Tuesday, June 30, 2015

Economy: Why Four Percent Growth Is Possible

(Drivebycuriosity) - Jeb Bush wants to be the next US president. The candidate pledges, if he wins the 2016 election he would set a target of annual 4% economic growth for the US (politico). Most experts respond negatively. The majority claims that 4% annual economic growth in the US is highly unlikely.

I think the pundits are too pessimistic as usual. I believe that 4% annual growth for a decade and more is possible. The economy would get a boost if the governments (federal & states) cut taxes, curb bureaucracy & ease immigration (johnhcochrane). America also could follow the European role model and privatize state owned enterprises like airports, harbors,  mail & railways (Amtrak). The proceeds could be used to invest into the infrastructure (streets, railways) which is in a lamentable condition. Privatization and a better infrastructure could lift the American productivity and foster growth.

                                                             High-Tech Revolution

But the main point for my optimism is independent from a political change. I think the US economy - and the rest of the world - is benefitting from a high-tech revolution. There is a deluge of technological innovations, creating a lot of positive tailwinds for the global economy in the coming years (driveby).

We are seeing rapid advances in:

- Robotics: Companies are using more and more robots to reduce costs and to respond more flexible to the demands of their customers. For instance robots are welding car parts together and are varnishing them & Amazon is using robotic systems in her gigantic fulfillment centers. The automatization process leads to cheaper & better products.

- Self-driving cars & trucks will reduce the number of accidents and lower costs of transportation, which leads to cheaper consumer goods. Because they are efficient they waste less fossile energy - good for the environment.

- 3D printing: Software controlled machines are literally "printing" parts of other machines and devices by using computational power, lasers and basic powdered metals and plastics. Soon companies & persons can produce almost anything exactly bespoked for individual tastes with low costs.

- Nanotechnology: The creation of new materials, built at the atomic level, could revolutionize  everything from chemistry to aeronautics, like creating new medicines, new fabrics and building material. For instance scientists are working on a new material which is much stronger & lighter than steel (economist).

- Biotechnology: Companies and university scientists develop new vaccines and cures by adapting or exploiting processes found in living organisms which could lead to a longer & more healthful life for all of us.  Altering plants by genetic engineering makes them more resistent against pests and more tolerant of temperature changes and draughts. Food gets more affordable and could be enhanced with vaccines against cancers and other diseases.  

- Health technology: Sophisticated machines improve the quality of healthcare through earlier diagnosis, less invasive treatment options and reductions in hospital stays and rehabilitation times.  So these technologies improve life quality and productivity.

 - Mobillization of Internet: Smartphones, tablets and other devices allow everbody permanent access to the world wide web. So we can organize our life better, like better shopping, improving leisure time, traveling, dating, eating out and more.

- Internet of Things: Devices like thermostats,  TVs, refrigerators, household appliances are or will be soon connected to the world wide web which will make our life  easier and create newmarkets for a lot of companies. Smart watches for instance can be used for 24/7 medical observation and health monitoring to prevent heart attacks and to discover other medical problems.

- Cloud computing: Amazon.com, IBM, Apple, Google and other companies offer data storage and processing either for free or for low fees, giving everybody access to a network of supercomputers. Companies & persons can process and store huge amounts of data without spending much money for own data centers.

                                                               Falling Information Costs

In general the Internet - including the "cloud" - increases the flow of information and reduces the cost of data. Data can be gained, processed and stored faster and cheaper. New ideas can spread faster, encouraging discoveries and inventions and boost the technological progress. Falling information costs are creating more markets and are expanding existing ones.

Restaurants, shops, movie theaters and a lot of other companies are gaining more customers because they can be more easily found and can advertise better for their products & services. Applications and recommendations from friends or unknown reviewers on Amazon.com, Facebook and other websites can gain interest for many products & companies which would have stayed unknown without the Internet. I believe that the falling information costs foster economic growth because they lift the productivity of  companies & persons.

Examples: Internet based travel networks like Airbnb - a website for people to rent out lodging - give people additional income by temporarily leasing or sharing their flats. Their customers can reduce costs for vacations or business travels which fosters tourism. Uber, a transportation network company whose mobile apps connect passengers with drivers of vehicles for hire and ride-sharing services, enables car owners to earn an additional income, their customers reduce their travel costs. Big data processing companies like Hopper are helping people to find cheap flights (hoppertravel). I reckon that in the coming years many other new companies will appear using the Internet to create new industries and markets.

Positive Feedbacks

Many of these technological adavances are working together, amplifying their impulse. These innovations are lifting the productivity of the economy significantly and are creating new markets & incomes. And it looks like that the technological progress is accelerating. Almost daily new products and companies with interesting business ideas appear. All these developments are adding up and accelerate the economic growth rate.


Monday, June 29, 2015

Economy: Europe - Goodbye Greece

(Drivebycuriosity) - There is a lot ado about Greece. The Greek mess rules the headlines and many alarmists predict an armageddon for Europe and the whole world. Today the US stock market dropped around 2% because of Greece. But I think the scaremongers are wrong as usual. I belive that the Euro area does much better without Greece.

Greek politics is a freak show run by stone age marxists and political clowns. Greek leaders want to play their ridiculous games - including blackmailing their creditors with threads like going bankrupt or opening boarders for ISIS terrorists - and don´t care about the consequences. No wonder, that they are backed by US leftwings like New York Times columnist Krugman. The sooner the country leaves the Euro zone the better. Greece is like a meth head who has to get rid of the drug, the generous credits from European banks & IMF, to cure himself.

And: Greece doesn´t determine the world economy. The Hellenic Republic is just an underdeveloped and miserably run tiny country on the periphery of Europe (with only 11 million people in a world with around 7 billion). It´s food is unedible, it´s music is unbearable, it´s politicians are untrustworthy.  Even when this small peripheral country goes finally bust, the world economy will continue growing.

Goodbye Greece

Sunday, June 28, 2015

Lifestyle: A Painting Class @ Cooper Union, New York

(Drivebycuriosity) - Sometimes one should try something really new, to enter new territory and to gain new experiences. I see myself as a writer, therefore I write this blog. But my wife and I attended just a class in acrylic painting. Now I am kind of visual artist too, albeit still very amateurish.

The class @ Cooper Union, New York was really fun (wikipedia  cooper). It took place the recent 2 Saturdays, each from 10am to 4pm, together 12 hours. The fee of $ 265 per heads (plus costs for paint, canvases and other material) is a good investment. The class gave us an intense and joyful experience and it expanded our horizons considerably.

The instructor, Jeffrey  Tolbert (jeffreytolbert), who is a really good teacher,  gave us a lot of inspiration. Jeff likes expressionists and their power- and colorful style. We were told, that artists don`t copy the reality, instead they create a fiction - and that's what we tried.

On the first Saturday we did a still life, just 2 bottles, a vase and a carafe; Yesterday we got a model, a young and very beautiful girl from the Philippines. The model was posing for us in the nude. First we exercised to sketch her shapes with rough black brush strokes. Each pose lasted just 5 minutes, therefore we had to sketch very fast. A good experience.  Then we changed to a colorful impression of the posing model. You can see my humble results here, but I will work on my technique. I promise. And I really admire and appreciate the patience and cooperativeness of the young Filipina.

Thanks a lot to Jeffrey and the model.

Friday, June 26, 2015

China: Why Morgan Stanley Is Wrong

(Drivebycuriosity) - This morning the Shanghai Composite, the gauge for China`s stock market, plunged 7.4% and lost around 18% for the week.

After a rally of about 150% over the recent 12 months the market has become increasingly nervous and volatile. Todays plunge got aggravated by Morgan Stanley and other negative analyst comments (bloomberg). Morgan Stanley claimed that China`s stock market had already passed its peak. The bank set a new 12-month Target Price range for Shanghai Composite of 3,250-4,600, that´s  minus 30% to minus 2% below the current level of the index. They alledged that an increased equity supply (more IPOs), continued weak earnings growth in the context of economic deceleration,  high valuations, and very high margin debt to free float market capitalization will send the stocks north.

I think they are wrong - and this correction will be short lived. The Shanghai Composite is a bet that China´s exceptional growth will continue. And the chances are good. The recent data from China´s economic front are encouraging: It seems that manufacuring has stopped the slow down this month (cnbc) and retail & industrial production stabilized in May (cnbc). There is a large chance that China´s growth rate in the second quarter was close to the number from the first quarter (plus 7%).

China´s stock market is still benefitting from some tailwinds:

- Beijing is successively executing a fundamental reform program, iniated in 2013, including huge investments into airports, railways and other infrastructure, encouraging migration from the rural areas to bigger cities (with a higher productivity) and more.
- Chinese centralbank has been reducing interest rates and rasing bank liquidity step by step.
- Exports get fostered by the growing US economy and the recoveries of Europe & Japan
- Lower oil and other commodity prices  reduce inflation rates;  consumers have more money to spend and industries (especially the transport sector) have less costs.

                                                          Bright Future

I believe that the future is bright for China - and justifies the stock market rally of the past months. The country is still in the begin of a secular catching-up process which is fueled by extreme income & wealth differences to the US and other Western nation values. The huge country is rapidly transforming into a consumer economy like the U.S. and other modern countries. Many peasants are moving to the huge metropolitan centers which are spread all over the huge country to lift their standard of living. This creates a fast rising affluent middle class, giving consumer spending a boost.

China´s growth also gets boosted by the technological progress and advances of Internet, automatization of industrial production and 3D-printing. These developments raise efficiency and  productivity of China´s economy as success stories like Alibaba and Baidu demonstrate.

Therefore the expected increasing equity supply will be digested, earning growth will get better and the high margin debt will be coverered by rising stock prices & climbing wealth. China´s stock market has still room to grow and the bull market will continue. Enjoy.

Contemporary Art: Whispering Eye @ NOoSphere, New York

 (Drivebycuriosity) - The gallery  NOoSphere on Manhattan´s East Houston Street has frequently interesting shows (no-in). This week I visited an exhibition called "Whispering Eye". I have no idea what that means, but anyway, as usual I found some interesting artworks there which I show here. As usual this is a very subjective selection.

I enjoyed the abstracts which you can see on top of this post. I like the very colorful explosive style which shows a lot of vitality. The powerful brush strokes of the expressionist nude above this paragraph also caught my eyes.

Does the painting above show some alien lifeforms?

                                              Something To think About

The artworks above - charcoal or Indian ink? - also give something to think about

But let the pictures speak for themselves.


Thursday, June 25, 2015

Movies: Jurassic World

(Drivebycuriosity) -What happens when you clone a very smart dinosaur? You got a problem. This is the idea of the "Jurassic Park" franchise. The topic reached a new peak in "Jurassic World", the newest installment of the series (imdb).

My wife and I invested 41 bucks into 2 tickets for the IMAX 3D-version. The money was well spent. We had a hell of a lot of fun watching the dinosaurs chasing people. Who can escape and who not? The film`s dramaturgy is well balanced, nail-biting action mixed with funny scenes, and there is even place for some romantics. As usual the makers quoted a lot of classics like Godzilla, Hitchcock`s Birds, Pitch Black, which amplified the fun.

The stars of the movie are of cause the dinosaurs, there are tiny & cute ones and funny dinosaur pets, but the story belongs to the big predatory monsters of course. I especially enjoyed the flying predators, but my favorites are the park's four - half tamed - velociraptors, named Blue, Charlie, Delta and Echo; smart, swift, elegant beasts, which looked and behaved like real predators. Jurassic World looked very real thanks to the computer generated effects (CGI) by Industrial Light and Magic and the 3D was well done.

The solid cast, including Bryce Dallas Howard, Vincent D'Onofrio & Chris Pratt, had just a supporting role, but that is ok for a dinosaur spectacle.

Jurassic World is the perfect summer movie and the record box office numbers are well deserved.

Wednesday, June 24, 2015

Commodities: The Oil Paradox

(Drivebycuriosity) - The oil market shows a paradox. There is too much oil, but the price doesn´t drop,  instead the oil price climbed around 50% since January. It seems that the oil market ignores the fundamentals: Oil supply is rising faster than the demand for oil. The OPEC producers plus Russia are raising production, to gain market shares, and the US productions stays close to the recent peak. Oil demand is curbed because consumers & companies (transportation) are more energy conscious and the technological progress makes cars & other machines more energy efficient (marketwatch). As a result the global oil supply has exceeded demand globally for the past five quarters, reports Bloomberg (bloomberg). Every day more barrels of oil are produced than consumed.

Where does all the oil go?  The answer: Hedge funds and other speculators have been pumping oil into oil tankers as a bet on rising oil prices. The ongoing speculative buying and storing of oil leads to a growing quantity of idle oil, which has to come back to the market (businessinsider bloomberg). So, if there will be no sudden fundamental changes, no sharp drop of oil production nor a sharp rise of demand, this oil would add onto the already existing massive oversupply. Therefore the likelihood of an again sharply falling oil price is rising daily. It is just a matter of time that the new oil bubble will burst.

Tuesday, June 23, 2015

Street Art New York: June 2015 Edition

Drivebycuriosity) - New York City is a mecca for street art lovers. There is always something going on. Since my latest street art report from May 2015 (driveby) I spotted a lot new works @ Lower East Side, East Village, Soho and other neighborhoods.

As usual I noticed a huge variety of styles & sizes. I detected the large mural on top of this post @ New York´s Highline. This is an elevated section of a disused New York Central Railroad spur, which is now a public park with lots of green and some artworks.

The colorful door above this paragraph belongs to 214 Lafayette in in Manhattan`s buzzing Soho area. This place has a tradition of frequently changing art work (driveby).

Someone put some abstracts (watercolor on paper?) on a house wall at East Houston Street, close to Lafayette.

I think the murals above, generously sprayed by anonymous artists, can easily compete with the contemporary art you can find in a classy art gallery.

There were new shutter door murals which beautify the entries of shops, bars & restaurants

The spreaders of stencils & stickers continued their work.

To be continued.

Monday, June 22, 2015

Culture: Punk Island 2015, Staten Island, New York City

(Drivebycuriosity) -  Punk is still alive and kicking. Yesterday lots of punks pilgrimaged to Staten Island, an island south of Manhattan & one of the 5 boroughs of New York City, to celebrate themselves, their culture, their music and the start of the summer. As in the years before my wife and I took the ferry from Manhattan to attend the annual "Punk Island", a free of charge rock festival (punkisland).

About 100 bands played over 10 hours on 7 stages (!). They delivered a broad spectrum of styles, even that all focused on the rough realm of punk. You could hear pop, hardcore, brass, violines, metal, funk & much more. I guess the program showed the state of art in the current punk scene.

We enjoyed not only the powerful music and the show, we also indulged into a beautiful summer day on New York´s water front in company of lots of nice people.

My favorite band was Absinthe Rose (absintherose). Kimbo Rose, the front woman, made clear that punk can be beautiful. I liked her rough songs as much as her appearance. And the singer/guitarist delievered all the popular poses rock concerts are famous for. Wow.

                                                       Powerful Group Dynamic

The audience was part of the fun. So many happy joyful people! There were lots of tattoos, colorfully designed hair and much more to see. A congenial part of Punk Island - like every rough rock event - are the very dynamic group dances where the people jump into each other while creating a powerful group dynamic.

Btw The place  offered also a georgeous look onto the Manhattan skyline and the ships on the harbour water.

I hope the tradition will continue. 

PS: Thanks to all the bands and organizers. Thanks also to the security guards and cops who took care that the event was nice, peaceful and pleasant again.