By: Economic & Finance Report

Ray Dalio founder and CEO of the world’s largest hedgefund, Bridgewater Associates, has told investors to be mindful in going in the global markets. He indicates the economy will probably do well for the next couple of years but a downturn is also approaching, over the horizons.  Bridgewater Associates LP manages a huge portfolio of over $150 billion in global investments and assets, around the world.

Dalio notes that the US economy under President Trump’s watch is doing well and corporate profits are doing better, but that rising debt has accumulated vastly and this needs to be monitored by companies and investors also.  The severity of corporate debt and lack of employee rising wages; will place a shock in the economy in the future, and Mr. Dalio is making it mindful that this needs to be noted and evaluated, along with current market trends. -SB


By :James Lyman BSAE, BSEE, MSSM

Economic & Finance Report

Today, when you say ‘technology displacement of people’, everyone thinks of the poor little old factory worker standing on the assembly line. Some machine is brought in, the down trodden worker is handed a pink slip, pointed to the door and told, “Don’t let the door hit you in the butt when you leave!” But this is the displacement when I was a millennium … many decades ago. This is the image most Americans still have of technology displacement. When the 2008 recession started, you may have noticed a number of news stories about professional people, corporate middle management making six figure incomes, who got laid off. Where once, they could have a new job in just days, or a few weeks, they had gone months even years without any offers. They were no longer needed, simply because those who remained working were now able to do the jobs of those laid off because of technology. In other words, those laid off had been displaced by technology just as factory workers had been decades before.

Images of factory workers being laid off when a new machine is brought in to do their jobs, persist as how technology displacement works. In reality, there are three ways or methods which people are displaced by technology, and they are:

1) Direct Displacement – The traditional technology displacement that everyone always think of, where a machine is brought in that directly replaces an individual, often several people. The classic example is the machinist, those workers who created the industrial revolution, who made modern America. These people were replaced, rather quickly I might add, by robot machine tools that not only did the work of highly skilled machinist, but did it faster, more accurate and much better all around. Not only did these robot machines take over the highly skilled and much sought after jobs of machinist, but they allowed the extensive migration of manufacturing

from America. Those skills once so required by manufacturing were no longer needed, making machinist obsolete.

2) Oblique Displacement – The second means of displacement is by a technology allowing one person to do the work once done by many. Using a machine, if one person can do the work once done by ten, then those remaining nine people are out of work, and so therefore are no longer needed. A 90% reduction of the work force. An example is draftsmen, those skilled workers who create and maintain the engineering drawings needed to define a product for manufacture … or for building your new house. These drawings were once done using drawing boards, T-squares, pencils, scales, dividers, compass and triangles. Just like an artist does, the draftsman would draw an image on paper of some part or thing, which was scaled so someone could make that part without error. This was a highly skilled occupation which took considerable time to correctly create such drawings, and even more time to make changes as a design evolved. But using a computer and CAD (Computer Aided Design) software, a draftsman could not only make drawings faster, but much more accurately, more accurate than a part could actually be made. A draftsman did the work of many traditional draftsmen using pencil and paper.

3) Indirect Displacement – The third method is where technologies displaces a number of people who have the intellectual ability to do the work of an unrelated career field. While not as clearly identified as the first two methods, especially the technologies doing the displacement, it has had a profound effect across the American economy. For years technologies have been displacing young people, especially new college graduates, who find limited job prospects for their field of studies. They have returned to universities to acquire a law degree, then pass the bar to become lawyers. These process has so glutted the job market for lawyers, that now between 20 and 50% of new lawyers are unable to find employment as lawyers. While there is no machine that has directly replace lawyers, they are nevertheless being displaced indirectly by a number of technologies

I just finished reading an interesting book, “The Second Machine Age” (1) which described how technologies displaces people by allowing reorganization of businesses so fewer people are needed. This is a form of oblique displacement, and explains why those corporate middle managers, making six figure incomes, got laid off. No machines or technologies were developed to deliberately replace them, it was just a consequence of a number of technologies. However, this is changing too, with a new artificial intelligence technology called Watson. If you Google three words … IBM, Watson and Jeopardy you will find a recent revolution in artificial intelligence, a machine named Watson that went against the two very top winners of the quiz program Jeopardy and beat the pants off them. The AI technology is now available to the commercial and medical communities, including television ads promoting sales of these systems. H & R block is now using this technology to prepare income tax returns.

The reality of today’s kids, the millenniums, is they are getting the worst deal since the Indians sold Manhattan for twenty-four dollars.

Our school systems have completely failed to provide the education necessary for the twenty-first century, continuing to prepare America’s youth for my world, the mid twentieth

century, a world already faded away and gone. They now live in a world which every few years, they must reformulate themselves for a new job … a new career field, and those who can’t are left behind. Therefore, the only real answer to technology displacement is education– the real education of the math and sciences which gives an individual the solid foundation to be able to continually reformulate themselves to continue a career.

No doubt, today’s youth are facing an uphill battle if they are to have any economic or financial future.

1.“The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies”, Erik Brynjolfsson, Andrew McAfee, W. W. Norton & Company, New York, 2014


By: Economic & Finance Report

Africa’s biggest cocoa producers Ghana, and Ivory Coast, will partner together to increase production of the cocoa bean. Both countries suffered economically because of the declining revenue of cocoa beans.

Presidents of Ghana, Nana-Akufo Addo, and Ivory Coast President, Alassane Ouattara met on Friday to discuss ways of increasing cocoa bean production and better coordinate between countries on increased development of the plant.

Both countries will be working with the African Development Bank, to find ways on capitalizing on cocoa and increasing the revenue in the sector. Ivory Coast and Ghana want to export more cocoa, which eventually helps revenues in both countries. Cocoa sales have suffered within the last several years worldwide and cocoa futures that are traded in global markets, have declined drastically as well; in daytime trading.  -SB


By: Economic & Finance Report

General Motors announced they were closing its operations in Venezuela. GM is closing shop in Venezuela because the Maduro government has seized their plant in Valencia.

As protests were on going in the country on April 19, 2017; protesters were clashing with the Maduro government over free and fair elections; and food scarcity within the country. Maduro’s government decided to take over the factory in Valencia. This seemed to be the last straw for the General Motors corporation.

The plant in Valencia, last produced a car in 2015 but the company has over 79 dealerships in Venezuela and close to four thousand employees.  Venezuela has taken over private companies property many times before, especially when protests have broken out in the country. -SB


By: Economic & Finance Report

Goldman Sach’s rolled out a new review/performance based system to rate and grade employees performance at the work place. The new system allows employees to attain, receive information and feed back from their supervisors and managers.

This innovative system allows employees and managers to get feedback among themselves all year round.  Entitled Ongoing Feedback 360+ allows employees more interactons and communication with their superiors on many work related issues and allows the managers to communicate to the employee on how to handle different work related issues, in a timely fashion.

The Ongoing Feedback 360+ will be used to allow direct communication with management and the employees at Goldman Sach’s, in a real time based ordinance. -SB


The US Treasury has placed the Swizz Bank on its bi-annual watchlist, for currency & export manipulation. The  Treasury indicates that within the  year Switzerland National Bank, has intervened and engaged in a major surplus s in trade amongst  the USA


The Swizz National Bank has used interventions in the past to devalue the currency against the dollar, that has helped their exports of goods and services and it has helped their currency.

The Swizz Natinonal Bank has indicated that they are not gaming or manipulating the currency but are trying to take pressure off the currency. -SB

Health Insurance Gorilla: The One Ton Gorilla In The House; That No One Talks About In The Debates About Health Insurance!!!!!!!!!

Economic & Finance Report

By :James Lyman BSAE, BSEE, MSSM

Since Hillary Clinton’s attempt to reform the health care system with insurance reforms, through Obamacare and now our present debates to again reform health insurance, there has always been a ‘one ton gorilla’ silently sitting in the middle of all these political debates and machinations. A massive gorilla that’s always been present, sitting quietly right square in the middle of it, dominating the whole national debate, but no one ever admits to its presences let alone considering its impact on the problem. And that two thousand pound gorilla is the growing problem of obsolete people in the midst of our economy!

Since the start of my engineering career in the seventies, I have witnessed one career field or class of jobs after another disappear to new technology. And while these people have mostly gone on to find new jobs, inevitably they are lower paying jobs because lower skills are required. Anytime you reduce the skill-intellectual requirements of a job you reduce your cost of labor simply because more people are able to do that job. This displacement by technology has created a growing class of Americans who are obsolete and therefore less able to make substantive contributions to society as reflected by their lower pay scales. The principle problem of these proposed health insurance programs for America is the growing abundance of people unable to afford health insurance simply because they have so very little to contribute to society. Because they are obsolete, they no longer have the ability to make contributions and therefore have little to no money. That’s the two thousand pound gorilla in the room. The preponderance of obsolete people is the gorilla weighting down, indeed crushing any and all efforts to provide access to health care to all Americans.

The structure of a bridge provides a perfect analogy, since it must support more than what’s crossing over it. It must also support the weight of itself, the weight of the structural members

that holds the bridge up. In general, the weight of the bridge far exceeds the weight of what crosses over it, so most of the weight of the bridge is supporting the weight of the bridge itself, only a small amount supporting the loads crossing over it. It should come as no surprise that as the weight on the bridge increases, without a corresponding increase in what the bridge is made of (weight), the bridge is less able to support these loads. This little paradox of bridge weight means it’s not enough to just add structure to support additional weight, you must also add structure to support the weight of that added structure. That added structure is many times more than was added to support the additional weight on the bridge.

OK, so what’s the point? Like a bridge, the bulk of working people support the working force by paying for infrastructure, government services such as police and schools, maintenance of public works, public communication networks (roads, waterways, air ways) … any and all parts of supporting a modern society. That means each is making money to pay a part for that support, while those who are too far behind, who have few to no skills needed in the twenty-first century, are unable to pay anything, so they’re the one ton gorilla sitting on the bridge being supported by the rest. But like the supporting members of the bridge, the bulk of the support workers provide goes to support the workers themselves with just a little left over to support the gorilla. Many people think that each individual worker is in turn able to support one of the unfortunate ones who are unable to make substantive contributions to society. This bridge analogy shows why this assumption is so invalid, because it isn’t a ‘one for one’ relationship … most of the bridge structure goes to holding up the bridge itself, not the gorilla.

But worst yet, obsolescence of people means the gorilla is made larger (heavier) by subtracting from those who are supporting the bridge and hence the gorilla. As the gorilla grows heavier, the bridge grows weaker and therefore less able to support the load on it. The burning of a candle at both ends! Eventually, just like a real bridge, it is no longer able to support the load and collapses. This is not some abstract intellectual exercise for debating in pubs and cocktail parties, we are seeing it now in Greece, Turkey, Italy, Spain … we’re seeing it now in Venezuela where the collapse of the socialist economy has people killing and eating their cats and dogs!

Social Security is a prime example of the many supporting the few. When first passed, there were a little over 16 workers to support each elderly recipient, while today it’s 2.6 supporters per recipient. And more and more of these supporters are the millenniums, at a time when fewer and fewer of them are able to support just themselves. The structure of the bridge is eroding while the gorilla continues to grow!

Principle factor in the health care problem is people are not advancing technologically, and therefore are less able to make substantive contributions to society. This is reflected in the people’s inability to pay for their heath care. This is the one ton gorilla that everyone is ignoring in the calculus of health care as well as other aspects of social problems. Right now, one side advocates extensive government control of the health system to resolve the mirid of problems, while the other side advocates the free markets to resolve those problems, with neither considering any aspect of the obsolete people who are the actual forcing function of these problems.

And as it stands now, it’s the millenniums and Z-generation who are will to be the fall guys for


By: Economic & Finance Report

Las Vegas gambling icon, Billy Walters has been convicted by a jury for insider stock trading. Mr. Walters had earned more then $43 million dollars from an insider trading tips over several years,  from former chairman of Dean Food Company, Tom C. Davis. Davis testified against Walters stating that he made the $43 million dollars off of Dean Food’s over the course of approx six years. 

Davis had been Walter’s best friend for over 20 years, and he was also the prosecution’s star witness against Billy Walters. Walters considered one of the greatest gamblers in the world, mainly betting on sports game, was also proactive in equities trading. His dominance as a multi millionaire, started in the gambling circut, then escalating his winning streak into the equities markets.

Mr. Walter’s businesses span from car rentals, golf clubs, real estate and car dealerships in Las Vegas, Nevada. His business empire is said to be worth $500 million dollars. He was convicted of all ten counts presented by the prosecutors and his sentencing is to July 14, 2017. -SB


By Economic & Finance Report:

Krispy Kreme owner JAB just placed another food entity in its business portfolio, by acquiring Panera bread for $7.5 billion dollars. Krispy Kreme head honcho Oliver Goudet stated that himself and his team strongly “supported the vision” of Panera and it’s strategic alliances.

Panera Bread will be serving the same soup specialities, and the menu will not change drastically, because of the new takeover by JAB. Panera will continue instilling its visionary primal goals and continue its deliverance in the successes that has  been provided to them.  In the USA and Canada alone,  Panera Bread has over $2,300 restaurants and counting. -SB


By: Economic & Finance Report

 Former Fed President of Richmond’s Federal Reserve Bank, Jeffrey Lacker has resigned today; effective immediately. Richmond’s Federal Reserve Bank  had issued a statement about the resignation of Lacker.  The head of Richmond’s Federal Reserve, Mr. Jeffrey Lacker had improper discussions with a financial analyst from Medley Global Advisors, on “confidential information” relating to Federal Reserve’s interest rate policy.

There was an ongoing investigation that the Federal Reserve Inspector General, Mark Bialek just concluded. No charges will be brought on Mr. Lacker, but he has lost his job as Richmond’s Federal Reserve point man.  Mr. Bialek’s investigation started in 2012, when information of  private Federal Reserve information had leaked.

Many members of the US Congress have been critical on the prudence of the  US Federal Reserve, and this episode certainly adds fuel to the fire, members in Congress have stated on numerous occasions that there is a lack of transparency; within the Federal Reserve’s fiscal policies and initiatives. -SB