Mish's Global Economic Trend Analysis

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Driverless Car Attitudes: Who Wants Em? Societal Disruption Coming Over Robots? Posted: 24 Jun 2015 10:40 AM PDT In response to First Self-Driving Truck Hits the Road Already, Nevada License AU010 I received an email from reader Stephen who welcomes the day driverless cars take over. Stephen writes ... Hello Mish I am looking forward to being to just sit in my car, and read or take a nap.  Then again I am 60. When I was a teenager I loved driving. I liked the ability to get to where I wanted to go without having to get someone to take me. I also liked driving just for the fun of it. In contrast, when I talk to my teenage nieces and nephews they are not as passionate about driving as I was when I was 15 and 16. They would rather be able to text or play a video game while the car is getting them there. On the truck side I agree with you, but I see little written about the unloading and delivering part of the equation. Once the trunk arrives, it has to be unloaded. Also, I recently I bought a washer and dryer.  The company delivered it to my house, unpacked it outside,  brought it inside, up to the 2nd floor, hooked it up. What scares me about robotics in general is the trend leaves a significant portion of the population unemployed. If the economic underclass becomes too large, and I believe we are pretty close to that point right now, society may break down. We need to find ways to evolve our education system and other social systems, to prepare everyone for jobs that require flexibility and thinking. Everything else will become automated. Regards, Stephen Changing Attitudes I too, liked to drive, and still do. But most if not all of my 60ish friends would just assume not drive. Some won't drive at night because of night-vision problems. Others are nerve-wracked over traffic. Some others would rather read or relax. The little association I have with millennials suggests they would rather text or watch a movie than drive. Heck, some I know will text someone in the next seat up in the bus rather than strike up a conversation, whereas I have sent less than 20 text messages in my entire life. Anecdotes are not data, but it also appears to me that most aging boomers and millennials would in general be at least as happy not having to drive than to have to drive. Last Mile In regards to deliveries, I have written about the issue many times. It's the long-haul truck jobs that will vanish first. Local deliveries, especially those that involve heavy lifting will require a person. Eventually the driver will go away, even if the "lifter" stays. Local delivery jobs will go to the young and the strong, not the skilled driver. What Can Be Automated, Will Be Steven is correct. What can be automated, will be automated. I have discussed this as well. It is one of the big problems the Fed faces. All of this technology is very deflationary. Yet the Fed wants to force prices up. It's a very losing battle, as higher prices increase the desire of businesses to automate sooner rather than later. The cheap borrowing cost of money is an added incentive. Not All Doom and Gloom In spite of the above, it's not all doom and gloom on the jobs front. I am sure there will be another technology or energy breakthrough that will create jobs. Throughout history, that has always been the case. Horses gave way to cars, hand picking cotton to the cotton gin, candles to electricity, passenger trains to planes, etc. The internet created tens of millions of jobs. My fear is not that all jobs will vanish, but rather there is a major war over energy, jobs, or protectionist meddling before we get to that point. Fuel for Societal Disruption Central banks and their inane war on CPI deflation, untenable student debt, massive pension issues as boomers head to retirement, and rising income inequality (for which the Fed is also to blame), and increasing use of robots (before the next job wave begins) provide fuel for societal disruption. Warmongers in Congress itching for a military showdown with Russia and protectionists seeking a trade war with China could indeed provide the match. On the warmongering front, also consider Warmongering Jackass Proposes Forced Servitude by Millennial to Fight Isis. 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.

Germany Rejects Greek Offer; Syriza Mutiny Over Concessions Posted: 24 Jun 2015 07:20 AM PDT Déjà Vu All Over Again With a hat tip to Yogi Berra, the setup in Greece today is a case of déjà vu all over again. Prime Minister Alexis Tsipras' Syriza hardliners threaten mutiny because the party believes the prime minister made too many concessions. Meanwhile, the IMF does not like the Greek proposal because it is too dependent on tax hikes instead of spending cuts. Germany rejects the proposal outright. Syriza Mutiny Over Concessions The Financial Times reports Greece Under Pressure to Build Support. Greece's parliament will have only a few days to pass all the economic reforms pledged by Athens to unlock desperately needed bailout aid, putting intense pressure on Prime Minister Alexis Tsipras to build domestic political support for the concessions. Berlin has insisted on full and immediate legislative approval of measures that may be agreed at a meeting of eurozone finance ministers on Wednesday evening, even though officials now concede a deal may come too late for Athens to meet a €1.5bn debt repayment to the International Monetary Fund due on June 30. Greek authorities have begun preparations for a hasty and potentially rancorous parliamentary debate over the weekend amid growing signs that Mr Tsipras's new reform plan — which would be presented to eurozone leaders on Thursday — faces fierce resistance in Greece. A handful of more radical members of Mr Tsipras' governing Syriza party have already vowed to mutiny over the proposals, and thousands of pensioners took to the streets of Athens on Tuesday evening to decry the plans. Officials representing the creditors said in Brussels on Tuesday that a deal before Wednesday's finance ministers meeting was still far from assured. The IMF has raised concerns that Greece's proposal relies too heavily on new taxes on labour and capital, rather than on cuts in government spending. One official involved in the negotiations on Tuesday with Athens described the talks as an "uphill" struggle. Emmanuel Macron, the French economy minister, said on Wednesday that he supported the IMF's tough stance. "The IMF is exercising its right and is right to be demanding of Greece," he told CNN. Breakthrough Far Off as Deal Terms Rejected Bloomberg reports Germany Says Greece Breakthrough Far Off as Deal Terms Rejected. Germany downplayed the chances of an imminent deal with Greece as Prime Minister Alexis Tsipras's government rejected the latest terms set by creditors to unlock bailout aid. The downbeat tone from Berlin reinforced the brinkmanship at play as Tsipras met in Brussels Wednesday with the heads of the three creditor institutions: International Monetary Fund Managing Director Christine Lagarde, European Commission President Jean-Claude Juncker and European Central Bank President Mario Draghi. "Our impression is that there's still a long way to go," German Finance Ministry spokesman Martin Jaeger told reporters at a regular government press briefing in Berlin. Creditor institutions have made "exceptionally generous" concessions to the Greek government, and "it's now up to the Greek side to show some movement," he said. It's time for the adults in the room (are there any?) to simply admit the obvious: even if there is another deal, it cannot possibly hold. 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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