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February 27, 2004

The Passion of Alan


There's a lot of speculation around Washington as to what exactly it was that caused Alan Greenspan's epiphany.  The whisper campaign has it that the rapture occurred over a cup of morning coffee when Alan's wife, who was leafing through the movie page, suddenly sprung on the 78 year old Alan, the tricky question of  retirement.  You can't, she said, go on forever; it's about time you started thinking about your legacy.  After all, up until the collapse of the dotcom bubble Alan was frequently equated in omniscence at least to the status of a pre-Galillean pope.  No doubt that's heady stuff even for someone who is perhaps the world's second most powerful man.


Alan --we call him that not out of personal familiarity-- is, of course, often in the habit of speaking in tongues when he is not in his more normal guise of the oracle of Constitution Avenue. Those around him have to bend forward and listen very carefully.  Thus, when Alan, the great mover of markets, decides to be loud and clear, you had better be warned that something really, really big is up.


Alan testified twice before various House and Senate banking committees this week and what he had to say each day has upset a great number of apple carts.  Over at the White House, Karl Rove thought he had a problem when Halliburton started running TV ads claiming it wasn't who they knew but who they are.


But first, a little contextually important Alan-history:  in his younger days the oracle of Constitution Avenue was a disciple of the famous libertarian writer Ayn Rand.  Rand is most famous for her novels depicting strong individuals (Gary Cooper played an architect in the movie made from one) who in lonely heroism battle the machinations of a bureaucratic and corrupt system.  In recent years, if he is to be judged by his actions, Alan had done a complete 180 degree flip-flop.  Most recently, in order to soften the pain of the dotcom bust, he has pursued the most vigorous  central bank manipulation of the economy in history.  In sum, laissez fare might have been something he found on the menu of a French restaurant for all he knew. 


Most of us, over the years, have come to accept the idea that our central bankers are there to smooth the economy from the cyclical bumps and dips that typify economic activity.  That's usually managed by raising and lowering interest rates at key points to discourage overly aggressive markets and to give a little heart therapy to moribund ones. 


In the world of Alan Greenspan we are no longer supposed to suffer the consequences of what the master once typified as "irrational exuberance".  So this time around the so-called recession after the great boom and bust of the 90's was so short lived --at least, officially-- that economists, who seem to travel in packs when it comes to announcing that a strong recovery is just around the corner, can't even agree when it began or when it ended, even according to the official government numbers.  (Of course, we know those numbers do indeed lie and that will be the subject of one or more of these future columns)   


And so on the eve of a massive meltdown, without any need for prompting and with Alan cheering it on, the administration decided to pump huge amounts of money into the economy by cutting taxes while boosting spending both domestically and, more tellingly, internationally, as the military was unleashed on Iraq to create an $80 billion a year wad of government contracts .  But why would average Joe taxpayer worry about that?  He was promised lower taxes as far as the eye can see.


In the meantime our Alan was doing his bit at the Fed.  He cut interest rates to the lowest they had been in half a century and encouraged the banks to lend, lend, lend.  The American megaconsumer, who never needs any encouragement, was also urged to get out and buy their way out of the downturn.  Not only did auto manufacturers offer no down payment, 0 percent financing but mortgage bankers were allowed to drop even minimum requirements on balloon home mortgage loans whose rates will skyrocket as interest rates start to go up, as they inevitably must. Instead of cutting back and saving a little money, as is their normal instinct in a downturn, consumers went out, refinanced their houses increasing their debt, bought newer bigger, more energy guzzling cars and houses, paid off their plastic debt and went right out and maxed out their cards again.


And so, indeed, there wasn't much of a recession and for a while it looked like all this activity would bear its fruits.  Companies, which did cut back mightily in hiring, started to make profits and the stock market, after 3 losing years, started to take off.  And so....one might say, so far so good.  The only trouble was (is), the normal things that happen as you get into the second or third year of a recovery just didn't seem to happen.  First, the job market, which requires 150,000 new jobs per month just to match the newcomers in the economy, continued to be downright anemic, at best losing better paying jobs and creating more Wal-Mart greeters and burger flippers


Equally ominous, there was no "pent-up demand".  That's an economist's buzz word that is used to describe what happens when people hunker down and put off replacing their old appliances for a year or two.  And so our friend Alan, in this parable, finds himself suddenly pushing on a string. Yes, he has lowered interest rates as far as they can go without the banks paying customers to take their money, and yes, he has pushed up home prices so people could bump up their mortgages and yes, he pulled the rug out from under the dollar, and yes, the government sent tax rebates back to everybody on a very unprogressive scale but still, here we are in an election year and things are starting to slide backwards.


Alan, it seems, may be riding the little train that couldn't.  So what does he do short of self flagellation; why he carries his brief all the way up onto that Golgotha called  Capitol Hill and lets go a little truth.  On Tuesday, he startled everyone who was listening --they do a lot of sleeping up there so it was probably a pretty tight number-- with a dire warning that the two government agencies, Fannie Mae and Freddie Mac, that back home mortgages may be in serious financial trouble.  Some of you, who aren't sleeping, may remember that not too long ago there was a little flap with one of these Agencies, Fannie Mae, when they were found to have cooked their books to the tune of $5billion last year.  They actually had hid some of their earnings.  Now why, you might ask, would a publicly traded but semi-governmental agency want to hide earnings of that magnitude.  You needn't wait for an answer, we'll give you our opinion:  Because they want to have some cushion against all those lousy loans they've got out there, houses with flimsy mortgages that won't be able to be paid when rates go up as the housing bubble too, comes to its dire end and kaplunk.....


So Alan was covering his reputed ass for posterity, a posteriori, it seems when he suddenly warned that these agencies that were merely following his lead turn out to hold the mortgages to millions of houses that can't be paid off by maxed out unemployed ex-consumers.


But Alan wasn't finished there.  The next day he went in front of another august Capitol Hill body and washed his hands of the deficit.  Yep, you heard it first here.  Alan does not take any responsibility for the growing deficits.  As he told the Senators, tax cuts are great, they stimulate the economy, the only trouble is that they drive up the deficit.  And, he went on to say, there's nothing to do but cut spending and cut it fast.... Because, the baby boomers are going to retire starting five years from now and they are going to want to collect their social security checks every month and get their promised medical care, something they have just been contributing to since they started working back in the Sixties.


Okay, says Alan, maybe they paid in but deep down inside they never thought they'd get it back.  They should have put more money aside for a rainy day like me.  It's the fault of modern medicine, people live too long.  They were supposed to contribute to the account but die before they could collect.


Yes, our friends, the second most powerful man in the world is telling you to save your money.  Of course, he hasn't told you how much and how fast he, or his successor, is going to depreciate the dollars you do save, when recession phase 2 sets in, has he?



  rmb     


 


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Copyright 2004 Richard Mendel-Black All Rights Reserved


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Posted by dymaxion at 05:49 PM


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February 20, 2004

Take Two RFIDs and ..........


We wrote a couple of weeks ago about the coming age of micro tracking devices, the size of a grain of rice, small enough to.... well, small enough to swallow without knowing. <a href="http://radio.weblogs.com/0130824/2004/02/06.html#a45" RFID's: Get Ready for Your Own Personal Jammer</a> .  But no, not even in our own radical proposal for the need for your own personal jamming system did we predict that someone would seriously propose embedding a micro radio transmitter on a chip into every pharmaceutical product.



That was until yesterday, when, over a leisurely cup of breakfast coffee, there was the Washington Post quoting Federal Drug Administration Commissioner Mark McClennan: 



"The makers of tracking devices have been experimenting with radio frequency computer chips, smaller than a grain of rice, that would be attached to drug labels or drug boxes, or even embedded in the medication itself. McClellan said tests are underway to determine the effect of the chips on the drugs' effectiveness and quality." <a href="http://www.washingtonpost.com/wp-dyn/articles/A52784-2004Feb18.html">FDA Looks to Chips to Thwart Drug Counterfeiters (washingtonpost.com)</a>


And so even before the first supply chain instantiation using RFIDs gets onto a pallet rolling into a Wal-Mart near you, the government has already moved this to a whole new application area. RFID's will be used, according to the FDA proposal to protect against pharmaceutical piracy.  The Washington Post quote came as the result of a press conference where the FDA released an important report entitled "Combating Counterfeit Drugs" http://www.fda.gov/oc/initiatives/counterfeit/report02_04.pdf.


People who have been wrestling over the implications of digital rights management (DRM) and piracy in the music and movie industry will chuckle as they read the report.  The FDA is now grapling with the intricacies of the spy vs. spy syndrome; i.e.. will potential counterfeiters smart enough to make copies of $6 pills not be smart enough to get their hands on the very RFID technology that the industry will use?  And so the FDA proposal starts to move even further down the slope of steganography and encoded messages whose very transmission must be kept hidden in order to be effective.  Imagine the implications!


In the meantime, as we predicted there is a bright future for the RFID industry.  By 2007 the database and tracking applications will be in place and we can expect integration with existing supply chain applications.  This should promise to become a multibillion industry for system integrators like Accenture (the FDA partner in this study) and IBM with a tsunami of database application upgrades worldwide.  In this light, it is easy to see Oracle's Larry Ellison's interest in buying Peoplesoft.


RFID's have hardly caught the public's attention but as we said in our previous article, the tiny chips with antennas are destined to get ever closer to getting under our own skins.  But if the industry has anything to learn, it should be the lessons of the same FDA and genetic food labeling.  Imagine, when someone with a slightly bigger megaphone than ours, gets wind of this latest proposal.  Either it's a wonder how these guys even manage to find their way to work or it's a greater wonder how tone-deaf the standard media is to the intricacies of introducing radical new technologies into the mainstream (no pun intended).


rmb   


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Copyright 2004 Richard Mendel-Black All Rights Reserved


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Posted by dymaxion at 05:15 PM


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February 18, 2004

Blowback, or Passage to India

Blowback, or Passage to India


In the last few weeks we've been taking notice of mainstream focus on the amazing drain of IT jobs to India.  "Wired Magazine" is the latest to take a shot at it with a series headed by Daniel H. Pink et al. http://www.wired.com/wired/archive/12.02/india_pr.html Bottom Line from everyone concerned:  The number of jobs flowing to India will increase exponentially as companies face the daunting fact that their competitors can buy 5 programmers or medical lab technician for the price of one US cube.  All three authors at Wired agree that painful as it is, we will just have to get used to the old saw "that the only thing constant is change" and the even older one: "This country has an endless supply of initiative and drive."


As usual, our take is a little more nuanced.  First off, we do agree that undoubtedly, we will move on --nothing stops time.... but the question to be begged, is how? The extended Silicon Valley boom occurred nearly on the heels of the rusting of the American Midwest --and not uncoincidentally, many of the pioneer cadre in the Valley had grown up and were the best and brightest of that very heartland. But we have to also bear in mind that thanks to that very Silicon Valley innovation the world has moved on.  The three major differences between now and the early 1990's are the advent of truly globalized corporations, the abundance of fiber cable and the speedy spread of cheap-CPU powered network technology.


That leads us, with the intensity of a Holmes on a case, to the hard question:  Do American's have an innate advantage in the realms of "imagination, concept and empathy", the qualities it is suggested in "Wired" that will keep our future and present white collar employees one step ahead of the foreign competition?  Clearly, we all certainly hope so.


Not too long ago, dweeb friends of ours would refer, without forethought to $20 bills as "techie foodstamps".  Not too much longer ago companies were offering $10,000 sign-up bonuses and bounties. Nobody was hiring programmers with job qualifications of "imaginative, conceptual and empathetic", though admittedly  "flexibility" might have been listed as a plus.


So what is it about our system, or water supply, for that matter, that provides us with a dominance in inventiveness, imagination, fantasy and conceptual skills?  Is this something we teach in our schools?  If so, things must have changed radically since we went to grammar school.  And from what we hear, the public education system back then was a marvel compared to what's served up most places these days.


Communication links and Moore's law are certainly speeding up economic evolution.  Are we closer to where we were mid-century or where Great Britain was at the turn of last century?  Yes, we are undoubtedly the world's great military power with no rivals in sight and so we spend on building up our military capabilities at a rate that is greater than the next 17 countries combined.  It can be said that the sun never sets on our globalized corporations.  GE, for example, has nearly 18,000 employees in India, no doubt more than they had in Schenectady (company HQ, then) right after World War II.


When you look carefully over the lists of achievers:  the innovators, inventors, media builders and industrialists of America's last half century, it is quite amazing how many were foreign born.  So the real question is not whether we have some great corner on innovation and drive but whether we still offer the lure of an open playing field where dreamers from all over the world are drawn?


And how is that equation driven by the add-ons of high bandwidth, cultural hegemony, English language speaking skills and speedy CPU's?  When the Japanese bubble burst --and, to keep the record straight,  it did reinflate briefly several times since-- it caused a certain re-evaluation.  The shining image of Japanese toughness, work ethic and just-in-time invincibility faded quickly into that of the Japanese hill of ants.


Investors, instead of keeping a short-term peeping eye on the Wall St. show, should be looking at what's really happening: in Iraq, in Washington at the Fed's printing presses and in the high tech sectors where the future picture will emerge.  No matter what the short-term brings, perhaps right up until the election, there will be a patch ahead where real adjustments occur and are made.  They're bound to catch a lot of people by surprise.  


rmb



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Copyright 2004 Richard Mendel-Black All Rights Reserved


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Posted by dymaxion at 02:18 PM


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February 12, 2004

And Now it's Big Media in Defense of Marriage

 


We were wondering how the administration's defense of marriage amendment was going to fly until we also caught yesterday morning's news that Comcast is looking to take over --oops, did they say merge with?-- Disney.  According to the Washington Post, a major New York brokerage firm issued an analyst's report calling the proposed deal one of "perfect merger 'partners'", while Dan Rather on the CBS Nightly News --a rival of Disney's ABC-- called it a "marriage".


It hadn't struck us before that the defense of marriage amendment had something to do with key economic infrastructure.  And so we thought about the metaphor and, with the Universal/Vivendi deal in mind, that nearly half of all marriages in this country result in divorce...and those are just the heterosexual ones.  And then right there on CSPAN (which I was getting through Comcast) the body politic was passionately nattering about Janet again. 


So here we have the government messing with marriage, the media and obscenity:  One of the first rulers to start messing with marriage --to put it mildly-- was Henry VIII, who, coincidentally, is said to be a distant Bush relative.  Upon taking the throne he was hooked up with his deceased brother's wife, Catharine of Aragon, who was 8 years his senior.  When he couldn't get a son with his Kate, Henry decided to go for an annulment.  Unfortunately for him, the Pope was one of Catherine's relatives and the rest is history.


Marriage, if the proposal goes through, is to be defined in the Constituion as the union of a male and female.  Presumably incest and bigamy will still be outlawed and you'll still be able to get a divorce.  The amendment will not affect Britney Spears or JLO, or any big media program where they get the pick of hundreds of women (and men) to line up in their skivvies and endure other humiliations just to marry some guy or girl for their money. Where's the shock value? After all, marriage in the past has mostly been a business affair, sometimes at the business end of a shotgun or pitchfork and often the merging of two adjacent farms, fields or kingdoms


So, according to the new Constitutional criteria, let's see how the deal between Disney and Comcast will hold up.  First off, we note that this is not a marriage in which both sides agree; Comcast, the suitor,  is actually forcing itself on Disney.  Perhaps, then, before going too far down this path, we ought to try to determine if this is a true marriage between a male and a female and thus whether the government in the form of the FCC and SEC should support it.  If so, we might have to assume that Comcast is the male and Disney ......  But then again, the Merrill Lynch analyst carefully chose the word "partners", a term often used by gay couples while Dan Rather went for "marriage".


From a program ratings standpoint, we know that Disney is unhappy.  S/he hasn't been doing as well lately as s/he ought to and just recently it leaked out that s/he had given a call to Microsoft to help her in downloading movies on the Internet.  Now, everybody who's watching this show in Hollywood knows what kind of lousy reputation Microsoft has when it comes to crawling in bed.  Many have gone down that path and few have lived to tell the tale.  In urbane business legend, MS is known as a modern day Caligula.  There's even a story that as a child MS climbed into bed with the great giant of the day, IBM, who rolled over but MS, little more than a sprightly young'un, dodged and IBM ended up splashing onto the floor.


Disney just isn't the lighthearted kid s/he once was and with all the movie studios, a major network (ABC), theme parks and sporty cable channels, s/he seems to be coming apart at the seams.  Along comes a kid who wants to be just the right fit.  Namely, the biggest cable company(21 million customers) in the country with more broadband customers (7 million)  than anybody else not to mention a few cable channels to boot.


And if we remember, it was the promise of broadband access (false, as it turned out to be) that got AOL over the top with Time Warner.  Once again, we see the promise of content getting rolled by the promise of a big pipe and connections.


The naked truth is: together, this couple could squeeze a lot of players right where it hurts most but as we said, it isn't that easy.  First off, Disney is going to have to do an extreme makeover, that may mean chopping off that schizophrenic head.  Then there's Mickey Mouse and Donald Duck with their secret of eternal trademark life.  Would they be happy answering to somebody in Philadelphia?  Wasn't that why W.C. Field's left the East Coast to give Hollywood its big boost?


So, even before the government passes that Defense of Marriage Act, there's going to be a drag out tug of war.  According to yesterday's NY Times: http://www.nytimes.com/2004/02/11/business/media/11WIRE-COMCAST.html "The bid is likely to ignite a bitter takeover fight.... The unsolicited offer also has the potential to make Disney takeover bait for other media giants that may now be inspired to make their own bids."


To make things even messier, if they can ever get their heads off of Janet's silicone, the government will do its own snooping around the "partnership".  First it will be the FCC.  Now, everyone knows that Chairman Powell has never seen a big fat media wedding he didn't like but lately he has been getting a lot of heat even from some of those same conservatives in Congress who back the Marriage Amendment.  There's even a Federal Court looking into his latest proposals on forced and unforced marriages.


Further, there's the SEC.  Their job is to check to see if a marriage like this doesn't constitute a monopoly.  Now, we also know that John Ashcroft, the head over at DOJ, which prosecutes these cases, is also a big fan of marriage, though not of "Marry a Millionaire" type programming.


Our guess: this is one marriage the administration will smile upon without getting under the covers to decide who's up and who's down.  Obscenity, it seems once again, is in the eye of the beholder.  That the guy who controls the pipe going into the house, the set-top box, the future delivery system for music and video, also gets to own a major studio and one of the big four networks, wow, that's beautiful, man!  At least that's the view on Wall Street.


And who said reality TV is dead?



  rmb     


 


dymaxionweb@verizon.net


Copyright 2003 Richard Mendel-Black All Rights Reserved


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Posted by dymaxion at 12:52 PM


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February 09, 2004

Get Ready for Stagflation

Sooner or later the dam will burst.  Right?  The government prints more money (M3 is back on the rise), the price of stocks goes up to bubble-level P/E's, gold is up, bonds are up sort of, art and antiques prices go up as do collectibles (watch the Antiques RoadShow any give Monday to see appraisals of $75,000 for the works of relatively unknown 19th century painters) and yet....


Wages remain flat to depressed and Americans face rising healthcare, education and property tax costs.  Are we on the verge of a big rush up of prices as the Fed is forced to push interest rates up (after the election, of course) to stem the collapse of the dollar and incentivize foreign investors to pick up US debt through the T-Bill market.  If all this sounds out of whack or just plain whacky, we think it is because we are, indeed, in a truly whacky moment.  In other words, there's just so much borrowing against the future that can be done unless that future is sure to be  mighty bright.  And is there anyone out there who truly believes we have a ghost of a chance that the 90's will somehow re-emerge out of the primordial soup described up above?


Well, if you're hoping, here's a sobering bit of information, in case you thought there weren't many more new ones out there.  It's one we got off of the Reuters feed Sunday evening:  http://biz.yahoo.com/rf/040208/economy_tools_1.html with the following headline: "US 2003 Machine Tool Demand Lowest on Record".  Now in this dismal world of rates and percentages, the figures reporting on something as pedestrian as machine tool demand aren't going to get a lot of notice.... unless, of course, you are a glutton for punishment.


There is, we are quite sure, no subject as diametrically opposed to a certain spangled breast in terms of getting public attention than machine tools.  If interest rates are boring at least some of us trying to pay down our own excesses or making an effort to earn a relatively risk-free buck against this crazy backdrop can relate to them.  But machine tools?  What the hell are they?


Having done the set up, I'll step right up:  machine tools are the machines that companies use to make machines and other more consumable items.  They are the backbone, the thing that people who work in manufacturing work on.  In other words, if you expected to see manufacturing jobs coming back in this country in 2004 you would most likely have seen the pace of machine tool purchases start to rise in 2003.  And as a whole, manufacturing jobs pay better than service jobs.


What we're getting at is this:  The government says we have no inflation yet the price of valuables and financial assets keeps going up.  If we lived in a rational world --and let's put that to immediate rest, we don't-- then you could argue that the smart money is betting on future price inflation and therefore they are tying up their money in things that are bound to gain in value to keep pace with inflation.  In other words, there is no real estate (or Faberge' egg) bubble, just an anticipation that rates and prices will start to rise at some point and there may be no holding them back.  In this scenario in the tug of war for US consumer dollars, even the Chinese and Japanese will be forced to loosen their grips and let their currencies rise against the dollar to protect their relative margins.


But hold on a second.  Rising interest rates, rising tchotcke prices, rising mortgages against a backdrop of an anemic if not phony recovery (phony because you can't have a recovery based on borrowing and no job creation) are more likely to be the prelude for a much deeper non-recovery where even the heroic American consumer family, mired in debt (read "The Two Income Trap" by Elizabeth Warren for a little background) hard-pressed to find two decent paying jobs, runs out of cajones.


Yes, we may once again see inflation but it might just be the really ugly kind we saw back in Jimmy Carter's oil crisis days, the kind they call Stagflation.  That's the kind where prices go up but the economy staggers along.  It's also the kind that doesn't push up the price of houses, luxury goods and obscure 19th century oils.  Something to bear in mind:  the last great gold rush (prices that is) occurred during the reign of none other than brother Carter.


rmb 
 


Special note:  For those of you receiving this through email notification, please also see: http://radio.weblogs.com/0130824/2004/02/06.html#a45 :RFID's:  Get Ready for Your Own Personal Jammer


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Posted by dymaxion at 05:36 PM


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February 06, 2004

RFID's: Get Ready for Your Own Personal Jammer

 


Since we tend to be "big picture" kind of observers here at the Dymaxion Web, we couldn't help but be intrigued all week with the list of "supertrends" that John Mauldin presented in his most recent weekly newsletter.  The problem, we noted, at least to ourselves, is that there are more blind spots in any crystal ball we've seen than in my father's torpedo-back 1962 Mustang.  Trends, we tried to note, are a lot like covert attempts to change the world, they inherently hide reactions or blowback, as it has come to be called.  We are, it seems, students of blowback.


So, in that spirit, we mused in the DM last Monday, entitled "Antidote to Disinformation", that perhaps the aging of populations in the developed world, especially insular Japan where immigration is culturally difficult, might result in a major push towards robotic systems.  The Japanese have certainly proved their ability to miniaturize electronic and mechanical systems, which after all is what robotics is all about.


Another problem with any list of "supertrends" is, of course, the prismatic effect; i.e., we reflect what we are looking at  based on pre-engineered edges and surfaces. So, Mauldin, one of the more astute observers, talked little about the disruptive impact that ever-enhanced micro-information gathering will have on business, science and society.


In order for a disruptive technology to reach its time, a whole bunch of base technologies have to be firmly in place.  In the case of micro-information, first you must have a high capacity, low cost network (the Internet), fast central processors (64-bit chips), low cost storage, ubiquitous wireless capacity and finally cheap intelligent chip manufacturing processes.


Welcome to 2004, the year of the RFID. or Radio Frequency IDentification. Whether you know it or not, you may already have a RFID in your life.  Certainly, if you drive often up and down the East Coast you have probably installed an EZ-Pass on your windshield.  If you are driving a Ford car or truck you may now have RFID's imbedded in your tires.


RFID's are tiny chips that can store information and transmit that data through built-in wireless transmission capability.  Their enormous potential to be a disruptive force lies in their tiny size (small enough to tag onto, say, a shirt label) their low cost to produce (less than a penny apiece) their data storage capacity (a magnitude greater than those striped bar codes they are replacing) and their intrinsic design that allows them to receive power from the receivers they talk to (no batteries required and so no half-lives to contend with). Like sleeper cells they only come to life when they receive an order from a master device.


Of course, if a technology doesn't have a market it might impress the Slashdot crowd but have little impact on everybody else's lives.  But this is not the case with RFID's in 2004.  Perhaps the two largest market forces in the country, the government and the consumer space are both taking giant steps into RFID's.  First, Wal-Marts has told its 100 largest suppliers that they must start attaching RFID's to items, boxes, crates, pallet-loads and containers.  The Department of Defense, has also announced that it too will start converting its supply chain to a RFID based system.


The business implications cannot be exaggerated.  With the backing of Wal-Mart and the DOD, it is only a matter of time before most car, appliance, furnishing and consumer goods will all have been tagged down to the component level.  For chip makers this will be a massive new  business. System integrators already in the supply chain management business will reap a windfall of new business as the information for these chips gets integrated into institutional logistics systems.  The crush of so much new data will reverberate back into computer and network sales that will benefit traditional IT companies like Intel, Microsoft and Cisco.


But there are even larger societal implications.  There has probably never been a greater threat to personal privacy than the influx of these devices into every corner of our lives.  When Benetton announced a couple of years ago that they were going to start using RFID's in the labels of their clothing, there was a pubic uproar aa people were made aware that somebody would be able to know, as went the old public service ad, it's 10 PM, where their socks, sweaters and underwear are.  So Benetton pulled back.  And so we can expect to hear assurances from other retailers that RFID's will be disabled, like those antitheft devices, at the point of sale.  At face value.... end of case.


But does that mean, however, that while you are in the store they won't be tracking, say, what aisles you walk up, what items you finger to check price, ingredients, what signs you stop to read, etc?  You get the picture!  After all, you probably are carrying one of their discount cards on you and its likely those cards will get their own RFID's as will your credit cards.  And the marketeers are just dying to know a little more about what you're interested in so that perhaps even by the time you get to the cash register they will have a few special offers tailored just for you. Of course, they might just invite you to opt in to that program with the promise of personally tailored specials.


But as implied by what went before.  The retail experience is only the tip of the iceberg.  Retailers can make all the assurances you want about your privacy but that will hardly be more than a proverbial finger in the dike of the information leaks that will spring from a world populated with layer upon layer of RFID's.  As we said before, RFID's may already be part of your life, little sleeper spies that can be awakened by anybody with a receiver and an understanding of their codes.  Nobody is going to want to turn off all these indicators as they come delivered in their appliances.  After all, they will have their functions, they'll tell you when a part needs to be replaced, when there is an update in firmware for your dishwater, when your coffee's cold, when you need to stop on the way home for milk, when there's a flaw in your heating and cooling system, what programs you may want to copy, etc.


RFID's are coming in both above and under the radar.  There will be huge profits and thus huge industry interests in fostering a smooth take off and flight pattern.  As we said above, predicting is a tricky business for those of us not possessing our own crystal balls but we have little doubt that, among all those things we can't imagine, they will also cause a whole new consumer technology to be born:  your own personal jammer.  Expect to see it on the "Coming Soon" menu of a wireless PDA near you.


    rmb



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Posted by dymaxion at 04:39 PM


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February 03, 2004

Antidote to Disinformation

 


What makes this project interesting for us here at the Dymaxion Web is the simple truth that where the stakes are highest the disinformation is greatest. Although this thought is never very far from our minds --being perhaps the raison d'etre of this publication-- we were forcefully reminded of this while reading the most recent posting of  John Mauldin's weekly newsletter, "Thoughts from the Frontline" (www.frontlinethoughts.com).  John talks about the "Super Trend Puzzle":



"I am a big fan of puzzles of all kind, especially picture puzzles.  I love to figure out how the pieces fit together and what picture emerges, ....


Perhaps that explains my fascination with economics and investing, as there is no greater puzzle (except possible the great theological puzzles or the mind of a woman, for which I have only a few clues."


John lists as his secular super trends:
   
        The Aging of the Developing World
        The Balancing of Globalization
        A Secular Bear Market
        The Muddle Through Economy  
   
It gives us some pause to wonder why so little serious ink is being given in the mediasphere to the great tectonic movements like the ones above that will eventually reshape all of our lives.  Certainly, as investors of hard-earned capital, we could do well to try to understand their implications on future markets and politics.


The Dymaxion Web has been founded --we've been cyberpublishing for all of two and a half months-- to create an antidote to misinformation, not through the brainpower of any single or group of individuals but through a dynamic network of information, knowledge and intuition:::: as is so hinted in our kick-line.


We can't, of course, be satisfied with merely reactively picking through the daily disinformation or fog of war. Much of what we see also comes  from informative pieces like Paul Krugman's column today in the New York Times entitled "Another Bogus Budget" http://www.nytimes.com/2004/02/03/opinion/03KRUG.html where the Princeton economist puts into context yesterday's attempt by the administration to hide the effects of its phony revenue and spending projections.


But it's also important to be constantly aware that disinformation is only part of the problem, even if it is perhaps the most pernicious.  After all, disinformation is the kind of thing that got us into Iraq and disinformation is likely to keep a veil over that particular tinderbox until it blows up in our faces.  Policy makers get us into these fixes but in the end, we all know who pays the piper.


We have to get at what's really going on as best we can in this vast forest first by establishing direct and indirect links (blogrolls seem to be catching on).  Our belief is that interactive communications within the context of something similar to a semantic web, albeit something more conducive to extended machine intelligence than the one described by Tim Berniers-Lee, can greatly enhance the knowledge snapshot at any given time.


We need eyewitnesses to report from the ground but even more importantly we need the perspective of human intelligence.  For instance, we need to analyze various lists of supertrends like those offered us by Mauldin and others until we have clearer views of the contradictions and permutations.  One example, --and this is just one of thousands--  how does technology development get changed by and change these supertrends?  Will the combination of biotechnology, computer intelligence and communications, or even robotics have a profound impact on the aging of the developing world curve?  Can we, for instance, expect to see the Boomers leading far more productive lives in their seventies and eighties than their parents or grandparents?


One of the gaps that struck us in the Mauldin analysis on "balancing globalization" and one  that may be critical, is the importance of  the US education infrastructure.  Anyone familiar with the absolute failure of our public schools has to wonder just how the US intends to maintain its leadership at the technological vanguard in the coming decades, particularly if the premise is correct that we will not be able to compete on labor costs or manufacturing know-how.  In the 90's we were able to easily import Indians and eastern Asians to fill the cubes of Silicon Valley.  But, of course, there was blowback, as there always is.  Today many of these engineers and entrepreneurs have returned to their own countries where they have set up shop.  No longer  can Silicon Valley or Alley rely on a cultural and communications gap that served as a buffer to outsiders looking for technology niches to exploit.  Can we be sure that the next Cisco will be a US-based company?


And so, we'll ask the question: Can the US, where, by the way, xDSL adoption trails much of the 1st World, assume that it will have a natural technological lead strong enough to propel it forward even in the face of growing global competition?  Looking into our schools, we can't say that's something we'd put our money on.


r m-b  


dymaxionweb@verizon.net  Copyright 2003 Richard Mendel-Black All Rights Reserved


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Posted by dymaxion at 05:14 PM


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