May 17, 2012

Verizon to kill unlimited data plans for existing subscribers | Mobile - CNET News

All good things must come to an end. There is no free lunch... at least not forever, anyway. Verizon also announced 4G LTE availability in my service area today so it's time to upgrade my phone to $(not a typo!)G soon.

"Verizon issued this statement on Thursday morning (5/17/12):
As we have stated publicly, Verizon Wireless has been re-evaluating its data pricing structure for some time. Customers have told us that they want to share data, similar to how they share minutes today. We are working on plans to provide customers with that option later this year.
We will share specific details of the plans and any related policy changes well in advance of their introduction, so customers will have time to evaluate their choices and make the best decisions for their wireless service. It is our goal and commitment to continue to provide customers with the same high value service they have come to expect from Verizon Wireless."

May 13, 2012

World Debt and GDP - Unsustainable

This is the chart I have been looking for.  Sorry, but the axis labels are not part of the graphic file. I have described them below. Thanks to Hayman Capital Management, LLC and Kyle Bass, via my dentist, for the lead to finally find it. Here is a comparison of the world's total  debt to GDP .

The dire conclusion is that the world's debt has grown at an 11% annual rate in these 9 years from $80 trillion to $220 trillion while the total world's GDP has grown only at a rate of ~4%. This is unsustainable and Bass' conclusion (in late 2011) is that hard defaults are imminent. See the full report and analysis here.

Blue = Public Debt Securities
Red = Private Debt Securities
Green = Bank Assets
Purple Line = Debt/GDP
The left axis is Total Global Debt in $Trillions from 0 at the bottom to $220 Trillion at the top ordinate. The columns are the years 2002 to 2010. The right axis is the Global Debt/GDP Ratio with the bottom axis at 240% to the top at 350%

May 10, 2012

Facebook's IPO - What to do?

Will 'irrational exuberance' drive up the price of Facebook shares at its IPO only to fall back soon after? Many rational folks caution this may be the case, but I'm betting many of FB's 900 million users will want a piece of the action on opening day. I'm not one of them.
From The Economist: "Investors who buy shares in the IPO will also have to accept that Mr Zuckerberg will continue to control more than 50% of the voting rights. “One person owning so much of a potential blue-chip company is more or less unheard of,” says Debarshi Nandy, a professor at Brandeis International Business School. Other tech firms, such as Google, have flourished under the tight control of small groups of founders, and Mr Zuckerberg shows every sign of maturing into an exceptional technology leader. But if something were to go badly wrong at Facebook in future, its shareholders will be able to do little more than give him a big thumbs down."

Quick Reference for Strands of Islam

Thanks to The Economist for this chart. Click here for the Economist story.

Vt homeowners work to help Lake Champlain - WCAX.COM Local Vermont News, Weather and Sports-

Vt homeowners work to help Lake Champlain - WCAX.COM Local Vermont News, Weather and Sports-

Our neighbor, Craig, and LCI folks discussing the of control stormwater runoff to keep pollutants out of the lake. Also includes a quick shot of our house.

May 7, 2012

Found this chart on Barry Ritholz's blog who reprinted analysis work done by Chris Turner to rebut some opinions and statements in April by Paul Krugman, who favors yet more government deficit spending. Turner's full analysis is here at the Ritholz blog.

My bottom line: Government spending has been out of control since 1978 and Congress is to blame. It's easier to target Presidents, but Congress is the real culprit. They refuse to make the hard choices and persuade the American people of their necessity. Instead, they do everything possible to retain/gain political power rather than address the problems.

The record of the last 4 years is crystal clear to me. The massive stimulus spending triggered by the near meltdown of the economy in 2008 caused by a combination of extraordinary risky behavior by Wall Street and failed government policies and regulation has failed to resolve the economic doldrums while at the same time creating massive and unsustainable debt. This debt will likely be resolved by devaluing the currency in the future with massive consequences.  It cannot possibly be paid off even by our great-great grandchildren.

Many Competing Paths on the Road to a Phone Wallet -

With the rapid uptake of smartphones I'm surprised their use as payment devices has not been quicker. The price of new merchant terminals is higher so retailers have little incentive to upgrade. The credit card companies are now accelerating the switch by  off-loading fraud responsibilities to the merchants not using the new terminals.

Android in advanced smartphones such as Samsung's Galaxy Nexus line support NFC (Near Field Communications),  now it seems merchant terminals will be NFC capable in the next 5 years according to this NY times story.  This method of payment makes a lot of sense rather than carrying a bunch of plastic in your wallet.

The interim competition will be from Square and PayPal who furnish their own smartphone card reader devices free to individuals and small businesses. I use Square infrequently for business and non-profit use. I find it easy, and convenient.

 "Merchants are facing heavy pressure to upgrade their payment terminals to accept smart cards. Over the last several months, Visa, Discover and MasterCard have said that merchants that cannot accept these cards will be liable for any losses owing to fraud.
“Everybody is going to be upgrading,” said Jennifer Miles, an executive vice president at VeriFone, which provides payment terminals to most merchants in the United States.
While updating the terminals for smart cards, VeriFone also plans to upgrade for smartphone wallets, providing the capability for near-field communication, the technology used by the Google and Isis wallets, the two biggest smartphone wallet projects."

May 6, 2012

April 2012 Employment Information - Grim News

[Hat tip to John Mauldin/Barry Ritholz for this information quoting yet another source,  Philippa Dunne & Doug Henwood of The Liscio Report (]

Jobs, the fodder for much political rhetoric in this campaign season, are not growing and we have little evidence of a sustained economic recovery.  Too many people are not in the labor force.

I believe that we are a long way from creating enough good paying jobs with a supply of people qualified to take them. Capital investments in technology will continue to substitute for labor for the foreseeable future, IMHO.

"* The longer-term picture of labor force withdrawal is kind of shocking. Total household employment is down by 4.4 million since the Great Recession began in December 2007, and the number of unemployed is up by 4.9 million. The civilian population is up 9.6 million – but the labor force is up just 447,000. The number classed as not in the labor force is up by 9.2 million – and those not in the labor force and wanting a job is up 1.7 million. In other words, just 5% of the increase in the adult population over the last 4 1/3 years has found its way into employment; the other 95% are not in the labor force.

* The unemployment rate fell by 0.1 point to 8.1%, its lowest level in more than three years. The number of unemployed fell by 173,000 – but the labor force shrank by almost the same amount, 169,000.

Without the labor force shrinkage, the unemployment rate probably would have been unchanged. Within the unemployed, the number of job losers fell – but so did the number of re-entrants and voluntary leavers, suggesting that the increased confidence we saw through those indicators in recent months may be dissipating. With the quit rate down, and the long-term unemployed dropping out of the labor force, the mid-ranges of unemployment duration (from 5-26 weeks) saw an increase, as the extreme short- and long-term durations fell."