I am asserting that A)Bubbles exist independent of central banks(government intervention), how they react to asset bubbles definitely affects how the macro economy is effected by the bubble and its eventual popping, seehttp://onlinelibrary.wiley.com/doi/10.1111/j.1468-2362.2006.00032.x/full for an excellent article detailing the back and forth on this very issue. B) Bubbles are an artifact of imperfection in the exchange of information(in the academic sense of the word, information travels in a variety of mediums Capital is a form of information, demand is a form of information, etc) between buyers and sellers. C) Governments and central banks can either mitigate or exacerbate the effects of bubbles on their host economies. D)Bubbles are a fundamental aspect of our economies because demand is never going to be perfectly inelastic(the exact opposite of bubble), sometimes people just want to have their furbies. E) Whenever a Bubble occurs in an interconnected international economy it will have repercussions in any attached country. F) Growth rates significantly above statistically normative growth = bubble, bubble growth can lead to collapse below minimum required growth rate to keep up with population if not managed correctly. Bubble economics, can in theory although not proven yet, be harnessed to provide additional tax income to state and local municipalities to help build out the foundation to support the new growth, this almost never happens because that excess capital that could be harnessed gets eaten up by graft, corruption, and middle men.
I think a good example to illustrate A) is the dot com bubble of the 90s, which to be fair, was a combination of over speculation by the private market coupled with economic distortions caused by government investment in Silicon valley.The Dot-com bubble is a perfect example of what happens when state, local, and federal government do not step in to manage the bubble, people ultimately lose their jobs and the overall economy weakens. High-Tech Start-Ups and Industry Dynamics in Silicon Valley delves into the nitty gritty of what made Silicon valley such a success, and ruminates on the possibilities, that we all lived from 2007 till today.
Crash and reboot: Silicon Valley hightech employment and wages confirms what I just asserted.
What these three articles show is that bubbles occur when we grow too fast because we cannot expand and "fortify" at high rates and therefore a collapse is energetically required, from a physics standpoint. The systems entropy is too high and unstable, it has to devolve to a lower energy state, which to us looks like a bubble popping. Sillicon valley got way too much money and was trying to grow in too many different directions. No one forced people to invest in Silicon Valley but there was irrational exuberance and imperfect information flow. If the last investors had known that the money they were investing was essentially "fat", in that SV had already received more than it could statistically reliably invest with a solid return, they would not have made those investments, which would not have hurt SV, and maybe there would have not been a dot com bubble. Alas, perfect information exchange is not possible, and therefore regardless of whether or not there is government there will always be bubbles. Governments can only mitigate or exacerbate, and just like a gun is only a tool, government sucks, and is dangerous, when you give it too much power and/or when the people running it are incompetent, corrupt, or self absorbed. The same thing was true with the housing bubble, yes the central banks perpetuated it, and Congress made it so easy to be corrupt that if you weren't doing it you would lose your job to someone who was because the profit rates were incredible.
If you go to http://www.measuringworth.com/growth/index.php, and you compare the economic years 80-81, 81-82-83-84-84-85 you see what I am talking about. Extremely anemic growth early on, ty Carter for sucking at foreign relations, followed by Bubble growth from investments from overseas, followed by the required pop, over the whole decade we only avged 3.4ish percent growth, from 1989-1990 we only had 1.88% growth, when just 4 years earlier we were at 7%. What happened in between, the Japanese Housing Bubble http://en.wikipedia.org/wiki/Japanese_asset_price_bubble, who was heavily investing in the US during the 80s, the Japanese, they have a bubble crisis investment dries up and US growth drops.http://en.wikipedia.org/wiki/Japan%E2%80%93United_States_relations#1980s:_Rise_of_the_falcons
The US needs about 3.5% growth to keep up with population, when we get above that I posit that there is a bubble somewhere to be found, either in Housing, in Financial derivatives, in commodities, or in some other kind of assets.http://seekingalpha.com/article/203348-u-s-gdp-growth-rate-won-t-be-good-enough
There was a housing Bubble that popped just a few years back, if you look at us growth rates they on the face don't appear to match up, but when you add in all the building we did on credit you can see that the bubble was not in assets, or really in homes, but was in credit, and when that credit dried up our economy tanked and we shed jobs because we had not built out the foundation to support all of our credit financed growth. http://en.wikipedia.org/wiki/File:USDebt.png The main things that have changed from 1950 to now is that we tax business and the wealth significantly less, while spending more on defense contracts, bailouts to the GE's and GS's of the world, and to the increasing costs of health care for old people. The newest bubble is the College debt bubble, I wish I could get you good empirical sources for that but since the bubble hasn't popped yet the only sources avail are either behind pay walls or aren't reputable.
Saturday, February 4, 2012
Wednesday, February 1, 2012
Are you ready for the best smart phone commercial ever, watch the video and check out my commentary below.
This video was released right before the launch of the Iphone 4-S. The blogs were all a twitter about what features were going to be available, and Samsung had just released their SII unit and were looking to blunt the traditional boom accompianed by the release of a new Iphone unit. The add uses a variety of different persuasive techniques to convince its target audience, the traditional 18-35 year old market, people who can afford smart phones but haven't been indoctrinated into the Cult of Mac yet, or people who are fence sitters. It pokes fun at Apple by showing fans waiting in long lines, something that is normally a good thing, and flips it on its head by use of hidden fear, e.g what features will the new phone have and how will people know I have a new phone. The characters in the ad actually utter those words, which was received remarkably well. It was sending the message if you want to be cool, but not act like you are trying to be cool buy the Samsung Galaxy SII.
All of the actors in the ad are known unknowns, in that they represent some known character archetype. Whether its the pretentious barista, the hipster cult of mac guy, the savvy Asian, or the annoying blond. The ad is overflowing with humor and did an excellent job of displaying the strengths of the Samsung while simultaneously jumping on the bandwagon of Anti-IPhone ads that were on the internet. Another such "ad" is below, although this one is user generated. I have included this ad, because it goes to show how a company does not have to have a whole ad campaign on its own anymore, user generated ads are not only free but they can add to the viral nature of any ad campaign.
One of the subtler aspects of the commercial was that the only person who said the Samsung was a "great phone" was the savvy asian, and it is known that Americans think of Asians as more tech savvy than them. This as heavily relies on the association principle, up to this point people have associated coolness, creativity, and sophistication to those who use I-brand products. This ad attempts to turn that on its head by portraying Apples customers as pretentious followers who are just being lead by the nose to buy inferior products, whereas the savvy people already have a great device, they don't have to wait in line. This ad was not seen in its entirety on TV because of its length, but segments of it were shown, and it was heavily played on the Comedy Central website, if one was watching Colbert, Stewart, or South Park during the weeks before and after the Iphone release they were almost guaranteed to see this advert. Which is ideal seeing as most of the people who watch those shows online are guaranteed to be in the target demographic.
I included this ad because while it was not released by Samsung it was released at the same time and was part of the decentralized viral ad campaign centered around the release of the Iphone 4s. It too pokes fun at Apples customers and is vital to understanding why Samsung felt like it would be a good idea to release an ad like the one they did.
This final ad is included to show just how plugged in companies are becoming in terms of social media, below is a "you tube star" who is now doing commercials for Mobile Samsung Paris. The use of dubstep and finger tutting is designed to make customers feel like Samsung is a hip, modern brand, that understands what they want out of a tech company.
For the record, I am a total Samsung fan, although I do not own the SII.
Tuesday, May 17, 2011
A Little Augmented Reality Check From Metaio
A Little Augmented Reality Check From Metaio
While tablets today are big bulky and expensive we all know how the cycle works in a few years they will be lighter, faster, and hopefully flexible. Augmented reality will hopefully folllow a trend similar to the trend in video games of increasing the number of pixels rendered ever year along with better physics engines.
Sunday, May 15, 2011
Wikileaks: GMO conspiracy reaches highest levels of US Government | FriendsEAT.com
Wikileaks: GMO conspiracy reaches highest levels of US Government | FriendsEAT.com
While I am not against all GMOs Monsanto is easily one of the biggest enemies of humanity in the world. Their totalitarian control over crop from seed to harvest gives one an idea of how they will use their global leverage o ensure continued starvation and billions in profits for themselves. GMOs could be setting humanity free from the viscous cycle of agrarianism but instead it is being used to line the pockets of fat rich white men who didn't even do the science in the first place.
BBC News - Australian dies after 'planking' on balcony, police say
BBC News - Australian dies after 'planking' on balcony, police say
Thinning the heard, thinning the heard. Planking to me seems rather asinine and if people die all the better, too many humans as it is we don't need to be bogged down by this kind of stupidity. A planker today is a car surfer the next.
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