Microsoft and Arduino Announce Hardware-Support Collaboration

From Makezine:


Microsoft seems to be getting more and more Maker friendly, and today their courtship moves further forward with the surprise announcement of two new collaborations with microcontroller makers Arduino.
Both projects, announced at the Microsoft developer conference Build, involve Windows 10, and both usher in a new level of Microsoft engagement with the Maker Movement.

http://makezine.com/2015/04/29/microsoft-arduino-announce-hardware-support-collaboration/

Satyajit Das: Two Views of Japan’s Setting Sun

Similarities are so there.

From Naked Capitalism:

Das discusses two recent books on Japan, and both provide windows on how Japan is coping with its now lost two decades. One of them is by Tag Murphy, who I met in my days in Japan and has long been a very insightful commentator. As I said at the Atlantic Economy conference, rather than trying to “jump start the economy,” which would take more radical restructuring than they are willing to engage in, the top wealthy might be better served to worry about managing low growth better. And for its many flaws, egalitarian Japan has muddled through a far more severe bubble and bust with more grace than we have.

http://www.nakedcapitalism.com/2015/04/satyajit-das-two-views-japans-setting-sun.html

, Repression, Inequality, and Despair: Striking at the Root of the Problem

From Jesse's cafe:

I was struck by this today. It was so pointed that I initially thought it was a hoax.

When we hear President Obama and the Congress, publicly admitting their egregious policy errors in the service of Big Money, then we will know that reform is nearer to hand.

But do not hold your breath for it. They know. But they are two faced, and caught in a credibility trap.

How meaningful that the rich and powerful are celebrating their success at the Michael Milken Conference today. Milken! And the President was cheerleading the Trans-Pacific Trade Agreement with PM Abe at the White House.

When the time comes for a banquet of consequences they will all say, 'Who could have seen this coming?"

Orioles COO John Angelos offers eye-opening perspective on Baltimore protests
By Ted Berg
April 27, 2015

Brett, speaking only for myself, I agree with your point that the principle of peaceful, non-violent protest and the observance of the rule of law is of utmost importance in any society. MLK, Gandhi, Mandela and all great opposition leaders throughout history have always preached this precept. Further, it is critical that in any democracy, investigation must be completed and due process must be honored before any government or police members are judged responsible.

That said, my greater source of personal concern, outrage and sympathy beyond this particular case is focused neither upon one night’s property damage nor upon the acts, but is focused rather upon the past four-decade period during which an American political elite have shipped middle class and working class jobs away from Baltimore and cities and towns around the U.S. to third-world dictatorships like China and others, plunged tens of millions of good, hard-working Americans into economic devastation, and then followed that action around the nation by diminishing every American’s civil rights protections in order to control an unfairly impoverished population living under an ever-declining standard of living and suffering at the butt end of an ever-more militarized and aggressive surveillance state.

The innocent working families of all backgrounds whose lives and dreams have been cut short by excessive violence, surveillance, and other abuses of the Bill of Rights by government pay the true price, and ultimate price, and one that far exceeds the importance of any kids’ game played tonight, or ever, at Camden Yards. We need to keep in mind people are suffering and dying around the U.S., and while we are thankful no one was injured at Camden Yards, there is a far bigger picture for poor Americans in Baltimore and everywhere who don’t have jobs and are losing economic civil and legal rights, and this makes inconvenience at a ballgame irrelevant in light of the needless suffering government is inflicting upon ordinary Americans.

This is from USA Today.

http://jessescrossroadscafe.blogspot.kr/2015/04/joblessness-repression-inequality-and.html

So You Want to Be a Hardware Entrepreneur?

From Makezine:

MakingSociety founder Mathilde Berchon spells out hardware entrepreneurship in her new guide.

As Oculus Rift, Jawbone, and Spark have increased the stature of hardware startups over the past several years, a dizzying number of resources have sprung up to support new ventures. In the no-nonsense “Hardware Incubators, The Guide,” now available as an eBook, MakingSociety founder Mathilde Berchon sifts through the specific spaces now available to hardware entrepreneurs.

“I wrote it with one goal in mind: saving you tons of research time so that you can focus on making an informed decision and move forward with your hardware project,” Berchon said.
First, according to Berchon, figure out your own needs. If you want to build your first prototype, look for a makerspace with tools and classes you could benefit from. If you want to take a prototype to market, consider an incubator, which will provide long-term support. To get through a specific phase of development, look for an accelerator program.
Then you’ll need to choose from the options in one of those categories, which is where Berchon’s guide shines: the rest of the volume breaks notable programs down by location, duration, sectors of interest, funding, and equity: entries include incubators Highway1 and Bolt, accelerators Haxlr8r and Y Combinator, specialized programs Nike + Fuel Lab and Silicon Catalyst, and makerspaces Techshop and MakerBay.

http://makezine.com/2015/04/28/want-hardware-entrepreneur/

AAPL Beats Expectations As China Becomes Dominant iPhone Market; Cash Jumps But So Does Debt

From Zero Hedge:

Moments ago AAPL reported Q2 earnings for the quarter ended March 31, 2015 which saw AAPL beat soundly on the top and bottom line as as result of a jump in iPhone sales, even as iPad and Mac sales came in below the expectation. EPS was $2.33 vs consensus $2.16, while revenues came in at $58.0 billion, $2 billion higher than the $56.0 billion expected. But while the operations were impressive if China and iPhone centric, what everyone is focusing on is the AAPL news that it once again expanded its buyback program en route to hitting the Goldman forecast of a record $900 billion in 2015 for the entire S&P500, by announcing it would boost its buyback authorization by more than 50%, from $90 billion to $140 billion.

2014.


http://www.zerohedge.com/news/2015-04-27/aapl-beats-expectations-china-becomes-dominant-iphone-market-cash-jumps-so-does-debt

HP-01 wrist instrument, 1977

From HP Virtual Museum:





The HP-01 wrist instrument looked like a digital watch but was smarter than many pocket calculators. It performed more than three dozen functions to manipulate and interrelate time, calendar and numeric data. With six interactive functions (time, alarm, timer/stopwatch, date/calendar, calculator and memory) the HP-01 had 28 tiny keys that the user operated with a stylus built into the bracelet. The HP-01, code-named "Cricket," was not a successful product for HP. It was too bulky and heavy, and HP sold it though upscale jewelry stores. But miniaturizing the math functions was quite an engineering feat, and when HP discontinued manufacturing the HP-01, its inner workings were destroyed so no one would copy the extraordinarily small package engineering. The HP Archives has a few of the remaining elements. The HP-01 currently is one of the most sought after collectibles in the antique electronics market, often fetching two or three times its original price ($650 for the silver color, $750 for the gold version).

http://www.hp.com/hpinfo/abouthp/histnfacts/museum/personalsystems/0022/

Walter Brueggemann: Speaking Truth To Power, Confronting Today's Pharaohs

From Jesse's Cafe:

Walter Brueggemann is a contemporary theologian and an Old Testament scholar from the United Church of Christ to whom I have been introduced by one of our patrons.

One of the things I appreciate most about le café, besides the occasional noted of how the patrons may have been affected by things served here, is when readers bring in knowledge and ideas and stories that I have not encountered before. It is certainly return enough for the simple fare served here.

Below are excerpts from a recent interview regarding his book Truth Speaks To Power.

For the complete interview which is not all that long you may read these excerpts in context here.

"Legitimate power always includes attentiveness to justice, When power is not attentive to justice it cannot endure. This is a summons to us to keep the agenda of justice for the vulnerable alive and front and center to maintain a kind of subversive stance toward power.

Power is the capacity to organize and administer social goods and social access. Truth is the structure of reality that is in the nature of things that cannot be violated by our capacity to administer it. Power can sometimes be administered in harmony with such truthfulness, but very often power is seduced so that it runs contradictory to truth.

Truth is not a set of propositions in the Bible, but a cluster of relationships. Those are relationships of dignity, well-being, security and respect. When power violates those, then those who administer such power learn is that they cannot finally withstand the force of truth. So, the truthfulness of God’s commitment to neighborliness does not give in in the long run.

Moses is designated at the burning bush to be the carrier of God’s truth, which in that narrative is that God does not want people to be enslaved to the economy of Pharaoh. God does not want exploitative labor or excessively cheap labor. Pharaoh never catches on as obtuse power usually does not.

The truth carried by Moses is always coming from below in the cries of the slaves, but it always turns out that power from above never has the capacity to silence the cries from below. It is the cry from below that is finally generative of the historical possibility. Pharaoh is very slowly diminished and his power wanes and he does not catch on until it is too late—which I think is probably a right rendering of how that tends to work...

Early on in the gospel traditions, the power elite in Jesus’ society who were colluding with the Roman Empire, recognized him as a threat and began to conspire to kill him. I think he was presented in the gospel narratives as being a huge threat to the established order of the Roman Empire...

Jesus became a reference point for much of the hostility and resistance to the power of the empire because he refused to accommodate and told another story of reality that the empire could not co opt.

It [the pursuit of political power] is very seductive for all of us. And I suppose it has been the seduction of the Jesus movement since Constantine, when Christians gained access to power and have loved having it. I think the collusion of the church with political order in almost any society causes the church to lose its edge and have failure of nerve about the gospel that has been entrusted to it...

The market ideology is now the new form of imperial power and many of us, without any critical reflection, have signed onto that and organized our lives in that way so we do not have any time, energy or capacity for the things that are rightly important to us."

 http://jessescrossroadscafe.blogspot.kr/2015/04/walter-brueggemann-speaking-truth-to.html

The Fate of The Tech Bubble Is In The Hands Of Just One Company

From Zero Hedge:

With the Nasdaq having finally eclisped its bubble-era record, the weight of the tech investing world now rests on the shoulders (or should we say "wrists") of just one company...

 

http://www.zerohedge.com/news/2015-04-24/fate-tech-bubble-hands-just-one-company

Kenneth Cole moves smartwatches in fashionable direction with wearables collection

From Mobile Marketer:

Kenneth Cole hopes to grab some of the excitement around wearables for itself by rolling out a smartwatch collection that arrives in twelve styles and enables users to take selfies, suggesting that more fashion brands will begin to permeate the wearables space.

The fashion brand has teamed up with Geneva Watch Group for Kenneth Cole Connect, which is set to launch in stores in April. As Apple introduces its iWatch, more brands are seeking to take advantage of the new technology that allows consumers to control their smartphones remotely as well as make a fashion statement with the accessories.

http://www.mobilemarketer.com/cms/news/software-technology/20092.html

Saxobank CIO Sees: "Zero Growth, Zero Inflation, & Zero Hope"

From Zero Hedge:

Entrepreneurs around the world are "drowning in this nothingness reality," and Saxobank CIO Steen Jakobsen sees a crisis correction as the only outcome of a zero environment in his opinion. "We have zero growth, zero inflation and zero hope," he explains based on his recent global travels meeting business leaders and key investors whose shared negative outlook was striking. The following brief clip concludes ominously, with Jakobsen noting that he "believes a Fed hike will act as a margin call on the global economy."

http://www.zerohedge.com/news/2015-04-23/saxobank-cio-sees-zero-growth-zero-inflation-zero-hope

CNBC Exclusive Interview: South Korea Minister of Strategy & Finance, Choi Kyung-hwan

The Korean finance chief, Choi Kyung-hwan thinks that smore timulus would be necessary. Further, the Korean economic fundamentals are sound and the competitiveness of Korean enterprises is good.

From CNBC:

Julia Chatterley (JC): So the Central Bank recently downgraded growth estimates for the South Korean economy, you've front-loaded spending for 2015, what more can you do in terms of fiscal stimulus for the economy?
Choi Kyung-hwan (CKH): Korean economy last year had implemented expansionary macroeconomics and as a result I believe we are seeing some recovery in the market and we will have to keep our eyes on the market during the first half of this year to see how the policy plays out and if required we will provide additional stimulus in the second half of this year.

JC: So you don't think this is a "back-door policy" to support Tim Cook and Apple and sell more Apple products than Samsung?
CKH: That actually would be very…on the product competitiveness of Samsung and Apple. In the short-term perhaps the exchange rate may have some influence, however, as far as the mid-term and long-term outcomes are concerned, it's their product competitiveness.
JC: So what about competitiveness then for South Korean companies? We saw the operating earnings drop double digits last year, they're getting squeezed as far as the automakers are concerned by competitors in the U.S. and in Europe…you look at the smartwatch, the watch developers, they're also getting squeezed by low-cost production from China in particular…how do you help your companies to compete cause they can't cut costs indefinitely?
CKH: It's true,Korean companies are being challenged by Chinese companies, especially in areas where Korea used to have much strength. And as such, Korean companies have to try even harder and one area that Korean companies are trying harder is the Research and Development area, we are pursuing accelerated innovation approaches and further when it comes to government, we are trying to help these corporations to be more competitive and one way we are doing that is by restructuring the labour market in sort of a reformation…and we are trying to supply more productive manpower that is available to the corporations. Further, the government is seeking to reform the regulations so that the corporations can be more, more competitive.

http://www.cnbc.com/id/102595946#.

China wants to build a solar power plant in space to solve its pollution problem

From Business Insider:



In 1941, science fiction maven Isaac Asimov wrote a short story entitled “Reason.” The plot revolves around protagonists Powell and Donovan, who live on a space station that collects energy from the Sun and transmits it down to Earth using microwave beams. As with most Asimov tales, the story addresses ethics in a world shared between humans and sentient robots.
But one key aspect of Asimov’s tale may soon become a reality—the space solar power station, which supplies energy to the planet and becomes a key driver in the story when a solar storm seems to threaten the safety of Earth.
In an effort to mitigate pollution in its coal-based economy, China plans to install a solar power station 22,000 miles off the ground in orbit with other geostationary satellites. The plan calls for over six square kilometers of solar panels, nearly twice the size of Central Park and large enough to look like a star in the sky. If realized, the solar station will surpass the scale of the Apollo project and the International Space Station, assuming the title of largest-ever space project to date.
Though the project may seem random and farfetched, both the U.S. and Japan have also been working on similar energy collecting systems that could beam power back to Earth. The Japan Aerospace Exploration Agency (JAXA) has proposed its own solar collector, which they hope to launch within the next 25 years. China, however, is working on the fastest time scale, with Chinese scientists predicting that a collector could be launched as soon as 2020.
There are a number of advantages to the project. On a planet burdened by the negative health and environmental impacts of fossil fuels, clean energy is the way of the future. In China specifically, certain regions like Beijing suffer deeply from the adverse effects of air pollution caused by the proliferation of coal power plants. Furthermore, the space panels could avoid the terrestrial problem usually suffered by solar power plants, like energy access fluctuating between sunny days and dark nights or during periods of cloudy weather.
But there are a few major problems to overcome before the project can be realized. Such a massive construction would weigh over 10,000 tons, and the rockets that currently exist can only carry up to a 100-ton payload. Chinese scientists would either have to discover how to lighten the solar panels or make major breakthroughs in rocket technology. Likewise, maintaining and replacing broken panels would be incredibly expensive over time.
Despite its shortcomings, scientists are still optimistic about the prospects of an orbiting solar power station. And would not be the first time one of Asimov’s predictions has become a reality, so the project seems promising in that respect.

http://www.businessinsider.com/china-wants-to-build-a-solar-power-plant-in-space-2015-4

Korea's GDP-Debt Ratio Ranked 7th In OECD

Again, a warning sign is clear.

From TBS:

A new report shows Korea's corporate debt to GDP ratio reached 105 percent in the second quarter of last year. The figure came from a parliamentary report based on data from the McKinsey Global Institute. The high ratio placed it 7th among a list of 15 member countries in the OECD. Ireland was ranked at the top with 189 percent, followed by Sweden and Belgium

https://www.tbs.seoul.kr/eNews/news.do?method=efmNewsInfo&idx_800=2098294&typ_800=L

또 내우외환.. 발목 잡힌 한국경제

서울신문으로부터:

[서울신문]갈 길 바쁜 우리 경제에 또 내우외환의 먹구름이 짙게 깔리고 있다. 안으로는 '성완종 파문'으로 국정이 사실상 올스톱되면서 4대 구조 개혁과 경제 개혁 입법안이 표류하고 있고, 밖으로는 그리스의 '디폴트'(채무불이행) 가능성과 중국 경기 둔화 조짐이 심상치 않다.

가장 큰 악재는 '성완종 파문'이다. 산적한 경제 현안을 블랙홀처럼 모두 집어삼키고 있다. 우리 경제의 '골든 타임'인 4월이 여야 정쟁 속에 무기력하게 시간만 흘러가는 형국이다. 정부가 지난해부터 국회 처리를 요청한 경제활성화 법안 30개 중 서비스산업발전기본법, 관광진흥법, 의료법, 크라우드펀딩법, 경제자유구역특별법 등 9개 법안 처리는 기약이 없다. 노동 개혁과 공무원연금 개혁은 '빈손'으로 전락할 위기다.

대외 위험도 스멀스멀 커지고 있다. 한동안 수면 아래로 가라앉았던 그리스 디폴트 위기가 다시 국제금융시장의 변동성을 키우고 있다. 디폴트가 현실화되면 그나마 살아나던 국내 주식시장이 타격을 입을 수 있다. 올해 7% 달성이 어려워 보이는 중국의 성장률 둔화도 우리 경제를 지탱하는 수출에 큰 타격을 줄 것으로 보인다.

정부도 이런 안팎의 요인을 감안해 올해 성장률 전망치 3.8%를 하향 조정하는 방안을 검토하고 있다. 기획재정부 고위 관계자는 20일 "4월 경제지표를 확인한 뒤 오는 6월에 성장률 수정 전망치를 공식 발표할 계획"이라면서 "1분기 성장률을 봐야겠지만 3.8% 달성이 쉽지 않아 보인다"고 말했다. 한국은행은 오는 23일 1분기 성장률 속보치를 발표한다. 당초 정부 전망보다 낮은 0%대 중반(전기 대비)으로 추산된다. 앞서 최경환 경제부총리 겸 기재부 장관이 "필요하면 하반기에 추가 (경기)부양책을 내놓겠다"고 한 것은 이러한 기류를 염두에 둔 발언으로 풀이된다.

이근태 LG경제연구원 수석연구위원은 "(성장률) 3%대 중반도 정부의 전망이라기보다는 희망 사항에 가깝다"면서 "세계 경제의 리스크가 터진다면 가계 부채, 디플레이션 등 국내 취약 부문을 중심으로 경제 위기가 올 것"이라고 진단했다. 이필상 서울대 경제학부 초빙교수는 "경기 활성화를 위해 추가경정예산과 추가 금리 인하 얘기가 나오고 있지만 돈을 덜 풀어서 경기가 안 살아난 것이 아니다"라면서 "정부가 대내외적으로 어려운 상황을 국민들에게 솔직하게 얘기하고 리스크 관리 대책과 새로운 성장 동력 비전을 제시해야 한다"고 지적했다.

http://media.daum.net/issue/352/newsview?issueId=352&newsid=20150421031722964

IBM Reports Worst Sales Since 2002

From Zero Hedge:

The annual collapse in revenue is just shy of that recorded during the financial crisis, with another consecutive Y/Y 11.9% drop in a row.


A more detailed breakdown of what actually happened:

• Revenue dropped by 11.9% to $19.6 billion
• Net Income dropped by 2.4% to $2.3 billion

And yet... GAAP EPS rose by 2.6% to $2.36
How did this happen?

http://www.zerohedge.com/news/2015-04-20/ibm-reports-worst-sales-2002-eps-beats-aggressive-buybacks-cut-tax-rate

Russia Adds One Million Ounces to Gold Reserves In March

From Jesse's Cafe:

"He is the reparation for our sins, and not for our sins only but for those of the whole world. The way we may be sure that we know him is to keep his commandments. Those who say, 'I know him,' but do not keep his commandments are liars, and the truth is not in them. But whoever keeps his word, the love of God is truly perfected in him."
1 John 2:3-5

Humanoid Robot Wows Crowd, Reacts to Facial Expressions, Can Engage in Conversation and Make Eye Contact

From Mish's blog:

"Ham" the humanoid robot drew crowds at a Hong Kong electronics event this week. Designed by US firm Hanson Robotics, Ham can recognize and respond to human facial expressions in a natural way.

Please consider Aye, robot?

With his lively eyebrows, winkled cheeks and eyes that follow you around the room - this state-of-the-art robotic head is menacingly lifelike.

The head, designed by American robotics designer David Hanson, is able to answer basic questions and can also be used in the simulation of medical scenarios

Ham is currently on exhibit at the Global Sources spring electronics show at AsiaWorld Expo - the largest event of its kind in the world, with more than 4,000 booths displaying the latest gadgets.

The head is created with malleable material called Frubber using soft-bodied mechanical engineering and nanotechnology.

It contains realistic pores that measure just 4 to 40 nanometers across (there are 10million nanometers in one centimetre).

Using specialised software the machine can recognise and respond to a number of human facial expressions in a natural way.

According to Hanson Robotics's website, the humanoids can actually see your face, make eye contact with you, and understand speech to 'engage you in witty dialogue'.

Such reactions are a major feat of engineering, according to chief designer David Hanson, the founder and and president of Hanson Robotics.

http://globaleconomicanalysis.blogspot.kr/2015/04/humanoid-robot-wows-crowd-reacts-to.html
 

Elizabeth Warren Throws Down Gauntlet, Calls for Genuine Financial Reform

From Naked Capitalism:

At the Levy Conference, Elizabeth Warren launched a new campaign for tough-minded, effective financial regulation. This ought to be a straightforward call for restoring banking to its traditional role of facilitating real economy activity. Instead, in this era of “cream for the banks, crumbs for everyone else,” common-sense reforms to make banks deal fairly with customers and remove their outsized subsidies will no doubt be depicted by pampered financiers as an unfair plot to target a successful industry. But as we’ve stressed, Big Finance gets more government support than any line of business, even military contractors. They are utilities and should be regulated as such. Thus even Warren’s bold call to action falls short of the degree to which the financial service industry need to be curbed.
Below is the video of her speech; I’ve also embedded the text at the end of the post.


http://www.nakedcapitalism.com/2015/04/elizabeth-warren-throws-down-gauntlet-calls-for-genuine-financial-reform.html

Intel Capital President Says Hardware Is Hot

From Makezine:

Intel Capital President Arvind Sodhani said Monday that he believes the venture-backed tech may be overvalued —but that among current ventures, hardware startups are some of the most accurately priced.

“We are going to need a lot of hardware companies if many of the disruptions and innovations that we are seeing today fulfill their promise, such as driverless cars and drones,” Sodhani said, according to Silicon Valley Business Journal reporter Cromwell Schubarth. “I think hardware companies are going to make a comeback and I think those companies are pretty well priced right now.”

http://makezine.com/2015/04/16/intel-capital-president-says-hardware-hot/

Simon Johnson: Restoring the Rule of Law in Financial Markets

From Jesse's Cafe:

With campaign finance reform, the need to reform the financial markets is one of the greatest social policy issues of our time.

Simon Johnson is one of the few 'name' economists who recognizes this and is willing to talk about it.

There is a bitter campaign being waged in the think tanks and the media against reform. The campaign is similar to that which was waged for almost a decade to overturn Glass-Steagall.

Getting rid of bad government by eliminating all government is just giving the real perpetrators what they wish. What we need are the kind of rules and regulation that Simon Johnson and Elizabeth Warren talk about here.

It is the kind of reform that Franklin Roosevelt worked to put into place that lasted for almost 70 years, until the forces of Wall Street were able to guile the people into handing over their pursestrings to them once again.

What is discouraging is the deep involvement of both sides of the aisle in the Congress in enabling this sad corruption of the markets and the financial system-- for money. And in particular how the moral and intellectual processes of the state have become corrupted by the power of the moneyed interests.

To put a fine point on it, once the professional classes become cowed or corrupt, reform of the process through systemic means is exceptionally difficult. What we have is deep capture and the credibility trap reinforcing the worst of the abuses through a series of punishments and rewards.

And what may be particularly galling is when insiders who are at the locus of the corruption, like our recent crop of presidential candidates on both sides, talk about how they will change things, while the money is still flowing through their hands, and the spin is flowing out of their mouths.

And alas, even some of the reformers seem more interested in getting some of their own power and money than in promoting real reform. We have a problem, not at the periphery of our actions, but at the moral root of our thinking.

I have always enjoyed listening to economist Robert Johnson's brief excerpt below, because it highlights the very crux of the problem. Unless some of the well to do and the professional classes shake off the lure of big money and the credibility trap, and start acting responsibly, this is going to end very badly.

And make no mistake, there are some of the self-deluded and their servants who see that turmoil that may come as just another opportunity for their looting and a rise to greater power as they energize the mob for their own ends. But they forget the great lesson of history, that once the madness is unleashed, it tends to serve none but itself.

Why should anyone stop lying and cheating, when they are so profitable under the rule of the modern gods of the market, power and money? Why stop at all? And then comes the inescapable agent of the downfall of excess, Nemesis, with all that it implies.

I have no illusions. Given the state of our condition, ninety nine percent of those who read this will go on and do absolutely nothing differently for themselves or their people. But it is in the moral one percent that there is some hope for peaceful, evolutionary change.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

No More Cheating: Restoring the Rule of Law in Financial Markets

By Simon Johnson

The political debate about finance in the US is often cast as markets versus regulation, as if “more regulation” means the efficiency of private sector decisions will necessarily be impeded or distorted. But this is the wrong way to think about the real policy choices that – like it or not – are now being made. The question is actually what kind of markets do you want: fair and well-functioning, with widely shared benefits; or deceptive, dangerous, and favoring just a relatively few powerful people?

In a speech on Wednesday, Senator Elizabeth Warren (D., MA) laid out a vision for better financial markets. This is not a left-wing or pro-big government agenda. Senator Warren’s proposals are, first and foremost, pro-market. She wants – and we should all want – financial firms and markets that work for customers, that encourage innovation, and that do not build up massive risks which can threaten the financial system and bring down the economy.

Senator Warren puts forward two main sets of proposals. The first is to more strongly discourage the deception of customers. This is hard to argue against. Some parts of the financial sector are well-run, providing essential services at reasonable prices and with sound ethics throughout. Other parts of finance have drifted, frankly, into deceiving people – on fees, on risks, on terms and conditions – as a primary source of profits. We don’t allow this kind of cheating in the non-financial sector and we shouldn’t allow it in finance either.

The unfortunate and indisputable truth is that our rule-making and law-enforcement agencies completely fell asleep prior to 2008 with regard to protecting borrowers and even depositors against predation. Even worse, since the financial crisis, the Securities and Exchange Commission, the Justice Department, and the Federal Reserve Board of Governors proved hard or near impossible to awake from this slumber.

We need simple, clear rules that ensure transparency and full disclosure in all financial transactions – and we need to enforce those rules. This is what was done with regard to securities markets after the debacle of the early 1930s...

Read the entire piece here.

 http://jessescrossroadscafe.blogspot.kr/2015/04/simon-johnson-restoring-rule-of-law-in.html

Why Is WalMart Mysteriously Shuttering Stores Nationwide For "Plumbing Issues"?

From Zero Hedge:

WalMart has abruptly closed multiple stores across the country affecting an estimated 2,000 employees over the past several days citing "ongoing plumbing issues" which it will apparently take the company 6 months or more to fix. Interestingly, the stores are geographically distinct, and have nothing in common other than "clogs and leaks," and no plumbing permits have been obtained for any work.

http://www.zerohedge.com/news/2015-04-15/why-walmart-mysteriously-shuttering-stores-nationwide-plumbing-issues

Europe to accuse Google of illegally abusing its dominance

From FT:

Google will on Wednesday be accused by Brussels of illegally abusing its dominance of the internet search market in Europe, a step that ultimately could force it to change its business model fundamentally and pay hefty fines.

On top of the pressure from Brussels, this week Google is also under scrutiny in France where lawmakers are considering an initiative that would force it to hand over its secret formula for ranking websites.

Critics complain that Google’s algorithm can be skewed to hurt rivals and want it published to ensure accountability. Google argues such transparency would make its search engine a target for spam and hand rivals its business secrets free.

http://www.ft.com/intl/cms/s/0/643f49ec-e285-11e4-aa1d-00144feab7de.html#axzz3XKvuFwZ4

America, Meet Your Brand New Largest Foreign Creditor

The U.S. and East Asian countries including Korea have fed off each other.

From Zero Hedge:

Exactly one month ago we wrote that "Japan Ties China As America's Largest Creditor" when, according to Treasury International Capital in the month of January, China sold just over $5 billion in Treasurys while Japan bought $8 billion in US paper. Fast forward to today when we are pleased to announce that, as expected, the trend has continued and for the first time since the great financial crisis, Japan is once again America's largest foreign credito.


http://www.zerohedge.com/news/2015-04-15/america-meet-your-brand-new-largest-foreign-creditor

Hacking the Streets of San Francisco at the Market Street Prototyping Festival

Way to go, San Francisco, one of my favorite cities in the States.

From Makezine:

Hackers took over Market Street in downtown San Francisco this weekend. Not Anonymous-style protesters, but urban makers, who brought 50 prototypes, custom built to modify the urban environment and make it more interactive.

The variable, manic identity of the street, which cuts a diagonal swathe across the city, is a frequent topic of discussion among San Franciscans and urban planning thinkers. It’s one of the most traveled streets in the city, filled with pedestrians, public transit, and tourists, so it’s ripe for experimentation. That was one purpose of the Market Street Prototyping Festival, held April 9-11, in five different blocks of the street.

It was difficult to tell who was on Market Street for the festival, and who happened upon it by chance, but that’s kind of the point — the artists and makers who were there with their creations talked about how people would come together to interact with them, as well as how the makers would adapt their prototypes to be more easily used.


http://makezine.com/2015/04/14/hacking-streets-san-francisco-market-street-prototyping-festival/

A Medical Student Creates Colorful Human Anatomy Diagrams Out of Sweets

Learning can be creative and fun!

From Laughing Squid:

Medical student Mike McCormick has come up with an ingeniously toothsome way to easily digest his lessons by recreating human anatomy with candy. The sweet diagrams also provide an easily palatable lesson for interested newbies as well.

 

http://laughingsquid.com/candy-anatomy-a-medical-student-creates-colorful-human-anatomy-diagrams-out-of-sweets/

NY Times: Legacy of a South Korean Ferry Sinking

From NYT:

That simple safety step — an attempt to avoid dangerous overloading — is one of a host of regulatory changes made since the sinking of the Sewol ferry, one of South Korea’s most traumatic peacetime disasters. A year ago this week, the accident claimed the lives of more than 300 passengers, most of them teenagers on a school trip to Jeju.

The overloading helped doom the ferry when it made a sharp turn in dangerous currents. But it was just one of numerous regulatory sins so serious that the country’s president, Park Geun-hye, vowed to untangle long-tolerated collusive ties with industry that many believe were at the heart of the tragedy.

But government critics remain bitter, convinced Ms. Park’s administration is more interested in moving past the tragedy that has threatened to become her biggest legacy than in undertaking a serious investigation of the disaster and bungled rescue. They cite recent safety lapses on ships as evidence of continued wrongdoing.

Last weekend, thousands of people, including 70 of the Sewol victims’ parents who shaved their heads in protest, marched in downtown Seoul to demand that a new investigation be opened.

http://www.nytimes.com/2015/04/12/world/asia/legacy-of-south-korea-sewol-ferry-sinking.html?_r=0

Financial Times: South Korea resource drive undone by scandal

From FT:

Just a few years after he helped the government spearhead a bold overseas investment drive, Sung Wan-jong was found hanging by his tie from a tree in northern Seoul, undone by one of South Korea’s most high-profile business scandals of recent years.

State-controlled companies — as well as private groups such as Keangnam Enterprises, chaired by Sung — were encouraged to raise debt to acquire energy assets abroad, from Iraqi Kurdistan to the Gulf of Mexico.

But there are growing complaints that the programme led to a huge waste of public funds, with some allegedly lost to corruption. The national board of audit and inspection on April 3 estimated that state-controlled companies suffered net losses of Won3.4tn ($3.1bn) by pursuing overseas resource projects under Mr Lee.

http://www.ft.com/intl/cms/s/0/54c0dcd2-df4d-11e4-b6da-00144feab7de.html

Michael Pettis: Will China’s Asian Infrastructure Investment Bank Eventually Matter?

From Naked Capitalism:

The financial media has attributed considerable importance to the fact that many of America’s close allies, including the UK, Australia, and Israel, have joined China’s new infrastructure bank against the clearly-stated desires of the US. While these moves seem to signal America’s declining influence, it does not necessarily follow that the infrastructure bank is destined to become a major international institution any time soon.
Michael Pettis deflates some of the hype surrounding this initiative, arguing that it is less significant from a geopolitical and practical perspective than virtually all commentators assume. China is simply not about to become the issuer of the reserve currency any time soon, and that limits how much financial clout it will have.

http://www.nakedcapitalism.com/2015/04/michael-pettis-will-chinas-asian-infrastructure-investment-bank-eventually-matter.html

Credibility Trap: Moving Beyond Corporatism and Corruption

From Jesse's Cafe:

The heart of the problem is that because of the credibility trap, we have never had a proper public discussion on what went wrong with the policies of the US. The apathy of the people enables this.

Oh yes, there are plenty of staged discussions in the media, where two paid talking heads and a moderator who carefully stages the parameters and definition of the 'discussion' shout slogans past one another that play to the emotions of their deeply polarized and propagandized constituencies.

Since we have not yet been able to speak frankly and openly about the massive fraud and abundant soft and overt corruption of the political and professional class, there can be no meaningful reform. Until one admits they have a problem and are able to face it, they cannot begin to address it.

 

So like any other type of hopeless addict, the US and much of its client states in the West will most likely have to finally hit rock bottom before they can begin to face their addiction to deceit and corruption, money and power. This will be difficult because so many of those who control the platforms for the conversation about corruption are also those hands are dirty with it, either by participation or acquiescence. It is the same phenomenon that compels a country to remain in protracted, winless wars long beyond any rational expectation of 'victory.'
And this is the credibility trap.

It is the widespread corruption and cowing of the professional class in a society that sets the stage for the madness of the mob.

It is foolish to hope that the plunderers of society will some day have enough, and come to their senses. They are not rational, but pathological, and their only impulse is to want 'more.' They will not stop until someone finally moves to stop them. But like battered spouses and ashamed parents we cannot even bear to raise the subject.

Perhaps the children will ask the right questions, since the adults are too diverted, preoccupied, and fearful.

Deutsche Bank : The Chart That Everyone Needs To Look At

From Zero Hedge:

Deutsche Bank Chief International Economist Torsten Sløk minces no words with his latest chart of the day. "In my view, every asset allocation team in the world should have this chart hanging on their wall," he writes.



The chart shows that a year ago, markets expected both the ECB and the Fed to hike rates at the same time (in early 2016). But now the implied gap has never been wider.
"The investment implication is clear: Expect that the benefits we have seen of QE in the US over the past 3 to 5 years will be playing out in Europe over the coming 3 to 5 years," says Sløk.
Source: Bloomberg

http://www.zerohedge.com/news/2015-04-10/heres-chart-deutsche-bank-says-everyone-needs-look

The Apple Watch Everyone Wants

From Adafruit blog:


It’s almost mid-April and that means the release of the smartwatch that everyone wants is nearly here, the Apple II watch by Aleator777! This beautiful project combines 3D printing and electronics to build an amazing retro Apple II-styled smartwatch. The case is 3D printed and painted to look like a tiny Apple II computer. Inside are Adafruit parts like a 1.8″ TFT, Powerboost 500, rotary encoder for the signature crown dial controller, and a Teensy 3.1 board powers the software for the watch. Check out the full-write up on Instructables, including this funny ‘press release':

CUPERTINO, California—September 9, 1984—Apple Computer Inc.® today unveiled Apple // watch™—its most personal device ever. Apple // watch introduces a revolutionary design and A BASIC USER INTERFACE created specifically for a smaller device. Apple // watch features A KNOB, an innovative way to SCROLL, without obstructing the display. The KNOB also serves as the RETURN button and a convenient way to PRESS RETURN. The CATHODE RAY TUBE display on Apple // watch features TEXT, a technology that ALLOWS YOU TO READ, providing a new way to quickly and easily access BASIC PROGRAMS. Apple // watch introduces a built-in VERY SMALL SPEAKER that discreetly enables an entirely new vocabulary of alerts and notifications you can HEAR. Apple Computer custom-designed its own 6502 PROCESSOR CUT IN HALF to miniaturize an entire computer architecture onto a PRINTED CIRCUIT BOARD. Apple // watch also features TWO DISK DRIVES to pair seamlessly with your MAGNETIC STORAGE DISKS.
Pricing & Availability Apple //w will be available in early 1985 starting at $1299 (US). Apple // watch is compatible with Apple // or Apple // Plus, Apple /// or Apple /// Plus, Apple //c, Apple //e, Apple Lisa, and Macintosh running on ELECTRICITY.

Apple II Watch

https://blog.adafruit.com/2015/04/09/the-apple-watch-everyone-wants/

GE’s Upcoming Appliance Hackathon

From Makezine:

Have you ever been standing in your kitchen, operating some appliance, and thought of a better way to do the task? Maybe you’ve come up with a change to the design that would make things easier or more efficient. That is the moment that FirstBuild hopes to capture.
Currently there is a huge gap between having an idea for a home appliance and being able to prototype and test something. Unless you’ve got a top of the line manufacturing facility, you’re probably out of luck. FirstBuild grabs those individuals, gives them the tools they need to try their designs, and helps show them off to the world. You can browse prototypes in their showroom and even purchase items that pass certain criteria on their site.

The FirstBuild microfactory was born out of GE Appliances, names we’ve heard many times in manufacturing. They hope to elevate people from tinkering to producing a product through events and contests both online and through their microfactory.

http://makezine.com/2015/04/08/ge-local-motors-offer-10000-prizes-upcoming-appliance-hackathon/

Samsung pursuing strategic direction in smart healthcare converging IT and biotechnology

This is not limited to Samsung. Apple and Google are interested in smart healthcare as well. Samsung has been well known for its fast-follower strategy.

연합뉴스로부터:
삼성그룹이 10년간 1조 5천억 원을 투자해 진행하는 미래기술육성사업의 올해 지원 과제가 정해졌다.

10일 삼성에 따르면 2013년 하반기부터 올해 상반기까지 매년 상·하반기로 나눠 기초과학, 소재, ICT(정보통신기술) 분야의 과제를 정한 것이 벌써 150건이나 쌓였다.

그동안 지원 과제 리스트를 분석한 결과, 인체·생명공학 등 의료부문 또는 의료기술과 IT(정보기술)의 융합 등을 주제로 한 과제가 전체 150건 중 18건(12%)으로 가장 많았다.

이어 2차전지, 태양전지, 발전기 등 에너지를 주제로 한 과제가 5건(3.3%)으로 뒤를 이었고 요즘 뜨는 아이템인 사물인터넷(IoT)이 4건(2.7%)으로 그다음이다. 사물인터넷은 지난해 지정 테마로 정해지기도 했다.

의료에 대한 관심은 다양하다. 암세포 성장 조절, 질병유발 단백질, 생체분자 네트워크, 새로운 뇌영상 MRI(자기공명영상 단층촬영장치), 항체 대체물질, 하이브리드형 인공 혀, 혈액 내 면역 향상성 등이 주제로 다뤄졌다.
이 부회장은 지난달 27일 아시아판 다보스포럼으로 불리는 중국 보아오(博鰲) 포럼에서 "삼성은 IT와 의학, 바이오의 융합을 통한 혁신에 큰 기회가 있을 것으로 보고 있다"고 말해 스마트 헬스 사업을 본격화하겠다는 의지를 내비쳤다.

http://media.daum.net/economic/industry/newsview?newsid=20150410061609762

Despite mounting household debt, extending the boost n housing bubble:가계부채 위험수위인데.. "LTV·DTI 완화 1년 더"

경향신문으로부터:

금융당국이 오는 7월 시효가 끝나는 주택담보인정비율(LTV)·총부채상환비율(DTI) 규제 완화 조치를 1년 더 연장하기로 했다. 가계부채 급증 우려에도 불구, 부동산 경기 부양을 위해 금융당국이 대출의 고삐를 죄지 않기로 한 것이다.

그는 가계부채 총량을 줄이기 위해 LTV·DTI 규제를 다시 강화해야 한다는 야당 의원들의 주문에 "가계부채 증가속도가 빠르지만 현재 관리 가능한 수준이라고 판단한다"며 "이제 부동산 시장이 온기를 찾고 있어 좀 더 지켜볼 필요가 있다"고 말했다.

금융위는 지난해 8월1일 부동산 주택담보대출 규제를 완화해 수도권에 50~70%였던 LTV는 전 금융권과 전 지역에 70%로, 수도권에 50~60%였던 DTI는 전 금융권과 수도권에 60%를 적용해 1년간 한시적으로 시행하는 것으로 조정했다.

http://realestate.daum.net/news/detail/main/MD20150409214517746.daum

NY Times: South Korea’s Invasion of Privacy

From NYT:

South Koreans have had to deal with a series of affronts to their privacy recently, but one blow stings more than the rest: The country’s three main telecommunication companies — KT, SK Telecom and LG Uplus — have been funneling subscriber information to law enforcement agencies whenever a request is made, without demanding a warrant or informing affected customers.

They gave away names, addresses, resident registration numbers and other customer information pertaining to more than six million phone numbers in the first half of 2014 alone. All of that data now sits with law enforcement authorities, with no prospect of disposal.

The collusion between telecom firms and the state is just another item in a long list of invasions of privacy by the government since President Park Geun-hye became a contender for high office more than four years ago. Some commentators warned that Ms. Park’s election might stoke authoritarianism because of her appeal among conservatives who honor her late father, the anti-Communist dictator Park Chung-hee, but no one predicted the republic of surveillance that has taken shape under her watchful eyes.

This downward spiral began during the tenure of President Lee Myung-bak, Ms. Park’s predecessor. But under this president, surveillance has reached new heights.

Initially, government monitoring was said to have something to do with reducing crime, social instability and pro-North Korean activities. But surveillance has become so commonplace that the government and the public seem to have forgotten its purpose. Policing the Internet, poring over private chats, installing an ever-increasing number of close-circuit television cameras and collecting information on telecommunication users are all part of this government’s tool kit.

In principle, Articles 17 and 18 of South Korea’s democratic Constitution prohibit the infringement of “privacy” and “privacy of correspondence.” But conservatives have sought to minimize those guarantees by invoking Article 37, which allows for curtailing rights “when necessary for national security, the maintenance of law and order or for public welfare.”

International condemnation is mounting over South Korea’s direction. Freedom House now classifies South Korea’s Internet and press freedoms as only “partly free” and has downgraded the country’s political rights rating by a notch for 2014. Amnesty International and Human Rights Watch have both called on the government to stop undermining freedom of expression, particularly in the arenas of politics and journalism.

Eventually, Ms. Park’s policies will threaten to undermine the “creative economy” she says she wants to stimulate. Her security and surveillance abuses are turning people away from the very technology companies that the country needs to stay competitive.

South Korea’s abrupt regression from a much-touted model of democracy into a land of fast-dwindling freedom is a cautionary tale even in this global age of surveillance. The erosion of privacy rights can and must be halted. We must be able to keep talking freely, even when there are those who would prefer our silence and blind submission.

http://www.nytimes.com/2015/04/03/opinion/south-koreas-invasion-of-privacy.html?_r=0

Introducing IoT-controlled LED street lights in Seoul, Korea

뉴스토마토로부터:

서울시는 도로 가로등에 사물인터넷을 적용해 전력사용량을 줄이겠다고 6일 밝혔다.

서울시 ‘스마트 LED 도로조명 제어시스템(스마트 도로조명)’은 사물인터넷을 활용해 특정지역의 환경, 사람, 사물의 움직임을 감지해 자동적으로 조명을 제어하는 시스템이다. 감지에 따라 가로등 밝기 조정도 가능하다.

서울시는 지난해 12월부터 시중 주변 무교로 가로등 25등, 보행등 11등, 세종대로 보행등 7등에 ‘스마트 도로조명’을 시범 운영해왔다.

서울시는 “3월말 현재 약 60% 에너지가 절감되는 것으로 분석됐다”며 “오는 6월까지 다양한 조건을 부여해 효과를 분석하겠다”고 말했다.

이택근 도로관리과장은 “도로조명 제어시스템이 확대되면 에너지 절감과 새로운 ICT융합산업을 창출하는데 서울시가 선도적인 역할을 할 수 있을 것”으로 기대했다.

 

http://www.newstomato.com/ReadNews.aspx?no=547019

Hardware Development: Spark Shows How to Make a Prototype PCB

From Makezine:

Prototype 2 Production guides makers in designing their own boards.

Prototype 2 Production, a blog by the Spark team about bringing products to market, published the first of a three-part series this week on how to build a printed circuit board prototype. The guide, written by Spark’s head of supply chain Will Hart, walks readers through PCB fabrication specs, checking for design rule violations and generating layout files.
Fabrication specifications cover the physical basics of a board: attributes like the dimensions, number of layers, physical material, and board thickness, which Hart writes “have a tremendous affect on its cost, yield, supply chain, and manufacturability.”

http://makezine.com/2015/04/02/hardware-development-spark-shows-make-prototype-pcb/

The Only TV News Report On The Economy You'll Ever Need

From Zero Hedge:

Confused as to whether good news is bad news, bad news is good news, or no news matters whatsoever, this brief clip summarizing every mainstream media report on the economy explains it all...


* * *
h/t Lance R

http://www.zerohedge.com/news/2015-04-04/only-tv-news-report-economy-youll-ever-need

The Death of Moore’s Law Will Spur Innovation

From IEEE Spectrum:

 

The scene is set, I believe, for many other kinds of open-hardware ecosystems to blossom. The inevitable slowdown of Moore’s Law may spell trouble for today’s technology giants, but it also creates an opportunity for the fledgling open-hardware movement to grow into something that potentially could be very big.

http://spectrum.ieee.org/semiconductors/design/the-death-of-moores-law-will-spur-innovation

Remembering the 47th Anniversary of Martin Luther King's Last Public Words

From Jesse's Cafe:

Martin Luther King gave this speech on 3 April 1968 in Memphis, Tennessee. 

On 4 April 1968, Dr. Martin Luther King, Jr. was assassinated.

http://jessescrossroadscafe.blogspot.kr/2015/04/remembering-47th-anniversary-of-martin.html

And this is the verdict: the light has come into the world, but some people prefer darkness to light, because their works serve evil. For everyone who walks with wickedness hates the light and does not move towards it, so that their works might not be seen clearly. But whoever lives in the truth comes into the light, so that their works may be seen in accordance with God's will."
John 3:17-21

Happy Easter!

China’s military and growing political power

From VOXEU:

The Soviets matched the US only by spending up to 20% of GDP on the military during the Cold War. This column argues that, in stark contrast to this example, China has the potential to match the US in certain military spheres with similar burden on its economy. Using exchange rates comparisons significantly understates the Chinese military spending. A much more realistic assessment is obtained using PPP terms. If both countries spent the same fraction of their GDP on the military, the relative size of China’s military machine would be more than 90% of the US one.
China’s rapid economic growth has led to a spate of comparisons between the sizes of the economies of China and the US. Authors wishing to make China look big use exchange rates adjusted for local prices.
Frankel (2014) argues that GDP converted at market exchange rates is a better measure of economic power since international spending power but not local spending power is what matters. Specifically, comparisons based on market exchange rate are appropriate for measuring the importance of a country in the world economy, such as the national share of world demand, the impact on financial markets, and international voting rights.

• As Frankel notes, since the market exchange rate is approximately half the value of the purchasing power parity (PPP) exchange rate, the US remains the world’s largest economic power by a substantial margin.

But another aspect of China’s rise is its rising military strength. Its military budget has grown at double digit rates for 20 years. The wider political economy implications of China’s rise also depend on this military muscle (Mearsheimer 2006, Friedberg 2011, Kaplan 2014). As evidenced by Obama’s ‘pivot to Asia’, this is already changing the balance of power in Asia, and the US foreign policy response (Clinton 2011, The Economist 2012).
But how should we compare this spending in RMB to the US military budget? Will market exchange rates or PPP exchange rates give a more accurate comparison of relative real military spending in each country?

Military Spending in China and the US

In a recent paper, (Robertson and Sin 2015), we show that China’s military budget was 18% of that of the US using market exchange rate comparisons, but 33% of the one of the US using PPP exchange rates. In addition, China spends only around 2% of its GDP on the military, compared to 5% by the US. If China raised its military spending to GDP ratio to the US level, it would be close to par with the US in PPP terms, but still far behind it in terms of market exchange rates.
Such large differences due to exchange rate choices cause anxiety in the Pentagon. It is a ‘known unknown’ that has been flagged many times by, for example, the Rand Corporation, the US Department of Defence, and military statistical abstracts such as the IISS and SIPRI (Crane et al. 2006, US Department of Defence 2011, IISS 2012, SIPRI 2012).
Frankel also points out that the market exchange rate matters for military power. He gives the example of China’s ability to project power in the South China Sea, which depends on its ability to purchase naval capacity. Likewise, China imports the latest generation anti-ship missiles from Russia.
But military spending more generally has a large domestic component. Around 1/3 of China’s military budget is spent on personnel – all of whom are paid substantially lower wages than their US equivalents – even after adjusting for differences in training. So, in this case it is not obvious whether market exchange rates or PPP exchange rate comparisons give a more accurate perspective.

A Military Unit Cost Exchange Rate

The correct exchange rate with which to compare military spending would be a price or unit cost ratio of military services in each country. We, therefore, tackle this problem by developing Tornqvist and Fisher price indices applied to data on broad military budget shares for personnel, equipment, and operations spending.
In accordance with Frankel’s arguments above, we use market exchange rates as a measure of relative military equipment costs facing each country since most equipment, or close substitutes, is tradable. For relative operations costs, however, we use PPP exchange rates as a reasonable proxy since the operations budget represents a bundle of traded and non-traded goods and services.
Finally, relative personnel costs are obtained using manufacturing wages, either gross or net of on-costs, since this represents the social opportunity cost of military employment.
Even after adjusting for differences in average schooling, we find that these differences in personal costs are very large. Because of this, our resulting relative military cost (RMC) exchange rates are very low. Thus, while the market exchange rate in 210 was around 6.8 RMB per dollar, and the PPP exchange rate was 3.7 RMB per dollar, we obtain a relative military cost exchange rate of 2.9 RMB per dollar.
This low relative military costs exchange rate implies a real value of China’s military spending of 40% of the US in real terms – larger than the level implied by using PPP rates of 33%, and much larger than the market exchange rate based figure of 18%. Moreover, if both countries spent the same fraction of their GDP on the military, the relative size of China’s military machine is over 90% of the one of the US.
One strength of our method is that it allows for the fact that the US uses more equipment-intensive techniques and China uses labour-intensive techniques. Thus, it avoids substitution bias associated with fixed basked approaches. Moreover, it can also be readily calculated with minimal data.
One caveat is that the method assumes the technology for combing inputs –but not the inputs choice – is the same in both countries. But even allowing for say, a 10%-20% productivity advantage in the US due, for example, to less corruption and better procurement practices, it would still leave a very large estimate of real spending that would be closer to the PPP estimate of China’s military spending.

Conclusion

We find that converting China’s military spending in RMB to dollars using market exchange rates will dramatically understate its real size. A more realistic assessment shows that China’s real spending is closer to the value implied by PPP exchange rates.
This economic measure of military strength is important because it shows that China has the potential to match the US in certain military spheres with a similar burden on its economy. This is in stark contrast to the Soviets’ cold war strategy, where they matched the US only by spending up to 20% of GDP on the military.
So, in terms of military spending, China is ‘number 2’ but only by a small and shrinking margin. This will matter a great deal in terms of its ability to enforce territorial claims and achieve its foreign policy objectives. In these terms, China’s ability to wield international political power would seem to be very close to that of the US.

http://www.voxeu.org/article/mismeasuring-china-s-military-spending

Iceland Stuns Banks: Plans To Take Back The Power To Create Money

From Zero Hedge:

Who knew that the revolution would start with those radical Icelanders? It does, though. One Frosti Sigurjonsson, a lawmaker from the ruling Progress Party, issued a report today that suggests taking the power to create money away from commercial banks, and hand it to the central bank and, ultimately, Parliament.

http://www.zerohedge.com/news/2015-04-01/iceland-stuns-banks-plans-take-back-power-create-money