Posts tagged 'Technology'

Rise of the Bond villains

- Our economy needs investors like Mr Zorin. California welcomes him with open arms.
- May I quote you on that, Mr Howe?
- Certainly. Is there anything else I can tell the Financial Times?

The dialogue is from A View to a Kill, in which James Bond — a la Roger Moore — poses as an FT reporter “James Stock” to figure out whether tech billionaire Max Zorin is simply a savvy microchip entrepreneur or a megalomaniac eugenicist with a plan to takeover the world.

The Bond cannon provides a few other characters who, as we’ll explain below, no longer seem quite so fantastically fictional. Read more

Robots, jobs and TFL strikes

On a morning which saw London grind to a halt because of a two-day strike by Transport for London workers protesting the closure of ticket offices (that is, due to automation)…

FT Alphaville was invited to participate in a panel debate about the implications of technological progress on jobs and labour, organised and hosted by the think-tank Resolution Foundation.

(Though to be fair, the tube strike didn’t seem to impact attendance and almost all of us arrived on time.)

Chairing the event was Channel 4 News’ Faisal Islam. Joining yours truly among the panelists was economist and author Diane Coyle, of Enlightenment Economics, Alan Manning, Professor of Economics at LSE and Michael Osborne, machine learning expert and associate professor at Oxford University. Read more

Designed in California, taxed in never never land

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Squish puny humans, investment theme du jour

Bank of America Merrill Lynch strategist Michael Hartnet favours themes this year.

Theme number one: it doesn’t feel pity, or remorse, or fear. And it absolutely will not stop.

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Non-monetary effects of research evolution

Ever since Robert Gordon made his assertion that all the low hanging technological fruit has been picked, evidence to the contrary has been piling up.

It’s worth noting, first off, that Gordon’s paper was relatively backward looking. It arrived at its conclusions by taking trends prior to 2007 and projecting them forward, largely ignoring the 2008 crisis that occurred. It also measured innovation in terms of dollar denominated growth. Read more

It’s not finance, it’s Cy-fi

Nanex, the market analysts who like to create visual representations of the markets, have animated half a second of trading activity in Johnson & Johnson stock. The results are quite intoxicating to watch:

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Deep thoughts on civilisation from Jeremy “Hari Seldon” Grantham

If you submit to theoretical physicist Geoffrey West’s urban development theories, then you’ve probably aware of the idea that humanity is set to face a critical crunch point soon enough (if not already). And by crunch point, we mean — either humanity throws everything it’s got at speeding up technology to ensure its resource consumption-to-population footprint becomes manageable, or we wither away.

(The Roman Empire, by the way, is perhaps the best example of a civilisation which failed to make the next great technologically leap to the carbon age and did actually wither.) Read more

Counterintuitive insights that are only now making the mainstream now

We just saw this post from Pragmatic Capitalism’s Cullen Roche on the supply of assets.

It offers a nice chart showing net issuance of “safe” assets, from Citi’s research team:

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“Phish and dips,” or, How to write the AP tweet hacking story when you don’t really care

1.) Steal headline from Lorcan. On Twitter.

2.) Multiple choice test to decide your condescending lede!

Question: When a fake (hacked!) Associated Press tweet about a White House attack moves the stock market down, then it recovers really fast — but maybe not making anyone much money — this is a referendum on the credibility of:

a) Twitter

b) Associated Press

c) The stock market

d) How FT Alphaville makes a living

e) All of the above

f) None of the above, shut up and get off Twitter

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Skidelsky on robots and more leisure

Love him or loathe him, Robert Skidelsky’s prose always makes for a good read.

His latest offering comes by way of Project Syndicate and relates to the issue of robots and the rise of automation. To what degree are we really approaching a leisure society and how best to respond to the changes afoot? Read more

This is not 1994

Dario Perkins at Lombard Street Research has a great little note out on Tuesday arguing why it’s absolutely wrong to assume the current bond sell-off is in any shape or form a repeat of 1994.

As he notes (our emphasis): Read more

Why a “free” market changes everything

Something very significant may be happening to labour and the capital reallocation process.

And arguably it’s down to technology and crowd-sourcing.

But before you shout: “this is what Marx always said, Ricardo and the Luddites were well ahead of you on that one”, we would propose what we’re talking about is a complementary trend not one that necessarily validates or duplicates what the above have said perfectly. Read more

The FT Alphaville podcast, with Dylan Grice

Welcome to FT Alphaville’s extraordinarily infrequent podcast… (click through for the podcast link).

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The robot economy and the new rentier class

It seems more top-tier economists are coming around to the idea that robots and technology could be having a greater influence on the economy (and this crisis in particular) than previously appreciated. Paul Krugman being the latest.

But first a quick backgrounder on the debate so far (as tracked by us). Read more

Culled UBS traders replaced with algos

It’s bad enough finding out that you’ve been made redundant when your pass fails to let you in to the building. But finding out that you’ve been sacked and replaced by a computer (which has more or less made your skills redundant)? That’s even worse.

So spare a thought for David Gallers, former head of CDS index trading at UBS, who was let go last week, to be replaced by snazzy new algo. Read more

The geopolitics of computer trading

You can’t accuse Her Majesty’s Government’s Office of Science computer trading review of failing to think ahead…

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A time of hoarding and inflation fears, 1930s edition

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How technology is killing the Asian growth miracle

George Magnus of UBS has a 29-pager out on Monday questioning if the Asian miracle may finally be over? FT Alphaville is still poring through the details, but couldn’t wait to bring you a substantial chunk of the note which is dedicated to the role of technology and its impact on Asian market dynamics.

We’ve noted on more than one occasion that economists may be missing a trick when it comes to how technology is changing the global economy. More so, that developments like 3D printing, could even pose a black-swan risk for Asia in their own right. Read more

Nasdaq’d

The full Citigroup blast against Nasdaq’s handling of the Facebook IPO is well worth a read. (Big hat-tip to NYT Dealbook, click to enlarge)

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Redefining labour

This is the third installment in FT Alphaville’s “Beyond Scarcity” series, a somewhat radical look at the impact of technological progress and efficiency on the volume of goods and services being produced by the system, asking whether “abundance” could now be a key determinant of deflationary forces in the western world.

On top of this, we have considered the role played by “artificial scarcity”, whether imposed wittingly or unwittingly by industry participants as a counterweight to such deflation, and to what degree such measures could now be running into scalability issues. In short, whether there is a limit to how much artificial scarcity private organisations can impose to counteract deflationary forces of abundance, without experiencing diminishing returns. Read more

The parable of water

Presenting an economic journey in felt, looking at whether the system’s ails have more to do with an abundance of goods than a shortage of credit because of the system’s technological advances and efficiencies. Move ahead to slide 20 for a snapshot of where we *think* we are today.

1) The water source. Read more

Space opera, beyond finance edition

FT Alphaville spent a lot of last week hanging out at Lift12, a Geneva-based technology conference exploring the social implications of new technologies.

We were particularly drawn to the Beyond Finance session last Thursday, which tried to take a peek at how technology might change the world of banking and money in the years to come. Read more

BlackBerry email outage hits half of users

Research in Motion, the maker of BlackBerry smartphones, was battling to shore up its network on Wednesday as it emerged that an intermittent service outage preventing users accessing email had spread to 30m-40m people, half of all Blackberry subscribers worldwide, the FT reports. RIM confirmed the problems during a news conference and said its engineers were working night and day to resolve the issue. David Yach, RIM’s chief technology officer for software, said there was no evidence of hacking, adding that the problems were global because RIM had to restrict service everywhere due to a backlog of undelivered messages after a core network switch in a data centre in Slough outside London failed on Monday. Since then the three-day old technical problems have spread to users in the Americas, Europe, India, the Middle East and Africa – the biggest network failure to hit the Canadian company since it launched the BlackBerry service a decade ago.

Ericsson hit by Europe and India projects

Ericsson’s second-quarter profitability was hurt by contracts in Europe and India, losses at the Swedish telecoms equipment maker’s joint ventures, and higher-than-expected costs for a job reduction plan, the FT reports. Ericsson on Thursday reported revenue of SKr54.8bn ($8.54bn) for the three months to June 30, up 14 per cent compared with the same period last year. Net income rose 59 per cent to SKr3.2bn, fuelled by the sales growth. However, the closely watched gross profit margin was 37.8 per cent in the second quarter, down from 39 per cent one year ago. The deterioration was blamed on lower-margin mobile network contracts in India based on third generation wireless technology and infrastructure modernisation projects in Europe. More such European projects are expected in the second half of 2011, which could put further pressure on profitability.

US earnings and debt hopes propel rally

Global technology stocks were rebooting the rally in riskier assets after Apple joined IBM in delivering better than expected results, the FT reports. The more ebullient mood was also founded on hopes that signs of progress in US negotiations on raising the government debt ceiling sharply reduces the chances of a technical default by Washington – an event whose fallout investors have had difficulty extrapolating. In addition, stronger than forecast US housing data on Tuesday provided a morsel for growth optimists to chew on, while an easing of eurozone stresses was also providing cud for the bulls. The FTSE All-World index was up 0.5 per cent, with the FTSE Eurofirst 300 up 0.6 per cent as traders price in the extra gains from Wall Street’s 1.6 per cent advance overnight. S&P 500 futures pointed to Wall Street putting on another 0.2 per cent at the opening bell.

iPad 2 lifts Apple above forecasts

Apple beat Wall Street expectations with third-quarter revenues up 82 per cent and profits up 125 per cent year-on-year fuelled by demand for its iPad, iPhone and Mac products, the FT reports. The company said its record sales had been led by the iPad 2 and growing demand for its products in newer markets, such as China. Apple shares rose more than 5 per cent to $397.20 in after-hours trading in New York, despite the company suggesting that its fourth-quarter outlook would be weaker than expected. “We … have a future product transition that we’re not going to talk about today and [this] will impact our September quarter,” said Peter Oppenheimer, chief financial officer. Apple did not announce in June its usual annual update to the iPhone, leading to speculation that an iPhone 5 would be introduced in its September quarter. For more analyst reaction see FT Alphaville.

IBM lifts profit forecast after sales jump

IBM raised its earnings forecast for the year as it reported a 12 per cent surge in second-quarter revenues, surpassing Wall Street expectations, the FT reports. “In the second quarter, our long-term strategic investments in the company’s growth initiatives again helped drive strong revenue performance,” said Samuel Palmisano, IBM chief executive, on Monday. “Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth.” Net earnings rose 8 per cent to $3.7bn as the company reported $26.7bn in revenue, $1.35bn more than had been expected by analysts. IBM lifted its full-year earnings forecast to at least $13.25 a share, ahead of analysts’ average estimate of $13.21. The company’s shares rose 3 per cent in after-market trading to $178.30.

Cisco loses 6,500 jobs in drive to cut costs

Cisco Systems is to cut its workforce by 9 per cent as it struggles to improve its performance and refocus on its core network equipment operations, the FT reports. The Silicon Valley company said 6,500 employees would leave the company as part of a $1bn annual operating expenses reduction announced in May. This includes about 2,100 staff opting for voluntary early retirement.The cuts were fewer than anticipated, with sources indicating last week that 8,000-10,000 jobs could be cut from a global workforce that totalled 73,400 at the end of April. Its headcount is set to be reduced by another 5,000, however, after the sale of a factory in Mexico to the Taiwanese contract manufacturer Foxconn, also announced on Monday.

US tech fund taps into social media

A second US fund dedicated to investing in still-private social networking and other technology companies has launched, marking the return of an investment strategy not seen since the dotcom bubble of the late 1990s, the FT says. The new fund, Keating Capital, announced it has raised $86m in capital from investors in an initial public offering, and is set to begin trading on the Nasdaq exchange as a closed-end fund by the end of the year. Earlier this year, GSV Capital raised $50m, and is currently trading on the Nasdaq. Mashable has an infographic comparing the dotcom bubble with recent activity.

Oracle rules out M&A as too costly for now

The FT reports that sharp increases in share prices of young technology companies has led Oracle, Silicon Valley’s most acquisitive company, to turn its back temporarily on considering new deals, the company’s executives said on Thursday. “They are by and large not attractively priced right now and don’t make sense and we’re not doing them,” said Larry Ellison, chief executive, on a conference call to discuss the company’s latest earnings. “Anyone looks at the valuations today, and we don’t think they make any sense,” said Mr Ellison, who began a series of acquisitions nearly a decade ago that has left Oracle with a software business that tops IBM and is second only to Microsoft. Safra Catz, Oracle’s co-president and a former investment banker, added that prices of potential targets were “quite ridiculous”. The high price of acquisitions meant that Oracle had turned its sights inward for growth, for instance by boosting the number of sales people in its hardware division, said Mr Ellison.