Dan on November 16th, 2014

Speaking of Russia (in my last post),  it was interesting to see Jim Rogers view on Russia in this interview on Business Insider.  Jim Rogers has been a long time staple of the financial news channels, and he is the first one I have heard state an alternative view of Russian Relations.

As a long time commodities trader and Asia investor,its interesting to see his take on whats going on in Russia.  He also is one of the few to link the suddenly falling oil prices to geopolitical pressure on Russia:

It’s [The recent drop in Oil Prices] a fundamental positive for anybody who uses oil, who uses energy. It’s not a positive for places like Canada, Russia, or Australia. It seems to me that this is a bit of an artificial move. The Saudis, from what I can gather, are dumping oil because the US has told them to in order to put pressure on Russia and Iran. 

Interestingly, another recent article discusses the effect of this drop in oil prices on various governments over a 4 quarter to 12 quarter time period.  This chart:

shows Jim Rogers analysis of the oil movement does not seem too far fetched.  Conventional Market wisdom would have you think oil prices should be strong given worldwide economic strength – so maybe something else is going on here to put the squeeze on Russia.

Dan on November 14th, 2014

It will be interesting to see who wins  in the battle between sanctions against Russia and the the worldwide military industrialists.  It looks like France will be first up to face this quandary, as they have two warships built and paid for by the Russians that are scheduled for delivery but being held up due to political conflicts.

An interesting echo back to World War I, when Britain seized two warships paid for by the Ottoman Empire,the HMS Erin and the HMS Agincourt.  From the Wikipedia entry for the HMS Agincourt:

The ship was nearly complete when World War I broke out, and British Admiralty fears of a German–Ottoman alliance led to her seizure for use by the Royal Navy (together with another Ottoman battleship which was being constructed in Britain). This act was a significant contributor to the decision of the Ottoman government to join the Central Powers, as the payments for both ships were complete, and distrust of Britain increased.

Germany later used this to their advantage to entice the Ottoman Empire to join the Central powers, when they had two warships trapped in the Mediterranean by the British that they then gave to the Ottoman Empire:

 Germany′s gift of the two modern warships had an enormous positive impact on the Turkish population. At the outbreak of the war, Churchill had caused outrage when he “requisitioned” two almost completed Turkish battleships in British shipyards, the Sultan Osman I and the Reshadieh, which had been financed by public subscription at a cost of £6,000,000. Turkey was offered compensation of £1,000 per day for so long as the war might last, provided she remained neutral. (These ships were commissioned into the Royal Navy as HMS Agincourt and HMS Erin respectively.) The Turks had been neutral, though the navy had been pro-British (having purchased 40 warships from British shipyards) while the army was in favour of Germany, so the two incidents helped resolve the deadlock and the Ottoman Empire would join the Central Powers.

 (Source:  The Pursuit of Goeben and Breslau)

So it will be interesting to see how this French thing plays out. If they mess with the Russians and further sour the West’s relations with Russia, it seems like there would be plenty of other foreign powers happy to gain favor with Russia and provide warships. Granted these Russian ships are only helicopter carriers and not battleships, but the historical similarities are interesting.

Dan on November 6th, 2014

Over the last few years I have had many discussions with friends and co-workers regarding what happened to Obama:  Why did his foreign and terrorism policy morph from candidate Obama’s anti-war / Nobel peace prize vision to the continuation of the Bush foreign policy?  My question has been was Obama a liar, did he change, or is he not in control?

The Boston Globe just recently published an interview with the author of a book that I think best explains this. The book, National Security and the Double Government, claims this shadow goveernment rose during the Truman Administration’s attempt to deal with the growing national security infrastructure.

If this author is correct, I suppose the good news is this has been going on for over 60 years, and the internet is allowing this to finally shedding some light on this.  Perhaps this proves Charles Bukowski was right – “The difference between a democracy and a dictatorship is that in a democracy you vote first and take orders later; in a dictatorship you don’t have to waste your time voting.”

Dan on October 30th, 2014

At first glance, the new HP Sprout PC didn’t really catch my eye, until I say a this new feature HP is including in its latest high end PC.  As stated in this article on TechTimes:

Key to Sprout’s game-changing new computer is the combination of an Illuminator equipped with a 14-megapixel camera and an array of sensors equipped with Intel’s RealSense 3D tracking technology and a 20-inch flexible Touch Mat that works as a capacitive, multi-touch projecting screen with 20 touch points….HP is making a big leap into blending the physical and digital into what it calls “blended reality” by allowing users to place real, physical objects, such as a ball, a mug or anything that could fit into the mat, and have them transferred into the screen.

While I am sure the technology here is pretty immature, it seems like in the near future this could really transform 3D printing.  Much of the effort to get something 3D printed is to get a CAD drawing of a 3 dimensional object that a computer can then use to render an object on a 3D printer.  Once this technology matures, if you seen some part or component replaced, all you would have to do it have it 3D scanned and sent to a fabricator.  Over the last few years, I had been thinking that if I was in college today, I would take CAD classes just to ensure I had a job once I left college – as the demand for CAD would have to be growing with the rise in 3D printing. Now, maybe CAD will be going the way of punch cards.

Maybe this has applications in the gaming space also. What better way to personalize your virtual world than to scan in personal objects or include with your avatar items from the physical world.

All this for a PC that costs $1899 for the first version.  It will be interesting to see where this technology leads, as how quickly it gains widespread adoption as the price of the technology falls.

 

Dan on October 22nd, 2014

Its been a year since I reduced my work schedule in order to pursue stuff I never get around to doing.  Over the years I have been falling behind on just about everything – from house projects to learning about new technologies.  When I first made the decision to reduce my weekly work commitments, I had a rough list of goals I wanted to achieve in my first year.  So I thought I would take this opportunity to give myself a performance review in regards to how well I have spent my extra time away from work in pursuit of personal enlightenment.

Not too surprisingly, I didn’t make nearly the progress I had hoped to on my goals.  A year ago, I would of stated  I had three primary goals to achieve in my first year:  Investigate/initiate robotics programming and other technologies, increase my writing, and focus on improving how I manage investments.

I didn’t make much progress on robotics, however I think I have a valid excuse.  Right now there is no clear leader in what platform will be the leading platform in robotics.  I am thinking Google will come out with the defacto standard, so I am holding off and delving into that until I see a more clear market leader.  So I am altering that goal to focus on developing something for the ‘internet of things’ most likely delve into home automation.  I just need to find something I want to automate.

I did not achieve my goal in increasing my writing.  The more I think and research it, I realize the first thing I really need to establish is a writing regimen.  I need to dedicate some time every week to focus on what I want to write.  So my goal for my next year is to really build out a time ‘budget’ for writing, then build the rigor it takes to be a productive writer.

I did do pretty well in the investment goal area.  Even though my stock picks are lagging the market this year (though I am blaming that on the poor performance of small stocks overall), I did do some work I feel good about in the area of asset allocation.  I have become much more immersed in various investing categories, which is leading to reduced risk (hopefully).  There is more to be done in this area, but I feel like I have met or exceeded my goal in this area.

So where else has all my spare time gone?   As I sit here at my desk, I notice the piles of papers and todo items have shrunk considerably.  I have taken care of personal and client projects that had been outstanding for many months, and enjoyed more work-free weekends.  I also feel good about my level of fitness.  Rather than spending my spare time browsing the refrigerator, I have actually increased my exercise and am probably eating better.   I am confident I will continue to make strides in this area next year.

So now that I consider myself officially ‘decompressed’, I am hoping to make additional progress on the same goals as I had last year, and if a few more goals creep in that would be OK to.

As for a performance review grade,  I give myself an ‘exceeds expectations’  grade.  Maybe I am an easy grader – but even though I didn’t hit all my goals, I have kept productive, learned a lot about a lot of things, and  have really enjoyed this last year.

 

Dan on October 11th, 2014

Not that we need another reason to distrust our secret government agencies, but here is a great example of why we shouldn’t have unchecked power in the NSA.

https://news.vice.com/article/these-are-the-financial-disclosure-forms-the-nsa-said-would-threaten-national-security

According to this article, the former head of the NSA held investments in small hi tech companies that specialized in cloud and surveillance technology.  This action doesn’t even come close to being ethical – and that Obama himself signed a waiver  to try to hide this under the guise of ‘National Security’ should lead any citizen to wonder why we have this shadow instutition with no oversight.

Ars Technica has a great addendum to this  article , noting that this former head has now founded his own company which offers cyber security protection.  In the article a great quote from Representative Alan Grayson of Florida:

Disclosing or misusing classified information for profit is, as Mr. Alexander well knows, a felony. I question how Mr. Alexander can provide any of the services he is offering unless he discloses or misuses classified information, including extremely sensitive sources and methods. Without the classified information that he acquired in his former position, he literally would have nothing to offer to you

Well put.  How many other examples of misuse of unchecked power exists in the US Governments intelligence organization?

Dan on October 9th, 2014

The new version of windows is out, and surprisingly Microsoft skipped a number and instead of naming it Windows 9 its Windows 10.

The reason?  As per this ars technica article

Terry Myerson, executive vice president for the Operating System Group, said that the new release represented such a shift in Microsoft’s approach to delivering Windows and in what Windows will be—able to span everything from an Internet-of-Things gizmo to a phone to a tablet to a PC to a server—that calling it Windows 9 wouldn’t be big enough to capture the differences.

Hmm.   Windows 10 looks a lot like Windows 7 to me – maybe they are just trying to distance themselves further from Windows 8.  But I think the real reason was more technical than marketing.   This article exposes the real answer based on a dev post on reddit.   Apparently Microsoft is aware that Microsoft and lots of third party code have compatibility checks that check which version you are running, and Windows 9 would cause huge problems.   The example snippet:

windows9

I think Microsoft did the right thing here – I have no doubt there is a bunch of code in use with this logic – and this would have wreaked havoc on people upgrading old applications to Windows 9.  I think they really dodged a disaster – kudos to the technical guys who convinced Microsoft to skip Windows 9.  I only think Microsoft should of been more forthcoming and spared us the BS.

I must admit however, that I would of enjoyed if the marketing department settled on Windows X instead – following the Apple roman numeral convention. Because they probably would of then run into likely compatibility checks for Windows XP…

 

Dan on October 4th, 2014

The rise in college costs over the last few decades have been significant. Tuition here in Washington used to be in the low $200 range in the 1970’s, now in tens of thousands of dollars.  Many theories exist out there regarding the cause  of all that – but it looks from this animated chart that it is simply supply and demand.

4yeardegrees

 

4yeardegreescurrent

current

 

For the full animated gif see http://imgur.com/5b8cOXJ

I wasn’t aware how many more people have 4 year college degrees now than in 1970.  But why the great increase in demand?  d av Perhaps its increased globalization of the workforce, perhaps the increase in technology, or something else.

I assumed the ease of getting student loans factored into this, but if you figure that there was much less demand in the middle of the 20th century, when the cost was low, that doesn’t seem to make economic sense.   Unless the rise of student loan money has led to schools lowering their admissions requirements, to soak up all that student loan money.

Many articles have been written about the impact of this debt on the economy of the future impact of this debt on the economy, one has to wonder if loading all these young adults with a huge debt load is the best use of our economic capital.  And is there a huge economic benefit to cranking out these 4 year degrees?  Maybe so.   It will be interesting to see the long term impact of this demographic shift.

Dan on September 26th, 2014

In this age of proxy wars and alliances, India appears to be gaining attention from both the east and west. This article quoting the Chinese media appears to indicate that China is wooing India, and the west is hoping that India will join the US Japan partnership leaning against China.

Meanwhile, India has a new prime minister, Narendra Modi, who recently visited Japan and this week is visiting the US.  The US seems to be rolling out the red carpet for him, starting with a CEO packed breakfast and a sold out Madison Square Garden appearance.

Interesting, Modi spent time in the US in the late 1990’s to spread his Hindu-Nationalist message.  And Modi is still a member of the RSS, which, according to Wikipedia, is a right wing, Hindu nationalist, para-military organization with a history of anti-Muslim violence.

So I would think India would be leaning towards the US, especially given the US Governments latest war on Muslim terrorists.  If this happens, I would think China would have a reaction, so this is definitely something worth watching.

Dan on September 20th, 2014

Doug Short at Advisor Persectives has an interesting look at historical inflation here:

http://www.advisorperspectives.com/dshort/updates/Inflation-Since-1872.php

The one chart that caught my eye was this one on inflation since 1872:

 

 

Inflation since 1972

 

What caught my eye was how prevalent inflation was prior to 1940.  Also curious to notice that during the roaring 20’s there was no inflation.  During the 30’s there was a large bout of deflation, but it is arguable that deflation was a result of the great depression, not the cause.

I am not arguing that America should abandon the effort to foil deflation – unfortunately the biggest losers to deflation are those that carry debt.  Deflation magnifies debt – and given the state of public and private debt deflation could result in disaster.  So lets be clear – the rarely stated reason goverments  around the world are so aggressively fighting deflation is because of the huge public and private debt in our economies.  And the only realistic path to reducing that debt must be inflation.