Yes, the rate of generation may slow down at night as people send fewer emails and watch fewer videos. But for every person hitting the hay, there is another person on the opposite side of the world that is turning their smartphone on for the day.
As a result, the scale of data being generated—even when we look at it through a limited lens of one minute at a time—is quite mind-boggling to behold.
The Data Explosion, by Source
Today’s infographic comes to us from Domo, and it shows the amount of new data generated each minute through several different platforms and technologies.
Let’s start by looking at what happens every minute from a broad perspective:
Americans use 4,416,720 GB of internet data
There are 188,000,000 emails sent
There are 18,100,000 texts sent
There are 390,030 apps downloaded
Now lets look at platform-specific data on a per minute basis:
Giphy serves up 4,800,000 gifs
Netflix users stream 694,444 hours of video
Instagram users post 277,777 stories
Youtube users watch 4,500,000 videos
Twitter users send 511,200 tweets
Skype users make 231,840 calls
Airbnb books 1,389 reservations
Uber users take 9,772 rides
Tinder users swipe 1,400,000 times
Google conducts 4,497,420 searches
Twitch users view 1,000,000 videos
Imagine being given the task to build a server infrastructure capable of handling any of the above items. It’s a level of scale that’s hard to comprehend.
Also, imagine how difficult it is to make sense of this swath of data. How does one even process insights from the many billions of Youtube videos watched per day?
Why Big Data is Going to Get Even Bigger
The above statistics are already mind-bending, but consider that the global total of internet users is still growing at roughly a 9% clip. This means the current rate of data creation is still just scratching the surface of its ultimate potential.
In fact, as We Are Social’s recent report on internet usage reveals, a staggering 367 million new internet users were added in between January 2018 and January 2019:
Global internet penetration sits at 57% in 2019, meaning that billions of more people are going to be using the above same services—including many others that don’t even exist yet.
Combine this with more time spent on the internet per user and technologies like 5G, and we are only at the beginning of the big data era.
via ZeroHedge News https://ift.tt/2SsbQnk Tyler Durden
Last August, several of Bank of America’s more skeptical analysts including Michael Hartnett and chief economist Ethan Harris wrote a piece on the law of large numbers, arguing that an ever-expanding list of uncertainties would likely undercut the markets going into year-end. At the time, the main concerns were the trade war, a hawkish Fed, Brexit, Quitaly and Iran oil sanctions. And now, Bank of America once again warns that this fall, a similar set of concerns could come to a head and halt the current rally in global equity markets.
As always, the trade war is at the top of the list.
While BofA’s economists are hopeful for a partial de-escalation between the US and China in the next few months, they are are becoming increasingly concerned that the current tariffs are permanent. With the US and China facing off across a demilitarized zone, a number of other battle fronts could emerge. The deadline for avoiding auto tariffs is mid-November. Additionally, there is a steady drift toward some kind of currency war: in the form of either countervailing duties or outright intervention. Countries that benefit from production shifting out of China, including Vietnam and other ASEAN countries, could face at least a serious threat of US tariffs. Meanwhile, the list of foreign firms facing unfair trade investigations by the US Commerce Department continues to grow. Elsewhere, Brexit, Middle East tensions, fraying Japan and Korea relations, and Washington DC policy missteps all loom as risk factors.
However, the list of global risks doesn’t end with trade. The next deadline for Brexit is 31 October, and there is a significant risk of a “no deal” exit either then or after another election. The oil market seems able to handle Iran oil sanctions, but it may face a bigger challenge if military conflict emerges in the Middle East. On the other side of the world, relations between Japan and Korea have frayed and there is a risk of a regional tech trade war in the coming months.
Finally, dysfunctional US politics are increasingly becoming a focal point.
Not to be outdone, the US Congress and the Trump Administration have created a massive to-do list this fall. Here they are, in order of priority.
Debt limit: The most urgent issue facing Congress right now is the debt limit. Breaching the debt limit and running out of cash is much worse than a government shutdown. The latter closes a limited range of activities; the former means immediately balancing the budget on a daily basis and a high risk of defaulting on a debt payment. Last week, Treasury Secretary Mnuchin sent a letter to House Leader Pelosi that the Treasury could run out of extraordinary measures by early-September, meaning that there is less than two months until the “x-date”.
With Congress scheduled to be on break until 9th September, consensus expects Congress to raise the debt limit before going on break. There is bipartisan support to tie the debt limit to a new budget deal but if talks stall, a short-term increase could be in the works. Ultimately, the final agreement will likely lift the debt ceiling beyond the 2020 presidential election.
Budget deal: The previous two-year budget deal is set to expire at the end of September and a new deal will be needed to avoid across-the-board spending cuts. Press reports early Thursday suggest that Congress and the Trump administration have a tentative deal to increase the spending caps and raise the debt limit. Details remain scant but higher spending caps would translate into a modest tailwind for growth and wider budget deficits in 2020 and 2021.
USMCA: The passage of USMCA remains in limbo in the US with the Democrat-led House looking for stricter enforcement provisions on labor laws and environmental protections as well as other changes in the trade agreement. Negotiations are ongoing between USTR Lighthizer and House Democrats. We think USMCA will ultimately be ratified by the US later in the year (the fall at the earliest).
Fed nominations: President Trump announced that he will nominate Judy Shelton and Chris Waller to the Federal Reserve Board. Chris Waller is a relatively conventional choice for the Board. Judy Shelton is not: in 2009, she argued that easy monetary and fiscal policy would create “ruinous inflation”; today, with the economy fully recovered from the Great Recession, she favors quickly cutting rates. Given that the nominations are not official yet and other pressing matters remain, we think the confirmation process is likely to bleed into late-fall/early-winter. If they are confirmed to the Fed, the two nominees will fill seats expiring in 2024 and 2030 (Table 1). Note that only the Senate will need to confirm their nominations with a simple majority.
Bipartisan wish list: Other policy proposals (eg, middle-income tax cuts, infrastructure and immigration reform) remain on the backburner. Given the political climate and split Congress, these policies are unlikely to get a look until after the 2020 elections.
That said, there are two important silver linings in these dark clouds according to BofA.
First, the Trump Administration is very reluctant to impose broad-based consumer tariffs. This makes across-the-board China, autos and Vietnamese tariffs less likely.
Second, since last fall, the Fed has done a 180-degree turn from steady tightening to pre-emptive easing. This not only helps cushion the trade shock in the US, but has also created space for many emerging market central banks to ease as well. The problem is that the market is already pricing in more rate cuts than many banks – certainly Bank of America – believe the Fed is likely to deliver. The markets expect about 110bp in cuts by the end of next year, while BofA has penciled in only 75bp, while Goldman goes so far as to expect the Fed to resume rate hikes in 2020. At some point, the Fed has to disappoint very high expectations.
The bottom line is that, according to Bank of America’s top economists, for now investors can continue to bask in the glow of Fed-fueled financial markets. However, “once that burns out and the rains arrive, the picture could look a lot different.”
via ZeroHedge News https://ift.tt/2Lyw3r0 Tyler Durden
Last week it was all fire and brimstone. The US was threatening more sanctions on Iran, the Brits were seizing oil tankers and Iran was violating the JCPOA.
I thought National Security Advisor John Bolton said the US would apply pressure until “the pips squeak.”
Where the pips are squeaking is on the Arabian Peninsula, not across the Persian Gulf in Bandar Abbas. Specifically, I’m talking about the United Arab Emirates. The UAE sent a delegation to Tehran recently that coincided with its partial withdrawal of troops from Yemen.
“The UAE would like to avoid seeing their country transformed into a battlefield between the US and Iran in case of war, particularly if Trump is re-elected. The Emirates officials noted that the US did not respond to Iran’s retaliation in the Gulf and in particularly when the US drone was downed. This indicates that Iran is prepared for confrontation and will implement its explicit menace, to hit any country from which the US carries out their attacks on Iran. We want to be out of all this”, an Emirates official told his Iranian counterpart in Tehran.
Iran promised to talk to the Yemeni officials to avoid hitting targets in Dubai and Abu Dhabi as long as the UAE pulls out its forces from the Yemen and stops this useless war. Saudi Crown Prime Mohammad Bin Salman is finding himself without his main Emirates ally, caught in a war that is unwinnable for the Saudi regime. The Yemeni Houthis have taken the initiative, hitting several Saudi strategic targets. Saudi Arabia has no realistic objectives and seems to have lost the appetite to continue the war in Yemen.
So, with the Houthis successfully striking major targets inside Saudi Arabia and the UAE abruptly pulling forces out, the war in Yemen has reached a critical juncture. Remember, the Republican-controlled Senate approved a bill withdrawing support for the war back in March, which the White House had to veto in support of its fading hopes for its Israeli/Palestinian deal pushed by Jared Kushner.
But things have changed significantly since then as that deal has been indefinitely postponed with Israeli Prime Minister Benjamin Netanyahu facing a second election this fall after he failed to secure a stable coalition.
After that there was the failed economic conference in Bahrain in June where Kushner revealed the economic part of the plan to a half-empty room where only the backers of the plan showed any real support.
And that’s the important part of this story, because it was Kushner’s plan which was the impetus for all of this insane anti-Iran belligerence in the first place. Uniting the Gulf states around a security pact leveraging the U.S/Israeli/Saudi alliance was part of what was supposed to pressure the Palestinians to the bargaining table.
By placing maximum economic sanctions on both Hezbollah in Lebanon and Iran while continuing to foment chaos in Syria was supposed to force Israel’s enemies to fold under the pressure which would, in turn, see the Palestinians surrender to the will of Kushner and Bibi.
The problem is, it didn’t work. And now Trump is left holding the bag on this idiotic policy which culminated in an obvious provocation when Iran shot down a $220 million Global Hawk surveillance drone, nearly sparking a wider war.
But what it did was expose the US and not Iran as the cause of the current problems.
Since then Trump finally had to stand up and be the grown-up in the room, such as he is, and put an end to this madness.
The UAE understood the potential for Iran’s asymmetric response to US belligerence. The Saudis cannot win the war in Yemen that Crown Prince Mohammed bin Salman began. The fallout from this war has been to push Qatar out of the orbit of the rest of the Gulf Cooperation Council, cutting deals with Iran over developing the massive North Pars gas field and pipelines to Europe.
And now the UAE has realized it is facing an existential threat to its future in any confrontation between Iran and the US
What’s telling is that Trump is making Yemen the issue to negotiate down rather than Iran’s nuclear ambitions. Because it was never about the nuclear program. It was always about Iran’s ballistic missile program.
And Secretary of State Mike Pompeo would have us believe that for the first time Iran’s missile program is on the negotiating table. I have no idea if that’s actually true, but it’s a dead giveaway that it’s what the US is after.
The main reason why Trump and Netanyahu are so angry about the JCPOA is the mutual outsourcing of the nuclear ballistic missile program by Iran and North Korea. North Korea was working on the warhead while Iran worked on the ballistic missile.
Trump tweeted about this nearly two years ago, confirming this link.I wrote about it when he did this. Nearly everything I said about North Korea in the blog post is now applicable to Iran. This was why he hated the JCPOA, it didn’t actually stop the development of Iran and North Korea into nuclear states.
But tearing up the deal was the wrong approach to solving the problem. Stop pouring hundreds of billions of dollars in weapons to the region, as Iran’s Foreign Minister Javad Zarif pointed out recently, is the problem. By doing this he took both Russian President Vladimir Putin and Chinese Premier Xi Jinping off his side of the table.
Now he stands isolated with only the provocateurs – Israel, the U.K., Saudi Arabia – trying to goad him forward into doing something he doesn’t want to do. And all of those provocations that have occurred in the past month have failed to move either Trump or the Iranians. They’ve learned patience, possibly from Putin. Call it geopolitical rope-a-dope, if you will.
I said last month that the key to solving Iran’s nuclear ambitions was solving the relationship with North Korea. Trump, smartly, went there, doing what only he could do, talk with DPRK Chairman Kim Jong-Un and reiterate his sincere desire to end proliferation of nuclear weapons.
He can get Iran to the table but he’s going to have to give up something. So, now framing the negotiations with Iran around their demands we stop arming the Saudis is politically feasible.
Trump can’t, at this point, back down directly with Iran. Yemen is deeply unpopular here and ending our support of it would be a boon to Trump politically. Trading that for some sanctions relief would be a good first step to solving the mess he’s in and build some trust.
Firing John Bolton, which looks more likely every day, would be another.
He’s already turning a blind eye to Iranian exports to China, and presumably, other places. I think the Brits are acting independently trying to create havoc and burnish Foreign Secretary Jeremy Hunt’s resume as Prime Minister against Boris Johnson. That’s why they hijacked the oil tanker.
But all the little distractions are nothing but poison pills to keep from discussing the real issues. Trump just cut through all that. So did Iran. Let’s hope they stay focused.
via ZeroHedge News https://ift.tt/2Y5JOzs Tyler Durden
After more than two years fighting with Democrats over border security, the Trump administration has replaced plenty of dilapidated barriers – yet hasn’t built a single mile of border fencing in open, unprotected sections of the southern US border, according to the Washington Examiner‘s Anna Giaritelli.
In a statement last week, U.S. Customs and Border Protection, the federal agency overseeing border barrier construction, confirmed that all the fencing completed since Trump took office is “in place of dilapidated designs” because the existing fence was in need of replacement. –Washington Examiner
CBP said that 51 miles of steel bollard fence had been replaced using funds set aside during FY2017 and 2018, however construction of new barriers where there aren’t any is ‘in the works’ according to the report.
The 50 miles of completed replacement barrier is a 10-mile gain since early April. In Trump’s two and a half years in office, his administration has installed an average 1.7 miles of barrier per month, and none of it in areas that did not previously have some sort of barrier. A total 205 miles of new and replacement barrier has been funded in the two and a half years since Trump took office. –Washington Examiner
Red tape?
One reason given to the Examiner for the lack of fencing in open-border regions is due to a difficult approval process for environmental zoning permits, according to a senior administration official. Another senior official blamed Democrats for blocking wall projects that the administration wants to complete.
“The wall projects are moving along as quickly as practicably possible given the unprecedented obstruction from Democrat lawmakers to protect and prolong open borders,” wrote the official, adding “These same obstructionists, including many who once supported border barriers, are the same people who would abolish ICE and DHS, let criminals run free across our borders, and turned a blind eye to the scourge human trafficking and child sex slavery enabled by their policies.”
Despite the slow (or no) progress in safeguarding unsecured portions of the border, Trump is applauding his administration for the progress made in reinforcing the current barriers.
Trump’s 2020 campaign debuted the slogan “Finish the Wall” at his first rally of 2019 in El Paso, Texas. At one point during his speech, the crowd began cheering “build that wall.” Trump responded, “Now, you really mean ‘finish that wall,’ because we’ve built a lot of it,” though he did not share numbers with the thousands of people in attendance. –Washington Examiner
In 2017, Congress approved $341 million for 40 miles of replacement wall in San Diego, California; Santa Teresa, North Mexico; Calexico, California; and El Paso, Texas.
“To this date, CBP has completed the construction of approximately 99 percent of the 40 miles funded in fiscal year 2017. Additionally, construction of 35 gates to close gaps in current border infrastructure in the Rio Grande Valley sector continues,” according to a DHS statement.
Approximately 400 miles is steel fencing comparable to theplanned new wall, only shorter. The other 300 miles of barrier is Normandy style, or a handful of steel beams fastened together to prevent vehicular traffic from getting by. However, the four-foot-tall fence does not prevent people from crossing. –Washington Examiner
The Trump administration was sued earlier this year after reallocating $6.6 billion from the Pentagon and elsewhere to fund border wall construction. The move was blocked by the 9th Circuit Court of Appeals – which the Supreme Court is expected to weigh in on over the next few weeks following a request from the Justice Department.
via ZeroHedge News https://ift.tt/2SqPkLy Tyler Durden
Chairman Powell’s testimony last week was closely scrutinized not just for its economic implications but also for its political overtones. Powell cited “trade tensions” as cause for concern about the strength of the global economy. He clearly seemed to be blaming President Trump’s tariffs.
But if the tariffs are what ultimately move the Fed to cut rates, Trump will have finally gotten what he wants out of Powell. In recent weeks, Trump has stepped up his attacks on the central bank, calling it the biggest problem facing the economy, floating the idea of firing Powell, and suggesting his administration would match China’s and Europe’s “currency manipulation game.”
Although many presidents before have pursued currency interventions and quibbled with Fed chairmen over interest rate policy, none have ever done it as openly and directly as the current one. Fed apologists in the media and in Congress view the central bank’s “independence” as being under assault.
The notion that the Fed ever was or could be independent of politics is a fanciful one. When a small group of people — appointed and confirmed by politicians — are empowered to make decisions that can make or break markets, economies, and elections, politics will inevitably intrude.
Fed chairman Jerome Powell may sincerely want to make monetary policy without regard to politics. But when political forces exert themselves on the Fed, he finds himself in an impossible catch-22. If he fails to cut rates, then the central bank risks becoming seen as the enemy of half the country as President Trump makes it his foil at campaign rallies. If Powell does what the President wants, then Democrats will accuse him of succumbing to political pressure from the White House.
Democrats used Powell’s Congressional testimony as an opportunity to get him on record in opposition to agold standard.
Although Trump himself is not calling for a gold-pegged dollar, one of his nominees to the Fed Board of Governors is – or at least has in the past. Potential Fed policymaker Judy Shelton has written and spoken extensively about the gold standard.
Apparently seeking to discredit Shelton’s views, Democrat Jennifer Wexton prodded Fed Chairman Powell into weighing in on the gold standard.
Ms. Wexton: Chairman Powell, do you think that the US should go back to the Gold Standard for our currency?
Chairman Powell: Let me say I wouldn’t… This could feasibly be considered commenting on a particular nominee who has recommended that, and of course, I will not do that. I will answer your question, but I want to make sure that this isn’t interpreted in that way. So, no, I don’t think that would be a good idea. The idea would be… Congress would have to pass a law and that law would say that our job with monetary policy is to manage the level of the dollar, stabilize the dollar price of gold, and we would then not be looking at maximum employment or stable prices. There have been plenty of times in the fairly recent history where the price of gold has sent signals that would be quite negative for either of those goals.
Ms. Wexton: Much better mission for the Fed is what you’re doing right now.
Chairman Powell: Well, this is why every country in the world abandoned the Gold Standard some decades ago.
Ms. Wexton: Okay. Well, that reluctance or that desire not to go back to the Gold Standard is something that you have in common with the CEO’s of seven of the world’s globally systemic important banks.
It’s no surprise that “too big to fail” bankers who depend on special privileges from the Fed and other central banks don’t like gold. It’s hard to orchestrate multi-trillion dollar bailouts of the financial system when the currency supply is limited by gold .
Some see that as a disadvantage. Others see it as a distinct advantage because it discourages banks from getting too big to fail to begin with.
Chairman Powell claims that gold-backed money would prevent the Fed from pursuing full employment – as if all workers have monetary planners to thank for their jobs – and stable prices. Of course, by “stable prices” he means prices that rise at his target rate of two-percent inflation. He means a dollar that steadily loses purchasing power.
Sound money, on the other hand, is market-based money and can be based on gold, silver, or anything else the market values. If the dollar were defined simply in terms of grains of silver, for example, then monetary policy and the politics surrounding it would recede into the background. No longer would markets swing wildly based on the particular phraseology contained in Fed policy statements.
No longer would every incumbent administration push for easy money policies. Instead of counting on the Fed to devalue existing debt and pave the way to pile on more of it, hard choices would have to be made by members of Congress about paying down debt and embarking on a fiscally sustainable path.
The fact that politicians, central bankers, and “too big to fail” bankers all oppose a gold standard is a tacit admission that hard money would serve as an effective constraint on their activities.
via ZeroHedge News https://ift.tt/2JOHJ5y Tyler Durden
Mexico City’s government is under attack by critics since a left-leaning administration took over in 2018, with critics claiming that violence has “spun out of control.” In response, the city now claims that the previous administration “extensively under-reported crime” and, as a result, the crime rate appears to have shot up in 2019, but it has really fallen.
Tens of thousands of criminal files from 2018 were reviewed and show that the city’s homicides have not risen by a third this year, as previously reported. Instead the number is only up about 12%, according to Ernestina Godoy, Mexico City’s chief prosecutor. In addition, violent crimes as a whole have dropped by 8% this year, she said.
The new figures are slated to be released as part of Federal data on and will certainly raise questions about the trustworthiness of crime statistics in Mexico. President Andres Manuel Lopez Obrador won his election on promises of curbing crime, corruption and violence. Mexico City’s mayor, Claudia Sheinbaum, is a close ally of his.
Godoy said: “The registry was distorted. In cases of rape they were classified as sexual harassment or abuse, or just injuries.”
More than 24,000 of 214,000 reviewed files on criminal cases were said to be doctored. Rapes in the prior year were actually double the number reported by former mayor Miguel Angel Mancera’s administration. Mancera had no comment.
Data shows that murders in Mexico’s capital city were up 36% from January to May versus the year prior. Godoy says homicides will formally now show a rise of about 12%.
Godoy concluded: “That’s still far too many. This is not being done to justify our government. We won’t deny the situation we are in.”
via ZeroHedge News https://ift.tt/2Gnejup Tyler Durden
China and Cambodia reached a (no longer) secret agreement last spring which allows Beijing to make use of a Cambodian navy base near the coastal city of Sihanoukville, according to the Wall Street Journal, citing US and allied officials familiar with the matter.
The deal gives China exclusive rights to a portion of Ream naval base in the Gulf of Thailand, close to an airport being constructed by a Chinese firm. According to an early draft of the deal seen by US officials, China will be allowed to use the base for 30 years, with automatic renewals once per decade after that. Beijing will be able to use the base to post military personnel, dock warships and store weapons.
According to the early draft of the base accord, China would build two new piers—one for Chinese use, one for Cambodian, U.S. officials said. U.S. officials said further dredging would likely be needed for the base to host larger Chinese navy ships.
The draft also allows China’s personnel to carry weapons and Cambodian passports, and requires Cambodians to get Chinese permission to enter the 62-acre Chinese section of Ream, U.S. officials said. –Wall Street Journal
As the Journal notes, “Military operations from the naval base, airport, or both, would sharply increase Beijing’s capacity to enforce territorial claims and economic interests in the South China Sea, to threaten American allies in Southeast Asia and to extend its influence over the strategically important Malacca Strait.”
China is re-asserting their historic imperial hegegnony over the Asia-Pacific region while making deep strategic inroads across Africa, South America, and Europe
While Chinese and Cambodian officials deny plans for a Chinese military base in the country (“Nothing is happening like that,” according to Cambodian government spokesman, Phay Siphan, who called it “fake news.”), concerns have been raised over construction in a China-backed investment zone that encompasses 20% of Cambodia’s coastline, according to Bloomberg.
Dara Sakor, a $3.8 billion China-backed investment zone encompassing 20% of Cambodia’s coastline, is unlike any other in the developing Southeast Asian nation. Controlled by a Chinese company with a 99-year lease, it features phased plans for an international airport, a deep-water seaport and industrial park along with a luxury resort complete with power stations, water treatment plants and medical facilities. –Bloomberg
According to the Journal, US officials have been lobbying Cambodia not to allow China’s military to make use of the Dara Sakor construction, which has made significant progress according to satellite photographs. “The site now features a two-mile-long runway—big enough for Boeing 747s and Airbus A380s, and for China’s long-range bombers and military transports,” per the report.
Dara Sakor international airport is located in a national park in sparsely populated Koh Kong province and will be Cambodia’s largest.
Recent satellite images shows that an area inside the Ream base has recently been cleared in apparent preparation for construction work. A bridge at the entrance is also being repaired.
Meanwhile, a state-run Chinese construction company is working on Dara Sakor airport, which is due to open next year and will be Cambodia’s largest despite being in a province with a population of 200,000 people. –all Street Journal
According to an Australian intelligence official, the Cambodian runway “seems far longer than needed for any normal commercial purpose or aircraft, and certainly longer than necessary for any tourist development envisaged there.”
While China’s deal for Ream base doesn’t constitute a ‘full-scale Chinese base,’ per WSJ, it “would give Beijing its first dedicated naval staging facility in Southeast Asia and a second outpost in what the Pentagon sees as a Chinese quest for a global network of military and dual-use sites,” setting off alarm bells in DC.
Washington is “concerned that any steps by the Cambodian government to invite a foreign military presence in Cambodia” would disturb regional peace and stability, said Emily Zeeberg, a spokesperson for the U.S. Embassy in Phnom Penh.
Surrounded by dense jungle and mangroves, and overlooked by a Buddhist temple, the naval installation in question, at Ream, covers about 190 acres and includes two facilities built with U.S. funding and used by the Cambodian navy, and a single pier where a dozen patrol craft dock. –Wall Street Journal
According to the report, US officials are debating whether Phenom Penh can be convinced to reverse course on the Chinese presence at Ream. One senior Pentagon official indicated that the United States wanted Cambodia to be a “preferred security partner,” however other officials fear the country has instead chosen team-red.
via ZeroHedge News https://ift.tt/2M5g6YO Tyler Durden
Authored by Matthew Hornbach, head of interest rate strategy at Morgan Stanley
The Fed won’t be enjoying a lazy summer this year. Chair Powell has teed up monetary policy easing at the conclusion of the FOMC meeting on July 31. The consensus expectation among economists calls for a 25bp cut in the target interest rate, while we expect the Fed to deliver 50bp. The market is pricing an outcome somewhere in between, with fed funds futures implying around 30bp.
The debate over the size/cost of an insurance cut remains active, thanks to a spate of strong data (nonfarm payrolls, inflation, retail sales) that have been perceived, at least at the margin, as increasing the risk that the Fed under-delivers at its July meeting relative to our expectation. For those FOMC participants who are less inclined to act aggressively against downside risks, these data points could also argue against delivering more than 25bp.
The minutes from the June FOMC meeting revealed that 14 of the 17 participants saw downside risks to the growth and inflation outlooks. What’s more, in their assessment of downside risks to the economic outlook, participants noted factors including “recent weak indicators for business confidence, business spending and manufacturing activity; trade developments; and signs of slowing global economic growth”. Thus, the case for concern does not hinge on the labor market or the consumer, but more on external conditions, trade policy, and manufacturing.
Chair Powell also underscored this point in his most recent remarks in Paris on Tuesday, expressing concern about “trade developments and global growth”. It’s important to note that our US public policy strategists, led by Mike Zezas, have characterized the post-G20 environment for trade escalation as an ‘uncertain pause’, while our global economists, led by Chetan Ahya, see global growth slowing through 4Q19 with risks to the downside.
In June, FOMC participants were also increasingly concerned about the inflation outlook, based on recent low inflation readings, downside growth risks, and lower inflation expectations. The June CPI print then surprised to the upside, with positive implications for core PCE (where we expect an increase in the year-over-year reading to 1.66% from 1.60%). So inflation has moved higher, but does the June data point alter the fact that inflation has fallen short of the Fed’s 2%Y goal for two decades, let alone put a measurable dent in that shortfall – or even the decline over the past four months? Recall that the Fed’s goal is to create enough inflationary pressure that inflation stays above its 2%Y goal for a sustained period. That means running the economy hot.
While these factors easily support a rate cut at the July meeting, they don’t necessarily justify the magnitude we expect. We’d point out that in June seven FOMC participants suggested the need for 50bp of accommodation this year, even before the FOMC judged that global uncertainty had persisted beyond the G20 meeting. Based on recent comments from policy-makers, we believe this number has grown. As such, we think the FOMC will be debating when to deliver 50bp of accommodation, as opposed to whether circumstances call for only 25bp.
Will the Committee cut by 50bp all at once, or in a gradual fashion reminiscent of the recent tightening cycle? In this regard, we note a deeply held view among monetary policy-makers that near the zero lower bound the Fed must act aggressively when low inflation or a downturn threatens. The message to policy-makers today? Don’t keep your powder dry. In addition, our own simulations have shown that, in terms of a positive impact on the economy, 25bp in cuts is a rounding error, while 50bp might be enough to mitigate the downside risks we face today.
Putting to one side their desire for aggressive action, current market pricing indicates that market participants won’t see a 25bp cut as aggressive. And that could result in tighter financial conditions than those in place today. To date, such conditions have helped to “sustain the economic expansion, with a strong job market and stable prices, for the benefit of the American people”. The recent labor market and inflation reports and retail sales data confirm this. Would policy-makers want to put those accommodative financial conditions at risk by delivering the 50bp they deem appropriate gradually? We doubt it.
via ZeroHedge News https://ift.tt/2O9FG1A Tyler Durden
“If we do not make the strong effort now, the time will soon be reached when the margin of control over space and over men’s minds through space accomplishments will have swung so far on the Russian side that we will not be able to catch up, let alone assume leadership.”
That sense of urgency has shifted over the decades from government to the private sector, where billionaires like Elon Musk, Richard Branson and Jeff Bezos, among others, are displaying profound enthusiasm in regard to the notion of exploiting space. Their interest appears to go well beyond space tourism for the thrill-seeking one-percenters, even though that’s what gets most of the media attention. As Cathal O’Connell reports for Cosmos Magazine, “Already companies are sending up 3D printers to produce replacement tools in space. Next we could see orbiting factories making products for sale on Earth or automated robots constructing satellites the size of a football field.”
If this all seems as exotic as those old 1930s “Flash Gordon” films did to the audiences of the day, recall that the experience of the Apollo 11 moon landing showed that reality has a way of catching up quickly to Hollywood fantasy (it also shows that when sufficient government resources are harnessed to a higher common purpose, good results can happen surprisingly quickly and efficiently). Once the likes of Bezos, Branson, Musk, and others find a way to economically hoist heavy machinery into space (and it is becoming more economic), permanent “off-Earth” manufacturing could become a reality.
But this raises an interesting issue: who chooses the technological alternatives that set out our future? Should this decision solely be left in the domain of the private sector? Should space be privatized in this matter? What about NASA? Consider the future: Forget about the threat of moving a Midwestern plant from, say, Ohio, to Mexico or China. Next time, it could be a robot-filled factory in space that takes your job.
To be clear, nobody is suggesting a return to medieval-style craft guilds. At the same time, it is worth noting certain salient aspects about technology: rather than acting in the service of mankind, technology has often been used in a way that creates a momentum of its own that establishes limits or controls what becomes socially possible. It is wrapped in an aura of linear progress and scientific inevitability, conveniently ignoring that its benefits are often skewed most heavily to the power brokers who initiate and champion its use. This is a principle danger of subcontracting space to billionaire plutocrats, whose ambitions and interests might be inconsistent with society’s broader public purpose. This is to say nothing of the increasing de-skilling of labor that could follow, if they are not integrated into this process somehow.
As the Wall Street Journal’s Greg Ip notes, the government-sponsored race to the moon spurred considerable “advances in computers, miniaturization and software, and found its way into scratch-resistant lenses, heat-reflective emergency blankets and cordless appliances,” all of which had tremendous benefits for society as a whole. But today, the government has largely lost its “moonshot mindset” and space, in turn, has increasingly become the focus of the oligarch class, seeking to enhance profit opportunities as well as exploiting the increasing trend of displacing human labor with machines. This is despite the fact that Professor Seymour Melman’s own research illustrated that if you give workers decision-making power on the shop floor, productivity tends to increase substantially.
Without a doubt, there are many benefits to be derived from the work being done in the cosmos. For example, the microgravity conditions pertaining in space are considered ideal for developing materials, such as protein and virus crystals, observes Sarah Lewin, in a piece discussing the incipient development of “off-Earth manufacturing.” The insights developed by these crystals could enhance drug research and provide useful new therapies and medical treatments for infections and diseases (such as heart disease and organ transplants). Space also enhances the scope for producing high-tech materials, whose production is otherwise adversely affected by the Earth’s gravity, one example being a “fiber-optic cable called ZBLAN, … [which, w]hen manufactured in microgravity… is less likely to develop tiny crystals that increase signal loss. When built without those flaws, the cable can be orders of magnitude better at transmitting light over long distances, such as for telecommunications, lasers and high-speed internet,” according to Lewin.
We shouldn’t be oblivious to the considerable human costs associated with work in the government’s space program – “Microgravity sets our fluids wandering and weakens muscles, radiation tears through DNA and the harsh vacuum outside is an ever-present threat” (to quote Lewin), to say nothing of the risk of death itself—which are mitigated considerably when you can do things with machines alone. At the same time, left unchallenged or unmonitored, these billionaires could use space to quietly initiate further radical changes to our social structures.
It starts with ownership models. There’s an interesting paradox of futuristic 24th-century economic visions in space being built on the 12-to-13th–century ownership models that make up Silicon Valley. Wealth sharing ownership models should be conceived as part of the futuristic vision if we don’t want to be saddled with human wealth disparities reaching factors of 12 or 15 zeros. Ideally, NASA (or some other space agency) should take a leading national developmental role in the production of goods in space, and then subcontract to manufacturers to do the actual production processes, rather than the other way around.
Of course, if the government does ultimately decide that space privatization is not a great thing, no doubt Silicon Valley and its market fundamentalist champions will trot out the line about the inefficient government fighting “technological inevitability” – a typical playbook from the Silicon Valley oligarchs (i.e., you can’t fight technological progress, so let’s just set up something like a Universal Basic Income – UBI – that acts like a painkiller, but masks the symptoms of economic injustice and fails to address the underlying causes of exploitation and inequality). That’s one major risk of “off-Earth” production when it becomes a plaything of the rich alone. That’s to say nothing of the fact that the billionaire class is already benefiting from a long series of government-funded innovations undertaken in the past, as Professor Marianna Mazzucato has illustrated in her work, “The Entrepreneurial State.”
One of which was the government-led (and funded) space program: at its funding peak, the lunar space program employed over 400,000 Americans. The management, national commitment and personal motivation of the participants were just as important as the technology itself in terms of ensuring the program’s success. It’s hard to see that sort of coalescing of interests in the absence of an overriding government stake when it comes to the production of manufactured goods in an environment outside a planetary atmosphere.
There is another unhealthy aspect to uncritically acceding to a paradigm in which supposedly superhuman entrepreneurs are selflessly taking up the baton from a tapped-out public sector. It becomes self-serving for the billionaires, and implicitly justifies and entrenches the economic status quo. As journalist Amanda Schaffer has argued:
“If tech leaders are seen primarily as singular, lone achievers, it is easier for them to extract disproportionate wealth. It is also harder to get their companies to accept that they should return some of their profits to agencies like NASA and the National Science Foundation through higher taxes or simply less tax dodging.”
It’s undoubted that orbital manufacturing will yield innovations in technology, medicine and material science in the next few decades. But we should recall that technology doesn’t simply have an autonomous momentum and direction that inexorably leads to social progress. Likewise, it bears recalling (as Professor Seymour Melman once observed) that technology “is applied in accordance with specific social criteria wielded by those with economic decision power in the society.” Melman’s implicit argument is that technology can be used to enhance worker control or to create more yet alienation. The government, therefore, shouldn’t be reduced to the role of passive minority shareholder collecting dividends or royalties from a privately run space enterprise.
That’s the old market fundamentalist model that has failed pretty badly on this planet, let alone replicating it in space. So before we get too wrapped up in all of the exciting new goodies that Jeff Bezos and his fellow space enthusiasts can create for us, let’s also ensure that this move to “the final frontier” doesn’t simply become a new form of technological control and enslavement, in which the benefits continue to be distributed in a profoundly illiberal direction as they are here on planet Earth.
via ZeroHedge News https://ift.tt/2JXXmru Tyler Durden
Iran’s ambassador in London warned on Sunday that the UK government must get its “domestic political forces” pushing for regime change under control or else the two countries will face dangerous escalation. The public statement came two days after the British-flagged Stena Impero was boarded and captured by IRGC commandos, and over two weeks after the tanker Grace 1 was seized by UK Royal Marines off Gibraltar.
Iranian Ambassador Hamid Baeidinejad urged via his personal Twitter account that continued pressure on Iran would be “unwise” given that Tehran stands “firm and ready for different scenarios”.
The ambassador said the UK government must“contain those domestic political forces who want to escalate existing tension between Iran and the UK well beyond the issue of ships” — in what appears a reference to the UK defense establishment and its allies at think tanks like the neoconservative the Henry Jackson Society and others, and powerful oil and weapons gulf allies like Saudi Arabia.
Iranian Ambassador to the UK Hamid Baeidinejad, via Iran News Daily
His statement implied that British ‘deep state’ elements were using the tit-for-tat tanker seizures as a convenient raison d’etre for pushing conflict with Iran.
On Friday Britain had issued its own warnings, with Foreign Minister Jeremy Hunt telling the Iranians they face “robust” and “serious consequences,” but he stopped short of discussing military options, instead his statements emphasized diplomacy. The UK has condemned it as “a hostile act” – and German Foreign Minister Heiko Maas has indicated European leaders are desperately trying to prevent “uncontrollable military escalation.”
Meanwhile, more details of Iran’s seizure of the still detained Stena Impero tanker have emerged. IRGC spokesman Brig. Gen. Ramezan Sharif was cited by Iran’s Fars News Agency over the weekend as claiminga Royal Navy warship had attempted to put up “resistance and interference” to prevent Iran’s navy from detaining the vessel.
State media released new footage showing the tanker impounded with Iran’s flag raised above.
State media of #Iran‘s Islamic Regime just released exclusive video of the seized #UK‘s Oil Tanker, Stena Impero anchored in #BandarAbbas port. They brought down the #UK‘s flag and raised the Islamic Regime’s flag in instead. pic.twitter.com/qWWFGtrff6
According to Sharif, Iran’s military had warned the tanker several times to change course before intervening. This followed Iranian state media claiming the Stena Impero was making unsafe and dangerous maneuvers which led it to collide with an Iranian fishing boat; however, neither the UK nor any independent source has backed this interpretation.
The IRGC spokesman further alleged that UK Royal Navy helicopters tried to stop Iran’s naval commandos from boarding the ship. Iran previously released dramatic video showing special forces operatives fast-roping to the tanker’s deck, but there was no evidence of UK aircraft overhead.
via ZeroHedge News https://ift.tt/2Yfdf6d Tyler Durden
