Month: February 2014

Submitted by Mike Krieger of Liberty Blitzkrieg blog,

The vision of ‘talking’ cars that avoid crashes is well on the way to becoming a reality. And we’re not just talking about cars talking to cars, but about cars talking to bikes, trucks talking to motorcycles, and even buses talking to pedestrians. This promises to significantly reduce the number of deaths and injuries on our nation’s roads while unleashing a new wave of innovation from advanced traffic management systems and smart mobility apps to real-time traffic, transit and parking information.

 

– Scott Belcher, President and CEO of the Intelligent Transportation Society of America

Worried about “pre-crime?” What about “pre-crash?”

The geniuses at the National Highway Traffic Safety Administration (NHTS) are so concerned about your “safety,” they have decided to take it into their own hands and make it mandatory that your car wirelessly communicate with other vehicles on the road. Transportation Secretary Anthony Foxx went so far as to say the technology could save “thousands of lives and even prevent accidents in the first place.” The concept of “pre-crash” has been born.

As in so many other aspects of life, there is a top down push to remove all control from the individual to the collective (recall the MSNBC host who proclaimed children don’t belong to their parents), typically justified within the content of the “war on terror,” and always justified with “it’s for your own good.” Apparently, we aren’t capable of making our own choices in anything any more, including something as simple as driving a car.

This push to exert control within individual vehicles is nothing new and appears to be a global phenomenon.  For instance, just last week I posted an article titled: The EU May Mandate a “Remote Stopping Device” in All Cars for Police Use.

Now we learn from The Detroit News that:

Washington— The U.S. Transportation Department said Monday it plans to propose requiring all new cars and trucks to eventually communicate with one another, which could one day help reduce up to 80 percent of crash deaths.

 

But under the tentative timetable laid out, automakers aren’t likely to be required to install the in-vehicle communication devices until around 2020 — and even then, the devices will be phased in.

 

Transportation Secretary Anthony Foxx said the National Highway Traffic Safety Administration will begin working on a proposal to require vehicle-to-vehicle communication in future cars and trucks. He said he hopes to propose the regulation by the time the Obama administration leaves office in January 2017. NHTSA gives automakers at least 18 months of lead time before mandating new technology.

 

Foxx said at a news conference the technology could save “thousands of lives and even prevent accidents in the first place.”

 

Acting NHTSA chief David Friedman said the technology is a “game changer” and “nothing short of revolutionary.”

Um, sorry but if this is such a “gamer changer” and “revolutionary” why not just put it out there and see if the market adopts it. If it is as wonderful as Mr. Friedman claims, why does it need to be mandatory. No one made Bitcoin mandatory, yet it is being adopted because it genuinely is revolutionary. This guy’s statement is completely idiotic.

But major challenges need to be addressed: including ensuring that the devices would be secure — to prevent hackers couldn’t take control of the signals.

Hahaha, ok good luck with that. Just ask Target for some tips.

NHTSA also expects to decide soon whether to require future cars to have active collision avoidance systems — like automatic braking that halts a vehicle about to strike a stopped vehicle in front of it. Those systems are currently on many luxury cars.

Yeah, what could go wrong…

Greg Winfree, assistant secretary for Research and Technology, said some automakers are already researching how they could tie together vehicle-to-vehicle systems and automatic braking. Future systems would also include cars talking to sensors embedded in highways. A car could alert a highway sign that the roads were icy — and the sign could flash a warning to drivers, Winfree said. “This a technological first step,” Winfree said.

Kill me.

Scott Belcher, president and CEO of the Intelligent Transportation Society of America, the nation’s largest association representing the transportation and technology communities including major automakers and suppliers, praised the announcement.

 

“The vision of ‘talking’ cars that avoid crashes is well on the way to becoming a reality. And we’re not just talking about cars talking to cars, but about cars talking to bikes, trucks talking to motorcycles, and even buses talking to pedestrians. This promises to significantly reduce the number of deaths and injuries on our nation’s roads while unleashing a new wave of innovation from advanced traffic management systems and smart mobility apps to real-time traffic, transit and parking information,” he said.

Of course he praises it, he is probably set to make a fortune from this mandatory gulag car network.

Full article here.

via Zero Hedge http://ift.tt/1imRral Tyler Durden

US and Japanese stocks began to fall the moment the bell rang in NYC on the end of the US day-session. By the times futures closed 15mins later, the S&P had already lost 6 points and the exuberance in the Nikkei had snapped back to USDJPY reality (100 points off its highs). As the evening progressed the dead-cat-bounce died with US and Japanese stocks tumbling to day-session lows. Dow futures are down 110 from the highs; S&P futures are down 16 points from the US session highs; and Nikkei futures – not helped by the 19th month in a row of falling YoY base wages – are testing 14,050, having dropped 300 points from the highs and removed all day-session gains. Stocks are re-crisis-ing as USDJPY tests back towards 101.

 

US and Japanese stocks started to crumble the moment cash closed in the US…

 

Nikkei snapped down to USDJPY at the close and has now lost all the gains of the day….

 

As has the S&P 500…

 

 

Charts:Bloomberg

via Zero Hedge http://ift.tt/1imIqOJ Tyler Durden

US and Japanese stocks began to fall the moment the bell rang in NYC on the end of the US day-session. By the times futures closed 15mins later, the S&P had already lost 6 points and the exuberance in the Nikkei had snapped back to USDJPY reality (100 points off its highs). As the evening progressed the dead-cat-bounce died with US and Japanese stocks tumbling to day-session lows. Dow futures are down 110 from the highs; S&P futures are down 16 points from the US session highs; and Nikkei futures – not helped by the 19th month in a row of falling YoY base wages – are testing 14,050, having dropped 300 points from the highs and removed all day-session gains. Stocks are re-crisis-ing as USDJPY tests back towards 101.

 

US and Japanese stocks started to crumble the moment cash closed in the US…

 

Nikkei snapped down to USDJPY at the close and has now lost all the gains of the day….

 

As has the S&P 500…

 

 

Charts:Bloomberg

via Zero Hedge http://ift.tt/1imIqOJ Tyler Durden

"Financial systems are unstable with excessive risk-taking," warns PIMCO's now solo guru Bill Gross, telling Bloomberg TV's Stephanie Ruhle that in a "Soros reflexivity… Once you get the levered system going, it hardly knows when and where to stop." Credit, as we have noted, has been relatively more stable (though less positive on the the way up) Gross notes and "the way to get rich in the past was to borrow money and to lever [up]," but Gross explains that now, "assets are artificially priced… from this point forward, double-digit returns, getting rich on leverage, no. You better look elsewhere for – for your profits," and not Asia. China is "the mystery meat" of emerging market countries, Gross cautions, "nobody knows what’s there and there’s a little bit of baloney."

• *CHINA `MYSTERY MEAT' OF EMERGING MARKETS
• *ERA OF GETTING RICH QUICKLY IS OVER
• *ERA OF GETTING RICH SLOWLY IS ALSO OVER
• *INVESTORS SHOULD PREPARE FOR MORE VOLATILITY

 

 

 

ERIK SCHATZKER: I think we’ve got to start in the most obvious of places. Why are risk assets correcting? What in your opinion is behind the sell off?

BILL GROSS: Well risk assets, financial systems are unstable with excessive risk taking on one hand and low returns on the other, which in turn encourages more risk taking. It’s sort of like Soros’ reflexivity. Once you get the levered system going, it hardly knows when and where to stop. And so that’s what we’re seeing. We have a highly levered global financial system with hedged positions that are moving back and forth based on emerging market countries and their growth rates or expected growth rates. And when those change, then positions change. And as levered positions change, you’ve got a lot of volatility and reflexivity, as Mr. Soros would have said.

STEPHANIE RUHLE: Why aren’t we seeing that kind of volatility in the credit markets? Yesterday Hyundai did an investment grade deal and it blew out, while I look at equities in emerging markets and they’re suffering. Why is everyone still piling into credit?

GROSS: Well credit is higher up on the stability hierarchy I suppose, Stephanie. It – it usually is thought of as a flight to quality, not necessarily corporate bonds or high-yield bonds but treasury bonds. And when investors want to park money in a supposedly safe haven, and we know that bonds aren’t necessarily safe all the time, they weren’t in 2013, but that’s where money goes. Money comes back to the center so to speak of the global financial network. And the center at the moment are one, two, three developed countries. That certainly includes the United States. And so we see treasuries being bought, treasury rates coming down under the assumption that the Federal Reserve will stay put for perhaps a long, long time.

SCHATZKER: Bill, what happens next? Would you call this just a bump in the road or have markets made a detour and we’re going to go down this new road for a while?

GROSS: Well I think we will for a while, Erik, meaning for a long, long time. We’ve talked about this with the new normal. The new normal really didn’t apply to the equity market last year, did it? Thirty percent was certainly not normal. But what we see going forward is a global marketplace and a global economy where growth is slow.

 

And to the extent that financial asset prices like stocks and other risk assets have anticipated that growth rate, that’s always a subjective judgement. And it was six to eight weeks ago. To the extent that that growth rate comes down, then risk assets become at risk and more volatility. So I think it’s all dependent upon a growth rate on the global economy. And certainly in the United States we saw some bad numbers over the past few days and we wonder whether or not that 3 percent growth rate in 2014 is for real.

 

So look at growth and look at inflation, by the way, for an indicator in terms of where the Fed goes. Because as we know, where the Fed goes, where quantitative easing goes and tapering and ultimately the policy rate, which is critical, where that goes is dependent upon not just growth but inflation. And so the inflation target numbers that we see close to 1 percent are clearly indicative of where bonds might rest and ultimately where stocks might go as well.

 

…

SCHATZKER: Bill, is that to say that nothing else has yet gotten cheap enough to tempt you?

GROSS: Well there’s no doubt that emerging markets are getting cheaper. The problem is emerging markets have problems. Take examples such as Brazil and Turkey. These are countries with widening current account deficits. These are countries which by necessity in order to stabilize their currency have to raise interest rates and put their economy at risk in terms of slower growth. So the question becomes whether a 13 percent three-year rate in Brazil relative to a 10 percent policy rate is an attractive situation. We think it’s getting there.

 

Brazil is not going anywhere in terms of straight downhill. It’s a country on the move, so to speak, and an important emerging market country, but to a certain extent it’s a fair question as to whether prices have been adequately discounting the slower growth that I speak to. I think we’re beginning to get there. The last wild card, Erik, in terms of emerging market space obviously is China. Is it 6 percent? Is it 7 percent? Is it 5 percent? I call China the mystery meat of emerging market countries. Nobody knows what’s there and there’s a little bit of baloney, so we’re just going to have to wonder going forward through this year as to the potential problems in China and other emerging markets.

RUHLE: All right. Mystery meat is disgusting. I remember my high school cafeteria. Tell us what investors are doing in terms of inflows and outflows. They’ve gotten very spoiled in the last couple of years with all the central bank intervention. It’s been very cushy. So this week your phone is ringing and what are they saying?

GROSS: Well they’re saying we want safety in principal. This is a Will Rodgers idea, Stephanie, back in the ‘30s. Not so much concerned about the return on my money as the return of my money. What product does that represent in terms of that possibility? Something with a relatively short duration and something with relatively short credit risk or credit spreads. Unconstrained bond funds are one example at PIMCO that are garnering a lot of attention. I’ve been managing that recen
tly and it’s doing really well.

 

The total return fund is doing really well. It’s up 1.5 to 2 percent for the month with some good stability and prospects for inflows. So bonds are back. They’re not all the way back, and I doubt they’ll get all the way back to the point of 16, 18 months ago in which interest rates in the 10-year was at 1.65. But bonds have a – have a stable position in almost all portfolios if only for diversification. So unconstrained bond funds, lower duration bond funds, diversified income, equities at some point. At PIMCO, yes, we’re promoting equities as well, and so there’s a place for all of them.

 

One last point though. I think the era of getting rich quickly is over, and I think almost that the era of getting rich slowly is over too. And so investors should simply bring down their return estimations and prepare for a little bit of volatility going forward.

RUHLE: So nobody’s getting rich anymore?

GROSS: Well not many. The way to get rich in the past was to borrow money and to lever hedge funds and levered corporate situations in terms of buyouts, et cetera, et cetera, or to buy the stock market in 2013, which itself is a levered type of investment. Corporations borrow 40 to 50 percent of their balance sheet. They lever up and you can buy equities in a levered type of situation. So leverage over the past 20 to 30 years, Stephanie, has really produced this total return, high return type of investment market that investors have grown used to. Pension funds think 7, 8, 9 percent is what they should expect, which means 4 percent from bonds and 12 percent from stocks. Not going to happen because basically we’ve been priced into the market. Assets are artificially priced. And from this point forward, double-digit returns, getting rich on leverage, no. You better look elsewhere for – for your profits.

via Zero Hedge http://ift.tt/1gL21LM Tyler Durden

"Financial systems are unstable with excessive risk-taking," warns PIMCO's now solo guru Bill Gross, telling Bloomberg TV's Stephanie Ruhle that in a "Soros reflexivity… Once you get the levered system going, it hardly knows when and where to stop." Credit, as we have noted, has been relatively more stable (though less positive on the the way up) Gross notes and "the way to get rich in the past was to borrow money and to lever [up]," but Gross explains that now, "assets are artificially priced… from this point forward, double-digit returns, getting rich on leverage, no. You better look elsewhere for – for your profits," and not Asia. China is "the mystery meat" of emerging market countries, Gross cautions, "nobody knows what’s there and there’s a little bit of baloney."

• *CHINA `MYSTERY MEAT' OF EMERGING MARKETS
• *ERA OF GETTING RICH QUICKLY IS OVER
• *ERA OF GETTING RICH SLOWLY IS ALSO OVER
• *INVESTORS SHOULD PREPARE FOR MORE VOLATILITY

 

 

 

ERIK SCHATZKER: I think we’ve got to start in the most obvious of places. Why are risk assets correcting? What in your opinion is behind the sell off?

BILL GROSS: Well risk assets, financial systems are unstable with excessive risk taking on one hand and low returns on the other, which in turn encourages more risk taking. It’s sort of like Soros’ reflexivity. Once you get the levered system going, it hardly knows when and where to stop. And so that’s what we’re seeing. We have a highly levered global financial system with hedged positions that are moving back and forth based on emerging market countries and their growth rates or expected growth rates. And when those change, then positions change. And as levered positions change, you’ve got a lot of volatility and reflexivity, as Mr. Soros would have said.

STEPHANIE RUHLE: Why aren’t we seeing that kind of volatility in the credit markets? Yesterday Hyundai did an investment grade deal and it blew out, while I look at equities in emerging markets and they’re suffering. Why is everyone still piling into credit?

GROSS: Well credit is higher up on the stability hierarchy I suppose, Stephanie. It – it usually is thought of as a flight to quality, not necessarily corporate bonds or high-yield bonds but treasury bonds. And when investors want to park money in a supposedly safe haven, and we know that bonds aren’t necessarily safe all the time, they weren’t in 2013, but that’s where money goes. Money comes back to the center so to speak of the global financial network. And the center at the moment are one, two, three developed countries. That certainly includes the United States. And so we see treasuries being bought, treasury rates coming down under the assumption that the Federal Reserve will stay put for perhaps a long, long time.

SCHATZKER: Bill, what happens next? Would you call this just a bump in the road or have markets made a detour and we’re going to go down this new road for a while?

GROSS: Well I think we will for a while, Erik, meaning for a long, long time. We’ve talked about this with the new normal. The new normal really didn’t apply to the equity market last year, did it? Thirty percent was certainly not normal. But what we see going forward is a global marketplace and a global economy where growth is slow.

 

And to the extent that financial asset prices like stocks and other risk assets have anticipated that growth rate, that’s always a subjective judgement. And it was six to eight weeks ago. To the extent that that growth rate comes down, then risk assets become at risk and more volatility. So I think it’s all dependent upon a growth rate on the global economy. And certainly in the United States we saw some bad numbers over the past few days and we wonder whether or not that 3 percent growth rate in 2014 is for real.

 

So look at growth and look at inflation, by the way, for an indicator in terms of where the Fed goes. Because as we know, where the Fed goes, where quantitative easing goes and tapering and ultimately the policy rate, which is critical, where that goes is dependent upon not just growth but inflation. And so the inflation target numbers that we see close to 1 percent are clearly indicative of where bonds might rest and ultimately where stocks might go as well.

 

…

SCHATZKER: Bill, is that to say that nothing else has yet gotten cheap enough to tempt you?

GROSS: Well there’s no doubt that emerging markets are getting cheaper. The problem is emerging markets have problems. Take examples such as Brazil and Turkey. These are countries with widening current account deficits. These are countries which by necessity in order to stabilize their currency have to raise interest rates and put their economy at risk in terms of slower growth. So the question becomes whether a 13 percent three-year rate in Brazil relative to a 10 percent policy rate is an attractive situation. We think it’s getting there.

 

Brazil is not going anywhere in terms of straight downhill. It’s a country on the move, so to speak, and an important emerging market country, but to a certain extent it’s a fair question as to whether prices have been adequately discounting the slower growth that I speak to. I think we’re beginning to get there. The last wild card, Erik, in terms of emerging market space obviously is China. Is it 6 percent? Is it 7 percent? Is it 5 percent? I call China the mystery meat of emerging market countries. Nobody knows what’s there and there’s a little bit of baloney, so we’re just going to have to wonder going forward through this year as to the potential problems in China and other emerging markets.

RUHLE: All right. Mystery meat is disgusting. I remember my high school cafeteria. Tell us what investors are doing in terms of inflows and outflows. They’ve gotten very spoiled in the last couple of years with all the central bank intervention. It’s been very cushy. So this week your phone is ringing and what are they saying?

GROSS: Well they’re saying we want safety in principal. This is a Will Rodgers idea, Stephanie, back in the ‘30s. Not so much concerned about the return on my money as the return of my money. What product does that represent in terms of that possibility? Something with a relatively short duration and something with relatively short credit risk or credit spreads. Unconstrained bond funds are one example at PIMCO that are garnering a lot of attention. I’ve been managing that recently and it’s doing really well.

 

The total return fund is doing really well. It’s up 1.5 to 2 percent for the month with some good stability and prospects for inflows. So bonds are back. They’re not all the way back, and I doubt they’ll get all the way back to the point of 16, 18 months ago in which interest rates in the 10-year was at 1.65. But bonds have a – have a stable position in almost all portfolios if only for diversification. So unconstrained bond funds, lower duration bond funds, diversified income, equities at some point. At PIMCO, yes, we’re promoting equities as well, and so there’s a place for all of them.

 

One last point though. I think the era of getting rich quickly is over, and I think almost that the era of getting rich slowly is over too. And so investors should simply bring down their return estimations and prepare for a little bit of volatility going forward.

RUHLE: So nobody’s getting rich anymore?

GROSS: Well not many. The way to get rich in the past was to borrow money and to lever hedge funds and levered corporate situations in terms of buyouts, et cetera, et cetera, or to buy the stock market in 2013, which itself is a levered type of investment. Corporations borrow 40 to 50 percent of their balance sheet. They lever up and you can buy equities in a levered type of situation. So leverage over the past 20 to 30 years, Stephanie, has really produced this total return, high return type of investment market that investors have grown used to. Pension funds think 7, 8, 9 percent is what they should expect, which means 4 percent from bonds and 12 percent from stocks. Not going to happen because basically we’ve been priced into the market. Assets are artificially priced. And from this point forward, double-digit returns, getting rich on leverage, no. You better look elsewhere for – for your profits.

via Zero Hedge http://ift.tt/1gL21LM Tyler Durden