of the central bank balance sheet. This happens for example when central banks lower collateral requirements or monetary policy rates, in particular the interest rate paid on reserves deposited with the central bank. A significant deterioration of the fiscal situation or a significant expansion of the monetary policy stance in the large-deficit countries could lead us to increase the probability we assign to the risk of hyperinflation."
http://www.zerohedge.com/news/ubs-issues-hyperinflation-warning-us-and-uk-calls-it-purely-fiscal-phenomenon
Hugh Hendry: Pessimistic about China, Optimistic about the U.S.
From the FT:
At the Milken Institute conference in May, he told the audience that France was just a year away from nationalising its banks and that politicians had still not faced up to the scale of the global debt bubble that was now imploding.
“We have reached a profound point in economic history where the truth is unpalatable to the political class – and that truth is that the scale and magnitude of the problem is larger than their ability to respond – and it terrifies them.”
Three years after Mr Hendry posted videos on YouTube of his visits to Chinese ‘ghost’ towns, he remains pessimistic about the Middle Kingdom. He is shorting the equity of Chinese state-owned enterprises, balanced by a long position in a basket of Asian non-discretionary consumer stocks.
He is also using credit default swaps to bet against the debt of financially leveraged Japanese companies such as Toshiba, which he believes are particularly exposed to a Chinese slowdown.
Mr Hendry insists that his reputation as a “contrarian” investor is wrong, and that his approach is in fact to take advantage of the prevailing momentum in markets. “Our ideas are harshly disciplined by market trends. You will never see us pursue a homegrown idea when it is to the detriment of the prevailing trend.”
For example, he reckons US government bond yields, already at record lows, will continue to fall. And, although he professes not to be a contrarian, he is more optimistic about the US than many investors and is “long the debt-saddled west and short the vastly over-vaunted and over-owned” Bric quartet of Brazil, Russia, India and China.
He believes that financial markets are single-digit years away from a crash that will present investors with opportunities of a lifetime. “Bad things are going to happen and I still think the closest analogy is the 1930s.”
http://www.zerohedge.com/news/hugh-hendry-when-i-speak-tv-it-gives-impression-i-am-full-myself
At the Milken Institute conference in May, he told the audience that France was just a year away from nationalising its banks and that politicians had still not faced up to the scale of the global debt bubble that was now imploding.
“We have reached a profound point in economic history where the truth is unpalatable to the political class – and that truth is that the scale and magnitude of the problem is larger than their ability to respond – and it terrifies them.”
Three years after Mr Hendry posted videos on YouTube of his visits to Chinese ‘ghost’ towns, he remains pessimistic about the Middle Kingdom. He is shorting the equity of Chinese state-owned enterprises, balanced by a long position in a basket of Asian non-discretionary consumer stocks.
He is also using credit default swaps to bet against the debt of financially leveraged Japanese companies such as Toshiba, which he believes are particularly exposed to a Chinese slowdown.
Mr Hendry insists that his reputation as a “contrarian” investor is wrong, and that his approach is in fact to take advantage of the prevailing momentum in markets. “Our ideas are harshly disciplined by market trends. You will never see us pursue a homegrown idea when it is to the detriment of the prevailing trend.”
For example, he reckons US government bond yields, already at record lows, will continue to fall. And, although he professes not to be a contrarian, he is more optimistic about the US than many investors and is “long the debt-saddled west and short the vastly over-vaunted and over-owned” Bric quartet of Brazil, Russia, India and China.
He believes that financial markets are single-digit years away from a crash that will present investors with opportunities of a lifetime. “Bad things are going to happen and I still think the closest analogy is the 1930s.”
http://www.zerohedge.com/news/hugh-hendry-when-i-speak-tv-it-gives-impression-i-am-full-myself
City Of Compton Next On the Muni Bankruptcy Deck
From Zero Hedge:
Because once the dominoes start, they don't stop. Stockton, Mammoth, San Bernardino and now legendary rap and LA riots nexus - the City of Compton. Fear not: the ESM, and the German population whose retirement age will have to be in the quadruple digit range to fund a broke world, has got this, too, covered. Also, only squares don't make fun of Meredith Whitney for saying municipal America is insolvent, so please do.
http://www.zerohedge.com/news/city-compton-next-muni-bankruptcy-deck
Because once the dominoes start, they don't stop. Stockton, Mammoth, San Bernardino and now legendary rap and LA riots nexus - the City of Compton. Fear not: the ESM, and the German population whose retirement age will have to be in the quadruple digit range to fund a broke world, has got this, too, covered. Also, only squares don't make fun of Meredith Whitney for saying municipal America is insolvent, so please do.
http://www.zerohedge.com/news/city-compton-next-muni-bankruptcy-deck
Tuesday, July 17, 2012
The Post-World War II American Renaissance Lightning Will Not Strike Twice
From Zero Hedge:
There have been quite a few stories comparing the post-WWII American economic "renaissance" with expectations that the same confluence of beneficial circumstances may repeat now, resulting in the same benign outcome. Many of these stories touch upon the key points debated in today's everyday politics: taxes, massive debt overhang, and the treatment of private business. Sadly, most of these stories are also just that: mythical representations of an idealized reality, which however have no analogy to what actually happened in the 1950s. In other words, none of the conditions that were in place in 1950 which allowed net US debt to decline from 80% of GDP to just 46% in one decade, are here now.
JPM's Michael Cembalest opines on how the US dug itself out of wartime debt levels after WWII.
I find that there is a lot of misreporting about how US debt levels were halved during the 1950’s. As shown in the table below, government spending was not cut sharply; there was no radical increase in tax collections, either from businesses or from households; and the Fed did not engineer negative long-term real interest rates to jumpstart growth. In addition to the competitive advantage the US had over recovering Axis Powers, the US of the 1950’s benefited from pro-business policies that resulted in over 4% annualized GDP growth throughout the decade. This approach is not in play now, raising questions about how the US will deal with 80% net debt to GDP for only the second time in its 200+ year history.
His conclusion:
1950’s time capsule: taxes were regarded as a greater cause for small business failures than tight money. Eisenhower championed legislation which eased tax burdens on small business and which culminated in a bill eliminating double-taxation (Subchapter S); he also eliminated wage and price controls. In the 1950’s, the private sector accounted for a post-war peak of 86% of all employment, a level not seen since.
Of course, much of the Keynesian miracle of 1950-1960 had to do with the "broken window" that was Europe, and specifically its rebuilding. Which means that one key variable that is missing is a continent full of destruction that just needed America's helping hand and some Brady Bonds, leading to America reaping a disproportionate share of the benefits. We are confident the American Military-Industrial complex is well aware of this and is already on top of things.
http://www.zerohedge.com/news/post-world-war-ii-american-renaissance-lightning-will-not-strike-twice
There have been quite a few stories comparing the post-WWII American economic "renaissance" with expectations that the same confluence of beneficial circumstances may repeat now, resulting in the same benign outcome. Many of these stories touch upon the key points debated in today's everyday politics: taxes, massive debt overhang, and the treatment of private business. Sadly, most of these stories are also just that: mythical representations of an idealized reality, which however have no analogy to what actually happened in the 1950s. In other words, none of the conditions that were in place in 1950 which allowed net US debt to decline from 80% of GDP to just 46% in one decade, are here now.
JPM's Michael Cembalest opines on how the US dug itself out of wartime debt levels after WWII.
I find that there is a lot of misreporting about how US debt levels were halved during the 1950’s. As shown in the table below, government spending was not cut sharply; there was no radical increase in tax collections, either from businesses or from households; and the Fed did not engineer negative long-term real interest rates to jumpstart growth. In addition to the competitive advantage the US had over recovering Axis Powers, the US of the 1950’s benefited from pro-business policies that resulted in over 4% annualized GDP growth throughout the decade. This approach is not in play now, raising questions about how the US will deal with 80% net debt to GDP for only the second time in its 200+ year history.
His conclusion:
1950’s time capsule: taxes were regarded as a greater cause for small business failures than tight money. Eisenhower championed legislation which eased tax burdens on small business and which culminated in a bill eliminating double-taxation (Subchapter S); he also eliminated wage and price controls. In the 1950’s, the private sector accounted for a post-war peak of 86% of all employment, a level not seen since.
Of course, much of the Keynesian miracle of 1950-1960 had to do with the "broken window" that was Europe, and specifically its rebuilding. Which means that one key variable that is missing is a continent full of destruction that just needed America's helping hand and some Brady Bonds, leading to America reaping a disproportionate share of the benefits. We are confident the American Military-Industrial complex is well aware of this and is already on top of things.
http://www.zerohedge.com/news/post-world-war-ii-american-renaissance-lightning-will-not-strike-twice
IMF Says Japan And Spain Are Done, "Debt Ratio Will Never Stabilize"
From Zero Hedge:
The IMF believes that advanced economy deficits will decline by about 0.75 percentage points of GDP this year which 'strikes a compromise between restoring fiscal sustainability and supporting growth". However, continued focus on nominal deficit targets runs the risk of compelling excessive fiscal tightening if growth weakens. In addition, there is a risk in the United States of political gridlock that puts fiscal policy on autopilot and results in a sharp and sudden decline in deficits—the “fiscal cliff.” What is more troubling is the significant upward revision to all of the peripheral European nations (with Greece now at 171% Debt/GDP in 2013 versus 160.9% forecast only 3 months ago). While the average debt-to-GDP ratio among advanced economies is projected to continue to rise over the next two years, surpassing 110 percent of GDP on average in 2013, debt ratios will by then have peaked in several advanced economies - though rather explosively they do not see debt ratios for Spain and Japan stabilizing.
http://www.zerohedge.com/news/imf-says-japan-and-spain-are-done-debt-ratio-will-never-stabilize
The IMF believes that advanced economy deficits will decline by about 0.75 percentage points of GDP this year which 'strikes a compromise between restoring fiscal sustainability and supporting growth". However, continued focus on nominal deficit targets runs the risk of compelling excessive fiscal tightening if growth weakens. In addition, there is a risk in the United States of political gridlock that puts fiscal policy on autopilot and results in a sharp and sudden decline in deficits—the “fiscal cliff.” What is more troubling is the significant upward revision to all of the peripheral European nations (with Greece now at 171% Debt/GDP in 2013 versus 160.9% forecast only 3 months ago). While the average debt-to-GDP ratio among advanced economies is projected to continue to rise over the next two years, surpassing 110 percent of GDP on average in 2013, debt ratios will by then have peaked in several advanced economies - though rather explosively they do not see debt ratios for Spain and Japan stabilizing.
http://www.zerohedge.com/news/imf-says-japan-and-spain-are-done-debt-ratio-will-never-stabilize
David Stockman: "We're At The Fiscal Endgame"
From Zero Hedge:
To those on the hill and elsewhere who suggest this growing 'fiscal cliff' and 'debt ceiling' crisis will all get solved, former Office of Management and Budget (OMB) Director David Stockman tells Bloomberg TV that "they will punt, punt, punt and kick the can with partial solutions driven by eleventh hour crisis-based extensions that will go on for the whole of the next term!" When asked whether this economy will be mired in the doldrums, he rather ominously states "it will be worse, because we will be in recession" and notes that when the lame ducks re-look at the budget numbers with a realistic recession (instead of the current assumption of no recession within 12 years) it will be far worse and in a political environment where 'we cannot possibly raise taxes - and we cannot possibly cut spending'. With a 78% disapproval rating for the 'do nothing' Congress, Stockman is surprised that 16% somehow approve - approve of what? His warning is that unlike in past periods, today "we are completely paralyzed, there is an ideological divide on taxes and entitlement like we've never had before" and while he realizes that "the debt problem doesn't become a debt problem until the market suddenly have a wake up call and realize that if the Fed doesn't keep printing, it's game over."
http://www.zerohedge.com/news/ombs-stockman-were-fiscal-endgame
To those on the hill and elsewhere who suggest this growing 'fiscal cliff' and 'debt ceiling' crisis will all get solved, former Office of Management and Budget (OMB) Director David Stockman tells Bloomberg TV that "they will punt, punt, punt and kick the can with partial solutions driven by eleventh hour crisis-based extensions that will go on for the whole of the next term!" When asked whether this economy will be mired in the doldrums, he rather ominously states "it will be worse, because we will be in recession" and notes that when the lame ducks re-look at the budget numbers with a realistic recession (instead of the current assumption of no recession within 12 years) it will be far worse and in a political environment where 'we cannot possibly raise taxes - and we cannot possibly cut spending'. With a 78% disapproval rating for the 'do nothing' Congress, Stockman is surprised that 16% somehow approve - approve of what? His warning is that unlike in past periods, today "we are completely paralyzed, there is an ideological divide on taxes and entitlement like we've never had before" and while he realizes that "the debt problem doesn't become a debt problem until the market suddenly have a wake up call and realize that if the Fed doesn't keep printing, it's game over."
http://www.zerohedge.com/news/ombs-stockman-were-fiscal-endgame
Sunday, July 15, 2012
"Trust in the Lord and do good; dwell in his lands and enjoy safe pastures. Take delight in the Lord, and he will give you the fulfillment of your heart. Commit your ways to the Lord; trust in him and he will make your righteous efforts shine like the dawn, and your vindication like the sun. Be still before the Lord and wait patiently for him; do not worry when people succeed in their evil ways, when they carry out their wicked schemes."
Psalm 37:3-7
Psalm 37:3-7
Innovation, Economy and Social Democratic Process (혁신과 경제, 민주주의)
How have regime changes in Korea’s political landscape affected Korea’s economic path along with its innovation apparatus and the social democratic process?
Are they more of the same: quasi-democratic corporate capitalist regime stemming from the kletocracy?
Those are the fundamental questions to ask.
I have stressed that the economic growth model Korea has pursued was flawed from the start because it is at the mercy of forces beyond their control. The same is true for Japan and China. Their mercantilist stance has fundamental flaws. One has to beware the long-term tendencies of this approach.
Korea should have converted its economy to a more balanced, sustainable economy and strengthened economic fundamentals since the 1997 financial crisis because it was a blessing in disguise. Instead, they have engaged in the financialization of the economy, blowing asset bubbles, while its export engine was working due to global boom.
Under the Park Chunghee regime, civil liberty was repressed and oligarchs formed although Korea advanced its economy rapidly at this stage. At least, the state imposed heavy regulation on finance in this period.
A sudden market liberalization and globalization drive without the proper regulatory structure under the Kim Youngsam administration triggered the 1997 financial crisis largely due to insolvent banks and overleveraged chaebols.
During the Kim Daejung regime, further adoption of the so-called free market principles as a part of the austerity package in the wake of the 1997 crisis continued the malicious trends by exposing the nation to destructive economic forces. In a sense, a different form of oppression began.
Nations differ in their economic and social democratic success due to their different institutional arrangements including economic, political, and academic institutions, the rules and regulations. Even if a nation has a free enterprise system, it has to be overseen by the regulatory structure. It has to educate, empower, and enrich a large class of people to provide the checks and balances. This is the core of the social democratic process and why the role of education and mass media gets so important. Once these processes and systems are in place, individual rights, civil liberty, and distribution of wealth and opportunity (education, free economic choices, the provision of public services, etc.) can be nurtured. In this way, innovation can be a constructive force for generating wealth for the most people, not a means of implementation for the political expediency. It will create incentives for citizens to gain necessary skills, make investments, and pursue technological innovation.
Does the American Elite Want Real Public Education?
From Naked Capitalism:
This Real News Network segment tackles the ugly topic of whether the deterioration of public education in the US is by design. You might also want to see the earlier shows in this series, the first on Obama’s educational policies, the second on Romney’s.
http://www.nakedcapitalism.com/2012/07/does-the-american-elite-want-real-public-education.html
This Real News Network segment tackles the ugly topic of whether the deterioration of public education in the US is by design. You might also want to see the earlier shows in this series, the first on Obama’s educational policies, the second on Romney’s.
http://www.nakedcapitalism.com/2012/07/does-the-american-elite-want-real-public-education.html
지멘스의 아이디어 경쟁
Siemens는 제품을 개발할 때 여러 부서 사람들로 하여금 서로 다른 아이디어를 내놓게 하는 아이디어 경쟁을 통해 아이디어를 사업화하고 있다. 아이디어를 평가할 때에는 전반적인 사업전략과 일관성이 있는지, 충분한 시장잠재력이 있는지 등 기술적∙경제적∙전략적 이슈들을 충분히 고려해서 평가하고 있는데, 평가기준을 설정하는 과정 자체도 큰 학습이 되었다. 아이디어 경쟁에 제출된 아이디어를 평가하는 체크리스트의 예시는 위의 표에서 보이고 있다. 제출된 아이디어는 이러한 체크리스트를 활용해 각각의 기술분야에서 전문성이 있는 심사위원들에 의해 평가되고, 선택된 아이디어는 초기 실행 혹은 타당성 분석을 위해 착수금이 주어진다. 최종적으로 이들 아이디어 중 몇 개는 제품개발까지 이어지게 된다.아이디어 깔때기와 상용화
모든 아이디어가 상용화되어 이익실현으로 이어지는 것은 아니다. 따라서 사업 아이템이 될 수 있는 아이디어를 발굴해 이를 잘 상용화해서 시장에 내놓아 가치를 창출하는 것이 중요하다 하겠다. 위의 그림은 신제품을 개발하는 데 있어서 아이디어 깔때기의 개념을 보여 주고 있다. 주요 단계별로 엄격한 심사과정을 통해 소수의 개발 프로젝트를 선정하고 이에 집중적인 투자를 해서 신제품 개발의 성공확률을 높일 수 있다. 초기 아이디어 창출 및 제품컨셉 개발단계에서는 가능한 한 많은 아이디어가 배출되도록 아이디어 깔때기를 넓게 잡을 필요가 있다. 초기 심사 다음 단계에서는 제시된 아이디어들을 계속 추진할 것인지 버릴 것인지에 대한 결정을 내리기 위해 구체화시키고 분석하는 작업을 하게 된다. 두 번째 심사를 통과해 승인된 프로젝트들은 신속한 출시를 위해 노력이 집중되고 인력이 갖추어지게 된다. IRI(The Industrial Research Institute)의 연구에 의하면 일반적으로 1개의 성공적인 신제품이 나오기 위해서는 최소한 4개의 개발 프로젝트가 추진되어야 하고, 4개의 개발 프로젝트가 선정되기 위해서는 약 3,000개의 아이디어가 수집∙검토되어야 한다고 한다.3M의 혁신적 문화
3M은 혁신적인 문화를 제도화하기 위해 다음과 같은 메커니즘을 활용하고 있다.◈ 15% 규칙: 1920년부터 3M에서는 개인시간의 15%까지를 원하는 프로젝트에 자유롭게 사용해도 좋다고 되어 있다. 이것은 자신의 꿈과 흥미가 있는 부문의 연구에 몰두하는 것을 공적으로 승인하는 것으로 참신한 아이디어의 탄생을 지원하고 있다.
◈ 25% 규칙: 각 사업부 매출액의 25%를 지난 5년 내에 개발된 신제품으로 구성한다.
◈ Genesis Grants: 사업부를 중심으로 한 중요한 연구개발과 관련해서 가용한 아이디어가 묻혀버릴 위험성을 고려해서 마련된 내부 모험투자기금으로써 신규 프로젝트의 시제품 개발 및 시장테스트를 위해 지원한다.
◈ Product Champion: 3M에서 신제품 개발에 관계하고 사업에 성공한 사람들에게 주어지는 명예로운 칭호로 10년, 20년에 걸쳐서 수많은 고생과 장애를 겪고 몇 번씩이나 실패를 거듭하면서도 작정한 프로젝트에 몰입해서 드디어 성공을 거둔 그 무용담은 계속 전해지고 후에 뒤를 잇는 사람들에게 무한한 격려가 된다.
◈ Carlton Society: 독창적인 기술적 공헌을 한 연구원들을 우대하기 위해 명예회원제를 운영한다.
◈ Dual Ladder Career Track: 기술직과 관리직의 승진경로를 별도로 설정하여 기술자들이 지속적으로 연구활동에 전념할 수 있도록 하고, 급여에서 차이가 나지 않게 하고 있다. 이는 기술직 신입사원에게도 승진에 대한 가능성을 자극시켜 줄 뿐만 아니라, 사원 한 사람, 한 사람의 적성과 장점을 최대한으로 발휘시킴으로써 회사 전체의 성장을 꾀한다.
◈ Own Business Opportunities: 신제품 아이디어를 고안한 사람이 실제 프로젝트를 추진할 수 있도록 한다.
◈ High Impact Program: 각 사업부가 1~3개의 제품을 선정하며 특정 기간 내에 신속히 출시 할 수 있도록 관리한다.
창의적 사람과 창의적 조직의 특성
기술 집약적인 기업에서 창의적인 문화를 조성하는 것은 중요하다. 왜냐하면 창의적인 아이디어는 기술적 노력을 어떤 방향으로 기울여야 할지를 제시해 줄 수 있기 때문이다. 창의적인 사람은 감지된 욕구를 충족시키거나, 문제를 해결하거나, 기회에 부응하거나, 그래서 조직에 의해 채택되는 아이디어를 내놓는 사람들이다. 그러나 창의력 그 자체는 결과물이라기보다는 과정이요, 종착지라기보다는 여정이다. 따라서 창의력을 장려하는 환경을 조성해서 모든 조직구성원들이 조직의 이익을 증진시키는 데 창의적 에너지를 발휘할 수 있도록 하는 것이 중요하다. 이런 의미에서 창의적 조직의 특성과 이 요소에 대응하는 창의적 사람의 특징을 Daft는 위의 표와 같이 제시하고 있다. “조율”이 창의적 조직에서 중요한 이유는 조직에게 이익을 가져다 줄 창의적 행위가 지속적으로 일어나게 하기 위해서는 모든 직원의 관심과 행위가 기업의 목적, 비전, 목표와 일치되어야 한다는 점에 있다. 또한 깊이 내재되어 있는 창의적 발상을 끄집어 내어 “자기 스스로가 시작하는 행위”로 이어질 수 있도록 조직구성원의 아이디어와 제안에 귀기울이는 조직시스템을 갖추는 것도 중요하다. 직원들이 정규업무 외에 실험할 수 있도록 하는 것이 중요하므로 공식적으로 부여된 일이 아닌 활동에 전념할 수 있는 자유시간을 허용하는 것도 필요하다. “뜻밖의 발견”은 행운의 사건이라 할 수 있는데, 이 또한 위험을 감수하고 탐험하는 것에 가치를 두는 문화를 창조함으로써 장려할 수 있다. 어떤 자극이 창의적 아이디어로 이어질지를 미리 아는 것은 불가능하므로 “다양한 자극”을 제공하는 것도 필요하다. 다양한 자극에는 안식년, 워크숍, 피정, 순환보직, 지역사회활동 등이 포함될 수 있다. 그리고 조직 내의 다양한 계층에 있는 전문성이 각기 다른 사람들과 접촉하는 것이 창의력을 북돋을 수 있으므로, 자주 교류하기가 힘든 직원들에게 그런 기회를 제공해 “내부 커뮤니케이션”을 활성화할 필요도 있다.신제품 개발 모델 예시
위의 그림은 한 다국적 전자회사의 신제품 개발 프로세스를 보이고 있다. 이 회사는 신제품 개발시 품질확보와 신뢰성을 높이고, 소비자의 욕구를 반영한 제품을 최저의 비용으로 최단시일에 개발하기 위해서 나름대로의 신제품 개발모형을 정립하여 활용하고 있다. 신제품 개발절차는 크게 시스템 단계, 개발 프로세스, 톨게이트로 구성되어 있다. 시스템 단계는 컨셉개발, 제품과 공정개발 및 자격요건, 제품 출시 및 지원의 세 단계로 나누어져 있다. 각각의 단계에서 이루어져야 할 개발 프로세스가 상세히 도출되어 있고, 한 단계에서 다음 단계로 넘어 갈 때마다 톨게이트 회의를 거치도록 되어 있다. 톨게이트 회의는 프로젝트의 진행단계별로 개발검토 승인, 개발계획 승인, 시방 확정 및 투자비 승인, 양산 승인 등의 주요 항목에 대해 최종 승인을 위해 검토하는 회의이다.스테이지-게이트 신제품 프로세스
Cooper는 스테이지-게이트 의사결정 과정을 통해 신제품이 개발될 수 있음을 주장하고 있다. 이 과정은 다섯 개의 스테이지(단계)로 구성되어 있고, 각각의 스테이지는 게이트(관문)에 의해 선행된다. 단계마다 베스트 프랙티스 활동들과 달성해야 할 목표를 규정하고 관문에서는 프로젝트를 진행할 것인지 그만둘 것인지를 결정하는(go/kill decision) 기준이 설정되어 있다. 각각의 단계에서 기술적 데이터와 마케팅 데이터를 검토하는 구조가 설정되는 것이 중요하다고 본다. 미국에서는 60%로 추정되는 제품개발자들이 개발노력을 가이드하기 위해 스테이지-게이트 프로세스를 도입하고 있다.신속한 개발 싸이클과 기술 격차
오늘날의 급격한 기술진보와 까다로운 고객의 취향, 짧은 제품수명주기, 국경을 넘어선 글로벌 경쟁 환경 하에서 제품을 시장에 내놓는 속도와 신속성은 신제품 개발과 출시의 성공을 결정하는 가장 중요한 이슈 중의 하나이다. 신속한 개발 싸이클을 유지하는 기업들은 지속적으로 새로운 기술 역량을 축적함으로써 경쟁사와의 기술격차를 확대해 나갈 수 있다. 위의 그림에서 경쟁사 둘 다 비슷한 양의 기술변화를 구체화한다고 가정하지만 같은 기간 동안 6개의 프로젝트를 수행하는 신속한 개발 싸이클을 가진 기업과 4개의 프로젝트를 수행하는 느린 개발 싸이클을 가진 기업간의 기술격차를 보이고 있다. 이는 스테레오 시장에서 두 전자회사 사이에 일어난 일이다. 신속한 개발 싸이클을 가진 기업은 처음부터 완벽한 제품을 개발하기보다는 신속한 출시를 통해 고객의 반응을 보고 제품의 특성이나 기능을 지속적으로 개선해 나간다.기술혁신과 제품혁신
혁신은 두 가지 부분으로 구성된다고 할 수 있는데, 첫째는 아이디어나 발명의 창출이고, 둘째는 그 기술적 발명을 사업화하는 것이다. 모든 기술혁신이 사업화되는 것은 아니다. 위의 그림은 기술혁신이 사업화되기까지의 과정을 보여 주고 있다. 사업화되는 5단계는 이전의 여러 단계를 합친 것만큼의 시간이 걸리고 자원도 더 많이 들어갈 수 있다. 이 단계에서는 구현가능한 프로토타입까지 결정된 구체적인 스펙과 제조 아이디어가 도출된다. 위의 그림에서 보이듯이 기술혁신 노력이나 제품개발은 주로 조직 내부에서 행해지지만 외부의 기술환경과 시장환경과의 긴밀한 교류 속에서 혁신이 이루어진다.제품 플랫폼 전략
핵심역량 개념과 비슷한 모델로써, 핵심 공통기술을 가지고 다양한 제품을 개발한다는 “제품 플랫폼 전략”도 기술혁신 전략을 세우는 데 유용하다. 플랫폼 전략은 제품전략의 장기적 초점을 제공한다. 단기간에 소멸하는 기존 시장을 겨냥한 단일 품목을 위한 제품전략이 아닌 새로운 시장을 위한 다양한 제품군을 만들 수 있는 플랫폼을 전략적으로 선택하고 보유하는 것은 매우 중요하다. 또한 플랫폼 전략은 재료비 절감, 인건비, 제조비용 등 운영적 효율성을 도모할 수 있다. 예를 들어, 개인 컴퓨터를 위한 제품 플랫폼은 OS와 결합된 마이크로프로세서이다. 이런 플랫폼으로부터 개별 제품들은 마이크로프로세서 속도 및 메모리 용량, 디스크 드라이브 사이즈, 모니터 유형과 같은 다른 플랫폼 요소들의 구성을 변화시킴으로써 파생된다. 위의 그림은 어떻게 신제품이 공통의 플랫폼으로부터 시간이 지남에 따라 파생되어 지는 지를 보이고 있다. 모든 제품들이 어떤 측면에서는 각기 독특하나, 제품 플랫폼의 공통 특성을 공유하고 있다. 가격과 기능에 따른 세분시장을 겨냥해서 제품 1, 제품 2 등으로 세분된다. 제품 1A, 제품 1B는 한 국가의 특성에 따라 차별화시킨 제품 1을 변형한 것이다.기술 포트폴리오의 전략적 자원 배분
오늘날 한 기업이 모든 R&D를 자체적으로 할 수는 없다. 그만큼 기술의 진보가 빠르고, 제품수명이 짧고, 보다 신속한 개발 주기기간이 요구되고 있으며, 기술의 융/복합 정도가 높기 때문이다. 기업들은 속도를 가속화시키고, 비용을 절감하고, 때로는 위험부담을 줄이기 위해 기술을 아웃소싱하고 전략적 제휴를 맺는 것이 필요하다는 것을 절감하고 있다. 위의 그림은 기술의 전략적 중요도와 기업의 내부역량에 따른 기술투자의 전략적 배분을 위한 분석의 틀을 제시하고 있다.◈ 기술의 전략적 중요도가 높고 기업의 내부역량이 높은 기술은 자체 R&D를 통해 집중적인 개발을 한다.
◈ 기술의 전략적 중요도가 높고 내부역량이 취약한 기술은 M&A, 전략적 제휴 등을 통해 외부에서 도입할 수 있는 방안을 모색한다.
◈ 기술의 전략적 중요도는 낮으나 내부역량이 높은 기술은 라이센싱을 통한 외주화를 적극 추진한다.
◈ 기술의 전략적 중요도가 낮고 내부역량도 낮은 기술에 대해서는 투자를 중단하거나 최소화한다.
기술 옵션 시나리오
기술전략을 수립하기 위해서 어떤 특정 기술을 개발할 것인가에 대한 몇 개의 시나리오를 도출할 수 있다. 각기 다른 시나리오는 몇 가지 옵션을 의미하기도 한다. 따라서 각 기술옵션에 대한 종합적인 평가를 내려 개발해야 할 기술을 선택하기도 하는데, 이 때는 위의 그림과 같은 평가항목을 고려할 수 있다. 여기에서 긍정적인 측면에는 실행하기 용이함, 저비용, 이 기술에 대해 공급업자를 알고 있는 것 등이 포함될 수 있다. 부정적인 측면에는 고비용, 미래의 불확실성에 따른 고위험, 현재의 구조로는 실행하기 어려움 등이 고려될 수 있다. 이들 각 항목들은 상대적 중요도에 따라 가중치를 달리할 수 있으며, 이들 가중치를 반영한 종합적인 평가를 통해 개발할 미래기술을 선택할 수 있다. 선택된 기술들은 전략적 목표와 개발소요기간, 구체적인 실행방안이 마련되어 실천에 옮겨지게 된다.혁신 패턴
위의 그림은 기술의 S곡선을 혁신패턴과 제품수명주기와 결부시켜 설명한 그림이다. 혁신은 이미 설명되었듯이 incremental innovation, architectural innovation, discontinuous innovation으로 분류할 수 있는데, 시간이 지남에 따라 이 세 가지 혁신이 일련의 혁신패턴으로 지속되는 것이 필요하다. 혁신패턴은 제품수명주기와 직결된다. 예를 들어, DOS와 같은 지배제품이 대두하고 Windows나 Mac과 같은 후속 대체 제품이나 서비스가 출현해 하나의 기술주기를 이루게 되고, 시간이 경과함에 따라 다음 기술주기로 이어진다. 따라서 제품수명주기에서 현 제품의 위치를 파악하고 어떤 혁신패턴을 추구할 것인지를 결정하고, 또한 기술적 불연속점을 파악하여 잠재적 차세대 제품을 예견할 수 있는 능력은 경쟁우위의 중요한 근간이 된다.Friday, July 13, 2012
Chinese Hot Money Flows; 'Anti-Goldilocks' China Data Not Enough To Move Needle
This doesn't bode well for the Korean economy.
From Zero Hedge:
As we wait anxiously for the not-too-hot and not-too-cold but just right GDP data from China this evening, we thought it instructive to get some sense of the reality in China. From both the property bubble perspective (as Stratfor's analysis of the record high prices paid just this week for Beijing property - by an SOE no less - and its massive 'microcosm' insight into the bubbliciousness of the PBOC's attempts to stave off the inevitable 'landing'); to the rather shocking insight that Diapason Commodities' Sean Corrigan offers that 'Hot Money Flows' have left China at a rates exceeding that during the worst of the Lehman crisis; take a range of key indicators – from electricity usage, to Shanghai container throughput, to nationwide rail freight ton-miles, to steel output – and you will notice that none of these shows a rate of growth during the second quarter of more than 4% from 2011, and some are as low as 1%. Whatever fictive GDP number we are presented with this week, the message is clear: “Brace! Brace! Brace!”
http://www.zerohedge.com/news/forget-chinas-goal-seeked-gdp-tonight-chart-keeps-pboc-night
From Zero Hedge:
A fractional miss of estimates for GDP growth (printing at +7.6% vs expectations of +7.7%) coupled with a just-as-fractional beat in Retail Sales (+13.7% YoY vs expectations of +13.4%) seems to be the perfect remedy for a global-depression-expecting and/or massive-stimulus-hungry market. GDP growth was its slowest since March 2009 but it appears the 'sell the rumor, buy the news crowd' are disappointed. S&P 500 futures popped a few pts and then faded back - remaining around +3pts for now (and EUR rallied into the number, sold off on the print and is now limping back higher). As we noted earlier, this is not the data you have been looking for - instead focus on hot money flows and the property pop, as the Chinese continue to impress with their 'data' showing the first engineered 'soft-landing' in history.
http://www.zerohedge.com/news/anti-goldilocks-china-data-not-enough-move-needle
From Zero Hedge:
As we wait anxiously for the not-too-hot and not-too-cold but just right GDP data from China this evening, we thought it instructive to get some sense of the reality in China. From both the property bubble perspective (as Stratfor's analysis of the record high prices paid just this week for Beijing property - by an SOE no less - and its massive 'microcosm' insight into the bubbliciousness of the PBOC's attempts to stave off the inevitable 'landing'); to the rather shocking insight that Diapason Commodities' Sean Corrigan offers that 'Hot Money Flows' have left China at a rates exceeding that during the worst of the Lehman crisis; take a range of key indicators – from electricity usage, to Shanghai container throughput, to nationwide rail freight ton-miles, to steel output – and you will notice that none of these shows a rate of growth during the second quarter of more than 4% from 2011, and some are as low as 1%. Whatever fictive GDP number we are presented with this week, the message is clear: “Brace! Brace! Brace!”
http://www.zerohedge.com/news/forget-chinas-goal-seeked-gdp-tonight-chart-keeps-pboc-night
From Zero Hedge:
A fractional miss of estimates for GDP growth (printing at +7.6% vs expectations of +7.7%) coupled with a just-as-fractional beat in Retail Sales (+13.7% YoY vs expectations of +13.4%) seems to be the perfect remedy for a global-depression-expecting and/or massive-stimulus-hungry market. GDP growth was its slowest since March 2009 but it appears the 'sell the rumor, buy the news crowd' are disappointed. S&P 500 futures popped a few pts and then faded back - remaining around +3pts for now (and EUR rallied into the number, sold off on the print and is now limping back higher). As we noted earlier, this is not the data you have been looking for - instead focus on hot money flows and the property pop, as the Chinese continue to impress with their 'data' showing the first engineered 'soft-landing' in history.
http://www.zerohedge.com/news/anti-goldilocks-china-data-not-enough-move-needle
Spain Has Its 'Let Them Eat Cake' Moment - Another Milestone Reached
From Jesse's Cafe:
Technically the pampered Spanish princess said, 'screw them all' rather than 'let them eat cake.' She is only saying what most of the Western elite are thinking about 'the problem of the hoi polloi.'
After the brazen theft of customer money by a well-connected financier, I said I was waiting for another shoe to drop, another milestone to be reached on this cycle of history.
I should add that a single instance of something obviously does not make a trend. It is the trend that is of significance. Do the perpetrators become emboldened, or does a horror of recognition bring things back into balance? No one wakes up one morning and decides, "I think I shall become a monster." Evil is a process of abnormality with which one becomes increasingly familiar, accepting,-- comfortable.
The next step in the rise of statism is capital controls, media suppression, and the increased repression of dissent by physical means and censorship. After that is the singling out of certain ethnic and religious groups for 'special treatment,' and campaigns to establish the 'otherness' of select targets. This could also be related to some age or class group, or even the disabled.
And then murder, first occasional and then systematic. It may take the form of starvation, denial of medical treatment, non-elective abortion, or euthanasia at first. Hopefully we will not progress as far on the cycle as any of these latter stage developments.
Here is a note from a friend about a news item that has not penetrated the Anglo-American news media yet.
Spain is implementing its latest austerity package. Spanish PM Mariano Rajoy Raises VAT 3pc in Shock U-Turn
When the Prime Minister Rajoy said to their National Assembly that they must cut benefits to Spain's unemployed, Miss Fabra was apparently caught on video shouting, "Screw them all."
The damage control groups are now trying to explain that Miss Fabra was not saying 'screw them' to the unemployed, who the Prime Minister was talking about, but rather 'the Socialists,' who favor things like benefits for the unemployed.
This is sparking quite a bit of anger in Spain, as one might imagine, which is suffering under very high levels of unemployment and facing further austerity cuts.
Spain's oligarchy appears to be a bit backward and thuggish. Rather than clumsily rigging lotteries and construction projects, they would be better off forming a banking cartel, rigging market prices, and stealing a little from everyone, every day, on every transaction. Then you can be a Very Important Person, dress well, have Congressmen publicly kiss your ring, and still gorge yourself at the trough of public corruption without marring your cufflinks.
In every one of these troubled countries that I examine, although the blame tends to fall on the 'lazy and foolish' many, if one scratches beneath the surface they find a corrupt core of greedy insiders, oligarchs, who have been inflicting economic distortions and pain on the public in the service of their own sense of entitlement.
http://jessescrossroadscafe.blogspot.kr/2012/07/note-from-europe-spain-has-its-let-them.html
Technically the pampered Spanish princess said, 'screw them all' rather than 'let them eat cake.' She is only saying what most of the Western elite are thinking about 'the problem of the hoi polloi.'
After the brazen theft of customer money by a well-connected financier, I said I was waiting for another shoe to drop, another milestone to be reached on this cycle of history.
I should add that a single instance of something obviously does not make a trend. It is the trend that is of significance. Do the perpetrators become emboldened, or does a horror of recognition bring things back into balance? No one wakes up one morning and decides, "I think I shall become a monster." Evil is a process of abnormality with which one becomes increasingly familiar, accepting,-- comfortable.
The next step in the rise of statism is capital controls, media suppression, and the increased repression of dissent by physical means and censorship. After that is the singling out of certain ethnic and religious groups for 'special treatment,' and campaigns to establish the 'otherness' of select targets. This could also be related to some age or class group, or even the disabled.
And then murder, first occasional and then systematic. It may take the form of starvation, denial of medical treatment, non-elective abortion, or euthanasia at first. Hopefully we will not progress as far on the cycle as any of these latter stage developments.
Here is a note from a friend about a news item that has not penetrated the Anglo-American news media yet.
Spain is implementing its latest austerity package. Spanish PM Mariano Rajoy Raises VAT 3pc in Shock U-Turn
When the Prime Minister Rajoy said to their National Assembly that they must cut benefits to Spain's unemployed, Miss Fabra was apparently caught on video shouting, "Screw them all."
The damage control groups are now trying to explain that Miss Fabra was not saying 'screw them' to the unemployed, who the Prime Minister was talking about, but rather 'the Socialists,' who favor things like benefits for the unemployed.
This is sparking quite a bit of anger in Spain, as one might imagine, which is suffering under very high levels of unemployment and facing further austerity cuts.
Spain's oligarchy appears to be a bit backward and thuggish. Rather than clumsily rigging lotteries and construction projects, they would be better off forming a banking cartel, rigging market prices, and stealing a little from everyone, every day, on every transaction. Then you can be a Very Important Person, dress well, have Congressmen publicly kiss your ring, and still gorge yourself at the trough of public corruption without marring your cufflinks.
In every one of these troubled countries that I examine, although the blame tends to fall on the 'lazy and foolish' many, if one scratches beneath the surface they find a corrupt core of greedy insiders, oligarchs, who have been inflicting economic distortions and pain on the public in the service of their own sense of entitlement.
http://jessescrossroadscafe.blogspot.kr/2012/07/note-from-europe-spain-has-its-let-them.html
Charles Hugh Smith: Middle Class? Here's What's Destroying Your Future
From Zero Hedge:
In broad brush, financialization enabled the explosive rise of politically dominant cartels (crony capitalism) that reap profits from graft, legalized fraud, embezzlement, collusion, price-fixing, misrepresentation of risk, shadow systems of governance, and the use of phantom assets as collateral. This systemic allocation of resources and the national income to serve their interests also serves the interests of the protected fiefdoms of the State that enable and protect the parasitic sectors of the economy. The productive, efficient private sectors of the economy are, in effect, subsidizing the most inefficient, unproductive parts of the economy. Productivity has been siphoned off to financialized corporate profits, politically powerful cartels, and bloated State fiefdoms. The current attempts to “restart growth” via the same old financialization tricks of more debt, more leverage, and more speculative excess backstopped by a captured Central State are failing.
Neofeudal financialization and unproductive State/private vested interests have bled the middle class dry.
http://www.zerohedge.com/news/guest-post-middle-class-heres-whats-destroying-your-future
In broad brush, financialization enabled the explosive rise of politically dominant cartels (crony capitalism) that reap profits from graft, legalized fraud, embezzlement, collusion, price-fixing, misrepresentation of risk, shadow systems of governance, and the use of phantom assets as collateral. This systemic allocation of resources and the national income to serve their interests also serves the interests of the protected fiefdoms of the State that enable and protect the parasitic sectors of the economy. The productive, efficient private sectors of the economy are, in effect, subsidizing the most inefficient, unproductive parts of the economy. Productivity has been siphoned off to financialized corporate profits, politically powerful cartels, and bloated State fiefdoms. The current attempts to “restart growth” via the same old financialization tricks of more debt, more leverage, and more speculative excess backstopped by a captured Central State are failing.
Neofeudal financialization and unproductive State/private vested interests have bled the middle class dry.
http://www.zerohedge.com/news/guest-post-middle-class-heres-whats-destroying-your-future
Thursday, July 12, 2012
Seoul Shares Drop 2.24 pct Despite Rate Cut
From Yonhap:
South Korean stocks plunged 2.24 percent on Thursday as investors were not cheered by the central bank's rate cut and foreigners dumped local stocks upon a futures and option expiry, analysts said. The local currency tumbled against the U.S. dollar.
After starting 0.08 percent higher, the Korea Composite Stock Price Index (KOSPI) dived 41 points to finish at 1,785.39, falling below the 1,800 level for the first time in more than a month. Trading volume was light at 314.5 million shares worth 4.24 trillion won (US$3.69 billion), with losers far outnumbering gainers 614 to 203.
The Bank of Korea (BOK) unexpectedly cut its key policy rate for the first time in more than three years in an effort to buffer the impact of the deepening eurozone debt crisis.
http://english.yonhapnews.co.kr/news/2012/07/12/70/0200000000AEN20120712009000320F.HTML
South Korean stocks plunged 2.24 percent on Thursday as investors were not cheered by the central bank's rate cut and foreigners dumped local stocks upon a futures and option expiry, analysts said. The local currency tumbled against the U.S. dollar.
After starting 0.08 percent higher, the Korea Composite Stock Price Index (KOSPI) dived 41 points to finish at 1,785.39, falling below the 1,800 level for the first time in more than a month. Trading volume was light at 314.5 million shares worth 4.24 trillion won (US$3.69 billion), with losers far outnumbering gainers 614 to 203.
The Bank of Korea (BOK) unexpectedly cut its key policy rate for the first time in more than three years in an effort to buffer the impact of the deepening eurozone debt crisis.
http://english.yonhapnews.co.kr/news/2012/07/12/70/0200000000AEN20120712009000320F.HTML
LG Display Chosen To Develop 60-inch flexible OLED By Korean Government
As shown in the case of the mobile phone industry, the Korean government’s direct intervention in picking winners and losers in specific product/industry development tends to serve the interests of a chosen few, not the general public in the long run. Instead, they should use more indirect measures such as tax cuts and implement institutional arrangements for businesses to pursue technological innovation and capital investments on a level playing field. The state-backed, chaebol-centered innovation undertaking in a mercantilistic twist Korea has engaged in has fundamental flaws over the long haul.
The Ministry of Knowledge Economy, which is spearheading this program, is aiming to achieve exports worth $56 billion and create 840,000 jobs through the research and development of transparent and flexible displays, LG Display said.
OLED has been chosen as one of the key technologies the government seeks to further develop by strengthening the industry’s R&D capability.
http://khnews.kheraldm.com/kh/view.php?ud=20120711001123&md=20120711201332_8
From Korea Herald:
LG Display has been chosen by the government to lead a project to develop transparent and flexible organic light-emitting diode displays.
Korea’s second-largest display-panel maker said that it will develop proprietary technology for ultra high-definition, 60-inch flexible OLED displays by 2017 as part of the government’s “Future Flagship Program” to promote next-generation technologies.
Korea’s second-largest display-panel maker said that it will develop proprietary technology for ultra high-definition, 60-inch flexible OLED displays by 2017 as part of the government’s “Future Flagship Program” to promote next-generation technologies.
The Ministry of Knowledge Economy, which is spearheading this program, is aiming to achieve exports worth $56 billion and create 840,000 jobs through the research and development of transparent and flexible displays, LG Display said.
OLED has been chosen as one of the key technologies the government seeks to further develop by strengthening the industry’s R&D capability.
http://khnews.kheraldm.com/kh/view.php?ud=20120711001123&md=20120711201332_8
Tuesday, July 10, 2012
China Imports More Gold From Hong Kong In Five Months Than All Of UK's Combined Gold Holdings
From Zero Hedge:
There are those who say gold may go to $10,000 or to $0, or somewhere in between; in a different universe, they would be the people furiously staring at the trees. For a quick look at the forest, we suggest readers have a glance at the chart below. It shows that just in the first five months of 2012 alone, China has imported more gold, a total of 315 tons, than all the official gold holdings of the UK, at 310.3 according to the WGC/IMF (a country which infamously sold 400 tons of gold by Gordon Brown at ~$275/ounce).
http://www.zerohedge.com/news/china-imports-more-gold-hong-kong-five-months-all-uk-combined-gold-holdings
There are those who say gold may go to $10,000 or to $0, or somewhere in between; in a different universe, they would be the people furiously staring at the trees. For a quick look at the forest, we suggest readers have a glance at the chart below. It shows that just in the first five months of 2012 alone, China has imported more gold, a total of 315 tons, than all the official gold holdings of the UK, at 310.3 according to the WGC/IMF (a country which infamously sold 400 tons of gold by Gordon Brown at ~$275/ounce).
http://www.zerohedge.com/news/china-imports-more-gold-hong-kong-five-months-all-uk-combined-gold-holdings
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