Mish's Global Economic Trend Analysis |
- "UberCab" vs. Al Gore's $90 Trillion Plan to Rid World of Cars: Uber CEO Asks Tesla for 500,000 Autonomous Cars in 2020; Peak Cars?
- Always Another "Last Chance", Until There Isn't; Myth of the Open Door; Last Chance for Whom?
- 940 Chinese Firms Halt Trading; China Allows Houses as Margin, Bans Use of Term "Equity Disaster"; Two Rules, Two Questions
| Posted: 07 Jul 2015 05:50 PM PDT A few days ago I received an email from yet another naysayer telling me that I was wrong about self-driving cars and we would not see them in his lifetime. I don't recall precisely how I answered, but it was along the lines of "Are you planning on dying in five years?" "UberCab" Coming Today I received an email from Richard, a more enlightened reader who writes ... Hello Mish,Uber CEO Wants 500,000 Autonomous Cars In 2020 Richard emailed a link to the Green Car Reports article Uber CEO To Tesla: Sell Me Half A Million Autonomous Electric Cars In 2020. Tesla Motors is one of several automakers planning to put a self-driving car on sale sometime in the next few years, and it already seems to have at least one big fan.Fact or Fantasy? Green Car Reports linked to a Forbes article in which Five Top VCs Predict The Future. The CEOs were Jenny Lee of GGV Capital, Steve Jurvetson of Draper Fisher Jurvetson, Rebecca Lynn of Canvas Venture Fund, Bill Gurley of Benchmark Partners and Shervin Pishevar of Sherpa Ventures. Two of the 10 CEO predictions were about cars. 5. End of the Auto Nation - Bill GurleyFact or Fantasy? Whether or not Tesla builds a half-million self-driving cars for Uber is not the point. Nor is a precise date of 2020 important. What's important is the trend. And that trend is both fast and unmistakable. Self-driving cars are coming, far sooner than most predictions suggest. And they will be far safer, with more features. Drivers Not Wanted The need for taxi driver, limo drivers, bus drivers, train drivers, and long-haul truck drivers will nearly vanish within 10 years, and five or six would not surprise me at all. The pace of technological advancement is breathtaking. Uber Banned As an important side note, Uber is banned in so many places I lost track. At one point I was accumulating all the places the company was banned. BusinessInsider reports Here's Everywhere Uber is Banned Around the World, then goes on to ask "Will Uber's $40 billion valuation be enough to cover its legal fees?"  That map and valuation is as of April 8, 2015. Since then it has been banned in more places. Here is a link to a Google search for "Uber Banned". As is often the case, France is on the forefront of idiotic reactions to technology to preserve over-paying and the French way of life. Uber in France Two days ago ComputerWorld reported Uber throws in the towel in battle with French taxi drivers. Uber Technologies is suspending its UberPop service in France, after a bitter fight with taxi drivers who say the service breaks the law.The Market, Not Politicians, Rule Inquiring minds may be wondering "How can Uber exist with political forces aligned against it?" The answer is simple: Uber provides a service that millions of people want! I receive emails all the time about Uber being banned, about drivers being unresponsive, about drivers not knowing where they are going, and of course about the idiotic reactions in France. But as long as people want Uber, it will not go away. And by 2020 (more or less), there will not be any discourteous Uber drivers, bad drivers, or unresponsive drivers because there will not be any Uber drivers at all. Al Gore to the rescue, NOT. Al Gore's $90 Trillion Plan to Rid Cities of Cars As preposterous as it may seem, Al Gore has a Plan to Spend $90 Trillion to Get Rid of Cars in Cities. "Former Vice President Al Gore and Mexican President Felipe Calderon proposed a $90 trillion plan to redesign every city on earth so that motor vehicles would become obsolete due to more dense populations." Never underestimate the stupidity of politicians and their ridiculously expensive solutions to non-problems that the free market will take care of on its own. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Always Another "Last Chance", Until There Isn't; Myth of the Open Door; Last Chance for Whom? Posted: 07 Jul 2015 02:39 PM PDT For at least a week I have seen numerous headlines and articles purportedly offering Greece a "last chance". We saw the same headlines before both of the prior Greek bailouts. Thus, and in spite of the fact we are weeks past the alleged midnight expiration of a deal, it's no surprise to see this headline today: Greece Faces Last Chance to Stay in Euro as Cash Runs Out. Greek Prime Minister Alexis Tsipras launched a desperate bid to win fresh aid from skeptical creditors at an emergency euro zone summit on Tuesday, before his country's banks run out of money.New Offer Coming Greece was given a "last chance" to produce an offer this morning to eurozone officials. To the surprise of eurozone leaders, Greece showed up without a proposal. Nonetheless, Greece poised to offer new proposal for third bailout. Greek negotiators stunned some eurozone finance ministers by arriving at their meeting without a revised economic reform proposal.Myth of the Open Door Check out that last paragraph. The door is open, but for what? Also note that Merkel said "There is still no basis for negotiations". What kind of door is that? Clearly, the only open door is for complete capitulation by Greece, and then some. Eurozone ministers now want additional reforms from Greece. Until Greece defaults on the ECB, this will be the state of affairs. Eurozone Exposure  Source of the table is Barclays, via email. I have no link. Upon default, Germany will learn that its portion of the bill is about €92 billion, France €70 billion, Spain €42 billion, and Italy €62 billion. Those numbers are from end of April and are undoubtedly higher today thanks to Target2 and cash under the mattress liabilities of banks. Where is Spain going to come up with €42 billion or Italy €62 billion? Questions Abound
Last Chance for Whom? Looking at the above numbers, I have to ask, precisely: Who is the "last chance" really for? The answer to that question explains why there has been "last chance" after "last chance" after "last chance". Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Posted: 07 Jul 2015 11:00 AM PDT Two Rules
Central banks globally have blown the biggest bubble ever in the wake of the 2008 crash. We have only just begun to see the carnage that is coming. That carnage started in China and it's going to spread. Two Questions
The two pertinent questions now are "How fast?" and "Where next?" I don't have the answer to those questions. Nor does anyone else. What I do know is attempts to stop bubbles from bursting don't work. Indeed, they only make matters worse. China's Market and Policy Timeline Bloomberg has an interesting graph of China's Market and Policy Timeline.  click on chart for sharper image In an absurd attempt to maintain GDP Growth estimates that no one in their right mind believes possible, here are some key actions that China took. Key China Actions
My favorite bullet point is number 5, March 31: Survey shows average investor in rally did not finish high school. 940 Chinese Firms Halt Trading The Financial Times reports Stocks Fall Despite Stabilization Efforts Hundreds of Chinese companies have halted trading in their shares as Beijing struggles to insulate the economy from the country's steepest equity decline in more than two decades.China Bans Use of Term "Equity Disaster" On the absurd theory that if you don't talk about it, the problem does not exist, China's sensors stepped into the act. "One local reporter, who did not want to be named, said the government had banned local media from using the terms 'equity disaster' and 'rescue the market' in their reports on the stock market." In spite of this plunge, the Shenzhen index is still up about 36 per cent for the year. China Allows Houses as Margin Margin speculation and loose money to spur growth is what's behind the bubble, but that does not stop idiot (no milder word will suffice) regulators from trying to stimulate margin. Fortune has the details in China's Big, Misguided Stock Market Gamble. The rout in China's frothy stock markets since mid-June has been painful, to say the least. Between its peak on June 12 and July 2, the Shanghai Composite Index, which includes China's largest companies, dropped 28%, wiping out $2.4 trillion in paper wealth.Effort to Prevent Losses Must Fail Resistance is futile. Regardless of efforts taken, loss prevention must fail. The explanation is simple: The losses have already occurred, they simply have not been fully realized. The same applies to Chinese GDP, purportedly growing at 7-10% for decades. High growth in emerging markets for a few years is reasonable, but not decades on end. Building entire cities where no one lives, malls where no one shops, trains that no one uses all add to GDP because of the ridiculous definition that says all government spending adds to GDP. Factor in malinvestment, future write-downs, pollution cleanup costs, etc., and the Chinese economy is hardly growing at all. Coupled with loose money, those are the conditions in which bubbles form. Global Equity Day-of-Reckoning Coming Courtesy of the Fed and central bankers in general, a global equity day-of-reckoning is coming, and very few even see it. In spite of all the messages you hear that "stocks are cheap", the fact remains stocks are not cheap. Central banks have still not admitted their role in the Great Financial Crisis, and they have done it again. It's too late to stop the carnage because the bubbles have already been blown. The open questions are as I stated at the top: "How Fast?" and "Where Next?" No one has those answers, but huge pain is coming. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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