The Moment The Market Broke: “The Behavior Of Volatility Changed Entirely In 2014”

Standard

Earlier today we showed a remarkable chart – and assertion – from Bank of America: "In every major market shock since the 2013 Taper Tantrum, central banks have stepped in (even if verbally) to protect markets. Following the Brexit vote, markets no longer needed to hear from CBs as they rebounded so quickly that CBs didn’t need to respond." As a result, buy-the-dip has a become a self-fulfilling put.

The immediate result of this dynamic has been two-fold: i) investors now buy every dip, or as Bank of America notes, "Investors no longer fear shocks, but love them, as it is an opportunity to predictably generate alpha.", and ii) selling of vol has become a self-reinforcing dynamic, in which lower VIX begets more vol-selling by "yield-starved investors", leading to even lower VIX as the shock that can reset the feedback loop is no longer possible, and thus the strike price on the Fed’s put can not be put to a market test.

These observations prompt BofA’s derivatives expert Benjamin Bowler to ask the rhetorical question: "volatility: new normal or bubble?" and answer: "It’s a bubble." Indeed it is, but absent the abovementioned market-clearing shock, it is difficult, if not impossible to anticipate what can burst this bubble.

In the meantime, the market has spawned some spectacular distortions, including the following observation: "As one measure of volatility, the Dow Jones Industrial Average traded in its tightest trading range since 1900 this year." Here is Bowler:

While asset valuations are not at life-extremes, volatility is. In 2017 the Dow traded in a 110yr record tight trading range, the VIX hit all-time lows, and US equities reversed from sell-offs at near their fastest pace in 90 yrs. Investors no longer fear risk but love it, as it’s another opportunity to harvest “dip-alpha”. Volatility across asset classes has decoupled from uncertainty. Even if seemingly irrational, apathy to all risk has been the right trade and an impossible trend for most to fight – the definition of a bubble.

A bubble, he adds, "induced by years of heavy handed central bank influence, where investors have learned that it has not paid to panic." Bowler asks readers to consider the following:

As one measure of volatility, the Dow Jones Industrial Average traded in its tightest trading range since 1900 this year

Near 90yr records are occurring in the speed that US equities are recovering from dips

The VIX is near 26yr lows despite political & policy uncertainty recently near 26yr highs


Gold call options price less than 1 in 100 chance of rising North Korean tensions in the face of rising North Korean tensions

The above leads Bowler to concludes that "while there is active debate about whether risk-assets like equities and credit are overvalued, it is much harder to argue that currently depressed volatility levels are unsustainable when near 100yr records in terms of low vol and the lack of persistence of any shock are being recorded."

So when did the market "break", and when did the behavior of volatility change so dramatically?

This overarching question has been plaguing Wall Street strategists for much of 2017. In July, we presented one answer from Deutsche Bank’s Aleksandar Kocic who pointed out the divergence between the economic policy uncertainty index and the VIX, which took place roughly in 2012, prompting the derivatives expert to conclude that something "snapped" roughly around that time, or as Kocic said, sometime in 2012 it was as if the markets “lost their capacity to deal with uncertainty.”

Bank of America takes a somewhat different approach, and instead of looking at the divergence between volatility and news – or shock – flow, highlights the moment BTFD became religion.

According to Bowler, "the nature of volatility since 2014 has entirely changed, with volatility shocks retracing at record speed. Investors no longer fear shocks, but love them, as it is an opportunity to predictably generate alpha." This is demonstrated in the following stunning chart which not only shows that every VIX dip is now just an opportunity to buy it, but that the market’s "fragility" is at an all time high based on the surging frequency of vol spike events, which in turn, and paradoxically, reassure investors that a central bank backstop can not be too far away.

BofA is hardly the first to point out this phenomenon: almost exactly one year ago, it was JPM’s "quant wizard" who highlighted precisely the same, if not through the perspective of VIX but the overall market response to recover from "shock" events:

It appears that the time horizon of macro traders has shortened, likely as a result of increased participation of machines and algorithms that are quicker to adjust to significant events and can eliminate trading activity of slower investors. Consider for example the US elections – traders in Japan registered a 5.4% Nikkei drop on the 9th, followed by a 6.7% rally on the 10th, while S&P 500 investors did not register a significant close-to-close move over the election (due to market hours difference). These two days were enough to shift the volatility regime (usually calculated from closing returns) for the whole of 2016 for the Japanese equity market, and leave it unchanged for S&P 500 (e.g. think of rebalancing needs of a hypothetical risk parity fund, or a short volatility strategy based on Nikkei vs. one based on S&P 500). We also noticed that for a number of significant catalysts this year (Brexit, US Election, Italy Referendum) broad expectations were wrong both on the outcome and the directionally forecasted impact. It is possible that the lack of market reaction (or a reaction that went against the accepted narrative) was in part driven by investors’ reluctance to transact (“two negatives equal a positive”).

Ah yes, the infamous "investor reluctance to transact", which has only gotten worse as we hinted in our "trader paralysis" post, and which Goldman demonstrated vividly just last month when the bank showed that hedge fund turnover has now dropped to an all time low as virtually nobody trades anymore.

Whatever the reason behind the broken market, however, whether it is central banks, machines, algos, risk parity funds, vol-targeting strategies,  self-reinforcing "Pavlovian" dynamics, or simply traders no longer trading, the question is what comes next? While we will have a more detailed breakdown in a subsequent post, here are Bowler’s three questions, and several answers of what to expect in 2018:

As we enter 2018, three questions are top of mind when it comes to volatility:

  1. Is 2018 the year when vol begins to normalize, or is this the “new normal”?
  2. As low vol threatens to sow the seeds of the next crisis, how will this end?
  3. Where does vol go in the longer-run; can we ever see the old-normal return?

 

Vol likely to rise off extreme lows; ’87 crash unlikely, but so is VIX averaging 20 While we will look at each question in more detail in turn, the short answers are:

  1. Higher not lower vol: We think 2018 is most likely to see higher (not lower vol) as the Fed builds more “ammunition” in terms of rate-hikes leaving them less sensitive to financial market conditions (i.e. pushing the Fed put strike lower), and as CB balance sheets peak in 2018.
  2. Vol bubble more likely to deflate than explode: While the risk of “fragility” shocks due to positioning and feeble liquidity is high, we think the level of leverage today, which is lower compared to the last time vol was this depressed (2007), does not present the same risks as then.
  3. Vol to remain low vs. long-run average: However, to the extent we remain in a low inflation/low rates environment, we may also remain in a lower than normal vol environment. So while VIX near 9 is an unsustainable bubble, VIX at 20 (the long-run average) may also be unsustainable in a slower growth world.

And BofA’s conclusion:

What to watch for? In a world slaved to rates, inflation remains key

 

From a macro perspective, we continue to believe unexpected inflation is the kryptonite for volatility. Inflation presents a “triple whammy”, first driving economic vol higher, destabilizing bond markets (and putting bond/equity correlation at risk), but importantly handcuffing central banks from being as sensitive to financial markets. In other words it both drives fundamental risk higher and significantly impairs the protection markets have become dependent on. Rising rates vol is key to watch.

 

How bad can it get? From here Aug-15 shock likely but ’87 crash is improbable

 

Interestingly, while the world is hyper-focused on how big the “short-vol” trade is, history shows that any liquidity shock large enough to create an equity bear market (20% fall in equities, similar to 1987 or LTCM crisis) provides a forewarning in terms of rising volatility first (look for S&P vol to double from 10 to 20). Fragility shocks (similar to Aug-15) that happen without warning remain the bigger risk today in our view.

 

So, how do you trade this? Long “vol beta”, cheap options for direction

 

The most important question is, how do you trade this environment where investors have given up on risk (or have learned to love it as buying dips has been “free money”). Evidence of a “bubble in apathy” is strong, and we believe it is unsustainable. However, the problem with any bubble is not recognizing you are in it but rather timing its end. Hence the key is finding trades that will profit from a change in environment but carry well and hence don’t require perfect timing. The beauty of today’s low vol is that it can be cheap to own optionality (for example for upside stock replacement) which affords the benefit of not having to time when markets may peak.

 

Does this mean short vol is a bad idea? No, but it needs to be smartly managed

 

Importantly, believing that today’s low vol is unsustainable does not mean all short vol positions are bad. Don’t forget, owning any risk asset (equity, credit etc.) is a short-vol trade. The key is finding the best short vol opportunity (highest risk-adjusted returns), while managing downside risks appropriately. Harvesting rich vol risk-premia is key to funding cheaper long vol positions elsewhere.

from Zero Hedge http://bit.ly/2zSsJNV
via IFTTT

Is Bitcoin now as good as Gold? (Video)

Standard

Crypto-Commodity is a phrase being thrown around as people ask the question is Bitcoin now as good as Gold? We discuss the latest with Gold and the online currency with Craig Erlam, Senior Market Analyst, for OANDA.

Gold is out of favour at the moment; this is due to a couple of circumstances. Dollar has shown some strength recently, and with the yellow metal being denominated in Dollar, it is very susceptible to Dollar performance. We have also seen the US Tax reform bill, with a joint committee being drawn up between the Senate and the House to amalgamate the bills to try and pass through both chambers. Which has helped support the dollar, further weighing on Gold.

Improvement in Risk appetite is typically bad for Gold. We can see a sideways trend between 1260 and 1300 since late September. Currently testing 1260 again, with momentum built up to the downside. Previous support zone combining with 200SMA & 300SMA. Should we see a break of 1260, would signal a bearish trend. Possibly down to 1240 level. We won’t see a big drop off in gold as there are a lot of elements bubbling away and we are unlikely to see a massive resurgence in the dollar.

But Is Bitcoin as good as gold? Craig Erlam says that it is not, at least not yet, but he believes that it could be. There are a couple reasons behind his thinking; one major factor being if Bitcoin becomes a new reserve currency in the long term. This could cause it to become a new replacement for gold. However Bitcoin will never have the intrinsic value. There are many sizeable hurdles for Bitcoin in the future that it has to jump before it can consider taking that mantle.

USD/JPY – Yen Dips as US Employment Report Meets Expectations

Are US Equity Markets Losing Their Sparkle?

CAC Dips as Financial Stocks Falter

from MarketPulse http://bit.ly/2zT9Ryv
via IFTTT

Watch Moogfest kick off with epic 50-hour livestream, lineup – minus men

Standard

Women and transgender artists have too often seen their work in electronic music pushed to the margins. Moogfest’s launch this year puts them first.

Moogfest this year promises to have the mix they’ve been brewing in the latest editions: part music festival, part conference, with music and music technology meeting up with larger themes around science and innovation. The difference is, instead of the presence of female and transgender artists being just another box for curators to tick — “hey, look, we booked some women” — here, they’re leading the announcement. That includes both a 50-hour livestream of back-to-back sets from a pretty amazing and diverse set of artists, plus the first wave announcement of artists.

Here’s Madame Gandhi explaining the idea:

The result is a mixture of people you know really well (legends like Suzanne Ciani, Moor Mother) alongside a lot of artists who are almost certainly new to you – particularly as they’ve been drawn from disparate genres and geographies. Indeed, these are the kind of people who have been quietly pushing music in new directions, but who might get lost in the fine print of music programs, or pushed to the side in music headlines. In fact, I think the upshot is a potential victory not only for gender equality, but for independent and out-of-the-mainstream music, too. And knowing CDM readers, irrespective of your gender, I think that’s a value you’re likely to enjoy seeing represented.

As Ciani tells The New York Times:

For Ms. Ciani, the theme for Moogfest 2018 is only natural. “Women have long been intimately connected to electronic music, perhaps because it offered a path outside male-dominated conventional music worlds,” she said. “What has changed is an awareness of women in the field historically as well as a huge influx of contemporary talent.”

Moogfest Shines a Spotlight on Female, Nonbinary and Transgender Musicians

To that I’d add that it’s worth noting that the “influx” and “contemporary” parts are also closely tied to international artists. Our own CDM contributor will have a conversation with a fellow Romanian woman in the Bucharest scene for one link to that; I’ve also had conversations recently with a some Iranian artists about the situation for women making music there (and the resulting international scene as they travel), and … well, look down the list of countries below.

Moor Mother, the ground-breaking experimental project of Philadelphia’s Camae Ayewa, is one of many people deserving of first-wave headliner recognition – and now getting it.

We’ll have some interviews with artists shortly, so Moogfest’s lineup is your gain, wherever you are.

To watch the livestream:

You can watch from anywhere beginning at 12pm ET on Wednesday December 6 until 2pm ET on Friday December 8.
http://AlwaysOn.Live

Or watch here:

I’m also cross-posting to our CDM Facebook page.

The schedule:

The beginning is – starting very radical, in a nice way! Unfortunately, upstream bandwidth / encoding looks … very choppy. Hoping some of the artists sort that out better. (This is a real roadblock of livestreaming, but that’s a topic for another time.)

Livestream artists:

Admina
(Bucharest, Romania)
Adriana T
(Athens, GA, USA)
Alissa Derubeis
(Asheville, NC, USA)
Amy Knoles
(Valencia, CA, USA)
Ana Paula Santana
(Guadalajara, Mexico)
Andrea Alvarez
(Buenos Aires, Argentina)
Annie Hart
(Brooklyn, NY, USA)
Awaymsg
(Durham, NC, USA)
Aseul
(Seoul, South Korea)
Bells Roar
(Albany, NY, USA)
Caz9
(Dublin, Ireland)
Club Chai (8ULENTINA & FOOZOOL)
(Bay Area, CA, USA)
Despicable Zee
(Oxford, UK)
DJ Haram
(Philadelphia, PA, USA)
Dot
(Los Angeles, CA, USA)
Ela Minus
(Bogota, Columbia)
Elles
(London, UK, USA)
Emily Wells
(New York, NY, USA)
Fari B
(London, UK)
FOSIL
(Chile, Santiago)
Galcid
(Tokyo, Japan)
Jil Christensen
(Durham, NC, USA)
KALONICA NICX
(Bandung, Indonesia)
Kandere
(Melbourne, Australia)
Katie Gately
(Los Angeles, CA, USA)
Kim Ki O
(Istanbul, Turkey)
Lauren Flax
(New York, NY, USA)
Lilith Ai
(London, UK)
Lucy Cliche
(Sydney, Australia)
Lya “Drummer”
(London, UK)
Madame Gandhi
(New Delhi, India)
Mileece
(Los Angeles, CA, USA)
Moor Mother
(Philadelphia, PA, USA)
Nazira
(Almaty, Khazakhstan)
Nesa Azadikhah
(Tehran, Iran)
Nicola Kuperus
(Detroit, MI, USA)
Nonku Phiri
(Johannesburg, South Africa)
OG Lullabies
(Washington, DC, USA)
OTOMO X (Fay Milton & Ayse Hassan)
(London, UK)
PlayPlay
(Durham, NC, USA)
Pulpy Shilpy
(Pune, India)
SARANA
(Samarinda, East Borneo)
Sassy Black
(Los Angeles, CA, USA)
Stud1nt
(Asheville, NC, USA)
Sui Zhen
(Melbourne, Australia)
Suzanne Ciani & Layne
(Bolinas, CA, USA)
Suzi Analogue
(Miami, FL, USA)
Therese Workman
(New York, NY, USA)
Vessel Skirt
(Hobart, Tasmania)
Zensofly
(Durham, NC, USA)

Of course, even better than live streaming is – being there in person. (No buffering issues! Or… if there are, seek medical attention!)

Here’s the first-wave lineup announcement, including a couple of friends (and a couple of idols)!

Amber Mark
Annie Hart
Armen Ra
Aurora Halal
Bonaventure
Carla Dal Forno
CEP (Caroline Polachek)
Caterina Barbieri
DJ HARAM
Ellen Allien
Emily Sprague
Fatima Al Qadiri
Fawkes
Gavin Rayna Russom
Helen Money
Honey Dijon
Jamila Woods
Jenny Hval
Kaitlyn Aurelia Smith
Karyyn
Katie Gately
Kristin Kontrol
Kyoka
Lawrence Rothman
Madame Gandhi
Maliibu Miitch
Midori Takada
Nadia Sirota
Nicole Mitchell
Noncompliant
Pamelia Stickney
Sassy Black
Shanti Celeste
SOPHIE
Stud1nt
Umfang
Upper Glossa

from Create Digital Music http://bit.ly/2BOd2Zu
via IFTTT

We drove a $35,000 Mustang and a $120,000 Porsche to see which we liked better — here’s the verdict (F)

Standard

Porsche 911 GTS

  • Both the Porsche 911 and the Ford Mustang have been around since the mid-1960s.
  • The Porsche 911 Carrera GTS and the Ford Mustang GT have some similar specs, but different engineering and a big difference in the price tags.
  • For the money, it’s hard to beat the Mustang.

I like Porsches, always have. I call the legendary 911 my "drive for my life car" — if I had to drive for survival and didn’t know what I’d be up against, I’d grab the keys to a 911 and not look back. 

But I also like Mustangs. Classic American muscle. But also exhilarating to drive. Once I’d driven for my life in a 911, I might start looking for a Mustang to celebrate with.

Until recently, and despite Ford’s re-invention of the Mustang as a globally popular sports car, I thought of the 911 and the Stang as occupying different universes. 

And then I drove them more or less back-to-back. And not just any 911 or any Mustang. I drove a GTS and a GT. Some serious metal, some serious motors, some serious power.

Here’s how it went:

Photos by Hollis Johnson unless indicated otherwise.

FOLLOW US: on Facebook for more car and transportation content!

SEE ALSO: The 2018 Ford Mustang GT is a powerful, high-tech muscle car that’s a blast to drive

Here’s the Mustang GT, 2018 edition, in the canyons above Malibu in sunny Southern California. Price tag? My test car was not stickered, but you can get one for a starting price of about $35,000.

The 2018 Mustang lineup has been refreshed after a new design was rolled out in 2015. It’s still the same old Stang, but it’s now made a bit sleeker overall. Feedback has been quite positive thus far, and I’m sold, even though I had few issues with the beefier look of the 2015 original.

My GT’s color was a triple-aggressive Triple Yellow. Hot as hell, if you ask me, and hotter still with those blacked-out wheels.

You can read my review here.

 

And here’s a 2017 Porsche 911 Carrera GTS, in a different kind of canyon. A concrete canyon in shadowy midtown Manhattan.

The color? A very sexy Carmine Red, which is a $3,000 extra. Overall, the GTS is a — brace yourself — $120,000 for the base version. But our test car was $128,980 vehicle with the extra add-ons. 

Obviously, you could buy several Mustang GTs for that price. And that’s kind of the point, as you’ll see as we make out way through this comparison.

The iconic, bug-eyed look of the 911 has been progressively tweaked since the car was introduced way back in 1963. Poetically for our purposes, the Mustang debuted in 1965 and has achieved equally iconic status. 

In my experience, most people — Stang fans or not — love the way the car looks. The 911, not so much. It’s an acquired taste. But nothing else resembles it, so the 911 announces itself just as surely. My feeling is that I never avidly want a 911 in my driveway, but when I have one parked there, I believe it looks dang good. 

In the vast lineup of 911 variants, the GTS sits at the top of what you might call the lowest tier. It’s the best "entry level" Porsche money can buy; to jump up a tier, you need to buy the 911 Turbo.

As it turns out, the Mustang GT is similarly situated, above the base Stangs with four-cylinder turbo engines, but below the mighty Shelby GT350. And both our competitors here were hardtop coupés with nominal back seats, although the Stang’s are a bit more accommodating of adults.

Let’s get down to it. First up, Mr. Mustang GT.

What was a muscle car is now a muscular sports car, as Ford has updated the driving dynamics. Mustangs are now quite effective at going around corners, as I discovered while canyon carving in LA.

See the rest of the story at Business Insider

from SAI http://read.bi/2k1wjyt
via IFTTT

What to Know Your First Time at Hot Yoga

Standard
Photo by digboston.

Maybe you need something to warm you up now that there’s a chill in the air. Maybe you’ve heard that hot yoga is relaxing. Or maybe you want to try something that’s challenging and yet, in some ways, easier: your muscles are more flexible when they’re warm. Welcome to hot yoga.

If you haven’t heard of hot yoga, you might think I’m making it up. I promise I’m not. It’s a yoga class done in a studio that’s been heated to—in the case of Bikram, the original hot yoga—105 degrees Fahrenheit.

Advertisement

You may have done yoga before, but if hot yoga is new to you, the usual beginner advice still applies: tell the instructor you’re new, don’t be afraid to ask questions before class, and feel free to sit out the harder moves if you truly need a break.

Here are some of the things I learned my first time:

  • People wear bikinis. You’re free to wear anything you like, but it gets really hot in that room. Some people in my class wore leggings and some wore shirts, but nobody wore both. I would say the average amount of clothing was a pair of shorts and a sports bra.
  • It’s the same poses every time. Bikram yoga uses a very specific sequence of poses in a 90 minute class. (This isn’t true of every type of hot yoga, though.) Once you’ve done a few classes, it gets a lot easier to follow along.
  • You will sweat like you have never sweated before. You’ll need a large towel to put on top of your mat, or else it turns into a slip ‘n’ slide. Plan on showering afterward, which might involve awkward communal showers.

Now it’s time for you to tell us your thoughts on hot yoga. If you’re a devotee, what do you think is most important for beginners to know? And if you’re thinking about trying it, what questions do you have?

from Lifehacker http://bit.ly/2B6gXUB
via IFTTT

This Tool Lets You Examine Tons of Amazon Product Reviews at Once

Standard

Thinking of spending a pretty penny on that shiny new gadget? Well, you might want to take a look at some Amazon reviews first so you know what you’re getting into. If the thought of digging through hundreds of reviews sounds like a chore, though, this free tool will make it easy.

The Review Index is a neural network-based tool that scans Amazon user reviews for electronics and gadgets, looks for recurring patterns in reviews, then displays them all to you in easy to read charts and graphs. All you have to do is paste an Amazon product page URL in the tool (it only works for electronics and appliances right now) and click summarize, then you’ll see how many reviews there are for the product, how many of those reviews are old or unverified, and whether or not the reviews are littered with fake spam reviews. The Review Index checks for spam by checking the review count per reviewer, looking for unverified review streaks, high amounts of reviews in a short amount of time, and other factors.

The tool also shows you several key qualities the gadget has, then shows you how many reviews are positive or negative in that regard. For example, a summary of a keyboard might list key qualities like controls, comfort, build quality, gaming, and product reliability. The more green the bar is for each key quality the better. It’s a pretty simple way to get a thorough look at a product in a very quick glance. If you want more information, however, you can toggle open each listed quality and read some quotes from actual positive or negative reviews for the product.

The Review Index is fairly new (and limited), but it’s off to a solid start. The tool was the number one trending AI product on Product Hunt for awhile, and they’ve even got a Chrome extension in the mix. It’s still only a beta they hope to build on and expand to more product types on Amazon, as well as cover different markets in the future. You can try it out for yourself at the link below.

The Review Index

from Lifehacker http://bit.ly/2nDdXt1
via IFTTT

Someone Put Together Virtually Everything That Happened In 2017 Into One Image

Standard
2017

Shutterstock

I’ll fondly remember 2016 as the year seemingly everyone couldn’t wait to be over. We lost a number of our favorite celebrities (including a gorilla whose death somehow managed to overshadow most of the other passings), dealt with a contentious presidential election made one half of the country hate the other 50%, and dealt with an overriding sense of dread about what terrible thing was going to happen next.

Plenty of awful things ended happening in 2017 as well— for example, Jake Paul made enough money to manage to afford a $7 million mansion. While this year might not have been as terrible as 2016, it was certainly as eventful (if not more).

Beutler Ink put together an impressive collage of the year in review that made me remember a dancing hot dog captured the hearts and minds of the internet, fidget spinners were way too big of a thing, a tweet about a duck who likes milkshakes predicted the downfall of once-beloved celebrities, and HBO actually decided to put out a show called The Young Pope.

It also reminded my Fyre Festival was a thing that happened, a memory that will never fail to entertain me.

2017 summary collage

Beutler Ink

You can read a summary of every major event, meme, and pop culture moment incorporated into the collage on Beutler Ink’s website. There’s certainly a lot to digest, so you might want to view a larger version of the image here. There’s no telling what else is going to happen in the last few weeks of 2017, but let’s just hope the section featuring celebrity deaths doesn’t get much bigger.

 

from BroBible.com http://bit.ly/2AxYRJN
via IFTTT

Less Retail Jobs, More Amazon Robots: Get Used To It

Standard

When it comes to job creation in the United States, President Trump will be displeased to hear the latest findings from Quartz170,000 fewer retail jobs in 2017 – and 75,000 more Amazon robots. 

In November, we explained that while everyone likes to point the finger at Amazon, America’s retail apocalypse can’t be tied to just one catalyst (see: A Look At America’s Retail Apocalypse In Charts), however, fierce competition in the industry has induced an army of robots at Amazon’s fulfillment centers, which has certainly led to the termination of retail employees across the industry. 

At the end of 2016, Amazon was the eighth-largest private employer in the United States with a headcount growing by 40% year-over-year. So basically, as Amazon’s robots helped to disrupt the overall retail industry, the excess of cheap retail labor is now  flocking to Amazon. 

We must point out the majority of positions being added are jobs not careers inundated in wage stagnation.

The article notes, Amazon’s growth has to come at some cost, because there is no free-lunch here.. 

Does Amazon create more jobs than it destroys?

The analysis below from Quartz’s staff provides the shocking realization that retail job-loss in 2017 is the first annual decline since 2009. Even though Amazon is hiring at a fast clip, it won’t be enough to cover the losses in the rest of the industry. All the while, amazon added 55,000 robots this year as the trend in robot additions is now parabolic…

 Assuming the current industry trends continue through the end of the year, the number of employees in Amazon-related retail (that is, retail that Amazon competes with, such as book stores, as opposed to areas it doesn’t compete with, like gas stations) will decline by about 1% year-over-year. While that’s a small percentage, the number of job losses would be 170,000. That would be the first annual decline since 2009.

 

Amazon’s employment increases won’t be enough to cover the losses in the rest of the industry. We have assumed Amazon will maintain its current year-over-year headcount growth rate and will add 146,000 employees worldwide in 2017, a 43% increase (excluding Whole Foods employees). Even with that aggressive growth assumption, and including Amazon employees worldwide, the combined employment at Amazon and Amazon-related retail would still decline by 24,000.

 

Amazon has already added 55,000 robots this year and its growth rate is accelerating. The company stated it had 45,000 robots at the end of 2016, added 35,000 robots by the end of the first half of 2017, and then another 20,000 in the third quarter. We’ve assumed another 20,000 in the fourth quarter for a total of 75,000 new robots in 2017. While it may be difficult to prove causality, it’s not difficult to see the correlation between a decline of 24,000 human employees and an increase of 75,000 robot employees.

Change in employees and robots at Amazon and Amazon-related retail

Amazon’s growth and efficiency (driven by AI and automation) is a key factor in stock performance verse S&P Retail Index. We must also add, the Swiss National Bank (SNB) has been a larger buyer of the stock igniting momentum to the upside. The article notes, the company is increasing robotics investment, and in their assumption— machines could represent at-least 20% of the total employee base by EOY. Employees within Amazon should be concerned about this startling trend, because even they are not safe.

Quartz further said,

The National Retail Federation (NRF) has forecast that retail-industry sales will grow by around 4% in 2017. (US Census Bureau data also confirms that growth rate through the first nine months of the year.) Online shopping is growing even faster—at 10% so far this year.

 

Amazon’s US business represents 35% of that growth. And Wall Street analysts estimate that the company will represent 51% of all US online sales growth by the end of the year.  

In the grand scheme of things, Amazon represents 20% of the entire US retail industry growth in 2017- even though it only represents 3% total retail sales. As explained in the beginning, there are many catalyst contributing to retail’s demise, but it appears Amazon is ushering in a new normal with robots overtaking retail jobs in contradiction to President Trump’s glorious statements about explosive job growth.

For the time being, retail employees who have been laid off will get another taste of reality, when they drown their sorrows at the local strip joint.

Get used to it, this is the new normal.

 

from Zero Hedge http://bit.ly/2iVI7WE
via IFTTT

The All-New Supercar Lamborghini Urus Is The World’s Fastest SUV Ever

Standard

Lamborghini Urus SUV Photos

Lamborghini

Sport utility vehicles are no longer only for soccer moms and dads. Especially not the insanely equipped Lamborghini Urus. The Lamborghini Urus doesn’t just haul your Trader Joe’s groceries and a bike in the back. This bad boy can also haul ass and hit nearly 200 mph. Urus is another name for aurochs, which is an extinct species of large wild cattle that was the forebear to the modern cow. But all you need to know is that this is the fastest SUV ever.

This crazy crossover accelerates from 0–60 mph in 3.6 seconds, which is faster than a Chevrolet Corvette. This SUV Lambo that boasts 650-horsepower and has a top speed of 190 mph, making it the fastest SUV ever. This Italian stallion packs a low-mounted, all-aluminum 4.0 liter V8 twin-turbo engine that is front-mounted, which is unusual for a Lamborgini. This beast maxes out at 6,800 rpm. This super vehicle features carbon ceramic brakes and electronic stability control. There are various driving modes that include Strada (standard), Terra (off-road), and Neve (snow). There is also an option to upgrade to three more modes: Sport, Corsa (track), and Sabbia (sand).

Not only is the Urus ultra fast, but it’s also ultra-luxury. The four or five-seat sport utility vehicle features a luxurious leather interior and offers seat massages. A Lamborghini SUV not only comes with Lamborghini performance but also Lamborghini pricing. The Urus has a starting price of $230,000.

from BroBible.com http://bit.ly/2ABtfBi
via IFTTT