Mish's Global Economic Trend Analysis

Meet "OSHbot" Lowes New Store Helper; Goodbye Retail Associates, Hello Robots
No Plans for Normalization: Fed Ends QE, Will Hold Rates Low for "Considerable Time", Will Reinvest Proceeds
NASA Rocket With Russian-Made Engine Explodes On Takeoff; Ironies Abound
MH17-Chief Investigator Investigates Possibility of Air-to-Air Missile, Seeks Cooperation From Russia

Meet "OSHbot" Lowes New Store Helper; Goodbye Retail Associates, Hello Robots

Posted: 29 Oct 2014 01:51 PM PDT

Goodbye Retail Associates, Hello Robots

The future of shopping has arrived, and it's not human.

Not only do robots cost less than humans, they don't complain, they speak multiple languages, and most importantly, by scanning aisles they know where every item is in the store and can take you straight to it.

Meet "OSHbot"

OSHbot is the newest member of the "Fellow Robots" family, and developed in partnership with Lowes Innovation Labs.

The future of shopping has arrived

Retail Robotics is an exciting and fast growing new market and Fellow Robots is at the forefront. Advances in sensors, wireless networking, voice recognition and design prototyping are enabling us to build the smart retail robots that can autonomously navigate through stores, help communicate with customers to understand what they need and locate it quickly.

OSHbot incorporates the latest of these advanced technologies. For example, a customer may bring in a spare part and scan the object using OSHbot's 3D sensing camera. After scanning and identifying the object, OSHbot will provide product information to the customer and guide them to its location on store shelves.

OSHbot Specs

Front Screen: 19.5 inches
Back Screen: 29 inches
Height: 5 ft
Weight: 85 pounds

OSHbot Technologies

Voice recognition
Advanced sensors
Autonomous navigation
Scanning
Obstacle avoidance

Making Science Fiction a Reality

The robot will come up to you and say in a pleasant tone "Hello I am OSHBot, your store robot helper. What can I help you with."

Show OSHbot a screw, and OSHbot will scan the item and take you to the exact match, or tell you if it's out of stock. Not even the most knowledgeable human clerk can do that.

OSHbot Articles

The Wall Street Journal reports Newest Workers for Lowe's: Robots

The LA Times says Robot sales clerk? 'OSHbot' to debut in San Jose

OSHbot Video

The following video explains everything you need to know. It's well worth a play.

OSHbot Experience

Would you rather deal with an associate who may be unfriendly and typically does not know where things are, or OSHbot?

I would take OSHbot 7 days a week.

I suspect so would most. And even if you wouldn't, it's guaranteed to happen anyway.

Robots do not complain, they show up on time, they want to help, they don't ask for overtime, and they do not need medical insurance, Social Security, or pensions.

All of the greeters and helpers at WalMart, Lowes, Home Depot, Target, and retailers in general will give way to "Fellow Robots". And that will happen sooner than anyone realizes.

Deflationary Forces

OSHbot, competition, and technology in general are inherently price-deflationary.

With that thought, I suggest that the Fed, Central Banks, and Governments are on a failed mission. Sure, they can raise the minimum wage and engage in inflationary policies, but they cannot halt the march of technology and create jobs at the same time.

Every hike in minimum wages or healthcare subsidies is an extra added incentive for corporations to use hardware and software robots.

Inept Central Bank Policies

Asset bubbles of increasing magnitude over time coupled with rising income inequality is a direct consequence of inept central bank deflation-fighting exercises.

For further discussion please consider Challenge to Keynesians "Prove Rising Prices Provide an Overall Economic Benefit".

Inquiring minds may also wish to consider James Grant Conference Video: Inflation Expectations, Growth, Policy Problems; Europe Has Become Japan.

The next asset bust, as well as the Fed's response to it, are likely to be spectacular.

Addendum

A few interesting comments came within minutes. Here are a couple of them.

Gordon writes "This is great for the mom and pops of the world but ask the robot about the hammer and what actually works instead of just trying to sell someone a hammer and it cannot tell you."

Jon responds: "Good catch. I can't tell you how many times I've gone to Lowe's or Home Depot with a DYI project and the guy walked me around and told me how to do the same thing at half the cost that I budgeted. All at the expense to the company's margins of course. But those dudes are the best."

My reply: Robots will never replace everyone, just a huge portion of such workers. Moreover, and over time, these robots will get smarter and smarter, complete with how-to videos.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

No Plans for Normalization: Fed Ends QE, Will Hold Rates Low for "Considerable Time", Will Reinvest Proceeds

Posted: 29 Oct 2014 11:47 AM PDT

Inquiring minds may wish to slog through today's FOMC Press Release on Monetary Policy but it's really not worth the time it takes to read it.

Here are a few details, generally expected

The Committee judges that there has been a substantial improvement in the outlook for the labor market since the inception of its current asset purchase program.
The Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate.
The Committee anticipates, based on its current assessment, that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program this month, especially if projected inflation continues to run below the Committee's 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.
If incoming information indicates faster progress toward the Committee's employment and inflation objectives than the Committee now expects, then increases in the target range for the federal funds rate are likely to occur sooner than currently anticipated. Conversely, if progress proves slower than expected, then increases in the target range are likely to occur later than currently anticipated.
The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Reinvesting Principal Payments

The Fed also released a Statement Regarding Purchases of Treasury Securities and Agency Mortgage-Backed Securities.

NEW YORK — On October 29, 2014, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to conclude the current asset purchase program by the end of October . The FOMC also directed the Desk to maintain the existing policy of reinvesting principal payments from the Federal Reserve's holdings of agency debt and agency MBS in agency MBS and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Reinvestments in agency MBS will continue to be concentrated in newly-issued agency MBS in the To-Be-Announced (TBA) market. The Desk will adjust the number of individual agency MBS operations per month as needed for operational efficiency. The distribution of agency MBS purchases could change if market conditions warrant.

10-Year Treasury Yield

Curve Watchers Anonymous points out the yield on 10-year treasuries barely budged today as shown in this chart of $TNX.

The 10-year treasury yield is up slightly today to 2.32% a rise of about 4 basis points. Yield is down about 20 basis points since the end of September..

No Plans For Normalization

In spite of a bit of rah-rah about jobs, the Fed practically committed to holding rates low indefinitely.

Here is the key statement: "The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run. "

In addition, the Fed will continue to reinvest proceeds from treasuries and agencies in a manner "to be announced".

Hikes? Forget about them. They are not coming.

Correction

I inadvertently posted a chart of TLT (a treasury fund) instead of $TNX, the treasury yield. Text above modified accordingly.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

NASA Rocket With Russian-Made Engine Explodes On Takeoff; Ironies Abound

Posted: 29 Oct 2014 11:03 AM PDT

Sanctions or not, NASA uses Russian-made engines to propel rockets.

Yesterday, just seconds after takeoff, a NASA Antares rocket with a Russian-made engine exploded on takeoff. The mission was to carry supplies to the orbiting space station.

Today, the Guardian reports that Russian rocket manufacturer insists it is not to blame for Antares crash.

The Russian maker of the engine used in the unmanned US supply rocket that exploded after liftoff in Virginia denied on Wednesday that its product was at fault for the catastrophe.

The launch phase of the Orbital Sciences Corporation's Antares rocket relied on two AJ-26 engines that were originally produced in the 1970s for a failed Soviet moon program and later modernised for US space flights. Speculation quickly centered on the Soviet-based engines, which have failed in tests, when the rocket exploded in a giant fireball after takeoff on Tuesday night.

But the Kuznetsov company in the Russian city of Samara suggested the blame lay not with its NK-33 engines, which formed the basis for the AJ-26 engines, but rather with their later modification in the United States, Russian news agency Itar-Tass reported.

Investigators from Nasa were scouring the site of the failed launch in Virginia by helicopter on Wednesday as they attempted to assess the extent of damage to the Wallops Flight Facility, which is owned by the agency. Engineers working for Orbital Science were trying to work out what caused the failure of the company's $200m rocket, which forced the cargo mission resupplying the International Space Station to be aborted seconds after launch.

The launch was the first time the Antares rocket had been launched at night from Wallops, and the fireball caused by its explosion could be seen from miles around.

The accident is likely to intensify scrutiny over Nasa's deal to subcontract resupply missions to private space operators following the end of its shuttle programme.

Orbital is under particular pressure to explain whether its use of ageing Russian rocket engines to power the first stage of the Antares rocket was a factor.

Kuznetsov argued that its NK-33 engines had undergone significant modernisation in the United States, including the addition of new components to direct the rocket's thrust vector. "The development and certification of all new systems were done by the American side without Kuznetsov specialists. In essence, the AJ-26 engine is undergoing flight tests," it said.

The NK-33 engines were first developed for the Soviet Union's N-1 moon rocket, but many of them wound up in storage when that program was cancelled after several launch failures. The US company Aerojet Rocketdyne reportedly bought about 40 of the Soviet engines in the 1990s and began modifying them for use in US rockets. The resulting AJ-26 engine has suffered some failures during tests: one caught fire in 2011, and another being tested in May before use in an Antares flight burned up.

Since the end of its space shuttle program in 2011, the United States has had to rely on Russian engines and entire rocket systems to deliver astronauts and supplies to the International Space Station.

But rising political tensions between the two countries have complicated their space cooperation. Following US sanctions against Russia over its role in the Ukraine crisis, Dmitry Rogozin, the deputy PM in charge of the space and defence industries, barred the export of Russian engines used to launch US military satellites into orbit and threatened to end US participation in the ISS beyond 2020.

Spectacular Video

Please click on the link to see a fascinating video of the explosion.

Ironies Abound

For all the hundreds of billions of dollars of wasteful military spending, the US does not even build its own rocket engines.

In spite of sanctions, the US relies on Russian-made engines, even for military satellites.

To top it off, sanctions bar exporting the engines elsewhere, even though we use them here! It's yet another perfect example of blatant US hypocrisy.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

MH17-Chief Investigator Investigates Possibility of Air-to-Air Missile, Seeks Cooperation From Russia

Posted: 29 Oct 2014 12:58 AM PDT

Spiegel Online interviews Fred Westerbeke, the Dutch lead investigator of flight MH17 crash.

Westerbeke states that a surface-to-air missile is the most likely scenario, but he also discusses "secret satellite images and a possible involvement of the Ukrainian military."

Here are edited interview snips from MH17-Chief Investigator Westerbeke: "Do the Russians Have More Evidence?"

Who shot flight MH17 from over Eastern Ukraine? The Dutch prosecutor Fred Westerbeke directs international investigation. He talks about secret satellite images and a possible involvement of the Ukrainian military.

Spiegel: Mr. Westerbeke, your job as chief prosecutor sounds hardly solvable: MH17 flight was shot down over a civil war zone, even now, three months later, your crime scene investigator for is not available. What gives you hope someday to be able to bring someone to court?

Westerbeke: The Netherlands does not determine in the case so alone. There is a very good cooperation with police and prosecutors, especially in Malaysia, Australia and the Ukraine. It is not easy. But we can do it.

Spiegel: In what period of time?

Westerbeke: Look at Lockerbie, the bombing of a Pan Am jumbo in December 1988 with 270 deaths. At that time, it took three years before you could name those responsible. We will certainly need the whole next year for our work, and perhaps even longer.

Spiegel: The Federal Intelligence Service BND assumes that pro-Russian separatists have shot down the machine with a surface to air missile. Recently some German parliamentarians corresponding satellite images were presented. Do you know these recordings?

Westerbeke: The problem is that there are very many different satellite images: Some of them can be found on the Internet, others come from foreign intelligence agencies.

Spiegel: High-resolution images, for example from US spy satellites could play a crucial role in the investigation of the case. Did you get those shots of the Americans?

Westerbeke: We are not sure if we already have everything, or whether there are more - material that may be even more specific. What we present is certainly not enough to draw any conclusions. We remain in contact with the United States to get satellite images.

Spiegel: The shooting down of flight MH17 is the biggest criminal case in the history of your country, it says. How many investigators are currently working?

Westerbeke: In the Netherlands alone there are ten prosecutors. Three of them coordinate the investigation, two work at the international level. Two more are responsible for the care of relatives. In addition, forensic expert number around 80. There are regular meetings with colleagues from Malaysia, Australia and the Ukraine to divide the work.

Spiegel: Because of fighting at the crash site, again and again, none of your investigators is on site. On which tracks you rely instead?

Westerbeke: There are metal fragments that were found in the bodies of the dead and in pieces of luggage. This could be shrapnel from a rocket-Buk, possibly also parts of the aircraft itself. We analyze this, so far there are no results. We also have some witnesses who were on the spot immediately after the crash. In the Internet we spot an immense amount of information. We also have various recordings of telephone conversations from the Ukrainian police. Some of it is already available online, but we did get richer material.

Spiegel: So far, is there any indisputable evidence?

Westerbeke: If you look in the newspapers, yes. But if we really want to bring the perpetrators to justice, we need more evidence than a recorded phone call from the internet or photos of the crash site. That's why we take several scenarios into consideration.

Spiegel: What are the scenarios?

Westerbeke: An accident, a terrorist attack, the shooting down by a surface to air missile or an attack by another aircraft. We have ruled out the first two.

Spiegel: Moscow circulated for some time, a claim that the passenger plane had been shot down by a Ukrainian fighter jet. Do you think it possible?

Westerbeke: Based on the available information, the launch is by a ground-to-air missile in my eyes is still the most likely scenario. But we do not close our eyes to the possibility that it might have been different.

Spiegel: The OVV report states that there were no military jets in the vicinity.

Westerbeke: Right. But that statement is based on information that was available at the time. The question is: Do the Russians have more evidence?

Spiegel: Your Prime Minister Mark Rutte has recently criticized Vladimir Putin because of his lack of support in the MH17 case. What is the role of Russia in the investigation?

Westerbeke: At the moment, not large, since it is not part of the investigation team. We are preparing a request for assistance, in which we ask Moscow for information that could be important. Among other things, we seek radar data with which the Russians wanted to prove the presence of a Ukrainian military jet near MH17 after the crash.

Spiegel: If you actually draw the participation of the Ukrainian Air Force on firing of flight MH17 into consideration - is it not absurd that Ukraine is involved in the investigation?

Westerbeke: Of course that's a problem. But we cannot determine without them. I want a way to make it clear: We have no evidence that Kiev has not been completely open with us. You give us all the information we want.

Notes: Translation from German is frequently difficult. I edited the Google translation to make it more readable. Also there is a bit more in the interview regarding rewards, bounties, the coming Winter, etc., but those clips were not very relevant so I truncated the translation a bit.

Investigative Problems

That seems like a pretty frank discussion of the issues, arguably the best we could have reasonably hoped for. Clearly, many investigative problems remain.

The first problem, which Westerbeke admitted, is that if Ukraine is involved, it will seek to prevent that finding. Nonetheless, Westerbeke was polite in his response stating there is no evidence Kiev has not been open.

The second problem is that no countries really want cooperation from Russia. Fortunately, it seems the investigative team does.

A third problem is US satellite evidence. Where the hell is it?

A fourth problem (unfortunately one that Spiegel never inquired about) regards flight deviations and tower to plane transmissions.

Without a doubt transmissions should be made available and flight pattern deviations over a war zone explained. If that has not been done (and I don't believe it has), then indeed there is strong evidence that Kiev has not been completely open.

The fifth problem is that even if the team concludes MH17 was downed by a surface-to-air attack, that alone does not prove who fired the missile.

Rush to Judgment

Finally, please note the "rush to judgment" by Ukraine, the US, Europe, and Western media in spite of glaring weaknesses in evidence gathered.

Nonetheless, it appears as if Westerbeke wants to do the job. Appearance or reality? If the latter, I wonder if he pokes around too much, if he will be removed from the mission.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Economy News

29.10.14

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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