Mish's Global Economic Trend Analysis

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The Most Common Job in 29 States to Nearly Vanish in 10 Years; Know What That Job Is? Posted: 21 Jun 2015 07:38 PM PDT The NPR claims the most common job in 29 of 50 US states is truck driving. This seems a bit overboard, and depends on how jobs are categorized, but here is the chart. The above chart from NPR "Planet Money" report that says ... We used data from the Census Bureau, which has two catch-all categories: "managers not elsewhere classified" and "salespersons not elsewhere classified." Because those categories are broad and vague to the point of meaninglessness, we excluded them from our map. Self-Driving Trucks Will Hit Us Like Ton of Bricks Please consider Self-Driving Trucks Are Going to Hit Us Like a Human-Driven Truck. It should be clear at a glance just how dependent the American economy is on truck drivers. According to the American Trucker Association, there are 3.5 million professional truck drivers in the US, and an additional 5.2 million people employed within the truck-driving industry who don't drive the trucks. That's 8.7 million trucking-related jobs. One further important detail to consider is that truck drivers are well-paid. They provide a middle class income of about $40,000 per year. That's a higher income than just about half (46%) of all tax filers, including those of married households. They are also greatly comprised by those without college educations. Truck driving is just about the last job in the country to provide a solid middle class salary without requiring a post-secondary degree. Truckers are essentially the last remnant of an increasingly impoverished population once gainfully employed in manufacturing before those middle income jobs were mostly all shipped overseas. Short-Term Job Outlook of the American Trucker The trucking industry expects to see 21% more truck driving jobs by 2020. They also expect to see an increasing shortfall in drivers, with over 100,000 jobs open and unable to find drivers to fill them. Higher demand than supply of truckers also points to higher pay, so for at least the next five years, the future is looking great for truck drivers. The only thing that could put a damper on this would be if the demand for truck drivers were to say… drive off a sharp cliff. That cliff is the self-driving truck. So when will the process end? When will self-driving cars conquer our roads? Adoption Timeline According to Morgan Stanley, complete autonomous capability will be here by 2022, followed by massive market penetration by 2026 and the cars we know and love today then entirely extinct in another 20 years thereafter. Other Estimates Navigant Research: "By 2035, sales of autonomous vehicles will reach 95.4 million annually, representing 75% of all light-duty vehicle sales." IHS Automotive: "There should be nearly 54 million self-driving cars in use globally by 2035." ABI Research: "Half of new vehicles shipping in North America to have driverless, robotic capabilities by 2032." Nissan: "In 2020 we're talking more autonomous drive capability. It's going to be an evolutionary process and 2020 will be the first year to truly see some of these capabilities start to be introduced in the vehicle." I think the the timeline is off a bit in two ways. Technology change and adoption are happening at a breath-taking pace. Penetration will happen faster than most of the estimates above suggest. Truck hauling jobs will vanish faster than inner-city truck driving jobs.  At $40,000 a year, the incentive to replace truck drivers with software is massive. And it will happen. Not only that, but insurance costs will drop. Most truck accidents are caused by user error: Driving too fast, driving while tired, driving intoxicated, etc. Robots don't drink, don't get tired, won't drive unsafe to get to a destination faster, etc. My initial vision is that drivers may still be needed for inner-city driving (at least initially), but most long-haul operations will quickly vanish as soon as licensing is complete in most of the states. What About Taxis, Uber? Taxi and limo driving jobs will also vanish. Travis Kalanick, the CEO and founder of Uber, said at a conference last year that he'd replace human Uber drivers with a fleet of self-driving cars in a second. "You're not just paying for the car — you're paying for the other dude in the car," he said. "When there's no other dude in the car, the cost of taking an Uber anywhere becomes cheaper than owning a vehicle." That, he said, will "bring the cost below the cost of ownership for everybody, and then car ownership goes away." People keep emailing me about insurance. Many believe the cost of insurance will skyrocket. I believe accident rates will plunge, and insurance costs with it. So what happens to a lot of insurance salesmen? Claims investigators? As for car ownership, those who live in cities and seldom leave their city will have a huge incentive to dump their car. That too is a massive disruption. Think of the manufacturing jobs that will vanish. Then again, cars will be nearly entirely robot-made, so those jobs will have already vanished. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Goodbye Kiss Today? Posted: 21 Jun 2015 05:39 AM PDT Parties on both sides still talk as if a deal over Greece is possible, but how realistic is that? And yesterday, the ECB voted to continue ELA, but did so with an amount less than Greece requested. Last Minute Phone Talks This morning, Reuters reported EU's Juncker, Greek PM Tspiras Hold Telephone Talks. European Commission President Jean-Claude Juncker spoke to Greek Prime Minister Alexis Tsipras on Saturday and will speak again on Sunday to seek a solution to Athens' debt crisis, an EU official said on condition of anonymity. Over the weekend, senior officials have remained in close contact ahead of a meeting of finance ministers and euro zone leaders scheduled for Monday, the official said. Tomorrow, eurozone officials hold an emergency meeting to discuss Greece. However, France and Germany Insist Greece Needs to Table Offer Today. France and Germany have told Greece it must have an agreement on economic reform measures with the trio of bailout monitors finalised and delivered before a crucial leaders' summit between Athens and its creditors on Monday. With the Greek cabinet meeting on Sunday to consider compromise proposals, François Hollande and Angela Merkel both telephoned Alexis Tsipras, the prime minister, to remind him that he needed a "staff level" agreement with the European Commission, IMF and ECB ahead of the summit. If a deal is reached, the two leaders said the summit could start talking about the Greek debt and a third bailout. France is open to discussing debt relief and restructuring, Mr Hollande told Mr Tsipras, whose radical leftwing government won office in January setting Greece on a collision course with its creditors. The Greek cabinet was summoned to a meeting at Mr Tsipras' Maximos Mansion residence on Sunday morning for a last-ditch meeting to hash out the government's strategy. Ministers are expected to discuss how Mr Tsipras can bridge his two seemingly intractable electoral mandates: to end austerity and block further cuts in spending while also satisfying creditors' demands for reform to keep Greece in the eurozone. Yanis Varoufakis, Greece's finance minister, writing in German daily Frankfurter Allgemeine Zeitung, has said German chancellor Angela Merkel faces "a stark choice" ahead of the crucial summit of European leaders in Brussels on Monday. Ms Merkel could enter into "an honourable agreement with a government that opposes bailouts" and wants "a negotiated solution that ends the Greek crisis once and for all". The second option was to "heed the sirens" from her government, which he said were "encouraging her to jettison the only Greek government that is principled and which can carry the Greek people along the path of genuine reform." Mr Varoufakis said the Greek government would come to Brussels on Monday willing to compromise. but it would only compromise as long as the Syriza-led government was not asked to take on new loans "under conditions that offer little hope that Greece can pay back its debts". "The choice, I am very much afraid, is hers," he said. In a sign of the growing anxiety in Greece, savers withdrew more than €1.6bn in deposits on Friday, according to two banking sources, the largest withdrawal in one day since Greece's left-wing government took office in January. More than €6bn have left the system this week, and bankers fear the withdrawals could speed up when the banks reopen on Monday. Syriza supporters will rally in front of Parliament on Sunday evening to urge the government not to give in to creditors' demands. By stating willingness to discuss debt relief and restructuring, while Greece offered little, it should be clear which side is willing to bend more. However, Merkel's hands may be politically tied. A majority of Germans now favor Greece leaving the eurozone. Those still expecting Merkel to cave may be in for shock therapy tomorrow. It is Yanis Varoufakis, Greece's finance minister, who signaled goodbye intentions stating Greece would not take on more debt, with both France and Germany talking about a third bailout. This dance has gone on far too long already. A goodbye kiss is long overdue. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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