Oddly Relevant Dec-13-2012

Ray Dalio's full discussion at Dealbook conference: Overall quite bearish: yield can't go down anymore, austerity is coming, economy is running out of steam, and QE is losing its efficacy. He expects the rates to turn in late 2013, and sees a slowdown with very little room to maneuver. [Note: While Bernanke sees nothing until mid 2015. Someone is going to be very wrong]...Source: http://www.livestream.com/dealbook?utm_source=lsplayer&utm_medium=embed&utm_campaign=footerlinks 

Data scientists take byte out of Mad Men: A new generation of executives, armed with millions of terabytes of data, are taking over today’s advertising world. They are schooled in creating sophisticated automated systems for buying and selling ads, searching for patterns in the data to tell stories and tapping algorithms to evaluate the effectiveness of marketing. The rise of online ad exchanges, which operate much like stock trading platforms, means that marketers can now buy ads based on the profile of the person who sees the ad, rather than the site where it appears. [Note: a good scenario where the result drives the variables, and one must be ahead of the curve to reap the benefits]...Source: http://www.ft.com/intl/cms/s/0/db8d250e-4279-11e2-979e-00144feabdc0.html#axzz2EzGtWP5X 

17 Things From Reading The Economist’s “The World in 2013” Issue: not me; but it includes: (1) Japan has set a specific limit to citizens’ waistlines. If workers do not slim down, their employers face fines; (2) Barack Obama’s first inauguration was festooned with hope and change. His second, alas, will be freighted with inertia and foreboding; (3) They predict that Fidel Castro will die in 2013; (4) The economists expect Indonesia to almost certainly grow faster than India in 2013 for the first time since the Asian financial crisis of the late 1990s. [Note: More forecasts please, this is quite entertaining]...Source: http://6thfloor.blogs.nytimes.com/2012/12/12/17-things-i-learned-from-reading-every-last-word-of-the-economists-the-world-in-2013-issue/?smid=tw-share 

Can Foxconn keep growing and improving its margins? Foxconn employs 1.4 mm people on 28 campuses and had enjoyed spectacular growth in the past decade. Perhaps more stirkingly, however, is that it believes it can still double its size, since demography (drop-off of labor supply) is strongly against it, and even moving to inner mainland wouldn't help. margins. Here's the CEO's plans: (1) Move upstream like buying Sharp, (2) push downstream by using the firm's supply-chain muscle to help its branded customers promote their products. [Note: The firm is a beneficiary of technological improvement, so I'm at least neutral at this point]...Source: http://www.economist.com/news/business/21568384-can-foxconn-worlds-largest-contract-manufacturer-keep-growing-and-improve-its-margins-now 

America's demographic squeeze:  On December 12th the Census Bureau reported that America’s projected population would rise 27% to 400m by 2050. That’s roughly 9% smaller than it projected for that year back in 2008 (see chart). Those 65 and over will grow to 22% of the population by 2060 from 14% now, while the working-age population, those aged 18 to 64, slips to 57% from 63%. That implies the ratio of retirees to workers will rise a bit faster than previously projected. The country will also become steadily more diverse as the non-hispanic white population slips to 43% in 2060 from 63% now. America will become “majority-minority” in 2043, a year later than projected back in 2008. [Note: Raise the eligibility age for Social Security and Medicare, as well as allowing more immigration]...Source: http://www.economist.com/blogs/democracyinamerica/2012/12/america%E2%80%99s-demographic-squeeze