From Zerohedge.com:
Meanwhile, the very act of continuing to drill puts more pressure on prices, imperiling the companies even further and encouraging still more debt issuance, which leads to more drilling and so on and so forth.
This is exacerbated by the fact that the more debt you take on, the more interest expense you incur, adding further incentive to drill, drill, drill.
In short: the entire sector is digging itself a hole (no pun intended).
This is a microcosm of the dynamic that’s taking place in the macroeconomy.
Those with access to easy money overproduce without witnessing a concurrent increase in demand from those to whom the benefits of ultra loose monetary policy do not immediately accrue.
Defaults are averted when troubled companies tap yield-starved investors for cash, which leads to further excess capacity, still more pressure on prices, still lower yields, further herding into risk assets, and around we go.
Citi’s Matt King recently described this as “creative destruction destroyed” and as the process by which “zombies are born...”
----
Link: http://www.zerohedge.com/news/2015-04-28/debt-pile-fuel-further-oil-price-pressure
Tuesday, April 28, 2015
WSJ: Oil-Industry Debt Mounts Up
From the Wall Street Journal online:
Oil and gas companies are continuing to pile up debt, a trend some warn could extend the slump in energy prices and hit economies reliant on the sector for growth and tax revenue...
The rise is largely due to a high number of bond sales in Europe, the Middle East and Africa, and in the U.S., where both Exxon Mobil Corp. and Chevron Corp. have recently tapped investors...
Add in syndicated bank loans and total borrowing by the oil-and-gas sector rose to $2.5 trillion at the end of 2014, up from $1 trillion of outstanding debt at the end of 2006, according to the Switzerland-based Bank for International Settlements.
It has warned that an “oil-debt nexus” could create a vicious circle whereby overindebted companies pump more oil to ensure they can pay interest on their loans, adding to the current global oil glut, and further depressing energy prices.
“Rapidly rising leverage creates risk exposures in the nonfinancial corporate sector that may be transferred across the global financial system,” it said in a recent report.
Any selloff of oil-company debt could hit corporate bond markets hard, given the huge amounts outstanding, the bank said...
----
Link: http://www.wsj.com/articles/oil-industry-debt-mounts-up-1430166847
Oil and gas companies are continuing to pile up debt, a trend some warn could extend the slump in energy prices and hit economies reliant on the sector for growth and tax revenue...
The rise is largely due to a high number of bond sales in Europe, the Middle East and Africa, and in the U.S., where both Exxon Mobil Corp. and Chevron Corp. have recently tapped investors...
Add in syndicated bank loans and total borrowing by the oil-and-gas sector rose to $2.5 trillion at the end of 2014, up from $1 trillion of outstanding debt at the end of 2006, according to the Switzerland-based Bank for International Settlements.
It has warned that an “oil-debt nexus” could create a vicious circle whereby overindebted companies pump more oil to ensure they can pay interest on their loans, adding to the current global oil glut, and further depressing energy prices.
“Rapidly rising leverage creates risk exposures in the nonfinancial corporate sector that may be transferred across the global financial system,” it said in a recent report.
Any selloff of oil-company debt could hit corporate bond markets hard, given the huge amounts outstanding, the bank said...
----
Link: http://www.wsj.com/articles/oil-industry-debt-mounts-up-1430166847
Sunday, April 26, 2015
Russians Found Hillary's Emails!
Breaking News from the New York Times:
Russian Hackers Read Obama’s Unclassified Emails
Some of President Obama’s email correspondence was swept up by Russian hackers last year in a breach of the White House’s unclassified computer system that was far more intrusive and worrisome than has been publicly acknowledged, according to senior American officials briefed on the investigation.
The hackers, who also got deeply into the State Department’s unclassified system, do not appear to have penetrated closely guarded servers that control the message traffic from Mr. Obama’s BlackBerry, which he or an aide carries constantly...
----
Link: http://www.nytimes.com/2015/04/26/us/russian-hackers-read-obamas-unclassified-emails-officials-say.html?
Russian Hackers Read Obama’s Unclassified Emails
Some of President Obama’s email correspondence was swept up by Russian hackers last year in a breach of the White House’s unclassified computer system that was far more intrusive and worrisome than has been publicly acknowledged, according to senior American officials briefed on the investigation.
The hackers, who also got deeply into the State Department’s unclassified system, do not appear to have penetrated closely guarded servers that control the message traffic from Mr. Obama’s BlackBerry, which he or an aide carries constantly...
----
Link: http://www.nytimes.com/2015/04/26/us/russian-hackers-read-obamas-unclassified-emails-officials-say.html?
Friday, April 24, 2015
Nasdaq, S&P set record highs
Today from Reuters.com:
The Nasdaq Composite and S&P 500 chalked up record high closes on Friday, propelled by strong results from tech behemoths Google, Amazon and Microsoft.
The Nasdaq Composite added 0.71 percent to end at 5,092.09, its second straight record high close.
The S&P 500 rose 0.23 percent to a record high close of 2,117.69 points, barely above its previous high of 2,117.39 set on March 2...
----
Link: http://www.reuters.com/article/2015/04/24/us-markets-stocks-usa-idUSKBN0NF16J20150424
The Nasdaq Composite and S&P 500 chalked up record high closes on Friday, propelled by strong results from tech behemoths Google, Amazon and Microsoft.
The Nasdaq Composite added 0.71 percent to end at 5,092.09, its second straight record high close.
The S&P 500 rose 0.23 percent to a record high close of 2,117.69 points, barely above its previous high of 2,117.39 set on March 2...
----
Link: http://www.reuters.com/article/2015/04/24/us-markets-stocks-usa-idUSKBN0NF16J20150424
Wednesday, April 22, 2015
Liberal Car Fetish Losing Love to SUVs
From car shopping research company Edmunds.com:
Car buyers are trading in hybrid and electric cars for SUVs at a higher rate than ever before, according to a new analysis from car-buying platform Edmunds.com.
The analysis offers a surprising look at how today's gas prices are drawing hybrid and EV owners toward gas-guzzling vehicles at a much more accelerated pace than in recent years.
According to Edmunds.com, about 22 percent of people who have traded in their hybrids and EVs in 2015 bought a new SUV.
The number represents a sharp increase from 18.8 percent last year, and it is nearly double the rate of 11.9 percent just three years ago.
Overall, only 45 percent of this year's hybrid and EV trade-ins have gone toward the purchase of another alternative fuel vehicle, down from just over 60 percent in 2012.
Never before have loyalty rates for alt-fuel vehicles fallen below 50 percent.
"For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment," says Edmunds.com Director of Industry Analysis Jessica Caldwell.
"Three years ago, when gas was at near-record highs, it was a lot easier to rationalize the price premiums on alternative fuel vehicles. But with today's gas prices as low as they are, the math just doesn't make a very compelling case."
To underscore the point, Edmunds calculates that at the peak average national gas price of $4.67/gallon in October 2012, it would take five years to break even on the $3,770 price difference between a Toyota Camry LE Hybrid ($28,230) and a Toyota Camry LE ($24,460).
At today's national average gas price of $2.27/gallon, it would take twice as much time (10.5 years) to close the same gap.
Edmunds' analysis comes at a time when overall sales of alternative vehicles have continued to slide.
EVs and hybrids accounted for just 2.7 percent of all new car sales in the first quarter of 2015, down from 3.3 percent during that same period last year.
The share of SUVs, meanwhile, has increased from 31.8 percent in Q1 2014 to 34.2 percent in Q1 2015.
Shoppers who want to learn more about hybrid and electric vehicles on today's new and used market are encouraged to visit Edmunds.com at http://www.edmunds.com/hybrid/.
Shoppers can also calculate "breakeven" times using Edmunds' Gas Guzzler Calculator at http://www.edmunds.com/calculators/gas-guzzler.html?sv.
----
http://www.edmunds.com/about/press/hybrid-and-electric-vehicles-struggle-to-maintain-owner-loyalty-reports-edmundscom.html
Car buyers are trading in hybrid and electric cars for SUVs at a higher rate than ever before, according to a new analysis from car-buying platform Edmunds.com.
The analysis offers a surprising look at how today's gas prices are drawing hybrid and EV owners toward gas-guzzling vehicles at a much more accelerated pace than in recent years.
According to Edmunds.com, about 22 percent of people who have traded in their hybrids and EVs in 2015 bought a new SUV.
The number represents a sharp increase from 18.8 percent last year, and it is nearly double the rate of 11.9 percent just three years ago.
Overall, only 45 percent of this year's hybrid and EV trade-ins have gone toward the purchase of another alternative fuel vehicle, down from just over 60 percent in 2012.
Never before have loyalty rates for alt-fuel vehicles fallen below 50 percent.
"For better or worse, it looks like many hybrid and EV owners are driven more by financial motives rather than a responsibility to the environment," says Edmunds.com Director of Industry Analysis Jessica Caldwell.
"Three years ago, when gas was at near-record highs, it was a lot easier to rationalize the price premiums on alternative fuel vehicles. But with today's gas prices as low as they are, the math just doesn't make a very compelling case."
To underscore the point, Edmunds calculates that at the peak average national gas price of $4.67/gallon in October 2012, it would take five years to break even on the $3,770 price difference between a Toyota Camry LE Hybrid ($28,230) and a Toyota Camry LE ($24,460).
At today's national average gas price of $2.27/gallon, it would take twice as much time (10.5 years) to close the same gap.
Edmunds' analysis comes at a time when overall sales of alternative vehicles have continued to slide.
EVs and hybrids accounted for just 2.7 percent of all new car sales in the first quarter of 2015, down from 3.3 percent during that same period last year.
The share of SUVs, meanwhile, has increased from 31.8 percent in Q1 2014 to 34.2 percent in Q1 2015.
Shoppers who want to learn more about hybrid and electric vehicles on today's new and used market are encouraged to visit Edmunds.com at http://www.edmunds.com/hybrid/.
Shoppers can also calculate "breakeven" times using Edmunds' Gas Guzzler Calculator at http://www.edmunds.com/calculators/gas-guzzler.html?sv.
----
http://www.edmunds.com/about/press/hybrid-and-electric-vehicles-struggle-to-maintain-owner-loyalty-reports-edmundscom.html
Friday, April 17, 2015
Tibetan Mastiffs Discarded as Fad Ends in China
Prices for the prized pets have now gone to the dogs. PB
----
From the New York Times online:
There once was a time, during the frenzied heights of China’s Tibetan mastiff craze, when a droopy-eyed slobbering giant like Nibble might have fetched $200,000 and ended up roaming the landscaped grounds of some coal tycoon’s suburban villa.
But Tibetan mastiffs are so 2013.
Instead, earlier this year Nibble and 20 more unlucky mastiffs found themselves stuffed into metal chicken crates and packed onto a truck with 150 other dogs.
If not for a band of Beijing animal rights activists who literally threw themselves in front of the truck, Nibble and the rest would have ended up at a slaughterhouse in northeast China where, at roughly $5 a head, they would have been rendered into hot pot ingredients, imitation leather and the lining for winter gloves...
----
Link: http://www.nytimes.com/2015/04/18/world/asia/once-prized-tibetan-mastiffs-are-discarded-as-fad-ends-in-china.html
Wednesday, April 15, 2015
$9 Trillion Short means $Dollar goes Higher
Oil is priced in dollars. PB
----
From BloombergView.com:
Investors speculating the dollar rally is fizzling out may be overlooking trillions of reasons why it will keep on going.
There’s pent-up demand for the U.S. currency that will underpin years of appreciation because the world is “structurally short” the dollar, according to investor and former International Monetary Fund economist Stephen Jen.
Sovereign and corporate borrowers outside America owe a record $9 trillion in the U.S. currency, much of which will need repaying in coming years, data from the Bank for International Settlements show.
In addition, central banks that had reduced their holdings of the greenback are starting to reverse course, creating more demand.
The dollar’s share of global foreign reserves shrank to a record 60 percent in 2011 from 73 percent a decade earlier, though it’s since climbed back to 63 percent...
Most strategists and investors agree on the reasons for the dollar’s advance versus each of its major counterparts during the past year: the prospect of higher U.S. interest rates while other nations are loosening policy...
Chris Turner, head of foreign-exchange strategy at ING Groep NV, sees the dollar surging through parity with the European currency by mid-year, from $1.0586 per euro ... He said gains will be spurred by bonds from Germany to Ireland yielding below zero.
“Central banks are re-accumulating their dollar reserves and low, or negative, bond yields in the euro zone will probably speed up that trend,” said London-based Turner, whose bank topped Bloomberg’s rankings for the most accurate currency forecasts in the past two quarters...
Billionaire Bill Gross of Janus Capital Group Inc. has meanwhile been betting on U.S. Treasuries against German bunds on the basis that the spread between American and European interest rates will narrow. He called his bet “the trade of the year.”
----
Link: http://www.bloomberg.com/news/articles/2015-04-12/the-9-trillion-short-that-s-seen-sending-the-dollar-even-higher
----
From BloombergView.com:
Investors speculating the dollar rally is fizzling out may be overlooking trillions of reasons why it will keep on going.
There’s pent-up demand for the U.S. currency that will underpin years of appreciation because the world is “structurally short” the dollar, according to investor and former International Monetary Fund economist Stephen Jen.
Sovereign and corporate borrowers outside America owe a record $9 trillion in the U.S. currency, much of which will need repaying in coming years, data from the Bank for International Settlements show.
In addition, central banks that had reduced their holdings of the greenback are starting to reverse course, creating more demand.
The dollar’s share of global foreign reserves shrank to a record 60 percent in 2011 from 73 percent a decade earlier, though it’s since climbed back to 63 percent...
Most strategists and investors agree on the reasons for the dollar’s advance versus each of its major counterparts during the past year: the prospect of higher U.S. interest rates while other nations are loosening policy...
Chris Turner, head of foreign-exchange strategy at ING Groep NV, sees the dollar surging through parity with the European currency by mid-year, from $1.0586 per euro ... He said gains will be spurred by bonds from Germany to Ireland yielding below zero.
“Central banks are re-accumulating their dollar reserves and low, or negative, bond yields in the euro zone will probably speed up that trend,” said London-based Turner, whose bank topped Bloomberg’s rankings for the most accurate currency forecasts in the past two quarters...
Billionaire Bill Gross of Janus Capital Group Inc. has meanwhile been betting on U.S. Treasuries against German bunds on the basis that the spread between American and European interest rates will narrow. He called his bet “the trade of the year.”
----
Link: http://www.bloomberg.com/news/articles/2015-04-12/the-9-trillion-short-that-s-seen-sending-the-dollar-even-higher
Monday, April 13, 2015
Fewer Start-Ups Is An Ugly Economic Signal
From Robert Samuelson at Real Clear Markets:
On any given day, you can expect news of major corporate mergers. In 2014, worldwide M&A totaled $3.5 trillion, up 47 percent from the year before...
The popularity of M&A actually involves economic weakness. Unable to expand internally - by creating products or entering new markets - companies rely on M&A for growth.
However, what works for the firm may work less well for society.
Although buying another company may enhance the acquiring firm's innovation, it doesn't add much to society's. And society's capacity to innovate is crucial.
It generates the wealth needed to raise incomes and dampen social conflicts...
In several studies, economists Robert Litan and Ian Hathaway of the Brookings Institution found that start-ups (firms less than a year old) had fallen from 15 percent of all businesses in 1978 to 8 percent in 2011.
Meanwhile, older firms (16 years or more) had jumped from 23 percent of businesses in 1992 to 34 percent in 2011. Their share of jobs was even higher, almost three-quarters of all workers.
What emerges is a portrait of business that, though strikingly at odds with conventional wisdom, is consistent with poor productivity growth. American capitalism is middle-aged.
Older firms, conditioned by success, are more rigid. They're invested, financially and psychologically, in existing markets and production patterns. They can adapt and innovate, but it's hard.
The M&A surge is one way older firms strive to overcome internal stagnation.
What's worrisome is not the success of the middle-aged businesses; it's the weakness of young firms and the apparent erosion of entrepreneurship.
As other research has shown, start-ups ultimately account for a disproportionately high share of new job creation and innovation.
The vigor of these new firms is essential for the economy to revitalize itself.
We don't know what explains their slide, though the sheer mass of government regulations is one candidate. Older firms have the lawyers and administrators to cope with the red-tape deluge; many small new firms drown.
But that's just a conjecture illuminating the larger question.
If the economy discriminates against young firms, we will all be paying the price for many years.
----
Link: http://www.realclearmarkets.com/articles/2015/04/13/fewer_start-ups_is_an_ugly_economic_signal_101620.html
On any given day, you can expect news of major corporate mergers. In 2014, worldwide M&A totaled $3.5 trillion, up 47 percent from the year before...
The popularity of M&A actually involves economic weakness. Unable to expand internally - by creating products or entering new markets - companies rely on M&A for growth.
However, what works for the firm may work less well for society.
Although buying another company may enhance the acquiring firm's innovation, it doesn't add much to society's. And society's capacity to innovate is crucial.
It generates the wealth needed to raise incomes and dampen social conflicts...
In several studies, economists Robert Litan and Ian Hathaway of the Brookings Institution found that start-ups (firms less than a year old) had fallen from 15 percent of all businesses in 1978 to 8 percent in 2011.
Meanwhile, older firms (16 years or more) had jumped from 23 percent of businesses in 1992 to 34 percent in 2011. Their share of jobs was even higher, almost three-quarters of all workers.
What emerges is a portrait of business that, though strikingly at odds with conventional wisdom, is consistent with poor productivity growth. American capitalism is middle-aged.
Older firms, conditioned by success, are more rigid. They're invested, financially and psychologically, in existing markets and production patterns. They can adapt and innovate, but it's hard.
The M&A surge is one way older firms strive to overcome internal stagnation.
What's worrisome is not the success of the middle-aged businesses; it's the weakness of young firms and the apparent erosion of entrepreneurship.
As other research has shown, start-ups ultimately account for a disproportionately high share of new job creation and innovation.
The vigor of these new firms is essential for the economy to revitalize itself.
We don't know what explains their slide, though the sheer mass of government regulations is one candidate. Older firms have the lawyers and administrators to cope with the red-tape deluge; many small new firms drown.
But that's just a conjecture illuminating the larger question.
If the economy discriminates against young firms, we will all be paying the price for many years.
----
Link: http://www.realclearmarkets.com/articles/2015/04/13/fewer_start-ups_is_an_ugly_economic_signal_101620.html
Friday, April 10, 2015
Jobless Recovery: ‘Routine’ Jobs Disappear and Don't Come Back
The headline at the Wall Street Journal blog post is about 'routine' jobs disappearing.
Are these 'routine' jobs the same as 'middle class' jobs?
That's the assumption based on a report published by Third Way, the Democrat think tank, which is honest enough to call our current employment situation a "jobless recovery."
However, their prescription is predictable: more training programs.
But the WSJ blog post nor the report from Third Way point to the real solution: a complete overhaul of K-12 education.
The seeds of monopoly control over education sown across decades continue to sprout poorly educated citizens today.
Our fundamental problem is that the basic K-12 education - delivered by governments and controlled by unions - cheats our country and hurts are students.
When poorly educated students enter the work force they are ill prepared. Whatever 'routine' job they did have is lost in a downturn and that job disappears.
Where do poorly educated, unemployed workers go when they can't find work after their 'routine' jobs disappear?
In large numbers, they drop out of the work force. PB
----
From the Real Time Economics blog at WSJ.com:
The American labor market and middle class was once built on the routine job–workers showed up at factories and offices, took their places on the assembly line or the paper-pushing chain, did the same task over and over, and then went home.
New research ... shows just how much the world of routine work has collapsed...
The economists released a paper today, published by the centrist Democratic think tank Third Way, showing that over the course of the last two recessions and recoveries, a period beginning in 2001, the economy’s job growth has come entirely from nonroutine work...
In the most recent recession, routine jobs collapsed and simply have not recovered, with employment in both cognitive and manual jobs down by more than 5% if the tasks are mostly routine...
In recessions of the 1960s and 1970s, routine jobs would fall during the recession but quickly snap back.
But after the recession in 1990, something changed.
Routine jobs fell and, as a share of the population, never recovered.
In the recessions in 2001 and in 2007-09 they fell even further.
The snapback never occurred, suggesting that many firms began coping with recessions by scrapping tasks that could be automated or more easily outsourced...
----
Link: http://blogs.wsj.com/economics/2015/04/08/is-your-job-routine-if-so-its-probably-disappearing/
Are these 'routine' jobs the same as 'middle class' jobs?
That's the assumption based on a report published by Third Way, the Democrat think tank, which is honest enough to call our current employment situation a "jobless recovery."
However, their prescription is predictable: more training programs.
But the WSJ blog post nor the report from Third Way point to the real solution: a complete overhaul of K-12 education.
The seeds of monopoly control over education sown across decades continue to sprout poorly educated citizens today.
Our fundamental problem is that the basic K-12 education - delivered by governments and controlled by unions - cheats our country and hurts are students.
When poorly educated students enter the work force they are ill prepared. Whatever 'routine' job they did have is lost in a downturn and that job disappears.
Where do poorly educated, unemployed workers go when they can't find work after their 'routine' jobs disappear?
In large numbers, they drop out of the work force. PB
----
From the Real Time Economics blog at WSJ.com:
The American labor market and middle class was once built on the routine job–workers showed up at factories and offices, took their places on the assembly line or the paper-pushing chain, did the same task over and over, and then went home.
New research ... shows just how much the world of routine work has collapsed...
The economists released a paper today, published by the centrist Democratic think tank Third Way, showing that over the course of the last two recessions and recoveries, a period beginning in 2001, the economy’s job growth has come entirely from nonroutine work...
In the most recent recession, routine jobs collapsed and simply have not recovered, with employment in both cognitive and manual jobs down by more than 5% if the tasks are mostly routine...
In recessions of the 1960s and 1970s, routine jobs would fall during the recession but quickly snap back.
But after the recession in 1990, something changed.
Routine jobs fell and, as a share of the population, never recovered.
In the recessions in 2001 and in 2007-09 they fell even further.
The snapback never occurred, suggesting that many firms began coping with recessions by scrapping tasks that could be automated or more easily outsourced...
----
Link: http://blogs.wsj.com/economics/2015/04/08/is-your-job-routine-if-so-its-probably-disappearing/
Sunday, April 5, 2015
We are in a "jobless recovery"
From CNN.com:
----
If job growth has been strong, why aren't wages going up?
We are in a "jobless recovery."
Job growth is distressingly low for this stage of the long recovery, now in its 69th month.
It took 6½ years from January 2008 until May 2014, for the economy to just get back the jobs lost during the Great Recession and we are still lagging behind the normal post World-War II recovery pattern.
Slow job growth is costly for the unemployed and their families.
It also slows overall growth, reducing the economy's potential growth, which further slows the economy, in a spiral of stagnation.
The Congressional Budget Office confirms this self-feeding slowdown.
Its potential GDP estimate for 2017 has fallen by 7.3% since its estimate at the start of the recession, which translates into over $320 billion in lost economic activity...
[another] reason for low wages is that jobs created in the recovery pay worse than the jobs we lost in the Great Recession.
The recovery jobs are concentrated in retail sales, food services, cashiers, stock clerks, and maids and housekeepers -- all low-wage sectors.
----
Link: http://www.cnn.com/2015/04/03/opinions/mcgahey-minimal-wage/index.html
----
If job growth has been strong, why aren't wages going up?
We are in a "jobless recovery."
Job growth is distressingly low for this stage of the long recovery, now in its 69th month.
It took 6½ years from January 2008 until May 2014, for the economy to just get back the jobs lost during the Great Recession and we are still lagging behind the normal post World-War II recovery pattern.
Slow job growth is costly for the unemployed and their families.
It also slows overall growth, reducing the economy's potential growth, which further slows the economy, in a spiral of stagnation.
The Congressional Budget Office confirms this self-feeding slowdown.
Its potential GDP estimate for 2017 has fallen by 7.3% since its estimate at the start of the recession, which translates into over $320 billion in lost economic activity...
[another] reason for low wages is that jobs created in the recovery pay worse than the jobs we lost in the Great Recession.
The recovery jobs are concentrated in retail sales, food services, cashiers, stock clerks, and maids and housekeepers -- all low-wage sectors.
----
Link: http://www.cnn.com/2015/04/03/opinions/mcgahey-minimal-wage/index.html
Friday, April 3, 2015
Jobs slowdown: US employers added just 126K jobs in March
From the Associated Press online:
A weakening U.S. economy spilled into the job market in March as employers added just 126,000 jobs - the fewest since December 2013 - snapping a 12-month streak of gains above 200,000.
The unemployment rate remained at 5.5 percent, the Labor Department said in its monthly report Friday.
The March jobs data raised uncertainties about the world's largest economy, which for months has been the envy of other industrialized nations for its steadily robust hiring and growth.
Employers now appear wary about the economy, especially as a strong dollar has slowed U.S. exports, home sales have sputtered and cheaper gasoline has yet to unleash more consumer spending...
In addition to reporting sluggish hiring for March, the government revised down its estimate of job gains in February and January by a combined 69,000.
----
Link: http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-04-03-11-18-41
New Book: 'Unfinished Work - The Struggle to Build an Aging American Workforce'
From the publisher's website at the University of Oxford Press:
The forces driving the first decades of the 21st century—-globalization, technology, and unprecedented wealth mixed with jarring economic instability—-are pushing the day of retirement later and later in life.
The era of the aging worker is here...
Unfinished Work probes the struggles of companies either unable or unwilling to accommodate the aging of their workforces and the quandaries of governments and policymakers eager to control pension pay-outs to retiring boomers, yet unsure how to keep them on the job.
What emerges is a compassionate but clear-eyed portrait of a world in the midst of a slow-motion aging revolution that will have vast consequences for present and coming generations.
----
Link: http://ukcatalogue.oup.com/product/9780199974450.do
The forces driving the first decades of the 21st century—-globalization, technology, and unprecedented wealth mixed with jarring economic instability—-are pushing the day of retirement later and later in life.
The era of the aging worker is here...
Unfinished Work probes the struggles of companies either unable or unwilling to accommodate the aging of their workforces and the quandaries of governments and policymakers eager to control pension pay-outs to retiring boomers, yet unsure how to keep them on the job.
What emerges is a compassionate but clear-eyed portrait of a world in the midst of a slow-motion aging revolution that will have vast consequences for present and coming generations.
----
Link: http://ukcatalogue.oup.com/product/9780199974450.do
Wednesday, April 1, 2015
Artificial Intelligence Interns: already taking jobs from humans
Think about this: does the unskilled workforce become more desperate as their unskilled jobs disappear? Yes.
Is their answer to seek employment in protected jobs? There is no doubt that is the preferred answer.
What are protected jobs? Union and government jobs.
Will politics invade job opportunities and fights emerge as to who gets union jobs or government jobs? That already exists due to patronage and screening based on political preferences.
Will dependency grow even greater on transfer programs because unskilled jobs will continue to shrink? Of course it will. PB
----
From NewScientist.com:
Forget Skynet.
Hypothetical world-ending artificial intelligence makes headlines, but the hype ignores what's happening right under our noses.
Cheap, fast AI is already taking our jobs, we just haven't noticed.
This isn't dumb automation that can rapidly repeat identical tasks.
It's software that can learn about and adapt to its environment, allowing it to do work that used to be the exclusive domain of humans, from customer services to answering legal queries.
These systems don't threaten to enslave humanity, but they do pose a challenge: if software that does the work of humans exists, what work will we do?
Humans used to manually move data between the relevant systems to complete these tasks, copying a phone number from one database to another, for instance. The user still has to call up and speak to a human, but now an AI does the actual work.
To train the AI, it watches and learns while humans do simple, repetitive database tasks. With enough training data, the AIs can then go to work on their own...
But what will the world be like as we increasingly find ourselves working alongside AIs?
David Autor, an economist at the Massachusetts Institute of Technology, says automation has tended to reduce drudgery in the past, and allowed people to do more interesting work.
"Old assembly line jobs were things like screwing caps on bottles," Autor says. "A lot of that stuff has been eliminated and that's good. Our working lives are safer and more interesting than they used to be."
The potential problem with new kinds of automation like Blue Prism and ROSS is that they are starting to perform the kinds of jobs which can be the first rung on the corporate ladders, which could result in deepening inequality.
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Link: http://www.newscientist.com/article/mg22630151.700-ai-interns-software-already-taking-jobs-from-humans.html
Is their answer to seek employment in protected jobs? There is no doubt that is the preferred answer.
What are protected jobs? Union and government jobs.
Will politics invade job opportunities and fights emerge as to who gets union jobs or government jobs? That already exists due to patronage and screening based on political preferences.
Will dependency grow even greater on transfer programs because unskilled jobs will continue to shrink? Of course it will. PB
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From NewScientist.com:
Forget Skynet.
Hypothetical world-ending artificial intelligence makes headlines, but the hype ignores what's happening right under our noses.
Cheap, fast AI is already taking our jobs, we just haven't noticed.
This isn't dumb automation that can rapidly repeat identical tasks.
It's software that can learn about and adapt to its environment, allowing it to do work that used to be the exclusive domain of humans, from customer services to answering legal queries.
These systems don't threaten to enslave humanity, but they do pose a challenge: if software that does the work of humans exists, what work will we do?
Humans used to manually move data between the relevant systems to complete these tasks, copying a phone number from one database to another, for instance. The user still has to call up and speak to a human, but now an AI does the actual work.
To train the AI, it watches and learns while humans do simple, repetitive database tasks. With enough training data, the AIs can then go to work on their own...
But what will the world be like as we increasingly find ourselves working alongside AIs?
David Autor, an economist at the Massachusetts Institute of Technology, says automation has tended to reduce drudgery in the past, and allowed people to do more interesting work.
"Old assembly line jobs were things like screwing caps on bottles," Autor says. "A lot of that stuff has been eliminated and that's good. Our working lives are safer and more interesting than they used to be."
The potential problem with new kinds of automation like Blue Prism and ROSS is that they are starting to perform the kinds of jobs which can be the first rung on the corporate ladders, which could result in deepening inequality.
----
Link: http://www.newscientist.com/article/mg22630151.700-ai-interns-software-already-taking-jobs-from-humans.html
China: Most Factory Robots in the World by 2017
From the Wall Street Journal online:
China ... already the world’s largest market for industrial robots ... is expected to have more factory robots than any other country on earth by 2017, according to the German-based International Federation of Robotics.
Chinese labor costs have soared, undermining the calculus that brought all those jobs to China in the first place, and new robot technology is cheaper and easier to deploy than ever before.
Not to mention that many of China’s fastest-growing industries, such as autos, tend to rely on high levels of automation regardless of where the factories are built...
China is letting low-cost production shift out of the country and is focusing instead on capital-intensive industries such as steel and electronics where automation is a driving force.
China’s emergence as an automation hub contradicts many assumptions about robots.
Economists often view automation as a way for advanced economies to retain industries that might otherwise move offshore, since the focus is finding ways to save on costly labor. Some of that is certainly going on.
But increasingly, robots are gobbling up jobs in developing countries, reducing the potential job creation associated with building new factories...
The trade group says one reason China will continue booming is because it has relatively low “robot density.” China has about 30 robots for every 10,000 factory workers. In Germany, the density is 10 times higher. In Japan, it’s 11 times higher.
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Link: http://blogs.wsj.com/economics/2015/04/01/why-china-may-have-the-most-factory-robots-in-the-world-by-2017/?
China ... already the world’s largest market for industrial robots ... is expected to have more factory robots than any other country on earth by 2017, according to the German-based International Federation of Robotics.
Chinese labor costs have soared, undermining the calculus that brought all those jobs to China in the first place, and new robot technology is cheaper and easier to deploy than ever before.
Not to mention that many of China’s fastest-growing industries, such as autos, tend to rely on high levels of automation regardless of where the factories are built...
China is letting low-cost production shift out of the country and is focusing instead on capital-intensive industries such as steel and electronics where automation is a driving force.
China’s emergence as an automation hub contradicts many assumptions about robots.
Economists often view automation as a way for advanced economies to retain industries that might otherwise move offshore, since the focus is finding ways to save on costly labor. Some of that is certainly going on.
But increasingly, robots are gobbling up jobs in developing countries, reducing the potential job creation associated with building new factories...
The trade group says one reason China will continue booming is because it has relatively low “robot density.” China has about 30 robots for every 10,000 factory workers. In Germany, the density is 10 times higher. In Japan, it’s 11 times higher.
----
Link: http://blogs.wsj.com/economics/2015/04/01/why-china-may-have-the-most-factory-robots-in-the-world-by-2017/?
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