Saturday, March 30, 2019

Boston Dynamics' new warehouse robot threatens millions of jobs in the next decade

The economy of the 2020s will be more volatile, and recessions could be more extreme. The collision of automation in the workforce will trigger economic disruptions far more significant than what seen in agriculture to industry (1900 to 1940) when nearly 40% of the workforce was displaced.
In the next ten years, automation may eliminate 20% to 25% of current jobs, or about 40 million, crushing the bottom 90% of Americans the hardest.
Boston Dynamics is at the forefront of developing new automation technologies.
The Waltham, Mass.-based company has released a new video of its warehouse robot, a  "mobile manipulation robot designed for logistics. Handle autonomously performs mixed SKU pallet building and depalletizing after initialization and localizing against the pallets."
Dubbed Handle, the robot uses an on-board vision system with a large suction cup arm to track boxes and then move them to a pallet. The video below shows several robots in a warehouse moving boxes to a pallet and conveyor belt, a task that would typically be completed by humans. 

“When Handle places a boxes onto a pallet, it uses force control to nestle each box up against its neighbors,” Boston Dynamics said. “The boxes used in the video weigh about 5 Kg (12 lbs), but the robot is designed to handle boxes up to 15 Kg (30 lbs). This version of Handle works with pallets that are 1.2 m deep and 1.7 m tall (48 inches deep and 68 inches tall).”
Warehouse workers probably won’t have to worry about Handle taking their jobs anytime soon. That also means the more than 600,000 Amazon employees, mostly fulfillment center jobs, are safe for now but could be in jeopardy in the next 3 to 5 years.
The next phase of automation has begun, and it will accelerate in the years ahead. Forty million Americans are at risk of losing their jobs to automation by 2030.

Thursday, March 28, 2019

Palantir wins competition to build Army intelligence system

Palantir wins competition to build Army intelligence system

The Army has chosen Palantir Technologies to deploy a complex battlefield intelligence system for soldiers, according to Army documents, a significant boost for a company that has attracted a devoted following in national security circles but had struggled to win a major defense contract.
Industry experts said it marked the first time that the government had tapped a Silicon Valley software company, as opposed to a traditional military contractor, to lead a defense program of record, which has a dedicated line of funding from Congress. The contract is potentially worth more than $800 million.
The Army’s decision to go with Palantir, which was co-founded by Peter Thiel, the billionaire investor and sometimes adviser to President Trump, brings to a close the latest chapter in a fierce competition.
In March 2018, the Army chose Palantir and Raytheon to vie for the next phase of the Distributed Common Ground System (or DCGS-A, for Army), which lets users gather and analyze information about enemy movements, terrain and weather to create detailed maps and reports in real-time. The system is designed to be used by soldiers fighting in remote, harsh environments.
But critics within the Army and in Congress have for years complained that DCGS-A cost too much and didn’t deliver the intelligence and capabilities that soldiers needed. Some soldiers said the system was too hard to use and searched for alternatives.
Many became backers of Palantir, which sells to governments and businesses, including in the financial and health care sectors.
Palantir and its advocates argued that their software was cheaper and could meet all the Army’s requirements. But Army brass defended their decision to pay for a custom-built platform.
In 2016, Palantir successfully argued in court that the government was required by law to consider purchasing commercial products, when available, rather than custom ones.
That sent the Army back to the drawing board and led to the face off between Palantir and Raytheon.
Before his death. Sen. John McCain (R-Ariz.) praised the new approach on Twitter, noting that after the Army had already spent $3 billion in development costs, “it was time to find another way.
Raytheon and Palantir were allowed to test their respective software platforms with a live audience of soldiers, who told them what they liked and didn’t and what they would change. The two companies then refined their offerings to suit the Army’s needs.
Traditionally, the government first chooses a company to build a system according to a set of detailed requirements. But this approach let the Army take both companies’ products for a test drive before settling on the winner.
“The Army changed its approach to acquisition,” Doug Philippone, a former Army Ranger who leads Palantir’s defense business, said in an interview.
He said the company was always confident it could win if it were allowed to adjust its technology after getting feedback from soldiers, who he said put the software through a rigorous test, even parachuting out of airplanes with reinforced laptops containing Palantir’s software.
Chris Johnson, a spokesman for Raytheon, said the company was disappointed in the outcome. “We will wait for the Army’s de-brief to understand their decision.”
The Army did not provide a comment for this story.
Raytheon and Palantir may compete for subsequent phases of work on the program.
Unlike most Silicon Valley start-ups, which aim to make their fortunes building consumer applications and software, Palantir at its founding set its sites on Washington, believing that its data analytics tools would find an eager market among U.S. spy agencies and the military, which are constantly trying to manage ever-expanding streams of information.
Philippone said the Army win had validated Palantir’s strategy.
“We founded the company around solving this particular mission,” he said.
The company faced initial skepticism from investors, who thought it couldn’t overcome entrenched bureaucratic interests and what they saw as political favoritism that led the Pentagon to spend billions every year with the same small group of Beltway contractors.
“Everyone told us we should stay away from Washington because it was corrupt and we didn’t know how to play golf with senators,” Joe Lonsdale, a Palantir co-founder, said in a 2011 interview.
The company got an early investment in 2005 from In-Q-Tel, the CIA’s venture capital arm, which tries to quickly develop technologies that the intelligence agency might use.
The In-Q-Tel connection helped Palantir get meetings with U.S. officials and intelligence analysts, and even test its software with the CIA’s counterterrorism center, according to people familiar with the matter.
Palantir Technologies, a Silicon Valley data analytics company founded by Trump adviser Peter Thiel and with roots in the CIA-backed In-Q-Tel venture capital organization, has won a major Army contract worth up to $800 million, CNBC has confirmed.
It’s the first time the venture-backed company has been named a “defense program of record.” Programs of record are essentially the biggest, multi-year projects awarded by the Pentagon.
The contract would require Palantir to build an intelligence system to aid soldiers in remote environments, called an Army Distributed Common Ground System, known as a DCGS-A. It was previously reported by the Washington Post.
Palantir, which has been rumored to be close to an initial public offering, beat out Raytheon, a more traditional defense contractor without Palantir’s Silicon Valley roots, a departure for the Army in terms of its biggest contracts.
“While we are disappointed in the Army’s decision on this initial delivery order, it represents a relatively small number of systems. We will actively compete for future delivery orders as we continue to work closely with the Army to help them meet their intelligence needs,” said Maureen Stevens, a Raytheon spokeswoman, via email. Stevens said Raytheon was awarded a DCGS-A 10-year contract last March, part of a “multiple delivery” plan by the Army. The Pentagon did not immediately respond to request for comment.
The deal would dwarf Palantir’s most recent government contracts, including a $222 million award in 2016 from the Department of Defense’s Special Operations Command (SOCOM). That sole-source award was for a technology and logistics software and support project called “All-Source Information Fusion, ” meant to bring together intelligence and other information gathered by SOCOM, which oversees the special operations units of all branches of the U.S. military.
Palantir’s customers have included top-tier banks, government agencies, health-care firms and manufacturers in the automotive and aerospace industries. The company provides tools for visualizing and making use of huge swaths of data, using proprietary software. Financial industry analysts have been monitoring Palantir as an IPO candidate for 2019.
Thiel co-founded Palantir in 2003, and was the company’s largest shareholder at its last round of funding in 2015, which valued it at $20 billion. The iconoclastic tech investor is worth $2.5 billion according to Forbes, and earned his fortune as an early leader of PayPal and investor in Facebook, where he sits on the board of directors. He was a prominent supporter of Trump during the 2016 presidential campaign, and has advised the administration informally on technology and science since then.

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Monday, March 25, 2019

Doom and Gloom for UK according to the people, not priced in to GBP

It's too late to undo Brexit votes, but according to polls many voters probably would have changed their votes had they known the economic damage Brexit would have caused.  Now it appears that the locals are restless, and they feel its doom and gloom no matter what happens, according to surveys.
Recent survey results published by Money Transfer Comparison highlight a very fractured outlook for the United Kingdom’s economy amongst respondents as the extended April 12th deadline for the British exit from the European Union approaches.  The survey, which collected responses from 2,552 British citizens, underscores the highly divergent views for the economic outlook amongst respondents.   Data collected by research analytics firm Corus uncovered the following:

-Only 11% of respondents who voted “Leave” in the referendum believe the UK economy will flourish during the 2 years following Brexit, while less than 7% of all respondents believe that will be the case
-Over 60% of respondents surveyed who voted to “Leave” believe the economy will either stay the same as before or worsen
-Approximately 48% of all respondents believe that the economy will worsen over the next two years if Prime Minister Theresa May’s Brexit agreement is advanced
-More than 54% of all respondents believe that the economy will worsen if a “no-deal Brexit” unfolds
-Nearly 52% of all respondents believe Prime Minister Theresa May mishandled the Brexit situation
-Slightly more than 55% of all respondents are dissatisfied with how Parliament has handled the situation

Interestingly, in the event of approval of the May Brexit agreement, the highest proportion of respondents, whether “Leave” voters or otherwise, believe that the economy will be the “same as before” in the following 2 years.  However, that figure drops below both the “doom and gloom” and “taking a small hit” economic scenarios forecast in the case of the “no-deal” Brexit.

Apart from highlighting the general level of frustration with public officials responsible for overseeing Brexit negotiations, the survey indicates that “Leave” voters are increasingly concerned about the economic outlook. This development might be another affirmation of the growing dissatisfaction with elected officials and the widespread discontent over the failure to reach an exit consensus.

Additionally, “Leave” voters are increasingly echoing exit concerns voiced by leading economists, with more believing that the “doom and gloom” outcome will come to fruition relative to the scenario whereby the economy is “flourishing”. Nonetheless, a comparison of the survey results with the recent performance of the UK Pound suggests that financial markets are deviating from increasingly negative public sentiment.

According to Money Transfer Comparison, this divergence might be attributable to financial markets and investors discounting the more extreme possibilities of a “hard Brexit” or “no-deal Brexit” which would align with the more polarized viewpoints underscored in the survey.  Nonetheless, the survey emphasizes that public sentiment does not necessarily mirror economists’ expectations. 

With all the uncertainty that remains in place ahead of the Brexit deadline, these more extreme scenarios still have a possibility of unfolding, potentially weighing on the Pound’s value despite financial markets increasingly discounting the likelihood of a disorderly EU exit.

The Trade

Here the trade is short GBP/USD because this negative bias is not priced in to the GBP/USD, in fact in the face of a gigantic crisis, GBP/USD has held up well.  So is Brexit really a crisis?  Government officials are preparing for the worst, including putrefying stockpiles of rubbish that can breed diseases and worse:

Government officials are preparing to deal with “putrefying stockpiles” of rubbish in the event of a no-deal Brexit, according to documents leaked to the Guardian.  If the UK leaves the EU without a deal on 29 March, export licences for millions of tonnes of waste will become invalid overnight. Environment Agency (EA) officials said leaking stockpiles could cause pollution. The EA is also concerned that if farmers cannot export beef and lamb, a backlog of livestock on farms could cause liquid manure stores to overflow. A senior MP said the problems could cause a public health and environmental pollution emergency. An EA source said: “It could all get very ugly, very quickly.”  The emails leaked to the Guardian were sent to EA staff, asking for 42 volunteers to staff crisis management centres that would deal with incidents. On Tuesday the chief executive of the civil service revealed plans to move up to 5,000 staff into an emergency command and control centre in the event of no deal.
As you can imagine, that’s just one potential issue there are many.  So let’s take a look at the GBP/USD chart:


If we are to take into account the polls referenced above, GBP/USD could be much weaker.  The strategy here is not to sell the GBP/USD outright but to buy Puts deep out the money.  That’s as a protection and as an alpha generator.

The political fall out

In the UK the Political class is clearly out of touch with the voters, in an eerily similar situation to what happened in the US during the last Presidential election.  Just moments before official results came in, the mainstream media had Hillary Clinton winning in a landslide.

But unlike their US counterparts, UK officials are at least preparing for an end game scenario, including revamping plans to evacuate the Royal Family out of the blood and gore that may develop in the cities:
If rioters take to the streets of London following a hard Brexit, a Cold War plan to evacuate the royals to an undisclosed location in the countryside would be immediately implemented.  The Queen and other senior royals will be evacuated from London in the event of riots triggered by a no-deal Brexit, under secret plans being drawn up by Whitehall.  Emergency proposals to rescue the royal family during the Cold War have been "repurposed" in recent weeks, as the risk continues to rise of the UK crashing out of the EU without a deal before next month’s deadline.

Whatever happens it looks like doom and gloom, according to the polls.  It seems that no matter what is negotiated the British economy will suffer.

There is a price to pay for Freedom.  When the United States separated from the United Kingdom, it took a long time for the economy to stand on its own.  The United Kingdom is itself a super state comprised of England, Northern Ireland, Scotland, and Wales.  By the UK joining the EU they completely lost their sovereignty and some say their identity.  But for many Britons, the economic downturn which may last only years is a small price to pay to be British once again.

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