Tag: finance

Despite hope (and talk) that Greece is on the path back to recovery, our recent discussion of the record deflation the nation is undergoing (and record unemployment) suggests Stournaras propaganda is just that. As Bloomberg’s David Powell writes, the embattled nation continues to push further into depression and a state of insolvency and appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt. Perhaps that is why Troika delayed its appearance in Athens as it is easier to ignore the truth that way? Especially as beggars, once again, will become choosers in the “grexit” debate.

Via Bloomberg’s David Powell,

Deflation in Greece continues to push the embattled country further into a state of insolvency.

The EU-harmonized measure of the headline consumer price index declined 2.9 percent year over year in November, according to data released by the National Statistical Service of Greece on Monday.

The gross domestic product deflator dropped 3 percent year over year during the third quarter of 2013, according to Bloomberg Brief calculations based on the levels of nominal and real GDP. The decline in prices is likely to have been greater than the economists of the International Monetary Fund had forecast. In the public sector debt sustainability analysis published in the latest review of Greece’s bailout package, they assumed the GDP deflator would measure minus 1.1 percent in 2013. It was released in July.

The official inflation forecasts for the following years also appear high. The economists assumed the GDP deflator would measure minus 0.4 percent in 2014, 0.4 percent in 2015 and 1.1 percent in 2016. Those figures may fail to materialize as a result of spare capacity in the economy. The unemployment rate measured 27.3 percent in August, the latest reporting period.

That compares with a recent peak in May of 27.5 percent, which was the highest level since the birth of the monetary union. The Organization for Economic Cooperation & Development estimates the non-accelerating-inflation rate of unemployment to be 15.6 percent. That’s a gap of 11.8 percentage points. A period of sustained deflation appears likely.

The experience of Japan demonstrates the difficulty of overcoming deflation. Nationwide Japanese CPI, excluding food and energy prices, slipped into negative territory in September 1998, measuring minus 0.1 percent year over year. It failed to move into positive territory for almost 10 years, hitting 0.1 percent year over year in June 2008.

In addition, spare capacity was much less in Japan than it is in Greece. The unemployment rate in the former never rose above 5.5 percent during the period. That compares with the latest estimate of NAIRU for Japan from the OECD of 4.3 percent.

Deflation raises the real interest rate on Greek debt. For example, the average real interest rate would rise to 5.7 percent from 3.6 percent in 2013, to 4.8 percent from 3.1 percent in 2014, to 4 percent from 2.6 percent in 2015 and to 3.2 percent from 2.1 percent in 2016, according to Bloomberg Brief calculations. Those figures assume the GDP deflator troughs at its present level of minus 3 percent in 2013 and rises to minus 2 percent in 2014, minus 1 percent in 2015 and 0 percent in 2016.

Deflation also weighs heavily on the pace of nominal GDP growth. It would fall to minus 7.1 percent from minus 5.3 percent in 2013, to minus 1.4 percent from 0.2 percent in 2014, to 1.9 percent from 3.3 percent in 2015 and to 3.7 percent from 4.8 percent in 2016, assuming the real GDP growth forecasts from the latest IMF review of the Greek economy and the aforementioned alternate inflation profile.

The nominal size of the Greek economy would be much smaller in 2016 under the alternate inflation scenario. It would measure 199.2 billion euros using the baseline scenario of real GDP growth and inflation from the latest report of the IMF. It would measure 187.5 billion euros using the baseline scenario of real GDP growth from the latest report of the IMF and the alternate inflation profile.

A shrinking economy increases the relative size of a country’s sovereign debt. Greece’s debt-to-GDP ratio would measure 158.3 percent in 2016 under the baseline scenario of the IMF and 168.9 percent for the same year under the alternate inflation scenario.

Greece appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7WkJeeTvKMk/story01.htm Tyler Durden

Despite hope (and talk) that Greece is on the path back to recovery, our recent discussion of the record deflation the nation is undergoing (and record unemployment) suggests Stournaras propaganda is just that. As Bloomberg’s David Powell writes, the embattled nation continues to push further into depression and a state of insolvency and appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt. Perhaps that is why Troika delayed its appearance in Athens as it is easier to ignore the truth that way? Especially as beggars, once again, will become choosers in the “grexit” debate.

Via Bloomberg’s David Powell,

Deflation in Greece continues to push the embattled country further into a state of insolvency.

The EU-harmonized measure of the headline consumer price index declined 2.9 percent year over year in November, according to data released by the National Statistical Service of Greece on Monday.

The gross domestic product deflator dropped 3 percent year over year during the third quarter of 2013, according to Bloomberg Brief calculations based on the levels of nominal and real GDP. The decline in prices is likely to have been greater than the economists of the International Monetary Fund had forecast. In the public sector debt sustainability analysis published in the latest review of Greece’s bailout package, they assumed the GDP deflator would measure minus 1.1 percent in 2013. It was released in July.

The official inflation forecasts for the following years also appear high. The economists assumed the GDP deflator would measure minus 0.4 percent in 2014, 0.4 percent in 2015 and 1.1 percent in 2016. Those figures may fail to materialize as a result of spare capacity in the economy. The unemployment rate measured 27.3 percent in August, the latest reporting period.

That compares with a recent peak in May of 27.5 percent, which was the highest level since the birth of the monetary union. The Organization for Economic Cooperation & Development estimates the non-accelerating-inflation rate of unemployment to be 15.6 percent. That’s a gap of 11.8 percentage points. A period of sustained deflation appears likely.

The experience of Japan demonstrates the difficulty of overcoming deflation. Nationwide Japanese CPI, excluding food and energy prices, slipped into negative territory in September 1998, measuring minus 0.1 percent year over year. It failed to move into positive territory for almost 10 years, hitting 0.1 percent year over year in June 2008.

In addition, spare capacity was much less in Japan than it is in Greece. The unemployment rate in the former never rose above 5.5 percent during the period. That compares with the latest estimate of NAIRU for Japan from the OECD of 4.3 percent.

Deflation raises the real interest rate on Greek debt. For example, the average real interest rate would rise to 5.7 percent from 3.6 percent in 2013, to 4.8 percent from 3.1 percent in 2014, to 4 percent from 2.6 percent in 2015 and to 3.2 percent from 2.1 percent in 2016, according to Bloomberg Brief calculations. Those figures assume the GDP deflator troughs at its present level of minus 3 percent in 2013 and rises to minus 2 percent in 2014, minus 1 percent in 2015 and 0 percent in 2016.

Deflation also weighs heavily on the pace of nominal GDP growth. It would fall to minus 7.1 percent from minus 5.3 percent in 2013, to minus 1.4 percent from 0.2 percent in 2014, to 1.9 percent from 3.3 percent in 2015 and to 3.7 percent from 4.8 percent in 2016, assuming the real GDP growth forecasts from the latest IMF review of the Greek economy and the aforementioned alternate inflation profile.

The nominal size of the Greek economy would be much smaller in 2016 under the alternate inflation scenario. It would measure 199.2 billion euros using the baseline scenario of real GDP growth and inflation from the latest report of the IMF. It would measure 187.5 billion euros using the baseline scenario of real GDP growth from the latest report of the IMF and the alternate inflation profile.

A shrinking economy increases the relative size of a country’s sovereign debt. Greece’s debt-to-GDP ratio would measure 158.3 percent in 2016 under the baseline scenario of the IMF and 168.9 percent for the same year under the alternate inflation scenario.

Greece appears highly unlikely to be able to reduce the domestic price level in order to restore competiveness and simultaneously avoid a second restructuring of its sovereign debt.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7WkJeeTvKMk/story01.htm Tyler Durden

While Bernanke may be about to leave; none other than his mentor and thesis adviser – former Bank of Israel chief Stanley Fischer is rumored to be in line for a new role:

• FISCHER STEPPED DOWN AS BANK OF ISRAEL GOVERNOR IN JUNE
• FISCHER LEADING CANDIDATE TO BE DEPUTY FED CHIEF: ISRAEL CH. 2
• DJ WHITE HOUSE NEAR NOMINATING STANLEY FISCHER TO FED VICE CHAIR

Also of note: Fischer was once upon a time considered the "dark horse" candidate to replace Bernanke:

Dark-horse candidates include Stanley Fischer, an American citizen who recently stepped down as governor of the Bank of Israel, and Roger Ferguson, another former Fed vice chairman and now chief executive of TIAA-CREF, a not-for-profit financial-services company.

For now the market seems oblivious that the #2 person at the Fed may be far more hawkish than Larry Summers ever would be.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/rf_48GzR-Xs/story01.htm Tyler Durden

Moments ago the Treasury sold $21 billion in 9 Year-11 Month paper in today’s 10 Year reopening of CUSIP WE6, which pricing at 2.824% was a sizable 0.7 bps tail to the 2.817% When Issued trading at 1 pm, and easily one of the bigger tails in the past year for the benchmark bond auction. And while the closing yield indicated a sudden drop off in demand into the auction, the internals were hardly as ugly, with a Bid to Cover of 2.61, below last month’s 2.70 (and below the TTM average of 2.73) but hardly a cliff drop in bidside demand. Breaking the allotment by final purchaser, Dealer got 40.5%, in line with the 39.2% average, while Indirects took down nearly half the auction, or 49.8% to be precise, far above the 38.3% LTM average, and the highest Indirect allotment since the 51.7% from June. Directs were therefore left holding 10.6% of the auction, the lowest such portion since the 5.2% in August 2012. Overall, hardly an impressive auction, and one which probably reflects concerns what the taper could do for longer duration in the months ahead.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/0kVRJIwTGmg/story01.htm Tyler Durden

Following yesterday's "selfie-gate" furore at Nelson Mandela's memorial service, it is perhaps unsurprising that the AFP photographer responsible for the series of incriminating photos come out with a wordy (and picturey) response to explain what we all saw. Roberto Schmidt notes, "it was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us." Indeed, especially for a president whose only focus is to be seen as "one of the people" and not actually doing, you know, work to help the people.

Via Roberto Schmidt of AFP blog,

So here’s the photo, my photo, which quickly lit up the world’s social networks and news websites. The “selfie” of three world leaders who, during South Africa’s farewell to Nelson Mandela, were messing about like kids instead of behaving with the mournful gravitas one might expect.

In general on this blog, photojournalists tell the story behind a picture they’ve taken. I’ve done this for images from Pakistan, and India, where I am based. And here I am again, but this time the picture comes from a stadium in Soweto, and shows people taking a photo of themselves. I guess it’s a sign of our times that somehow this image seemed to get more attention than the event itself. Go figure.

Anyway, I arrived in South Africa with several other AFP journalists to cover the farewell and funeral ceremonies for Nelson Mandela. We were in the Soccer City stadium in Soweto, under a driving rain. I’d been there since the crack of dawn and when I took this picture, the memorial ceremony had already been going on for more than two hours.

From the podium, Obama had just qualified Mandela as a “giant of history who moved a nation towards justice." After his stirring eulogy, America’s first black president sat about 150 metres across from where I was set up. He was surrounded by other foreign dignitaries and I decided to follow his movements with the help of my 600 mm x 2 telephoto lens.

So Obama took his place amid these leaders who’d gathered from all corners of the globe. Among them was British Prime Minister David Cameron, as well as a woman who I wasn’t able to immediately identify. I later learned it was the Danish Prime Minister Helle Thorning Schmidt. I’m a German-Colombian based in India, so I don’t feel too bad I didn’t recognize her! At the time, I thought it must have been one of Obama’s many staffers.

Anyway, suddenly this woman pulled out her mobile phone and took a photo of herself smiling with Cameron and the US president. I captured the scene reflexively. All around me in the stadium, South Africans were dancing, singing and laughing to honour their departed leader. It was more like a carnival atmosphere, not at all morbid. The ceremony had already gone on for two hours and would last another two. The atmosphere was totally relaxed – I didn’t see anything shocking in my viewfinder, president of the US or not. We are in Africa.

(AFP Photo / Roberto Schmidt)

I later read on social media that Michelle Obama seemed to be rather peeved on seeing the Danish prime minister take the picture. But photos can lie. In reality, just a few seconds earlier the first lady was herself joking with those around her, Cameron and Schmidt included. Her stern look was captured by chance.

I took these photos totally spontaneously, without thinking about what impact they might have. At the time, I thought the world leaders were simply acting like human beings, like me and you. I doubt anyone could have remained totally stony faced for the duration of the ceremony, while tens of thousands of people were celebrating in the stadium. For me, the behaviour of these leaders in snapping a selfie seems perfectly natural. I see nothing to complain about, and probably would have done the same in their place. The AFP team worked hard to display the reaction that South African people had for the passing of someone they consider as a father. We moved about 500 pictures, trying to portray their true feelings, and this seemingly trivial image seems to have eclipsed much of this collective work.

(AFP Photo / Roberto Schmidt)

It was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us.

I confess too that it makes me a little sad we are so obsessed with day-to-day trivialities, instead of things of true importance.

During Mandela's memorial service in Johannesburg. (AFP Photo / Roberto Schmidt)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mUJRsh5tRes/story01.htm Tyler Durden

Following yesterday's "selfie-gate" furore at Nelson Mandela's memorial service, it is perhaps unsurprising that the AFP photographer responsible for the series of incriminating photos come out with a wordy (and picturey) response to explain what we all saw. Roberto Schmidt notes, "it was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us." Indeed, especially for a president whose only focus is to be seen as "one of the people" and not actually doing, you know, work to help the people.

Via Roberto Schmidt of AFP blog,

So here’s the photo, my photo, which quickly lit up the world’s social networks and news websites. The “selfie” of three world leaders who, during South Africa’s farewell to Nelson Mandela, were messing about like kids instead of behaving with the mournful gravitas one might expect.

In general on this blog, photojournalists tell the story behind a picture they’ve taken. I’ve done this for images from Pakistan, and India, where I am based. And here I am again, but this time the picture comes from a stadium in Soweto, and shows people taking a photo of themselves. I guess it’s a sign of our times that somehow this image seemed to get more attention than the event itself. Go figure.

Anyway, I arrived in South Africa with several other AFP journalists to cover the farewell and funeral ceremonies for Nelson Mandela. We were in the Soccer City stadium in Soweto, under a driving rain. I’d been there since the crack of dawn and when I took this picture, the memorial ceremony had already been going on for more than two hours.

From the podium, Obama had just qualified Mandela as a “giant of history who moved a nation towards justice." After his stirring eulogy, America’s first black president sat about 150 metres across from where I was set up. He was surrounded by other foreign dignitaries and I decided to follow his movements with the help of my 600 mm x 2 telephoto lens.

So Obama took his place amid these leaders who’d gathered from all corners of the globe. Among them was British Prime Minister David Cameron, as well as a woman who I wasn’t able to immediately identify. I later learned it was the Danish Prime Minister Helle Thorning Schmidt. I’m a German-Colombian based in India, so I don’t feel too bad I didn’t recognize her! At the time, I thought it must have been one of Obama’s many staffers.

Anyway, suddenly this woman pulled out her mobile phone and took a photo of herself smiling with Cameron and the US president. I captured the scene reflexively. All around me in the stadium, South Africans were dancing, singing and laughing to honour their departed leader. It was more like a carnival atmosphere, not at all morbid. The ceremony had already gone on for two hours and would last another two. The atmosphere was totally relaxed – I didn’t see anything shocking in my viewfinder, president of the US or not. We are in Africa.

(AFP Photo / Roberto Schmidt)

I later read on social media that Michelle Obama seemed to be rather peeved on seeing the Danish prime minister take the picture. But photos can lie. In reality, just a few seconds earlier the first lady was herself joking with those around her, Cameron and Schmidt included. Her stern look was captured by chance.

I took these photos totally spontaneously, without thinking about what impact they might have. At the time, I thought the world leaders were simply acting like human beings, like me and you. I doubt anyone could have remained totally stony faced for the duration of the ceremony, while tens of thousands of people were celebrating in the stadium. For me, the behaviour of these leaders in snapping a selfie seems perfectly natural. I see nothing to complain about, and probably would have done the same in their place. The AFP team worked hard to display the reaction that South African people had for the passing of someone they consider as a father. We moved about 500 pictures, trying to portray their true feelings, and this seemingly trivial image seems to have eclipsed much of this collective work.

(AFP Photo / Roberto Schmidt)

It was interesting to see politicians in a human light because usually when we see them it is in such a controlled environment. Maybe this would not be such an issue if we, as the press, would have more access to dignitaries and be able to show they are human as the rest of us.

I confess too that it makes me a little sad we are so obsessed with day-to-day trivialities, instead of things of true importance.

During Mandela's memorial service in Johannesburg. (AFP Photo / Roberto Schmidt)

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/mUJRsh5tRes/story01.htm Tyler Durden

JPY carry trades are not helping and stocks just keep testing lows and finding no new BTFATH-ers for now. This will come as a little surprise to those who have watched the saturated and less exuberant credit markets unable to join the party for the last 2 months.

Credit never bought it…

and all those NFP taper-is-good gains are gone…

as JPY carry is being unwopund (for now)…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TtoMS6JCU7U/story01.htm Tyler Durden

JPY carry trades are not helping and stocks just keep testing lows and finding no new BTFATH-ers for now. This will come as a little surprise to those who have watched the saturated and less exuberant credit markets unable to join the party for the last 2 months.

Credit never bought it…

and all those NFP taper-is-good gains are gone…

as JPY carry is being unwopund (for now)…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TtoMS6JCU7U/story01.htm Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The Python That Ate Your Job

We are already well into the "end of work."

The more accurate title would be "The Python (Script) That Ate Your Job." Python is a computer language whose core philosophy is summarized by "PEP 20 (The Zen of Python)", which includes aphorisms such as:

• Beautiful is better than ugly.
• Explicit is better than implicit.
• Simple is better than complex.
• Complex is better than complicated.
• Readability counts.

(source: Wikipedia)

As I understand it (from a non-programmer POV), Python enables rapid development of scripts that may not be optimized by some metrics but which work perfectly well in terms of solving a problem in a cost-effective manner.

(Programmers can be highly partisan, i.e. emotionally attached to their preferred language, so I am trying to be as non-partisan and careful as possible here to avoid arousing the ire of either Pythoneers or Python detractors. I am just an ignorant bystander; please don't shoot the piano player, etc.)

A senior manager at a small tech company recently related a story that illustrates 1) the power of Python (and other scripting languages) and 2) the changing nature of work:

The company had some time-consuming data analysis that needed to get done on a regular basis, and the manager was considering recruiting a (paid) intern to do the work. Instead, he spent four hours writing a Python script which did the work in a few minutes. He named the program "Intern."

This story is repeated thousands of times a day across millions of tasks. Virtually all of my self-employed friends use technology to enable one person to produce output that would have taken three people in the 1980s.

As management guru Peter Drucker noted, enterprises don't have profits, they only have expenses. If you are self-employed or own/manage a business, you will immediately grasp the profound truth of this insight.

If you can replace an expensive worker (and every employee is expensive nowadays, due to the high cost of labor and general overhead) with a Python script that can be crafted in a few hours, financial fact compels you to do so: your business has no profit, it only has expenses.

This dynamic is scale-invariant, meaning it is true of all organizations, from one-person businesses up to global corporations and entire nations. A non-profit group only has expenses, and so do churches, cities and nations. Once expenses exceed income, the organization goes bust.

Could I be replaced with a Python script? In some ways, yes: a script could be written that mined the thousands of entries and essays I've written for repeating words, phrases and themes, and the script would rehash the material into "new" entries.

But since the script isn't logging "experience" in the same way as a human does, the script would not be able to replicate dynamics such as changing one's mind or taking a new direction, although it could randomly generate such behaviors to mimic human development.

Would the script be "good enough" to attract readers? Perhaps; but attracting and keeping readers is not necessarily a problem-state that can be solved with data-mining and pattern matching, as readers seek not just novelty and expressive writing but insight. Any script that rehashed existing material would not be generating new insight; it would simply be repackaging previous insights.

For highly partisan blogs, this might well be "good enough," since partisan readers actually want to read the same rehashed material again and again: in effect, a script that repackaged "it's the Demopublican's fault" with new headlines and slightly different content would closely match the human content generator's output.

I have no doubt some clever programmers have already played around with generating rehashed content and posting it as a blog written by a human being, an artifice masked by an avatar ("Hi, my name is J.Q. Public and I write about politics."). It would almost amount to sport to generate a phony history and cobbled-together quirks to fill out the illusion of personhood.

(Some readers have even wondered if "Charles Hugh Smith" is such an avatar. The answer is no, because the history and quirks of "Charles Hugh Smith" are simply too implausible to be believable. Also, the cost of maintaining such a complicated avatar isn't worth the paltry income generated by the blog. What machine intelligence would be dumb enough to maintain this idiotically complicated enterprise for such a paltry return? Only a human would be compelled to do so.)

Could a robot and standardized scripts replace everything I can do with a Skil 77 wormdrive power saw? It could certainly do a great many repetitive tasks at a work bench, but it would not be able to do non-standardized, on-the-jobsite tasks such as cutting out the rotten sections of a wood window frame. The robot might be able to execute the cuts (presuming it was light enough and mobile enough to stand securely on a scaffold or slope), but it would need a human partner to program the cuts in the real world and in real time.

In other words, "work" is increasingly a partnership of humans and technology. If one's skills and experience (i.e. labor) can be replaced with a Python script, it will be replaced by a Python script. Organizations that fail to replace costly paid human labor with a script will have much higher costs than those organizations that replace paid labor with scripts.

The paid human labor that can't be replaced by a script will increasingly require the knowledge and skills needed to collaborate with technology as an essential work partner.

We are already well into the "end of work." Digital pythons have been eating jobs for some time now, and because organizations only have expenses, they will continue to do so indefinitely until the only paid jobs left are those that cannot be fully replaced by a script or a robot operating on standardized scripts.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5lhrj3ol6yc/story01.htm Tyler Durden

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The Python That Ate Your Job

We are already well into the "end of work."

The more accurate title would be "The Python (Script) That Ate Your Job." Python is a computer language whose core philosophy is summarized by "PEP 20 (The Zen of Python)", which includes aphorisms such as:

• Beautiful is better than ugly.
• Explicit is better than implicit.
• Simple is better than complex.
• Complex is better than complicated.
• Readability counts.

(source: Wikipedia)

As I understand it (from a non-programmer POV), Python enables rapid development of scripts that may not be optimized by some metrics but which work perfectly well in terms of solving a problem in a cost-effective manner.

(Programmers can be highly partisan, i.e. emotionally attached to their preferred language, so I am trying to be as non-partisan and careful as possible here to avoid arousing the ire of either Pythoneers or Python detractors. I am just an ignorant bystander; please don't shoot the piano player, etc.)

A senior manager at a small tech company recently related a story that illustrates 1) the power of Python (and other scripting languages) and 2) the changing nature of work:

The company had some time-consuming data analysis that needed to get done on a regular basis, and the manager was considering recruiting a (paid) intern to do the work. Instead, he spent four hours writing a Python script which did the work in a few minutes. He named the program "Intern."

This story is repeated thousands of times a day across millions of tasks. Virtually all of my self-employed friends use technology to enable one person to produce output that would have taken three people in the 1980s.

As management guru Peter Drucker noted, enterprises don't have profits, they only have expenses. If you are self-employed or own/manage a business, you will immediately grasp the profound truth of this insight.

If you can replace an expensive worker (and every employee is expensive nowadays, due to the high cost of labor and general overhead) with a Python script that can be crafted in a few hours, financial fact compels you to do so: your business has no profit, it only has expenses.

This dynamic is scale-invariant, meaning it is true of all organizations, from one-person businesses up to global corporations and entire nations. A non-profit group only has expenses, and so do churches, cities and nations. Once expenses exceed income, the organization goes bust.

Could I be replaced with a Python script? In some ways, yes: a script could be written that mined the thousands of entries and essays I've written for repeating words, phrases and themes, and the script would rehash the material into "new" entries.

But since the script isn't logging "experience" in the same way as a human does, the script would not be able to replicate dynamics such as changing one's mind or taking a new direction, although it could randomly generate such behaviors to mimic human development.

Would the script be "good enough" to attract readers? Perhaps; but attracting and keeping readers is not necessarily a problem-state that can be solved with data-mining and pattern matching, as readers seek not just novelty and expressive writing but insight. Any script that rehashed existing material would not be generating new insight; it would simply be repackaging previous insights.

For highly partisan blogs, this might well be "good enough," since partisan readers actually want to read the same rehashed material again and again: in effect, a script that repackaged "it's the Demopublican's fault" with new headlines and slightly different content would closely match the human content generator's output.

I have no doubt some clever programmers have already played around with generating rehashed content and posting it as a blog written by a human being, an artifice masked by an avatar ("Hi, my name is J.Q. Public and I write about politics."). It would almost amount to sport to generate a phony history and cobbled-together quirks to fill out the illusion of personhood.

(Some readers have even wondered if "Charles Hugh Smith" is such an avatar. The answer is no, because the history and quirks of "Charles Hugh Smith" are simply too implausible to be believable. Also, the cost of maintaining such a complicated avatar isn't worth the paltry income generated by the blog. What machine intelligence would be dumb enough to maintain this idiotically complicated enterprise for such a paltry return? Only a human would be compelled to do so.)

Could a robot and standardized scripts replace everything I can do with a Skil 77 wormdrive power saw? It could certainly do a great many repetitive tasks at a work bench, but it would not be able to do non-standardized, on-the-jobsite tasks such as cutting out the rotten sections of a wood window frame. The robot might be able to execute the cuts (presuming it was light enough and mobile enough to stand securely on a scaffold or slope), but it would need a human partner to program the cuts in the real world and in real time.

In other words, "work" is increasingly a partnership of humans and technology. If one's skills and experience (i.e. labor) can be replaced with a Python script, it will be replaced by a Python script. Organizations that fail to replace costly paid human labor with a script will have much higher costs than those organizations that replace paid labor with scripts.

The paid human labor that can't be replaced by a script will increasingly require the knowledge and skills needed to collaborate with technology as an essential work partner.

We are already well into the "end of work." Digital pythons have been eating jobs for some time now, and because organizations only have expenses, they will continue to do so indefinitely until the only paid jobs left are those that cannot be fully replaced by a script or a robot operating on standardized scripts.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5lhrj3ol6yc/story01.htm Tyler Durden