Feed aggregator

New Russia Sanctions: Washington, Delusional About US Energy Capacity, Lashes Out

Energy Bulletin - 48 min 4 sec ago

The effect of the sanctions will be to speed the Russian decline, forcing up world oil prices as soon as US tight oil maxes out and goes into its inevitable nosedive.

Categories: Peak oil news

Ukraine - headlines

Energy Bulletin - 49 min 23 sec ago

•US and EU Lose Major Energy Battle in Ukraine •Coordinated Sanctions Aim at Russia’s Ability to Tap Its Oil Reserves •Ukrainian 'seizes Avdiivka' in rebel Donetsk stronghold •Ukrainian prime minister Arseny Yatseniuk resigns •Ukraine votes to keep Western companies out of gas industry •US intelligence officials just gave a very unsatisfying briefing on MH17

Categories: Peak oil news

The Market Ticker - I Hate It When I'm Right (IoT)

The Market Ticker - 1 hour 24 min ago

Time for this one again....

The devices came from manufacturers of TVs, webcams, home thermostats, remote power outlets, sprinkler controllers, hubs for controlling multiple devices, door locks, home alarms, scales and garage door openers.

All of the devices included remote smartphone applications which were used to control them.

It was found that 90 per cent of the devices collected personal information, 70 per cent transmitted that data on an unencrypted network and 60 per cent had insecure user interfaces. Eight out of ten failed to require a strong enough password.

Good luck folks.  As soon as you start bringing this crap into your home you are giving criminals access to the most-intimate portions of your life and worse, you may be putting your safety at risk -- as I recently warned.

The obvious -- being able to open your garage door and thus gain access to the house and rob it, is only the beginning of the vulnerabilities.

No, manufacturers will not fix this.  They have no incentive to do so; indeed, they have every incentive not to do so as they want and use that data themselves!

Categories: Economics

The Surging Market Sector You’re Probably Ignoring

The Daily Reckoning - 1 hour 33 min ago

If the back-and-forth action in the markets has you banging your head against the wall these days, maybe you’re concentrating on the wrong stocks…

While the market churns near its highs and investors continue to fret over the makings of a possible correction, Asian stocks listed on U.S. exchanges are catching fire. Japanese markets are at 6-month highs. And Nasdaq data show a basket of Asian ADRs advancing to new 52-week highs.

Today, I want you to concentrate on China. Specifically, those much-maligned Chinese stocks that trade (sometimes erratically) here in the U.S. I see signs that the market is building up for a new speculative frenzy for beaten-down Chinese names. If you pay attention and hop onboard at the right time, you have the chance to score more than one massive trade before the end of summer.

First, let’s take a look at the breakout. After enduring a sideways trading range since the financial crisis, Chinese stocks listed in the U.S. are finally catching a bid. This group of stocks has been coiling for nearly six years—and they’re nowhere near their highs posted back in 2007…

Some of the biggest, most recognizable Chinese stocks are leading the way higher. Baidu Inc. (NASDAQ:BIDU), usually referred to as “China’s Google”, surged after beating earnings estimates late last week—including a 59% year-over-year gain in revenue. The stock is up nearly 20% in the past four weeks alone. And it’s not the only big mover.

Chinese ADRs are ramping across the board. I counted 18 liquid Chinese stocks up by at least 2% Tuesday afternoon. Of these, five were up more than 6% by the closing bell.

While these red-hot shares span a variety of sectors and industries, I think the best possible course of action is to narrow your search to Chinese technology and internet stocks. These are the names that could get the most attention.

Regards,

Greg Guenthner
for The Daily Reckoning

P.S.  If you’d like to learn more about specific profit opportunities, sign up for my FREE Rude Awakening email edition. Every issue contains at least 3 chances for you to discover real, actionable stock picks that could show you how to profit in any kind of market. Check it out for FREE, right here.

Categories: Economics

The Market Ticker - Oh Look At The Alarmists! (CME)

The Market Ticker - 1 hour 38 min ago

Things that make me in the morning.....

The latest warning comes from Paul Singer’s Elliott Management Corp., a $24.8 billion hedge-fund firm based in New York. Singer warned investors, in a letter obtained by Bloomberg News, of what he sees as the gravest threat: an electromagnetic pulse from the Sun that knocks out the grid for months or longer.

Bah.

Let's talk about what Singer is referring to -- a CME.

CMEs, or "Coronal Mass Ejections", are effectively a "storm in space."  The Sun's corona is comprised of highly-charged particles.  Every now and then (quite often, in fact; it is not uncommon for them to happen daily) a bunch of this highly-charged material is ejected from the Sun and heads outward at a high rate of speed.

If this material intersects the Earth's orbit (when it's there) and the material interacts with the Earth's magnetosphere it causes large shifts in that magnetic "bubble" -- a bubble that, incidentally, is utterly necessary for life on Earth.  This is one of the reasons life is possible on Earth -- the magnetosphere protects the planet from ordinary charged particles in the solar wind and cosmic rays; were it to not be present the upper atmosphere would be stripped off over time by those particles, ultimately destroying the ability of the planet to support life.

In any event the disruption in the magnetosphere presents a problem.  When a conductor (in this case long-distance wires used to carry power) is present in a magnetic field changes in that field induce a current in the wire.  This is how a generator works; a coil of wire is (intentionally) moved through a magnetic field, transferring the rotational energy of the coil to electrical energy.  The amount of induced electrical energy is determined by the amount of conductor so-exposed, the strength of the field and angle of incidence of the change in field to the conductor.

The field in this case is huge and in the case of long-distance electrical transmission lines the wire is very long -- ergo, the induced current would be very large.  Large enough to destroy transformers and switching gear. 

Thus, the warning.

Here's the problem -- CMEs are not something that sneak up on you.  At least not in the modern era; we have satellites that watch the Sun all the time, and we see the CMEs.  Having seen one we know which direction it was pointed and can compute whether a collision with the Earth's magnetosphere will take place -- before it happens.

So if we were to see such a thing coming we'd have quite a bit of notice -- typically one to five days of warning, and in any event (even for really fast-traveling ones) many hours.  And therein lies the solution -- disconnect the lines.

See, the risk isn't to the wire, it's to the connected equipment that can be arced over and shorted out.  No connection, no arc-over.

So what would happen if a really big CME were detected headed straight for us?  The long-haul and medium-distance part of the grid would be shut down.  This would result in most areas of the nation being blacked out, but damage would be somewhere between minimal and none.  After the storm passed, which doesn't take very long, those generating stations left running would be reconnected and used to restart the rest.

In short you'd have an "electrical holiday" for a day or two -- but not an event that would leave the nation blacked out for months due to massive damage.

In other words, relax.  Yes, CMEs are real.  Yes, there will be another one that is both very large and impacts the Earth.  Smaller ones happen all the time; indeed, CMEs are a nearly-daily thing, but space is vast and the Sun is a 360 degree ball; only a very few of these CMEs are "aimed" at the orbit of the Earth and at a time we will intersect it.  Those that do threaten to do so are detectable, and will be detected -- before they get here.  And yes, the next time one does come this way it will cause quite a bit of inconvenience -- but not the end of our civilization.

Categories: Economics

Local Communities Playing Vital Role in Marine Conservation

Energy Bulletin - 2 hours 27 min ago

...it’s good news that a first of its kind assessment of community-led marine conservation in the Western Indian Ocean adds to growing evidence that marine conservation works best when local communities are responsible for fisheries management.

Categories: Peak oil news

Five Industries Worrying About Peak Oil - ValueWalk

Peak Oil - Google - 2 hours 31 min ago

ValueWalk

Five Industries Worrying About Peak Oil
ValueWalk
The debate over the impact of peak oil has been raging for decades. Although few deny that the end of mass oil consumption is drawing nearer, educated estimates now range between 2020 and 2030. But more important than the timeframe of peak oil are its ...

and more »

The Market Ticker - GDP: First Look (+4%)

The Market Ticker - 3 hours 59 min ago

I wonder who's paying attention to the internals....

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 1.9 percent in the second quarter, compared with an increase of 1.4 percent in the first. Excluding food and energy prices, the price index for gross domestic purchases increased 1.7 percent, compared with an increase of 1.3 percent.

Real personal consumption expenditures increased 2.5 percent in the second quarter, compared with an increase of 1.2 percent in the first. Durable goods increased 14.0 percent, compared with an increase of 3.2 percent. Nondurable goods increased 2.5 percent; it was unchanged in the first quarter. Services increased 0.7 percent in the second quarter, compared with an increase of 1.3 percent in the first.

In other words the increase was largely durable goods -- if you believe it.  I'm not at all sure I do.

In addition:

Real nonresidential fixed investment increased 5.5 percent in the second quarter, compared with an increase of 1.6 percent in the first. Investment in nonresidential structures increased 5.3 percent, compared with an increase of 2.9 percent. Investment in equipment increased 7.0 percent, in contrast to a decrease of 1.0 percent. Investment in intellectual property products increased 3.5 percent, compared with an increase of 4.6 percent. Real residential fixed investment increased 7.5 percent, in contrast to a decrease of 5.3 percent.

I don't buy this one either; the durables report certainly doesn't bear that sort of increase out.

The change in real private inventories added 1.66 percentage points to the second-quarter change in real GDP after subtracting 1.16 percentage points from the first-quarter change.

That's a very large inventory increase -- and it's only good if you sell it through.  We'll have to see what the following quarter brings in that regard.

The markets loved the number, but the revisions that will come to Fed expectations from it should not be ignored.

Categories: Economics

Livestock: more than meat

Energy Bulletin - 4 hours 50 min ago

Beyond the debate about meat in our diet and the environmental impact of cows, there is an emotional and cultural angle on our human relationship with livestock that is rarely discussed.

Categories: Peak oil news

The Original Geo-engineers

Energy Bulletin - 4 hours 53 min ago

If we want to construct a healthy and resilient world for ourselves and our fellow creatures, we could do worse than look to the lowly beavers for hints on how it can be done.

Categories: Peak oil news

23 Food Sharing Projects That Are Disrupting Hunger

Energy Bulletin - 4 hours 54 min ago

Food is one of our most basic needs. And yet, for over 800 million people, food insecurity remains a daily issue.

Categories: Peak oil news

The Market Ticker - This Is A Parachute - Put It On And Jump!

The Market Ticker - 5 hours 35 min ago

Why does anyone tolerate this sort of intentional and, it appears, knowing misdirection and worse?

Nine reasons to love your mortgage?  I'll give you the first one, it probably is the cheapest way for you to borrow.  But the others?  Well, let's look.

2. It's a negative bond. 

That's bad, not good!  Why would you want a negative bond?  That this clownface nearly led with this reason is all you ought to need to know to go find him, warm up the tar and find the bag of feathers.

3. It leverages your entire financial life.

How is that good?  Oh yes, he does note that leverage multiplies both losses and gains, but then he makes a statement that while factually true is radically misleading -- while a brokerage can call a margin loan that is underwater, your bank can't on a mortgage.  

That doesn't matter, however, because the loss is still yours, and what's even worse is that you get to pay interest on lost money and you're locked in and forced to do so.  There is a ying for every yang; your brokerage will typically call your margin loan at the point it goes into negative equity -- while you've then lost everything you had in the account the bleeding stops there.  With a mortgage this is demonstrably not true!  If you put 5% or 10% down and the house goes down in value by more than that amount you are now paying interest on lost funds and unless you have the deficiency you cannot sell because you cannot extinguish the note, so the loss is yours on both a present and continuing basis, not the bank's!

4. It's a backup source of emergency money.  

No it's not, really.  If you have a job and other assets you can sell the assets or borrow against them.  If you lose your job getting a home equity line will be virtually impossible.  Further, see #3 -- increasing your leverage is always dangerous and with a mortgage due to the relative illiquid nature of real estate the risk is very-much tilted toward you.

5. It makes inflation your friend.

The hell it does.  The payments on a fixed-rate mortgage may stay the same but the value of the home does not if rates rise because the buyer has to finance with today's rates, not yesterday's.  There is no free lunch -- the premise of "inflation being your friend" is a false one, stoked with a 30-year trend of decreasing interest rates.  We're at the lower boundary for that and any pickup in inflation is either going to result in no benefit in that regard or worse, higher rates that destroy value and render your mortgage "upside down."

6. It lets you profit from falling interest rates.

Yes, but not really as this guy suggests.  Refinancing resets the amortization clock and since most of your payment in the first few years on a mortgage goes to interest doing this, even at lower rates, is a huge lose for you if you have a number of years into the original mortgage.  So the truth is that this only helps you if you just got the loan, where the clock reset doesn't hurt much.  Where falling rates do help is that they make it possible to finance more house with the same payment, and this tends to drive up prices.  Now tell me -- which is more likely over the next 20 years -- lower or higher rates?

7. It's an effective way to build wealth.

No, it's not.  As noted the actual appreciation in price barely outstrips inflation.  The problem with "forced savings" is that it's a chimera; you cannot both have forced savings and a home equity line, for example, nor can you have forced savings and constant refinancing.  So which is it, asshole?

8. It's your default investment.

And a poor one at that.  Next.

9. Paying it off can drastically reduce your cost of living.  

Well, yes.  And not having it in the first place can do so sooner.  This is particularly true when you consider that the average $200,000 mortgage costs you nearly $150,000 more in interest (assuming a 30 year, 4% loan.)  People will often claim that due to inflation the "real cost" is much lower, but that's false; the problem with the claim is that most of the interest cost is front-loaded due to how amortized loans work (that is, the early years are mostly interest) and you lose the purchasing power immediately, along with the inability to invest those funds in something productive.  And no, that's not necessarily a bubbly thing like the stock market either!

So all-in Jonathan has 1 out of 9, with the other 8 reasons to "love" your mortgage really being reasons to hate it instead, along with pelting him with rotten tomatoes wherever you may see him for trying to goad you into destroying your financial life.

PS: Once you're out of the plane you will discover that "parachute" you were handed is in fact a knapsack.  

Bon voyage.

Categories: Economics

Cold War leftovers

Energy Bulletin - 7 hours 38 min ago

One should be grateful to one’s critics–it is much better to be criticized than ignored.

Categories: Peak oil news

Community Column: Cara Naden of Transition Langport explores what it means ... - Western Gazette

Transition Towns in the media - 8 hours 20 min ago

Community Column: Cara Naden of Transition Langport explores what it means ...
Western Gazette
Two of his students developed the Transition towns concept. The definition for Transition is this: “The process or a period of changing from one state ... In 2006 Transition Town Totnes become the first Transition initiative and quickly other grass ...

Categories: TT news

5 Industries Worried About Peak Oil - 24/7 Wall St.

Peak Oil - Google - 30 July 2014 - 12:33pm

5 Industries Worried About Peak Oil
24/7 Wall St.
The debate over the impact of peak oil has been raging for decades. Although few deny that the end of mass oil consumption is drawing nearer, educated estimates now range between 2020 and 2030. But more important than the timeframe of peak oil are its ...

and more »

The Transitioner's Digest (July)

Transition Culture - 30 July 2014 - 11:00am

This month our theme has been 'Celebration'.  We have set out to explore 5 questions: Why do you celebrate? Why is celebration important? What are the ingredients of good celebration? What is the wider context for celebration? What is the personal context for celebration?  We started by addressing some of these questions, especially the third one, in our monthly editorial.  It reflected on Transition Town Lewes' recent 'Seven Year Itch' celebration, and what some of the key ingredients of good celebration might be.  

We published a beautiful article by Ian Wild, drama teacher at Kinsale Further Education College in Ireland, a celebration of the cob and cordwood amphitheatre built at the college, which in itself links back to the very earliest days of Transition, as well as being a celebration of the power of natural building materials.  While not really part of our theme, we also heard from Naomi Oreskes about her recent book The Merchants of Doubt and what it tells us about the roots of organised climate scepticism.  

Site editor Rob Hopkins has been on the road (well, train) recently, and shared his reflections on two recent trips, one to Germany for the launch of the German edition of The Power of Just Doing Stuff, (Einfach. Jetzt. Machen!), and one to Lancaster for the recent Roadshow event there.  He also shared the odd tale of 'The House That Baz Built'.  

Ecopsychologist and addictions specialist Chris Johnstone helped us to address the question of "why is celebration important?"  "Without celebration we wither away" he told us.  "Celebration is a form of psychological nourishment and it’s absolutely vital to keep ourselves going", he continued, before wrapping up the interview with some music.  For the wider context question we had also hoped to interview John Croft, founder of 'Dragon Dreaming', but it just didn't quite work out.  Perhaps another time. 

Sophy Banks, in her monthly column shared what felt for her to be some of the key ingredients for building "A Culture of Celebration".  She also discussed why it is so important to build appreciation into how our Transition groups work: 

"Brain scientists have found that our brains are wired to be like Velcro to criticism – it goes in really quickly, and sticks – but like Teflon to praise – it slips past and is slow to go in".

Fiona Ward of the REconomy Project, in a post called On learning to celebrate a £10,000 failure, looked very honestly at the failure of an early REconomy Project, and what she learnt from it, an experience she described as:

"...one of being willing to stop heading in a direction that required too much efforting to make it work (and was perhaps too entrenched in traditional thinking), and to admit it wasn’t working. Then lift up my head, take time to reflect and then tap into a direction that felt/feels much more effortless, where energy and results naturally seem to flow". 

Three Transition initiatives shared their stories of "How We Celebrate".  Crystal Palace Transition Town's Joe Duggan talked about how their AGM has become the opportunity for a great celebration of all that the group has achieved over the previous year (*Spoiler Alert* which is really rather a lot).

Four members of Transition Bristol wrote about their recent Small Green Sunday event, reflecting on what the group has done over the past 7 years.  We also heard how Transition Town Wilmslow's Energy Group weave celebration into what they do.  

Transition Network's Ben Brangwyn interviewed author, social entrepreneur, thinker, blogger and systems thinker, and also member of Bowen in TransitionDave Pollard, while he was at Schumacher College recently for their Dark Mountain course.  They looked at celebration from Dave's own very particular angle.  

Our theme for August will be, as it has been for the past couple of Augusts, The Power of Not Doing Stuff, where we try to model taking time away from doing Transition, switching off phone and laptops and reconnecting with ourselves, our families and the actual living, breathing world.  We will be back for the start of September with the theme of Making Space for Nature, which promises to be fascinating.  See you soon. 

Categories: TT news

Why the Government Views You As Collateral Damage

The Daily Reckoning - 30 July 2014 - 9:12am

The illusions, mistakes and misconceptions of central planners take their toll in a great variety of ways — mostly as costly nuisances.

Occasionally, when they are particularly ambitious, they make the history books.

Napoleon’s march on Moscow. Mao’s great famine. The Soviet Union’s 70-year economic experiment. These fiascos are caused by well-meaning, smart public officials. They are the Hell to which the road paved with good intentions leads.

The pretension of the central planner is that he knows a better future — one that he can design and bring about.

Sometimes, a mistaken public policy can be reversed or abandoned before it has done serious harm. Mostly, however, a combination of special circumstances makes correction impossible. The disastrous policies are reinforced until they finally reckon themselves out in a catastrophic way.

Large-scale planners fail because they believe three things that aren’t true.

First, that they know the exact and entire present state of the community they are planning for (wants, desires, hopes, capabilities, resources); second, that they know where the community ought to go (what future would be best); third, that they are capable of creating the future they want.

None of those things is more than an illusion. Together, they constitute what F. A. Hayek called “the fatal conceit, that man is able to shape the world around him according to his wishes.”

Full knowledge of current conditions would require an infinite amount of real information. As 19th century philosopher, Samuel Bailey, wrote in 1840, it would require “minute knowledge of a thousand particulars which will be learnt by nobody but him who has an interest in knowing them.” The planners have nothing like that. Instead, they rely on a body of popular theories, claptrap and statistical guesswork.

As to the second point — that they are blessed with some gift that tells them what the future should be — we pass over it without argument.

No one really believes that people in the United State Congress or the French National Assembly or in the bureaucracies and think tanks of these nations have anything more to guide them than anyone else. Which is to say; all they have is their own likes and dislikes, prejudices and fears, and self-serving ambitions.

Each man always does his level best to shape his world in a way that pleases him. One wants a fat wife. One wants a fortune. One wants to spend his time playing golf. Each will try to get what he wants depending upon the circumstances.

And the future will happen.

The pretension of the central planner is that he knows a better future — one that he can design and bring about. The god-like vanity of this assertion is staggering. No one really knows what future is best for humankind. People only know what they want.

I presume that the best future is the one in which people get what they want… or at the very least what they deserve. A man burning in hell may want ice cream; it doesn’t mean he will get it. But the central planner presumes to know not only what he wants, but what he should have.

It is scarcely worth mentioning, additionally, that the central planner’s hands are as empty as his head. He has no ice cream to give anyone. Where individual plans and evolution will take us collectively, no one knows. Fate will have the final say. But the central planner will have his say first, disrupting the plans of millions of people in the process.

He certainly has no ‘amor fati’ … a faith in, and an affection for, Fate. It would put him out of business.

Instead, he steps in to impose his own version of the future. And as soon as the smallest bit of time and resources are shanghaied for his ends rather than those of individual planners, the rate of natural, evolutionary progress slows. That is, the millions of private trials that would have otherwise taken place are postponed or canceled. The errors that might have been revealed and corrected are not discovered. The future has to wait.

Even when they are applied with ruthless thoroughness, central plans inevitably and eventually go FUBAR. No ‘workers’ paradise’ ever happens. The War on Drugs (or Poverty… or Crime… or Terror… or Cancer) ends in a defeat, not a victory. Unemployment does not go down. The ‘war to end war’ doesn’t end war. The Domino Theory falls; the dominoes don’t.

Or, if any of these grand programs ‘succeeds,’ it does so by undoing previous plans often at a cost that is far out of balance with the reward. World War II is an example of central planning that seemed to work. But the Allies were merely nullifying the efforts of more ambitious central planners in Germany and Japan.

Generally, life on planet Earth is not so ‘rational’ that it lends itself to simpleminded, heavy-handed intervention by the naïve social engineer.

Sure, we can design bridges. Houses too. And particle accelerators. But we cannot design economies. No more than we can invent real languages. Societies. Customs. Markets. Love. Marriages. Children. Or any of the other important things in life.

Large-scale central planning can be effective, but only by pulverizing the delicate fabric of evolved civilized life.

Not to overstate the case, however, it is also true that humans can design and achieve a certain kind of future. If the planners at the Pentagon, for example, decided that a nuclear war would be a good thing, they could bring it about. The effects would be huge. And hugely effective.

This extreme example reveals the only kind of alternative future that the planners are capable of delivering.

Large-scale central planning can be effective, but only by pulverizing the delicate fabric of evolved civilized life. It is a future that practically no one wants, because it means destroying the many different futures already in the works — marriages, businesses, babies, baptisms, hunting trips, shopping, investment, and all the other activities of normal life.

Not all central planning produces calamities on that scale, of course. But all, to the extent they are effective, are repulsive. The more they achieve the planners’ goals, the more they interfere with private goals, and the more they retard or destroy the progress of the human race.

Still, this view I am putting forth is hardly accepted wisdom.

Most people would dispute that it is wisdom at all. It is a minority view, held by such a small group that all of its members together could be soused with a single bottle of good whiskey.

Regards,

Bill Bonner
for The Daily Reckoning

Ed. Note: In today’s issue of The Daily Reckoning readers saw a chance to grab a copy of Bill’s new book before it is available on Amazon or anywhere else. Just a small part of being a reader of the FREE Daily Reckoning email edition. Click here to sign up right now and never miss another great opportunity like this.

Categories: Economics

The Market Ticker - BlackBerry Buys SecuSmart

The Market Ticker - 30 July 2014 - 7:00am

In short, what does it mean?

NEW YORK -- BlackBerry said Tuesday that it will acquire Secusmart, a German mobile security company. The purchase highlights how BlackBerry is doubling down on the enterprise as well as mobile security.

The two companies have been partners since 2009. The plan is for Secusmart, known recently for its anti-eavesdropping software, to become a core component of BlackBerry's security portfolio and enterprise mobility management pitch.

This company has a very cool little implementation -- it's basically an AES encryption chip (hardware-based) along with an authentication chip built into a standard micro-SD card envelope.  When plugged in you wind up with an authenticated crypto system that is then accessible over the SD interface, allowing encryption of voice.

One of the issues for mobile handsets is that current ARM processors prior to ARMv8 do not support hardware crypto.  Voice traffic requires fairly high performance in order to work reliably, so hardware acceleration is a must.

This also offloads the potential for contamination of the system crypto into the card, compartmentalizing that risk (and, if a problem is found, allowing fixing it without trashing the underlying device!)

I like it, in short.  This makes BlackBerry the only company with a demonstrably secure path forward for not only data communications but voice and SMS, and brings forward the potential for carrier-independent and cross-carrier secure transport in both government and enterprise environments.  

With a bit of work that capability might even be extensible to consumer users as well.

Categories: Economics

The Peak Oil Crisis: The SunCell - Falls Church News Press

Peak Oil - Google - 30 July 2014 - 5:24am

The Peak Oil Crisis: The SunCell
Falls Church News Press
This disruption of the existing order would also be massive for coal, gas, and oil would no longer be needed except as petrochemical feed stocks; the electric grid could disappear or change radically; and buildings could become self-contained with gas ...

Your Chance to Cash In on a Massive Infrastructure Overhaul

The Daily Reckoning - 30 July 2014 - 4:45am

The Internet, and its user base of billions of people worldwide, is in the middle of a crisis — a bandwidth crunch that impacts us all.

Since the Internet boom of the 1990s, Internet infrastructure has not had a major upgrade in carrying capacity. Now, for the first time in more than a decade, we are on the edge of an immense spending cycle aimed at upgrading those “old pipes”.

The critical shift in standard that needs to take place to keep those “pipes” from clogging is from decade-old 10G (10-gigabit) bandwidth capacities to the faster, higher-capacity 100G network — also known as 100G Ethernet. This new network bandwidth will become a global standard, running underground from city-to-city and undersea from continent-to-continent.

As with all creative destruction, there will be victims and beneficiaries. Luckily for you, this new spending cycle will be a multiyear benefit for one particular group: fiber optic networking companies.

You see, the fast lane of the information superhighway travels on pulses of light, moving primarily through fiber-optic cables and secondly through satellite.

America’s favorite sport is coming to grips with the need to embrace new technology that connects its fans.

Over long distances — and increasingly over short ones — fiber-optic technology supplies the communications medium of choice. Here’s why fiber-optic networking and equipment suppliers will be one of the best tech trades of the decade …

The Three Big Drivers of Big Data

There are three big drivers of traffic in big data…

The first is video distribution.

Google’s YouTube, Hulu, and Netflix have helped video become the biggest single consumer of bandwidth capacity in the network. For one thing, these platforms keep adding higher quantities of video to their services. But the video content has improved in quality as well. High definition video doubles bandwidth, and emerging 3-D video formats doubles it yet again.

The second driver of the bandwidth crunch is voice.

Leaving aside the fact that programs like Skype, FaceTime and Google Chat combine high bandwidth video with their phone calls; communications are becoming more and more international. Such long distances demand more reliability. Moving alongside voice is also music, which is digitized and broadcasted through popular apps like Pandora, Spotify, and more.

Last of our big three bandwidth users is data.

Cloud computing, or the migration of software and computing services from independent networks to online providers, is the big kahuna when it comes to data. When we store our data in cloud-based data centers, it’s channeled over vast geographical areas in order to maintain resilience and closeness to end-users. That means that when we plug into the Internet, The Cloud must be able to accommodate incoming traffic from anywhere and everywhere.

There are, of course, less obvious contributors to the bandwidth crisis.

Machine-to-machine communications contribute automatically. Smart grids such as connected utility-metering systems use a lot of bandwidth too. Remote monitoring services are tied to hospitals, schools and security systems. And then there are the ever-populating point-of-sale retail terminals of the variety you use in the “self-checkout” line at the grocery store.

The point is: big data cannot be stopped. And somebody is going to need to build Internet infrastructure that can handle all the growth. At this rate, bandwidth infrastructure will become as important as road, water and electricity systems within the next decade.

NFL Stadiums Embrace Tech

I’m not the only one saying that either. America’s favorite sport is coming to grips with the need to embrace new technology that connects its fans.

According to CNN,

“Stadium owners and operators need to get their hands on the fact that they need to put in Wi-Fi like they need to put in plumbing.”

Think about it. When you’re at a game, sweep the crowd and see how many people are using their smartphones. People are constantly keeping track of the score, updating their fantasy football picks, forwarding highlights, sharing moments and chattering through social media …

And if you don’t see this, it’s because the stadium you’re in can’t handle the web traffic!

About a dozen stadiums in the U.S. have Wi-Fi capability, and about 20 have Wi-Fi in certain areas. Most operate on service provided by Verizon and/or AT&T.

The problem is that these cellular carriers may not be able to handle the bandwidth at their current capacity.

That’s not good news for some of the biggest telecom operators, like AT&T (T), Verizon (VZ), British Telecom (BT) and China Mobile (CHL). “Each year, the carriers look for ways to innovate and get greater productivity,” affirms Andrew Schmitt, an optical analyst at Infonetics Research. “Moving to 100G is a big jump, but they have to do it to remain competitive.”

In addition to the big operators, wholesale telecom carriers such as Level 3 Communications (LVLT) and Internet network service providers like Equinix (EQIX) have the same problem.

Then there are the tech giants such as Amazon (AMZN), Microsoft (MSFT) and Google (GOOG). Each must invest heavily to build and expand massive data networks. For three consecutive quarters, for example, the king of search spent over $1 billion on data centers and servers.

Such companies have proved they are willing to spend billions to hold existing customers and claim new market share. They have no choice but to upgrade their networks to 100G speeds in the future.

The Internet’s present infrastructure was not built with the intention of being the chief conduit to deliver all this data, voice and video content.

We have no choice. We must make the switch.

The 100G expansion will favor innovators who are ahead of the game

Here is a list of companies for you to check out that are all competing in this sector:

Ciena (NASDAQ: CIEN), JDSU Uniphase Corp (NASDAQ: JDSU)., Finisar Corporation (NASDAQ: FNSR), Infinera (NASDAQ: INFN)…

Smaller ones include Oclaro, Inc (NASDAQ: OCLR) and NeoPhotonics Corp (NYSE: NPTN).

The 100G expansion will favor innovators who are ahead of the game, and weaker competitors will be increasingly disrupted and weeded out of the industry. The past decade has seen fiber optic networking companies consolidate, with more consolidation expected as different vendors compete for the new network standard.

That’s why it’s so important to be ahead of the game with the most disruptive tech and most disruptive business model going forward.

Don’t worry. We’ll continue this theme in your future issues.

Best,

Josh Grasmick
for Tomorrow in Review

Ed. Note: The overhaul of the existing fiber-optic infrastructure will be a huge boon for a handful of lucky tech companies. To make sure you get in on the ground floor of this emerging trend, sign up for the FREE Tomorrow in Review email edition.

Categories: Economics
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