Tuesday, January 8, 2013

Oddly Relevant Jan-8-2013


Subways are spreading fast: In China mostly, while London metro’s 2bn pound revenue barely covered running costs of 2.2 bn pound. The biggest networks are now in Beijing and Shanghai (442 km and 423 km respectively), and China shows no signs of stopping. What’s more, per Roland Berger, a consultancy, the world market of railway has been growing at 3.2% through downturn and is set to grow at around 2.7% a year until 2017. [Note: good news for Bombardier, Siemens, and Alstom; still a tough business to run, but how can the not profit?]…Source: http://www.economist.com/news/business/21569059-subways-are-spreading-fast-going-underground

5 ETF Megatrends of 2013: (1) More proprietary indices from bigger ETF firms, (2) mutual fund providers enter the ETF market en masse, applying their proprietary methods; (3) More actively managed funds; (4) fiduciaries running ETF retirement plans; and (5) sharp fee cuts in ETF expense ratios continues. Also, we might be seeing ETF in 401(k) plans. [Note: ETFs acting more like vehicles of strategies, interesting]…Source: http://www.advisorone.com/2013/01/07/5-etf-megatrends-for-2013?page=1

2nd year of limbo for (some) quant funds: after attracting $108.2 bn since the end of 2008, quant funds had been disappointing. According to the Newedge CTA Trend Sub-Index, which tracks the performance of the largest computer-driven, or quant funds, fell 3.4%last year after a 7.9% decline in 2011. Trend prediction via technical analysis fueled by Ph.D. level stats and math somehow doesn’t work this time. [Note: I wish for their success, for such will make the market more inefficient and volatile—more room for our profit]…Source: http://www.bloomberg.com/news/2013-01-08/london-s-quantitative-hedge-funds-report-second-year-of-losses.html

Paradox of our era: Tech progress enlarges the pie but makes many worse off: While 60 years ago, the income of men between 45 and 54 beat out that of 25- to 34-year-old men by 4 percent, today the gap has grown to 41 percent. Before you scream conditional bias, it’s true that less jobs are proportionally created than before and unemployment becomes worse. Some argue for a bigger redistribution tax, others argue for better education.
Note: But our living standard had only improved thanks to the productivity boost brought forth by technology advancements. I see the real problem beneath that it takes much longer for our generation to match the machines in terms of competency, and even much more to master enough knowledge to initiate tech improvements and innovation—since we have already progressed so far. Such is our human limit, and we shall hope for the best.

Climate change causes trouble to oysters: hardly surprising. Too much carbon dioxide in the atmosphere, earth’s waters absorb some of it, carbonic acid is created, ocean becomes more acidic, and oysters slow the growth or even die as they have hard time forming shells. Worse is ahead as the water from the dept today holds CO2 absorbed 30-50 years ago—and carbon emissions have continued rising since. [Note: Doesn’t seem like anything can be done, no?]…Source: http://www.care2.com/causes/oysters-killed-by-climate-changes-evil-twin.html

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