I always find it fascinating that people keep bring up buggy whips but don’t bring up any evidence of it.
Since the invention of the automobile sales of horse tack has steady increased. Unfortunately it not broken down into buggy whips, ridding crops, etc. The number of horses has increased in the U.S. and the number of farriers has increased.
Of course, the working plow horse is now the “pet” dressage horse.
If you flip the math you realize that now the company could employee those 100 workers to run 1,250 robots to do the work of 2,500 workers - increasing productivity by 2,500%. Assuming the capitalist take 90% of the increased productivity as profits (IIRC, the long term trend is 30%) workers would only see their pay increase by 250%.
I call that a gain. So did our forefathers who underwent the above.
Living during a renaissance is a scary thing full of uncertainties – and in the short term people are going to get whacked by the upheaval. The answer is not to slow down change but find ways to mitigate the short term pain (training, unemployment insurance, etc.).
I was going to use Luddites as well – but to show the argument cuts both ways. The Luddites had invested decades into building up human and physical capital. You had middle aged people where there assists and productive were destroyed, basically knocking middle class professionals into poverty.
In the long run individuals found better things to do them to weave cloth. Society was better as a whole with the higher productive, but certain individuals were worse off.
Which for me is kind of the scary thing about this recession. It has been long with deep presentiment unemployment. When the economy does perk up we are going to have a lot of people with stale human capital who, historically speaking, have lower productivity and lower wages.
The reason why most teams fails is because of culture issues, not technically issues. The wrong person can destroy a team just as well as a incompetent boss.
I assume the poster’s upper management only hires talented people and respects the poster’s opinion. I don’t see where the poster said they had decision making power or a veto. I assume that their opinion will be consider along with other factors.
One of my worst job experiences was with a highly competent accountant. She managed 14 accountants and 1 tech person – myself. The expectations that we set up for each other were radically different and we would talk past each other for hours on end.
o.k. – we are talking about 2 different things. I am talking about the total supply of gold above ground. That is pretty constant. (but with a recent growth rate of above 1% a year – that surprised me)
Your chart shows a dip in gold after 1960 – that is the supply of gold is decreasing. It’s not because that would mean the supply of gold is evaporating into thin air.
You are talking about the amount of gold held by central banks. Before 1860 most money circulated either as gold coins or as paper money backed by a private bank that held gold reserves. After 1860 the governments got more active in issuing paper money backed by gold. As the economy grew the demand for money increased – for every new bill put in circulations gold had to be added to the reserve – hence the big increase. Then, after the 1960s, governments went off the gold supply. Why burry a bunch of metal in a vault to sit? So they dumped it.
Maybe you are trying to argue that bullion gold gets converted to industrial or jewelry. Well, if gold is currency then it does not matter what form it is in – gold is money. Also, little goes into industry. And I would argue that jewelry is a soft argument. A lot of people use gold jewelry as an alternative to a savings account.
Currently there is 165,000 metric tons above ground. Or 24 grams per person.
2,400 metric tons where mined on average for the past 5 years. This increased total world supply by 1.4%. (Which, I admit, is higher than I though.) I would assert that production is higher than average because high gold prices have stimulated demand. http://minerals.usgs.gov/ds/2005/140/ds140-gold.pdf
On the other hand, the world economy has been growing around 2% a year for the past 5 years. I would assert that was below average – year world recession. http://en.wikipedia.org/wiki/Gross_world_product
I would argue from a historical standpoint that a spread of 1% between GDP growth and gold is low –but let’s go with that. If currency had to be backed by gold, holding everything else equal, we would have a 1% deflation rate.
You provided a broken link - which is kind of false so I don't know what that means about your argument - but I think you missed the point on mine.
The money supply is tied to the amount of currency. (the simple version.) If currency grows faster then GNP you get inflation. If GNP grows faster you get deflation. In 1849 cheap gold was found in CA. causing global inflation. So, if the world economy were to grow 2 to 3% a year - exponentially - we would want the supply of gold to grow 2 to 3% a year exponentially IIRC, gold mining adds significantly less then 1% a year.
The problem with gold is that it's production is not tied to GNP. Nor is it value magically tied to GNP.
First, mathematically, everybody is using the wrong formula. (Geometric Mean)^2 = (Arithmetic Mean)^2 -(Standard Deviation)^2. She may have an average return of 3% but here geometric return (which is what you are calculating) is going to be less that. Only after we figure out the variance can we plus our number into the above formula. (And yes, I am making assumptions about the bell curve. In reality the fat tails would reduce the geometric return even more - but we have to start someplace.)
Second, from a practical viewpoint, these things don’t scale. HFT are trying to exploit inefficiencies in the system. Chasing nickels before they go down the drain while being chased by a steamroller. These inefficiencies tend to be subtle, small, and transient.
But yes, her story does stink of yesterday’s fish.
The founding fathers 1. distrusted parties and 2. distrusted the mobs of democracy. The idea was that people would choose wise men who would chose the president. This happened once with the election of Washington – and never again.
It was also supposed to give smaller states more weight and it sort of works for that.
It works less well when you have states that are persistently blue / red - which would have left them aghast.
US Congressional districts, IIRC, represented about 60k. Less, if you consider that voting was restricted to white land owning males. Local factors dominated.
Currently, they represent over 600k. Big districts imply campaigns via negative 30 second ads. A big recent change is the amount of outside money pouring into the primaries – which dilute local factors and encourages ideologies over pragmatists.
There is one critical difference between the examples you give and A123.
You referred to special breaks given to an industry as a whole. In theory anybody could set up a oil / agribusiness, etc. and enjoy those breaks. Dirty but open.
A123, on the other hand, was given preferential treatment that only they got. If I open a battery business tomorrow I may not enjoy the same break. Dirty and closed. That to me represents a greater danger because now awards are offered to who you are instead of what you are doing.
1. A POTS line. Our firm dropped that in favor of VOIP this month. This is a technical, not functional difference – so it can be ignored for this question. 2. A hunk of plastic (preferably Bakelite) on your desk which is a single function device. We still have those – and I kind of need it. (Combination of cheapness and having to monitor calls for regulatory purposes. VOIP on the laptop would cause compliance issues and bandwidth issues (maybe – or at least that the story we are getting from the network people))
If Finland’s tax code allows REITs then this maneuver will create long term value for the company. (I dislike REITs because the REIT tax code distorts the real economy - which might give you a hint where I am on the political / economic spectrum).
If Nokia is doing this for some quick cash and for some window dressing to its balance sheet – that is something else. That would reek of short term desperation – which implies long term hardship.
Pick apart the wiki article you posted and you will see things like:
Production approach: Net Value Added = Gross Value of output – Value of Intermediate Consumption. (where Gross value of output is revenue) or
Income approach:.Corporate profits Etc.
Here is an example.
In country Y Manufacture A has revenue of 45b and profits of 5b. Middle Man B distributes company’s A product. It has revues of 50b and profits of 5b.
In country Z Integrated company C produces and distributes 50b of product and has 10b of profits.
Question – Is countries Y GDP twice as big as country Z. No – because you nailed it on the head when you referred to real “economic activity”.
There are differences between corporate and GDP accounting. Investing is assets is a cost to companies reducing profits (short term, accounting wise). For GDP it is added in. But it is still more akin to prfoits then revenue.
Let me try to refine this question - Do you want to manufacture high quality phones or clone phones? I don’t know the answer.
Nokia is known for 1. Engineers who make really good hardware and 2. High quality manufacturing in context of supplying different models in different markets (think different languages, networking standards, supply chains, etc.).
Now, can Nokia charge a premium for it’s hardware over it’s rivals “beige box” android rivals? If the answer is yet then MSFT should keep Nokia intact. If not..
Tax Reasons: In the U.S. Real Estate Investment Trusts have favorable tax treatment – which is why the owner of the building and the occupier of the building is almost never the same, or for
Financial Engineering reasons: a one time transaction to raise cash and is good window dressing for the financial statements. Better than taking out a mortgage, but it’s only a one time, stop gap measure.
The score is partially based on who (and how many people) owns the physical switches. I would guess In China that would be the state.
Unlike Kenya or Aruba, who get low scores because they only have limited undersea cable fiber reaching them, and thus are liable to being physically taken out but 1 badly placed anchor.
No, it causes deflation.
Gold is basically fixed in quantity. Mining has little effect on the overall supply.
As the economy grows and the money supply is fixed, the value of money increases.
This shifts wealth to those people who hold cash, a non-productive asset.
This increase real interest rates, deterring investments in productive assets. It is a horrible, horrible thing.
See “A Monetary History of the United States “ by Milton Friedman
You would be (slightly) wrong. The quick and dirt version:
The richer you are the more kids you have.
The higher the cost of college the fewer kids you have.
Recently, cost of college > rich.
SS is a Pyramid scheme, not Ponzi. Please don’t confused people by mentioning Ponzi schemes and SS in the same sentence. While Ponzis are a sub class of Pyramids, Ponzs, by definition, cannot be sustained. This is not necessary true of Pyramid schemes.
SS is set up so you get more then you pull in. (Unless you are an African American Male, but that is a different story.) Hence the pyramid part. As long as the base grows (increasing population, increasing income growth, etc.) you’re fine.
And, well, all debt are IOUs. The difference is that Congress has put the SST “debt” into a special bucket all of its own. And, for budget purposes, does not consider it debt. Legally does this make a difference? I don’t know. But I do know it is poor accounting.
Well, yes and no. I pick no, but I will admit the issue has been deliberately muddied.
First, the fund does not invest in T-Bills – it holds special units. They look like treasury notes, they pay interest like treasury notes, and are backed by the full faith and credit of the US. The fund claims that they treasury notes. Congress, on the other hand, has passed laws saying it is not debt, is not part of the government debt, etc.
Second, one could question the logic of the Federal Government borrowing money from itself. It is a bookkeeping entry – promising to raise the money in the future from taxes. It is not a real asset, it has no economic value.
Slashdot Mirror
I always find it fascinating that people keep bring up buggy whips but don’t bring up any evidence of it.
Since the invention of the automobile sales of horse tack has steady increased. Unfortunately it not broken down into buggy whips, ridding crops, etc. The number of horses has increased in the U.S. and the number of farriers has increased.
Of course, the working plow horse is now the “pet” dressage horse.
If you flip the math you realize that now the company could employee those 100 workers to run 1,250 robots to do the work of 2,500 workers - increasing productivity by 2,500%. Assuming the capitalist take 90% of the increased productivity as profits (IIRC, the long term trend is 30%) workers would only see their pay increase by 250%.
I call that a gain. So did our forefathers who underwent the above.
Living during a renaissance is a scary thing full of uncertainties – and in the short term people are going to get whacked by the upheaval. The answer is not to slow down change but find ways to mitigate the short term pain (training, unemployment insurance, etc.).
I was going to use Luddites as well – but to show the argument cuts both ways. The Luddites had invested decades into building up human and physical capital. You had middle aged people where there assists and productive were destroyed, basically knocking middle class professionals into poverty.
In the long run individuals found better things to do them to weave cloth. Society was better as a whole with the higher productive, but certain individuals were worse off.
Which for me is kind of the scary thing about this recession. It has been long with deep presentiment unemployment. When the economy does perk up we are going to have a lot of people with stale human capital who, historically speaking, have lower productivity and lower wages.
The reason why most teams fails is because of culture issues, not technically issues. The wrong person can destroy a team just as well as a incompetent boss.
I assume the poster’s upper management only hires talented people and respects the poster’s opinion. I don’t see where the poster said they had decision making power or a veto. I assume that their opinion will be consider along with other factors.
One of my worst job experiences was with a highly competent accountant. She managed 14 accountants and 1 tech person – myself. The expectations that we set up for each other were radically different and we would talk past each other for hours on end.
I found this – which I think is fun:
http://www.numbersleuth.org/worlds-gold/
o.k. – we are talking about 2 different things. I am talking about the total supply of gold above ground. That is pretty constant. (but with a recent growth rate of above 1% a year – that surprised me)
Your chart shows a dip in gold after 1960 – that is the supply of gold is decreasing. It’s not because that would mean the supply of gold is evaporating into thin air.
You are talking about the amount of gold held by central banks. Before 1860 most money circulated either as gold coins or as paper money backed by a private bank that held gold reserves. After 1860 the governments got more active in issuing paper money backed by gold. As the economy grew the demand for money increased – for every new bill put in circulations gold had to be added to the reserve – hence the big increase. Then, after the 1960s, governments went off the gold supply. Why burry a bunch of metal in a vault to sit? So they dumped it.
Maybe you are trying to argue that bullion gold gets converted to industrial or jewelry. Well, if gold is currency then it does not matter what form it is in – gold is money. Also, little goes into industry. And I would argue that jewelry is a soft argument. A lot of people use gold jewelry as an alternative to a savings account.
Currently there is 165,000 metric tons above ground. Or 24 grams per person.
2,400 metric tons where mined on average for the past 5 years.
This increased total world supply by 1.4%. (Which, I admit, is higher than I though.) I would assert that production is higher than average because high gold prices have stimulated demand.
http://minerals.usgs.gov/ds/2005/140/ds140-gold.pdf
On the other hand, the world economy has been growing around 2% a year for the past 5 years. I would assert that was below average – year world recession.
http://en.wikipedia.org/wiki/Gross_world_product
I would argue from a historical standpoint that a spread of 1% between GDP growth and gold is low –but let’s go with that. If currency had to be backed by gold, holding everything else equal, we would have a 1% deflation rate.
You provided a broken link - which is kind of false so I don't know what that means about your argument - but I think you missed the point on mine.
The money supply is tied to the amount of currency. (the simple version.)
If currency grows faster then GNP you get inflation. If GNP grows faster you get deflation. In 1849 cheap gold was found in CA. causing global inflation.
So, if the world economy were to grow 2 to 3% a year - exponentially - we would want the supply of gold to grow 2 to 3% a year exponentially IIRC, gold mining adds significantly less then 1% a year.
The problem with gold is that it's production is not tied to GNP. Nor is it value magically tied to GNP.
2 points.
First, mathematically, everybody is using the wrong formula. (Geometric Mean)^2 = (Arithmetic Mean)^2 -(Standard Deviation)^2. She may have an average return of 3% but here geometric return (which is what you are calculating) is going to be less that. Only after we figure out the variance can we plus our number into the above formula. (And yes, I am making assumptions about the bell curve. In reality the fat tails would reduce the geometric return even more - but we have to start someplace.)
Second, from a practical viewpoint, these things don’t scale. HFT are trying to exploit inefficiencies in the system. Chasing nickels before they go down the drain while being chased by a steamroller. These inefficiencies tend to be subtle, small, and transient.
But yes, her story does stink of yesterday’s fish.
But then it’s subject to orbital decay. And if I learned one thing from ST:TOS, without power things in orbit deorbit fast.
The founding fathers 1. distrusted parties and 2. distrusted the mobs of democracy. The idea was that people would choose wise men who would chose the president. This happened once with the election of Washington – and never again.
It was also supposed to give smaller states more weight and it sort of works for that.
It works less well when you have states that are persistently blue / red - which would have left them aghast.
Well, yes and no. Focusing only on the House.
US Congressional districts, IIRC, represented about 60k. Less, if you consider that voting was restricted to white land owning males. Local factors dominated.
Currently, they represent over 600k. Big districts imply campaigns via negative 30 second ads. A big recent change is the amount of outside money pouring into the primaries – which dilute local factors and encourages ideologies over pragmatists.
I am o.k. with a think of the US Constitution.
There is one critical difference between the examples you give and A123.
You referred to special breaks given to an industry as a whole. In theory anybody could set up a oil / agribusiness, etc. and enjoy those breaks. Dirty but open.
A123, on the other hand, was given preferential treatment that only they got. If I open a battery business tomorrow I may not enjoy the same break. Dirty and closed. That to me represents a greater danger because now awards are offered to who you are instead of what you are doing.
A phone has 2 components.
1. A POTS line. Our firm dropped that in favor of VOIP this month. This is a technical, not functional difference – so it can be ignored for this question.
2. A hunk of plastic (preferably Bakelite) on your desk which is a single function device. We still have those – and I kind of need it. (Combination of cheapness and having to monitor calls for regulatory purposes. VOIP on the laptop would cause compliance issues and bandwidth issues (maybe – or at least that the story we are getting from the network people))
So don’t be too pedantic.
And scalable.
Telcoms allow a worldwide workforce.
Technology has been allowing to leverage up IT staff so you need fewer of them.
Two trends that offer feedback on themselves.
Er – I am not a jaded socialist.
If Finland’s tax code allows REITs then this maneuver will create long term value for the company. (I dislike REITs because the REIT tax code distorts the real economy - which might give you a hint where I am on the political / economic spectrum).
If Nokia is doing this for some quick cash and for some window dressing to its balance sheet – that is something else. That would reek of short term desperation – which implies long term hardship.
I am going to disagree with you.
Pick apart the wiki article you posted and you will see things like: .Corporate profits
Production approach: Net Value Added = Gross Value of output – Value of Intermediate Consumption. (where Gross value of output is revenue) or
Income approach:
Etc.
Here is an example.
In country Y
Manufacture A has revenue of 45b and profits of 5b.
Middle Man B distributes company’s A product. It has revues of 50b and profits of 5b.
In country Z
Integrated company C produces and distributes 50b of product and has 10b of profits.
Question – Is countries Y GDP twice as big as country Z. No – because you nailed it on the head when you referred to real “economic activity”.
There are differences between corporate and GDP accounting. Investing is assets is a cost to companies reducing profits (short term, accounting wise). For GDP it is added in. But it is still more akin to prfoits then revenue.
http://www.forbes.com/sites/timworstall/2011/06/28/gdp-for-a-country-is-not-the-same-thing-as-turnover-for-a-business/
Maybe for phones – but smartphones are the future – and it does not look pretty for Nokia.
http://www.economist.com/blogs/graphicdetail/2012/09/daily-chart-6
Let me try to refine this question - Do you want to manufacture high quality phones or clone phones? I don’t know the answer.
Nokia is known for 1. Engineers who make really good hardware and 2. High quality manufacturing in context of supplying different models in different markets (think different languages, networking standards, supply chains, etc.).
Now, can Nokia charge a premium for it’s hardware over it’s rivals “beige box” android rivals? If the answer is yet then MSFT should keep Nokia intact. If not..
GDP is more akin to profit then to revenue. Apple's net profit was 47b in 2012, or about 1/4 of Finland. We should compare apples to Apple.
I wonder if they are doing this for
Tax Reasons: In the U.S. Real Estate Investment Trusts have favorable tax treatment – which is why the owner of the building and the occupier of the building is almost never the same, or for
Financial Engineering reasons: a one time transaction to raise cash and is good window dressing for the financial statements. Better than taking out a mortgage, but it’s only a one time, stop gap measure.
The score is partially based on who (and how many people) owns the physical switches. I would guess In China that would be the state.
Unlike Kenya or Aruba, who get low scores because they only have limited undersea cable fiber reaching them, and thus are liable to being physically taken out but 1 badly placed anchor.
No, it causes deflation.
Gold is basically fixed in quantity. Mining has little effect on the overall supply.
As the economy grows and the money supply is fixed, the value of money increases.
This shifts wealth to those people who hold cash, a non-productive asset.
This increase real interest rates, deterring investments in productive assets.
It is a horrible, horrible thing.
See “A Monetary History of the United States “ by Milton Friedman
You would be (slightly) wrong. The quick and dirt version:
The richer you are the more kids you have.
The higher the cost of college the fewer kids you have.
Recently, cost of college > rich.
Long version: http://www.economist.com/node/21561112
SS is a Pyramid scheme, not Ponzi. Please don’t confused people by mentioning Ponzi schemes and SS in the same sentence. While Ponzis are a sub class of Pyramids, Ponzs, by definition, cannot be sustained. This is not necessary true of Pyramid schemes.
SS is set up so you get more then you pull in. (Unless you are an African American Male, but that is a different story.) Hence the pyramid part. As long as the base grows (increasing population, increasing income growth, etc.) you’re fine.
http://en.wikipedia.org/wiki/Pyramid_scheme
I think they pay interest - about 2.4%
Rate: http://www.ssa.gov/OACT/ProgData/newIssueRates.html
Formula: http://www.ssa.gov/OACT/ProgData/fundFAQ.html#n3
And, well, all debt are IOUs. The difference is that Congress has put the SST “debt” into a special bucket all of its own. And, for budget purposes, does not consider it debt. Legally does this make a difference? I don’t know. But I do know it is poor accounting.
Well, yes and no. I pick no, but I will admit the issue has been deliberately muddied.
First, the fund does not invest in T-Bills – it holds special units. They look like treasury notes, they pay interest like treasury notes, and are backed by the full faith and credit of the US. The fund claims that they treasury notes. Congress, on the other hand, has passed laws saying it is not debt, is not part of the government debt, etc.
Second, one could question the logic of the Federal Government borrowing money from itself. It is a bookkeeping entry – promising to raise the money in the future from taxes. It is not a real asset, it has no economic value.
So, quakes like a duck but by law is not one.