Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

i have thought that self-drivers should be economically sensible for uber/lyft/taxi - it would mean not paying a driver but i realize that otoh it means having a lot of capital tied up in the vehicles, along with maintenance, insurance, and so on. it's not clear to me whether they'd be better off just continuing to exploit the drivers.

[dcarrigg]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

i have thought that self-drivers should be economically sensible for uber/lyft/taxi - it would mean not paying a driver but i realize that otoh it means having a lot of capital tied up in the vehicles, along with maintenance, insurance, and so on. it's not clear to me whether they'd be better off just continuing to exploit the drivers.

Now you're starting to think like me.

Why would you abandon a situation where you completely avoid the FLSA for pennies on the dollar by buying of congress and the executive and state and local governments for pennies on the labor dollar for over a decade--a situation in which you have such rapid turnover that 30% of your drivers lose money when adjusted for capital and operating costs--when you could keep that going and not have to take on the expenses and risk yourself?

But then again, they are in fact blowing tons of R&D on it anyways.

Tells me they want the data. They don't want to turn their whole fleet over to self-driving cars. That's nowhere near as profitable as the current arrangement. But they want to turn a small percentage of them over, and over a wide geography.

They are a silicon valley firm after all, which is why they don't get regulated by public utility commissions like a taxi company.

And I bet they think like a silicon valley firm.

The money's in the data--the real time info, street maps and camera feeds and mic feeds. It's not in eliminating the drivers.

And I'm not convinced it ever will be.

More than that, I'm not convinced they want or expect it to be. The brave new driverless future sells. Mayors and chambers of commerce and futurists all believe it. But you don't need a census to do an accurate survey. You know that better than most of us, I figure. Five hundred or a thousand or so is enough for a representative sample of a given area.

But if that really is your goal, it's kind of a PR nightmare. I mean, it has 1984 written all over it. People in America chafe even at the UK CCTV system. And now a more intrusive one will be all over every road and parking lot? People won't like that.

So why not dress it up in futurism and transit as a service solutions? You'll get lots of pom pom waiving, and people will be looking the other way while you accomplish what's really profitable about it.

I don't think you need a tinfoil hat for this one. Just a few hours thinking things through and a basic knowledge of survey methods.

[vt]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

The Chinese don't have to dump treasuries, they just let them mature and they don't buy new ones.

Just the act of not buying is enough to give the Treasury Department fits.

[dcarrigg]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

The Chinese don't have to dump treasuries, they just let them mature and they don't buy new ones.

Just the act of not buying is enough to give the Treasury Department fits.

Where else are they going to put the cash from the trade imbalance? If Trump solves it, no worries on either side--receipts go up in the US, either through tariff or higher GDP, and if not, China continues to have a boat load of cash with nowhere safer to put it.

No matter how bad/weird things are, is there anything safer than treasuries? Until there is, and the Chinese are convinced of it, I'm not convinced they have any other option.

Actually, I think at this point they got what they came for and they'd like to wind down the America trade relationship and start running deficits themselves focusing on domestic consumption and building out their own trade network. Like GRG said, they can't sell off fast because they'll blow up their own investment. It's probably going to be a slow unwind.

Any event big enough to blow up their spot--even a sudden stop buying--would crash the value of their holdings, right?

They're now invested enough in treasuries not failing that they can't let them fall too far...

This looks like one of those, "when you owe the bank a million it's your problem, when you owe the bank a billion it's their problem" sort of scenarios...

China is deeply invested in America's success...or at least in America's continuing ability to pay back debt dollar for dollar until maturity of all their holdings...

But I agree with you vt that they're going to slow down buying at some point. I just think it'll be very carefully.

[touchring]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

But I agree with you vt that they're going to slow down buying at some point. I just think it'll be very carefully.

Don't know much about treasury, but China most probably won't rock the boat while they try to fix their economy (real estate bubble) and build up their military/navy. The US probably has less than 10 years to solve the trade deficit issue. It's time to start producing real goods and build real infrastructure, no matter what the cost. If it takes a recession to make this happen, then let it happen.

If the Germans and Japanese have been doing this, there's no reason why Americans can't. All those inflation, etc, are excuses MSM and economists come up with because bankers can make much more selling you crap at a premium than selling you premium made in usa goods.

Ironically, a recession resulting from tariffs and economic restructure may actually lead to lower rent, lower inflation while creating real jobs in manufacturing and construction.

At the end of the day, what will happen will eventually happen. Trump is right to make it happen earlier while the US economy is still doing well and americans banks are relatively strong.

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

1. re china's treasuries and u.s. trade deficit - the chinese want to use their dollar reserves, if possible, to BUY things: companies, natural resources, and so on. the broadcom/qualcomm deal was to be an example, but it's been torpedoed. nonetheless, it would be interesting to know how they're funding their african infrastructure programs - they'd be smart to be spending dollars as much as possible.

the u.s will solve its trade problem, along with its deficit/debt problem and unfunded entitlements problem, by sharply devaluing the dollar. if you haven't listened to, or read the transcript of, luke gromen's interview by expat i recommend it.

https://www.macrovoices.com/302-luke...rs-is-underway

then read the 5 part series on the dollar published in late dec also at macrovoices.

for the chinese view on the weaponization of the usd, read:
Qiao Liang: The Eastward Move of the United States and the Westward Progress of China: China's Strategic Choice under the Sino-American Game (Seventy-first issue)

this is in chinese, but if you open it in chrome google translate will take care of that problem.

2. @dcarigg - i'm not sure what data self drivers will gather that's not already in the origin/destination data that the drivers put into the uber app. that's equivalent to the metadata on phone calls being gathered by the nsa. what's the other data that you see as useful, and in what manner?

[dcarrigg]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

2. @dcarigg - i'm not sure what data self drivers will gather that's not already in the origin/destination data that the drivers put into the uber app. that's equivalent to the metadata on phone calls being gathered by the nsa. what's the other data that you see as useful, and in what manner?

Not just metadata. Close to real time 3D image and sound recordings of everything through lidar, radar, other range finders, high def video, and audio recordings. Like video cameras on every street, but not stationary--able to rove around and update everything, and not limited to the visible spectrum or blocked by obstructions, maybe short of lead blankets or something.

So far as the quantity of data goes, we're talking a wide constant stream--not just megabytes. We're talking about 1 gigabyte per second. 4G lte is about 2 orders of magnitude too slow--upload speeds are maybe 15 mpbs, but Qualcomm's 5G test speeds were pulling 1.5 gbps...that's the biggest generational jump in upload bandwidth, and now there's a good way to send this kind of data everywhere. The two technologies are going to have to work in tandem. It launches next year, but won't be picked up by the big boys like apple until probably 2020-21.

I mean, maybe a medical analogy will help. Think about the advances in proteomics in the past decade or so. Almost all of it involves high-detail 3D mapping of physical protein structures in real time to watch them fold and unfold and get a sense of the geometry, right? How it moves, where it moves, what goes where, these sorts of questions that matter for biotech pharma etc.

Now apply the same sort of logic to the social sciences. There are a million questions you could probe with this kind of data. Even totally anonymized, being able to test how people physically move around and who they actually interact with and how during the day in different income brackets, or age brackets, or from different races, or what have you might answer all sorts of interesting socioeconomic questions, right?

And you also have a complete and accurate historical database of everything that happened at any given time within 100 yards or so of just about any public roadway in any direction, laser-measured down to at least the centimeter. Obviously, rarely traveled rural roads might only get one of these suckers heading down it every so often--but the data will be best where there are the most people. Very useful for following just about any individual you can think of. Probably very useful even for wildlife conservation biology and all sorts of other fields I'm not even considering, (and it wouldn't shock me if they needed to overrepresent self-driving-cars in rural areas and decide to fund a rural program that they spin as almost charity to get the numbers they need to make sure the data's significant and reliable enough).

I mean, the GPS in your phone now already tells them a lot. They know if you like to swing through dunkin donuts on your way into work for certain. But it's only so accurate. You can turn it off. It can tell where you are, and thanks to fingerprint scanners, confirm whether it's actually you that's there, but it doesn't necessarily know what you're doing or saying or how you're moving or what you're looking at or who you're interacting with or why.

One of the great things about LiDAR, usually the technology that makes the self-driving car possible, is that it's not necessarily limited by physical obstructions. With a few tweaks, you can see through trees or walls to make out what people are up to just fine. And it's also easy to see though walls even with cheaper radar arrays. Police and soldiers use those things all the time. And one out of every 20 cars you pass by on your day or so just happens to be scooping all this up and beaming it back to HQ--be that Google or Apple or Facebook or Amazon or Uber.

I mean, if that data's actually what they're after, then it makes more sense that these sorts of companies are the ones getting into it, right?

Meanwhile, Ford's catching up to the data game, and they've been at it for a while. The Fusion Energi is already sending them 25gb per day of data per car. They mostly sell and use the data for companies in the auto supply chain. That is, at least for the sake of their own business, they've found a way to be self-reliant for data needs for now.

But I'm talking a whole new level. Way outside the box. More like 80 or 90 terabytes per car per day if you run it 24hrs. Petabytes per car per year either way. Not just knowing how fast you drove or what your destination was. Knowing which direction your head was turned and who was in which cars around you at any exact point during your trip.

So long as they're selling it, it almost doesn't matter what the question is. They'll have data to answer almost anything anybody wants to know if they got a network like this up and running. Insurance companies, bankers, marketers, supply chain managers, health care providers, law enforcement, universities, all sorts of people and industries might pay big bucks for info that's useful to them that these suckers could scoop up.

And it really doesn't have to be nefarious. Paramedics could find you passed out on the side of the road in the snow because a car saw you and contacted them. On their way to get you, someone in the passenger seat / back could take a look at what you were doing before you passed out. Did you slip and hit your head? Were you clutching your chest? Whatever it is probably gives them a couple minutes head start on prepping for you, right? Auto insurance companies would have real records of almost every accident. No more he-said-she-said, and probably way fewer no faults. Advertisers could find out that nobody is really craning their necks up and looking at two of the billboards of the 12 they run down I-95, and reposition them accordingly. A supply chain manager could even better follow everything--the whole portfolio--in real time than she can today. Car got stolen? Let the eyes find every version of that make-model-year-color on the road and narrow it from there. Lots of just off the cuff commercial value to the kind of data this would bring.

I mean, remember those google maps cars that roamed the landscape and created google street view? Now imagine 5% of all automobiles are doing that all the time and then a little more. They got in trouble for sniffing out wifi data while they were driving around in those things too, so I wouldn't be shocked if the cars are also trying to gather data on open smart phones and appliances and routers and networks as they roam around. But think about how much value Google got off sending a street view car everywhere over a number of years. It made google maps the goto map software. And it gave them a lot of info they could use to tweak their calculations with it. And now android phones feed data back into it, so they know if you're going slow and can predict traffic rates etc.

But they could do a hell of a lot more with a hell of a lot more data...

I mean, this thing's about a decade old now:




And this thing is more capable now looking like this (and you don't even have to pay a software engineer to drive the sucker around to collect all that data for you):

[vt]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

Here's recent hard data on who actually owns our debt:

https://www.bloomberg.com/news/artic...-quicktake-q-a


Chart of foreign nations that own our debt:

http://ticdata.treasury.gov/Publish/mfh.txt

[dcarrigg]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

BTW, vt, I think you're on the right track with this..

[GRG55]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

I agree. The Chinese may trim US$ holdings at the margin, but they will not "dump" USTs.

There are lots of pundits who have been calling for the "collapse" of the US$, especially after the Wall St precipitated financial crisis. And many of them make compelling sounding arguments for why that should occur.

But I cannot help but notice that many of the holders of some of the world's other major currencies seem to be losing their ardor. Witness the Italians (an important EU economy participant, unlike poor Cyprus or Greece) and the seemingly growing desire to exit the Euro currency union (or, more to the point, to have Germany exit it so the remainder can undertake an overdue reflation). The Pound, which was already declining, got hammered on the Brexit vote and is slowly trying to struggle back. Large volumes of capital continue to try to exit mainland China, despite the authorities increasingly draconian efforts to stem it. The mighty HKD looks like it is breaking down. Is there anybody holding rubles voluntarily? Anybody checked out the comparative performance of the Canadian $ in the past five years?

If confidence in other major currencies continues to erode it would seem the US$ will remain the safe haven of choice, and that could be what precipitates the next global financial crisis. Not a $ crash, a $ runup. And that is an outcome I don't think the world is expecting or ready for.

[touchring]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

1. re china's treasuries and u.s. trade deficit - the chinese want to use their dollar reserves, if possible, to BUY things: companies, natural resources, and so on. the broadcom/qualcomm deal was to be an example, but it's been torpedoed. nonetheless, it would be interesting to know how they're funding their african infrastructure programs - they'd be smart to be spending dollars as much as possible.

the u.s will solve its trade problem, along with its deficit/debt problem and unfunded entitlements problem, by sharply devaluing the dollar. if you haven't listened to, or read the transcript of, luke gromen's interview by expat i recommend it.

https://www.macrovoices.com/302-luke...rs-is-underway

then read the 5 part series on the dollar published in late dec also at macrovoices.

for the chinese view on the weaponization of the usd, read:
Qiao Liang: The Eastward Move of the United States and the Westward Progress of China: China's Strategic Choice under the Sino-American Game (Seventy-first issue)

this is in chinese, but if you open it in chrome google translate will take care of that problem.

Thanks, but the article too long, I could only read till half of it before giving up. Here's a translated version - https://translate.google.com/transla...-text=&act=url

Can't link it to how it will determine what will happen to the US$. I agree that Ukraine is a sabotage, but the rest sounds like propaganda to me. The aircraft carrier is over-rated, it's more for show. Everyone knows if war really comes, who will volunteer their only son (child) for military action?

All Chinese elites only want is to make lots of money and then send the money out of China, live in the West when they retire.

To me, the reason why the US dorminates economically is because it is a continuation of the British empire - British empire, system, language and political system still lives on.

[jk]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

the chinese piece is interesting in pointing out the cycle of 10 and 7 year movements of the dollar- 10 down, 7 up. high dollar in the early 80's killed latin america. then southeast asia reflated as the dollar dropped, only to have the thai bhat and then the other dominoes go down, including the ruble, when the dollar strengthened.

when first latin america crashed, and years later southeast asia- assets got very cheap for american vulture investors. his theory is that the latest cycle was aimed at china but didn't succeed.

it's about how the u.s., once the gold window was closed, could milk the exorbitant privilege to acquire global assets.

[touchring]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

It’s different this time. China didn’t have any recession in the last 1000 years cos there was no America or Dollar sabotage.

[dcarrigg]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

That's largely what I'm thinking as well. Combine it with the unicorns & rainbows wishful equity valuations in the tech sector and lots and lots of corp junk bond debt and record high housing costs in some markets and medical costs everywhere, relatively flat wages and record levels of private household debt, and there's lots of tinder and kindling around waiting for a spark (assets to deflate / demand to destroy). Of course, there are some counter-forces--corporate tax cut, elimination of Dodd-Frank reserve requirements for all but the 12 biggest banks, these sorts of things will push the other way. I just think they're not nearly strong enough to balance things out.

[GRG55]

Re: Fed Raises and Now Tariffs? Have we been in ka--- for ten years?

That's largely what I'm thinking as well. Combine it with the unicorns & rainbows wishful equity valuations in the tech sector and lots and lots of corp junk bond debt and record high housing costs in some markets and medical costs everywhere, relatively flat wages and record levels of private household debt, and there's lots of tinder and kindling around waiting for a spark (assets to deflate / demand to destroy). Of course, there are some counter-forces--corporate tax cut, elimination of Dodd-Frank reserve requirements for all but the 12 biggest banks, these sorts of things will push the other way. I just think they're not nearly strong enough to balance things out.

The USA has always had a comparatively high tolerance for destruction of capital. In moderation it was a strength of the US economy. Ideas and entrepreneurs could secure risk capital, and a failed enterprise did not mean lifetime purgatory for the proponents - people could fail and still have a chance to try again.

Now we have oceans of liquidity and the "risk free" benchmark price of that capital, the US Treasury, has been manipulated to nearly zero for years. When anything is abundant and free human nature tends to place no value on it. And that is what I believe is giving rise to the funding and proliferation of unicorns and rainbows, speculations in everything from bitcoin to Tesla and everything in between. It is utterly ludicrous. And it is far from restricted to the USA. Witness the creditworthiness of what backs loans in China. Or the insanely low rates at which credits like Italy can borrow funds. And at some point it seems almost certain there will be another round of massive capital destruction as we saw in 2008/09.

The USA corporate tax cut has been highly disruptive to global financial markets, and I am not sure it will be beneficial to the USA beyond the initial flush.