George Soros, a rather famous billionaire who has the morals and ethics of Lucifer, Prince of Light, has bought 15 million puts on the S&P; this means he's betting heavily that the S&P will go down a fair bit in the next couple of months. He's rarely wrong when he bets big - he started out as a dirt poor jewish boy in Nazi occupied Hungary and started his fortune by selling out other Hungarian jews to the Nazis; from there he never looked back. The market spent the week trying to decide if it would make a new high or not; hasn't happened yet. It might next week; it might even continue to climb for a bit, but with nearly every central bank in the world tightening it's hard to see how this can last a lot longer. Also concerns about a new recession getting started are growing - I continue to think this is just weather, but perhaps weather will set off a recession. We are a bit due. Goldman Sachs says a bit more than half the slowdown is weather. The rest they attribute to over built inventories due to the strong growth of Q3 and Q4 2013, raising the capital gains tax, and ending long term unemployment.
Is the US headed into recession? Housing starts, traditionally a leading indicator, tell us we are. But we built up 'way too many homes last decade and we still have a large overhang of foreclosures, so I'm not sure what this means. In any case, mortgage applications and housing starts are dropping off, and so are associated construction jobs.
Obama has been bringing in illegal muslims from Indonesia, Malaysia, Pakistan, Palestine. No one knows an exact number - the best estimates seem to be that we have about 4 million muslim immigrants in the country. By executive order Obama's bringing 80,000 muslim refugees each year. He's also put in a new program so that muslims can get citizenship in 10 weeks - by designating people who speak Arabic, Dari, Pushti as having special skills and allowing them to enlist in the army, who have special citizenship expediters. There's no background check for this program. Bill Killian, a US attorney, claims that anti-Muslim speech violates Muslim's Constitutional rights and should be illegal and punishable by law. At this time, Obama’s DOJ is working to determine what, exactly, is considered illegal speech against Muslims. Guidelines and specific laws are expected to come soon. Yesterday I went to a restaurent supply company. They had a meat locker about helf the size of a decent grocery store. 80% of the meat available was marked Halal, the muslim version of kosher. The halal meat included New Zealand lamb, California beef, Arkansas chicken and Armenian goat.
The US is having one of the snowiest winters on record, with snowfall at about triple normal levels. Except for California, where we're at about 20%.
China is having one of their smoggiest winters on record, with Beijing air so bad you're not to go outside. If you're old, like me, you remember the even-odd gas rationing of the 70's - Beijing has a similar system to disallow half their cars from driving on a given day, but they're afraid to use it. Smog levels are at the "red" level now to trigger this system but authorities are unwilling to make the call. The current "orange" level means no BBQs, no fireworks, no demolition work, no outdoor school activities. The red level would add closed schools and every other day driving. In January the particle count in Beijing was 20 times the World Health Organization's safe level. Chinese already have a lung cancer epidemic due to this - rates have doubled in the last decade. A former Chinese health minister estimates it's killing 350,000 - 500,000 people per year, making smog the #4 killer behind heart disease, cancer and smoking. The particles almost certainly come from coal fired plants and diesel trucks - cars and factories don't put out much in the way of particles. China hopes to have coal produce under two-thirds of their electricity by 2017; given their large deserts and world leading solar panel companies I'm surprised they don't start building some solar plants. Another offered plan was to put huge sprinklers on top of tall buildings and produce artificial rain to clear the air; but realistically China doesn't have the available water in the north to do this. And if they spray untreated water from their rivers, I wouldn't care to have that falling on me.
Doctors in the UK have surgically implanted a 3D printed pelvis. The patient had bone cancer and needed most of his pelvis removed. So the doctors first took multiple xrays, measured carefully, and 3d printed a duplicate pelvis. Then they decided what bone to remove. They made a mold from that portion of the 3d model, and poured a replacement out of titanium. Then the patient got a replacement hip, and off he walked. Software is only going to improve, and 3d printing of unique or small volume parts is only going to increase.
There are ongoing and persistent concerns about China's debt bubble - will they engineer a soft landing? No one ever has, but maybe the Chinese are smarter than all of us. However this week China's manufacturing numbers came out and they're pretty poor. If this continues, the deflating of the debt bubble will be put on hold pending pumping the economy back up - the kleptocrats that run China know very well that they have to keep providing more and better jobs to the masses or they will be out. One day they're going to run out of wiggle room and this will get very ugly very quickly, but not this year I think.
Protests in Ukraine have turned quite violent - about 20 people including 7 policemen died just on Tuesday. Police sent in an armored car to break up the protestors; the protestors set it on fire with molotov cocktails. These guys are seriously unhappy with their government. Ukrainians in the west want closer ties to Europe, lower taxes, a freer economy; Ukrianians in the east and the Ukranian government prefer closer ties to Russia. 80% of Russian gas exports flow through the Ukraine, so after a certain level instability will be very expensive for Russia. The US is considering sanctions as a way to make sure we keep our name in front of everyone. Latest news: Ukraine president Viktor Yanukovich has been voted out of office and has fled Kiev, leaving behind his huge mansion with personal heliport, zoo, golf course and lake. New elections will be held soon.
Venezuela is now also having violent uprisings, with students calling for new elections and the military going after the students. It's simpler in Venezuela: their economy is coming apart due to incompetent central planning, and, the government assures us, fascist American influence. And just to help the truth get out, the Venezuelan government has shut down TV stations and the internet. ps: Time- Warner owns the copyright on the Guy Fawkes mask and makes a couple dollars every time you buy one to protest corporations and governments.
Christmas and Easter no more: Belgium is a country in search of an identity. It's divided into two parts - dutch speaking Flanders in the north and french speaking Wallonia in the south. Complexity is now added by the fact that the largest cities in Belgium are rapidly becoming muslim - Brussels and Antwerp are 25% muslim. Belgium has recently added laws to restrict muslim politicians from trying to convert Belgium to sharia, islamic law. This isn't going to work, of course - in 15 to 20 more years muslims will be a majority in much of Belgium, and that will be that. To help preserve their cultural identity, French Wallonia has renamed the school holidays. Christmas is now "Winter Holidays," and Easter is now "Spring Holidays." Halloween, a pagan holiday at best but which has its roots in this region, is now "Autumn leave." Lent, a Catholic holiday that's a bit foreign to my protestant upbringing, is now the far more clumsy "rest and relaxation leave." In a recent survey it was found that more than half of muslim youth in Flanders say they will never be integrated into Belgium society and that they have been the target of racism. In a muslim ghetto in The Hague, sharia has already been established - smoking, alcohol and pork are forbidden, and dutch police have been ordered out of the area. The 500 year old Catholic University of Leuven announced they now offer a degree in islamic theology. It would seem Belgium is ahead in the race to see which European country can become muslim first.
Where is the US GDP produced? The map below splits the US into 50-50 by GDP.
The foundation of a democracy is a free news media. And America has a free media, right? With lots of divergent voices, right?
"Your" car. Right. You know how everyone is worried about their smart phone telling everyone where you are? Your car already does that. Ford's marketing chief Jim Farley said, "We know everyone who breaks the law; we know when you're doing it." Some insurance agencies routinely ask your car what you were doing just prior to an accident. Progressive Insurance offers discounts if you give them unfettered access to your car's data port - no big surprise there, Progressive is named after the left-wing movement, and Progressives aren't interested in your privacy. Oregon is trying out a new system where instead of the 30¢ per gallon gas tax they ask your car how many miles you've driven and charge you 1.5¢ per mile. The Feds are considering a similar change in taxes. This is a bad deal if your car gets more than 20 miles per gallon - in other words it's a tax on Hondas and Toyotas and a subsidy for Ford pickups. And Ford has just applied for a patent on a system to tell advertisers where you are and serve up local ads and directions on your car's display screen. They can notice places where you stop for lunch once or twice a week and record them as a preferred provider for you. Your road trip will soon be a man, a mustang, a dog named Charlie, and a noisy ad for Taco Bell's New Fritos-Doritos-Red-Hot-Tacolitos! Turn Left at the Next Off-Ramp! Special Discount Coupon already Texted to Your Phone! (I could have had a great career in advertising. Really.)
For some time police departments have had cameras that can read license plates - it's common to see a police car driving slowly
through a mall parking lot looking for stolen cars or expired plates or unpaid parking tickets. Or driving through a Reno gun show
parking lot looking for California plates so that those cars can be stopped at the CA border (this happens). Automated License Plate
Reader or ALPR cameras already scan and record the plates of millions of cars across the country. Law enforcement agencies in large
metropolitan areas like Los Angeles and New York have databases of millions of plates. A 2011 survey of more than 70 police departments
showed that 79 percent used ALPR technology and 85 percent expected to acquire or increase use in the next five years. On average, these
agencies expected that 25 percent of police vehicles would be equipped with license plate readers by 2016. Well, the
KGB DHS is
envious and wants a piece of this action. So they're contracting for a National License Plate Recognition database so that they can
"track illegal immigrants and fugitives from the law." However, DHS also wants to include data from "asset recovery specialists" (repo
companies) and "access control systems" (private security cameras in office building and mall parking lots). Private companies already
collect data on a nationwide basis and may have more data than all law enforcement records combined. Just a few years ago, Vigilant
Solutions had a database of about 700 million plates, MVTrac claimed it had records on "a large majority" of registered vehicles in the
US, and TLO has a "massive database of one billion vehicle sightings" with "up to 50 million new sightings" added each month. DHS also
wants "a zoomed out image of the vehicle" to allow the agency to identify the vehicle and its occupants. Mike Katz-Lacabe, a San Leandro
California resident, learned just how revealing these photos can be after he requested his own license plate data from the cops and
received a photograph that clearly showed him and his young daughters getting out of their car in their own driveway. The DHS database
would be available as a smart phone app - click a photo of a license plate, get complete info a couple seconds later, including history
Last week I noted the Great Lakes were freezing over to an unusual extent. Here's a NASA picture:
The Navy has a couple new toys they will deploy in the near future - a laser that can shoot down missiles, drones and aircraft; and a rail guy that fires 7 pound bullets at seven times the speed of sound. The big point of these? They're cheap. Firing the laser costs about $2 per shot; the rail gun perhaps $5. Interceptor missiles cost well north of $1m. If you have 50 attacks coming at you simultaneously, the missiles cost a lot of money and probably you run out. The laser or rail gun costs less than $1000 to repel the same attack. Currently China believes they can take down a US aircraft carrier by overloading the defenses with multiple attacks, but if the carrier group has a couple of these, that's no longer true - now China needs to come up with tens of millions of dollars worth of hardware to be a threat, and we defend ourselves for a few hundred dollars. Isn't this exciting? No one has actually attacked one of our carrier groups since WWII - Korea, Vietnam, Iraq, Afghanistan, Sudan, Somalia, Rwanda, none of these people could even find a US carrier group much less attack one, but Now! Now if they do we're ready! There's not a single person active in the Navy who was around for WWII, but we now are really, really prepared to fight that war. We could win WWII in about three weeks with our current DOD. I try to imagine a situation where China decides their clever investment in future business is to take down a US carrier group - while there's much to dislike about Chinese government officials, I just can't see them as that stupid.
There are a couple ways to generate electricity from the sun: you can have a bunch of mirrors, get something really hot, like water, generate steam and make power with a big GE turbine from the steam. Or you can use Photo Voltaic (PV) solar panels. In California we have the largest installations of each, built with heavy taxpayer subsidies. Unfortunately it takes several years to build a power plant, and in that time things have changed. Just coming on-line is the Ivanpah solar thermal plant in Death Valley. It cost about $2.2 billion to build and will make about 400 megawatts of power. By way of comparison any decent dam or coal fired plant or nuclear plant makes about 2,000 to 5,000 megawatts, so this is a pretty small power plant in terms of power. Just over the hills in Bakersfield Warren Buffet is building a 580 megawatt PV solar panel plant, roughly half again more power than Ivanpah, for about the same price. PV panels are made from silicon and have a declining cost curve - they're already cost effective in small installations on your house, and soon they'll be even cheaper than they are today. Right now the panels are under $1 per watt, meaning Warren will be getting his basic solar panels for about $500m; the rest of the money goes into control and transmission. Anyway, California has the world's largest thermal solar power station, and quite likely the world's last thermal solar power station. It just makes me so proud to pay taxes here. . .
Although people in the US are driving less each year, overall world oil consumption continues to climb, setting a new record pretty much every month. The number of new drivers in China, India and emerging economies easily takes up the slack of the missing US drivers. The world as a whole is currently consuming nearly 100 million barrels of oil per day - I find this unimaginable. Of course there will come a day when oil simply can't be pumped this quickly. The question then will be, can this amount of energy be replaced by solar, wind, geothermal? Surprisingly, the answer is yes. At current prices, the world spends about $3.6 trillion dollars per year on oil, and replacing all that energy with solar panels would cost about $70 trillion - about 20 years worth of oil. Since solar panels last about 20 to 25 years, we could be making and replacing solar panels every year instead of pumping oil and shipping it across oceans - Solar power is comparable in cost to oil right now. And the price of solar panels is cutting in half every decade. In ten years solar should be cheaper than coal, in 15 years cheaper than natural gas. The required solar panels to replace all the world's oil would roughly cover New Mexico - not a problem, the world has a lot of deserts that could be paved over with panels. So the world will inevitably run out of oil, but we can maintain our current lifestyle by switching over to wind and solar based electricity and electric cars. Solar panels only make power for about 5 hours per day, but we use power more like 18 hours per day, so about half the power generated from 9am to 3pm has to be stored for use that evening and night. The power will most likely be generated in deserts and stored in mountains. We can pump water up hill then generate power by dropping it back down hill with better than 95% efficiency. Big winners: Solar panel and wind generator companies; GE, Pratt & Whitney and Rolls Royce, who build turbines; people who build electric motors and batteries. Losers: Plastics are going to get pricey as oil climbs to $200 / barrel and beyond. Exxon and BP will have to find a new way to make a living. And the Arabs? To quote Matt Damon (Syriana), "a hundred years ago you were living in tents out here in the desert chopping each other's heads off and that's exactly where you'll be in another hundred years."
You've seen wind generators by now - huge propellers 100 feet in the air generating power. SheerWind has just announced a new type of wind power generator. Wind is gathered at the top, funneled through a decreasing radius pipe where the wind speed is multiplied by four, and drives a turbine located at ground level. They claim the cost is 75¢ per watt in very large installations, which means it's very competitive with solar power. If you live in a high wind area - the plains, from central Texas north to the Dakotas - perhaps you'll start seeing some of these rather odd looking structures.
The FDA has just approved Zeuterin for use in dogs. This is a single shot, about $20, that permanently sterilizes a male dog. It's especially effective if given to dogs 3 to 10 months old, but has proven effective for dogs outside that age range. Here in the US we kill almost three million dogs each year in pounds; it would be fantastic to see that number reduced dramatically.
Want to buy an Olympic medal? American Vic Wild has won two snowboarding golds in Sochi for Russia; Korean Victor An has won three speed skating gold medals in Sochi for Russia; the two hired guns have accounted for five of Russia's ten gold medals. American Gary di Silvestri and his Italian wife Angelica bought themselves a place on the Olympic team of Dominica - in fact they're the only two entrants in the Sochi Olympics for Dominica, and are apparently realizing their personal dream of competing. Hubertus von Hohenlohe, a 55 year old German prince, is competing in his sixth Olympics slalom with the Mexican team. It's a bit easier to make the Mexican ski team than the German ski team, and perhaps a bit of money is lubricating this relationship too. von Hohenlohe easily wins the award for best Olympic ski outfit.
German gun manufacturer Armatix has begun selling a gun which can only fire when the owner wears an accompanying wrist watch. Personally, I'm indifferent to the gun, and I wouldn't wear the watch to take out the garbage. The NRA says it's uncomfortable with the idea of intelligent weapons and "government mandates that require the use of expensive, unreliable features, such as grips that would read your fingerprints before the gun will fire." Meanwhile, Connecticut's mandatory assault weapons registration law went into effect on Jan.1. Owning an unregistered assault rifle in CT is now a class D felony. State officials report they are stunned by the response - they estimate that no more than 15% of the rifles have been registered. They speculate that gun owners are unaware of the law. They're probably correct as it's now known that gun owners don't watch the news, preferring to cling to their bibles.