RFID - Tag Localization

Today we have completed the tag localization experiment, an effort to gain the raw data needed to establish the probability of an RFID location in 3D.

The experiment was conducted off-campus using a structure of PVC pipe measuring 8 feet long by 8 feet wide by 10 feet tall.

We spent the entire day on the experiment, and took many photographs to document the apparatus.

I will be analyzing the data during the next few weeks.

Special thanks to the host of the experiment.

Interesting Experience

Yesterday evening, I went to Nashua CVS to pick up some things. Among the things that I had purchased was a bottle of Welch's grape juice.

The young woman doing checkout mentioned that her Dad worked at Welch's. It happened to be someone that I knew when I held a position at the company!

What an interesting coincidence!

The Problem with Macroeconomic Management

I read a quote in the WSJ today that highlights a major drawback of macroeconomic management as a means of combating the economic malaise that has gripped the American economy.

Macroeconomics seeks to look at the big picture when establishing policies favorable to growth. The current viewpoint is that the Fed will purchase government bonds, driving up the price, lowering interest rates, and expanding the money supply.

Investors are developing an outlook that no matter what happens, macroeconomic policy will be a bailout.

This is the quote that is particularly alarming to me:

"'That's the conventional wisdom of the market now, that if the economic reports are solid, the market will go up, and if they're not, the Fed will do more stimulus and then the market will still go up,' said Phil Dow, director Of equity strategy at RBC Wealth Management."

Yesalavich, Donna Kardos, 2010. Bets on aid from fed help stocks. The Wall Street Journal, Sept. 28.

Missing is the evaluation of expected profits for a particular firm. Investors seem concerned only with frequency trading and shifts in macroeconomic policy rather than a true assessment of equity fundamentals.

I think the stock market will have a hard time moving forward without a better balance between frequency trading, evaluation of macroeconomic effects, and fundamental analysis.

When investors rely heavily on macroeconomic analysis, it is extremely difficult to predict exactly how this will affect individual companies.

I do not believe that a sustained stock market rally is possible based just on the anticipated effects of macroeconomic policy.

More on China - Long Term Trends

In 2007, I made a trip to China. I filed several reports within MIT. One of the reports became a published article, which I think expresses many of the same observations that Ian Johnson has made in recent writing (see The Party: Imprenetrable, All Powerful)

This is the article:

The Asian Megalopolis: Opportunities for Information Technology Growth (part II)

The Chinese officials allowed me to listen in (through an interpreter) on the process of government. This was kind, and I received many insights.

I think this is another great article on China, published in 2006.

Great Article on China, 2006

American needs to understand the complexity of Asia as it is a big part of the future of the global economy.

This is Interesting - MIT Glass Lab

These glass pumkins are truley beautiful!

Great Glass Pumpkin Patch @ MIT

Check it out!

Commodities

The prices of many commodities like corn, wheat, soybeans, copper, silver, gold, sugar, coffee, and orange juice are doing very well these days with double digit increases for many.

If the global economy is so weak, why are commodity prices rising?

I think there are two answers. Drought or poor growing conditions in Brazil and Russia, along with other countries like Pakistan and India that are experiencing flooding.

The second answer, China has become a major buyer of commodities such as copper.

I feel that the surge will moderate for industrial commodities. However, agricultural commodities will continue to increase, leading to a repeat of civil unrest as food price inflation surges.

During the next decade, I think commodities will be a major story. Oil, though not surging in price currently, will do so at the first emergence of moderate economic growth.

The Party: Impenetrable, All Powerful - Ian Johnson

I very much recommend that folks interested in China visit the following link for an intro to an extremely important article:

The New York Review of Books

The Party: Impenetrable, All Powerful by Ian Johnson

This is a subscription site and I have not read the entire article. However, the small bit of real-world experience that I have had with China resonates in the political analysis put forward in this writing.

We need to have more of this type of analysis!

For a related post, see the following:

Ian Johnson

There is so much Americans need to understand about Asia.

Economic Growth - Q3

Folks are writing that Q3 GDP growth is around 1.4%, slightly less as compared to the estimate for Q2, which was 1.6%.

These rates of growth probably mean that unemployment is increasing. Growth rates of 2.5% to 3% (estimates vary by economist) are needed to create 1.5 million new jobs per year new entrants to the labor force. The American economy is not even providing new jobs for these people.

Until unemployment goes down, there will be dim prospects for economic growth. Cisco systems reports from their perspective that the recovery is bumpy at best. With so much uncertainty, corporations are not going to invest with the intent of expending business.

All indications are that it will be a lean holiday season for retailers. I hear very little about any predictions for 2011. Things are much to uncertain to make estimates of economic growth for next year.

As time goes on, there will be increasing pent-up demand for various goods and services. I think part of the current stock market rally is the hope by investors that pent-up demand will spark higher economic growth in Q4 and 2011.

I think this is a bit of wishful thinking as consumers continue to be under severe financial pressure.

As a final thought, with the expiration of stimulus tax credits for first time home buyers, the outlook for home prices is extremely bleak. There will be severe declines this Fall according to some analysts.

Overall, consumers have little if any ability to go on a buying spree. This is affecting business investment in capacity, thus becoming an additional damper on economic growth.

Food

The drought in Russia has tightened the global supply of wheat. Another drought in Brazil has drastically lowered the level of the Amazon River. Sugar, orange juice, and coffee prices are moving up because of the fear of a lower crop for this major exporting country. Prices for food in India and China are moving up at rates more than 10%. Other Asian countries experience similar inflation. In India, each year the hope is for a normal monsoon. If there is less rain than expected, there will be anticipated shortages of water.

Overall, I think it is important to understand and track these trends. Further, new technology must be developed to increase food production using a smaller footprint. This means raising productivity and tracking losses from the field to the consumer.

These developments mean a coordinated program MIT involving agriculture, energy, and water makes a great deal of sense.

The Fall Election

I see increasing signs that there will be a pre-election stock rally on the expectation that the Republicans will elect enough party members to the US House for majority control.

This expectation might not reflect the reality of the underlying economy or a true shift in political power. Control of both the House and the Senate might be with narrow majorities for either party. The Republican party might be somewhat split with between the conventional and the Tea Party conservatives.

The prospect of gridlock remains the most likely outcome of the election.

Gridlock might be good as there will be greater difficulty in passing legislation to spend more money or to make government larger. It also means a difficult legislative environment to bring about changes needed in American policy going forward.

I think this will be an extremely interesting and important mid-term election.

Great Information about China - Ian Johnson

As always, Alan Abelson writes an excellent column on financial news and world affairs. This article has an exceptionally good section on the future of China:

Abelson, Alan, 2010. The bad-news bulls. Barron's, Sept, 25.

Abelson reports on the some writing by Ian Johnson, formerly of the WSJ and winner of the Pulitzer Prise. The original piece by Johnson appeared in the New York Review of Books.

I very much like reading Johnson's work. By the description in Barron's, his views are very close to my own view regarding the future of China and the prospects for a continued boom.

If the Chinese economy does slow down, something that I think is inevitable, then commodity prices will fall causing a great impact on the world economy.

I have never known of an economy that grows forever. Eventually a slowdown will happen. When it does, it will be interesting to observe the reaction of China's political leaders.

For a related post, see the following:

Ian Johnson

There is so much that Americans need to understand about Asia.

More on Data-Driven Agriculture

Prof. Katia Passerini has written a nice intro. to the following publication:

Mobile Technologies in the Enterprise: Applications, Implications, and Trends

Cutter IT Journal - Sept. 2010, Vol. 23, No. 9

Our article is published in this edition. It relates to data-driven agriculture. I think there are many possibilities in this area.

We hope to be doing more research in data-drive agriculture very soon. The following article that we did many years ago remains in my mind one of the all-time classics in understanding the value of models and the assessment of risk for agricultural operations.

Allen, Stuart J., Schuster, Edmund W., 2004. Controlling the risk for an agricultural harvest. Manufacturing & Service Operations Management, 6:3.

The vision that we have is that models and the assessment of risk will determine field operations for agricultural systems.

The Rally

I think we are in the midst of an election year stock market rally!

Epidemics

This is a very good article and a trend worth watching closely.

McKay, Betsy, 2010. Training experts to find and fight epidemics. The Wall Street Journal, Sept, 22.

I think we have become far too complacent regarding the chance of a major epidemic perhaps caused by antibiotic resistant bacteria or new forms of virus. I will be writing more about this issue soon.

My iPad (Part IV) - Overcoming the Lack of Flash

Recently I have installed Analytics Pro on my iPad. This hooks onto Google Analytics and re-displays the web date from my various sites, thus overcoming Safari's lack of Flash compatibility.

There is a work around for limitations of Safari on the iPad. I think these solutions will solve many of the issues that I had with the browser.

Overall, the iPad is a wonderful tool for my academic needs. Tablet computing is the future! I very much recommend the iPad!

Reference to the M Language in Healtcare

It is interesting that the paper at the following link includes a reference to the M Language, developed at MIT:

CAPSIL

Home and Mobile Monitoring Systems

May 5, 2009

"More research is required into the intelligent fusion of multiple data sources to provide an accurate context within which a measurement is taken. In fact it has been suggested that the development of sensors and hardware may outpace the development of the computational systems required to make proper use of the data, so a situation may arise where the data is available but there are no systems able to use it! An interesting research development is the MIT M language [31] which is a Wiki based approach aimed at developing a software solution to integrating multiple disparate data sources."

Ref. 31 is:

D. L. Brock, E. W. Schuster, S. J. Allen, and P. Kar, "An Introduction to Semantic Modeling for Logistical Systems," Journal of Business Logistics,, vol. 26, 2005.

For this paper, we won the Plowman Award in 2004. This is given by the Council of Supply Chain Management Professionals (CSCMP).

Evidently this project is associated with Harvard University.

Bloomberg News

Folks should check out Bloomberg News for the iPad. The app is free. It provides a great deal of information. However, the free online financial articles are not as good as the Wall Street Journal or Barron's.

As I understand, the Bloomberg subscription services are very good.

Having an iPad means that I use my 3G phone much less. My cell phone, a Samsung Omnia II, is powerful but the graphics of the iPad are far superior. I think the iPad will mean less cell phone use although it is hard to know by just how much.

An overlooked issue, I find my iPad extremely useful for work. I can get emails anywhere and respond using a very good keyboard.

I will have more to write later. I have a very good impression of the iPad.

Ramifications of a Currency War

This post builds on,

The Global Currency War

The ramifications of an all-out currency war are wide ranging. Essentially such a sequence of events means that major economies in the world would compete to devalue their currency relative to the US Dollar, which acts as the reserve currency for global trade. The hope would be to preserve or increase trade with the US.

While devaluation (pegging) means that the prices of goods imported into the US are lower, it also means that purchasing power for citizens of other countries is lower and international profits, when converted to US Dollars, are less.

By pegging the Yuan to the US Dollar, China is reducing the purchasing power of its people who might be interested in buying imported goods. This is hardly a progressive, international approach to trade or the desire to built long-term, win-win relationships.

If a cycle of devaluation takes involving Central banking open market moves in China, Japan, and other Asian countries, then US multinational corporations will find operations in these countries to be less profitable. I think CEO's will decide to limit future Direct Foriegn Investment (DFI) in Asia as a result. The excess money will flow back to the US for investment, or perhaps to the EU or South America.

A recent article shows an initial glimpse of this developing trend:

Savitz, Eric J., 2010. The trillion-dollar challenge. Barron's, Sept. 18.

The gist of the article is that many American companies hold large amounts of cash overseas because of tax reasons. The example cited is Cisco Systems, which holds about $30 billion outside of the US.

At a time when the US economy is sputtering, it makes sense to invoke policies that are favorable to companies like Cisco Systems and allow them a profitable way to bring foreign cash back home for investment in domestic markets.

Of course, there is always a chance that a pull-back in DFI might cause further restrictions and regulations on existing foreign capital with the worst case being nationalization of specific industries. China has a history of taking such extreme steps. So do other countries. If any hint of this type of policy change exists, American companies will quickly pull out to preserve capital.

An all-out currency war would in my view force capital back to the US and put the global economy on a path towards less cooperation and long-term economic growth.

The basic principle of a free market for currency trade is the most effective tool known in allocating resources and producing efficiency. Government control, whether by China, Japan, or other Asian countries, will not have the desired impact of preserving economic growth. To the contrary, the past 40 years of establishing international trade would be set back, perhaps requiring many years to repair.

Windows Phone 7

Microsoft's new software for mobile phones will not be available for Verizon networks until sometime during the first half of 2011. The new software is named Windows Phone 7.

I have a Samsung Omnia II that runs Windows Mobile OS 6.5. There will be no ability to upgrade to 7.0. This is extremely disappointing.

This is the article;

Wingfield, Nick, 2010. New microsoft phone software to start only on gsm devices. The Wall Street Journal, Sept. 18.

More on the Yen; Concern about Japanese Policy

This article published today givens further indications that Japan is resolute in defending the Yen against further appreciation relative to the US Dollar.

Nakamichi, Takashi, 2010. Noda says japan may act again on yen. The Wall Street Journal, Sept. 18.

It is not clear to me if these statements are just talk designed to appease political opposition or if it is meaningful and further action is immanent. Given that one intervention has taken place, to a bit of a surprise, I think it is possible that another will happen.

The global economy does not need a currency war at this time of weak recovery from a deep recession.

I feel that the pegging policy of China has initiated this pending currency war. In my opinion, this is as destructive to the global economy as massive tariffs.

Sharp - Comments from the Japanese CEO

This is another important article that reports criticisms towards the government from leading Japanese corporations:

Osawa, Juro, 2010. Sharp blasts tokyo on yen, taxes. The Wall Street Journal, Sept. 18.

This follows comments about the strength of the Yen by the CEO of Hitachi. However, the comments go further in asking for subsidies, something that the debt heavy Japanese government is not in a position to deliver.

These type of statements are uncommon in Japan. There appears to be distrust of China's intentions in purchasing the Yen along with rivalry with Korean electronics companies who are making inroads in the global industry. The currency issue has driven a wedge between all three countries in East Asia and perhaps has created the most tense relations in years.

What I find concerning is the entitlement attitude of exporting countries. By choice, these countries, namely China, Japan, and Germany choose to structure their economies around exports to achieve quicker economic growth. Now that that the US Dollar has weakened, exporting countries can not accept the anticipated shift in trade patterns that naturally occur.

In theory, a free market for currency is the best way to allocate global resources. For awhile, governments have respected this proven economic principle. However, recent political pressure in exporting countries has led to a reluctance to accept free market currency principles. There is nothing but economic downside for the global economy if this policy approach continues.

The above article also has an interesting note about prospects for the US economy:

"Mr. Katayama's worries are also due to growing uncertainties over the world economy, especially in North America and Europe. 'I think the North American market is cooling down severely,' he said, adding that this year's holiday shopping season toward the end of the year will be 'really tough.'"

Cooling down indeed!

The Global Currency War

I have written many times about the affect of currency pegging for the Chinese Yuan. As readers know, I consider this a major issue that has already sent ripples of tension through the global economy, most recently with Japan's efforts to weaken the Yen against the US Dollar.

My hope is that rational minds prevail because an all out currency war via quantitative easing is surly a downward spiral when viewed as a way to jump start stagnant, export oriented economies. Currency wars could lead to tariffs, which was the death knell during the 1930's Great Depression.

The following article does an excellent job of outlining the global currency situation. I encourage the Wall Street Journal and Barron's to publish detailed analysis in this area. It is an important issue for America.

Forsyth, Randall W., 2010. Central banks embrace risky currency gambit. Barron's, Sept. 17.

Simply put, Central banks are out of conventional options as interest rates approach zero and major economies remain stagnant. The radical step is to purchase bonds thus injecting cash into the money supply, driving bond prices higher, interest rates even lower, and the currency weaker.

However, as the following quote (Stephanie Pomboy) from the article indicates, devaluation of currencies can not all happen at the same time:

"But there is a potential dark side, concludes Pomboy. While the worldwide push down on interest rates 'unleashed a torrent of capital, lifting all economic 'boats' and bringing the world together, pushing down [currencies] will tear the world apart. Everybody can lower rates simultaneously. Everybody cannot debase their currencies at once.'"

She concludes that this "threatens to end the Era of Globalization."

I believe that this outcome is possible, and that investors are seeing the start of this process.

Mr. Forsyth's article goes on to state:

"One reason for optimism that won't happen is policy makers seem to have learned from history and seem intent not to repeat the mistakes of the past. The rapid, forceful and internationally coordinated response to the near meltdown of the global financial system in 2008 was to avoid a rerun of the 1930s and the failures of policy then. The collapse of international trade then resulting from the waves of currency crises and other protectionist measures transmitted the Great Depression around the globe; that is another lesson learned from that era."

In my opinion, this statement is unrealistic in the face of political pressures being felt in all of the major global economies. The US, Japan, China, France, Germany, U.K., and Italy experience various political pressures ranging from high unemployment to the demands of exporters. All of these pressures are significant, prompting radical Central bank action.

In conclusion, watch the currency markets closely during the next few weeks for signs of intervention and a desire to weaken various currencies.

The Cash Rich American Corporation

The most recent estimate is that American corporations are holding $1.845 trillion in cash and short-term, liquid assets. This is about 7% of total assets, an amazingly high number.

Lahart, Justin, 2010. Companies still holding lots of cash. The Wall Street Journal, Sept. 17.

Firms seem to have little desire to invest the cash. Confounding things, with US stock prices depressed because of the weak stock market, corporations still appear reluctant to implement stock buy-back programs.

This single fact is perhaps the best sign that trouble remains ahead for the US economy.

I believe that there are structural changes happening in investing and the way corporations view risk that will force many changes to American society. The public is not prepared to accept these changes.

I never though I would see that day that corporations would choose to sit on large piles of cash rather than invest in America.

A Sobering Thought

This quote puts into perspective the alarming debt problem that the US government faces:

"Despite the frugality of households and companies, total U.S. debt edged up 1.2% as state, local and federal governments borrowed to finance massive deficits. Government debt, including the liabilities of state and local governments, rose 4.6% to $11.1 trillion in the second quarter. That's nearly $38,000 a person."

Whitehouse, Mark, 2010. Americans' net worth falls. The Wall Street Journal, Sept. 17.

Though I do not know for sure, the above quote is probably low because of all of the off-budget borrowing by government agencies.

Imagine, the national government debt for a family of four approaching $160,000. As a society, what on earth are we doing!!!???

For the approaching fiscal year, there might be more than $1 trillion dollars added to the national debt raising it almost 10% year over!

The US is running huge government budget deficits along with significant trade deficits. This trend has accelerated during the past 10 years.

I recall attending an event given almost 5 years ago on campus where the speaker mentioned that the US trade deficit was inconsequential. Without going into details, the speaker indicated that this was a national policy. I took great objection at the time regarding the policy.

Of course when an economy is growing, the trade deficit is of less importance. In times of prosperity, people at all levels of society become complacent about financial matters.

Besides ultra low interest rates, I think the trade deficit has played a complex role in hamstringing the US economic recovery. It is partially responsible for the "leakage" associated with stimulus spending. In my opinion, the seeds of the 2008 Financial Crisis were sown in mid decade and before. There were many signs that government leaders, business managers, and the public missed, or refused to believe.

More on Counterfeit Drugs, WSJ Article

To continue the discussion from the following link,

Unbelievable Recant of Published Research - Counterfeit Drugs

there was a follow-up article on the WSJ Blog:

Bialik, Carl, 2010. Dubious origins for drugs, and stats about them. The Wall Street Journal, Sept. 10.

This is from the article (regarding the extent of counterfeit drugs),

“It is a wild guess made by someone,” said Albert Wertheimer, professor in Temple University’s school of pharmacy, “that, now, everyone quotes.”

If the original estimate was a "wild guess," why was it published in the first place? Many people based important decisions from this data, and now it is suspect along with being recanted by WHO and FDA. Amazing!

More about Aggeos, Inc.

I think I speak for all of the folks involved in that we are very happy to form Aggeos, Inc. for the purpose of putting the M Language, with modifications, into practice. The M Language was developed at MIT at the Data Center Program. I worked in the program from Mar. 2003 to Dec. 2009.

The recent article that Ken Lee and I did for Cutter IT Journal lays out a small part of the potential for this new technology. It details a specific application of the Lee-Schuster Semantic Enterprise Architecture.

This is the article currently in press:

Schuster, Edmund W., Lee, Hyoung-Gon, 2010. Mobile computing, spatial intelligence, and interoperability for agricultural field data. Cutter IT Journal 23:9, 28-34.

Several other articles, outline the M Language product called Kratulos:

Lee, Hyoung-Gon, Schuster, Edmund W., Allen, Stuart J., Kar, Pinaki, 2010. The open system for master production scheduling: information technology for semantic connections between data and mathematical models. International Journal of Operations Research and Information Technology 1:1. 1-15.

Lee, Hyoung-Gon, Schuster, Edmund W., 2009. Intranet architecture for the semantic enterprise. Cutter IT Journal 22:9, 31-37.

Finally, we have completed the following manuscript:

Schuster, Edmund W., Lee, Hyoung-Gon, Ehsani, Reza, Allen, Stuart, J., 2010. Machine understandable semantics for agricultural systems. Computers and Electronics for Agriculture, under review.

Early Ref. to PV

On p. 345, Dos Passos talks about ..."the dynamo, the electric coil, radio, the photoelectric cell, the internalcombustion motor, ..."

Dos Passos, John, 2010, The Big Money. Boston: Houghton Mifflin.

I did not know that solar power was a part of thought during the 1920's.

Publication - Mobile Computing, Spatial Intelligence, and Interoperability for Agricultural Field Data

This is our most recent publication:

Schuster, Edmund W., Lee, Hyoung-Gon, 2010. Mobile computing, spatial intelligence, and interoperability for agricultural field data. Cutter IT Journal 23:9, 28-34.

The article is about our work in data-driven agriculture.

A quote:

"A somewhat overlooked facet of mobile computing is that various devices can be useful ways to input data for sharing through the Internet. Rather than data and information being produced and distributed in a top-to-bottom manner under centrally controlled circumstances, mobile computing allows perhaps millions of people to become observers and, in some regards, the equivalent of intelligent sensors for their immediate surroundings.

Given the difficulty and cost of establishing robust, pervasive sensor networks that include adequate mobility and communication, the alternative of human sensing, communicated through devices such as 3G cell phones, is rapidly emerging as a distinct discipline within the broader area of mobile computing. The faint beginnings of this shock wave of change are just now being felt in several industries, though for years academics have been considering the possibilities of such things as collective intelligence, considered by some as a subset of crowdsourcing."

My iPad (Part III) - The Situational Browser

As mentioned previously, I like my iPad very much except for the fact that I can not get Safari (the browser) to work in some situations. For example:

1. I can not email an article from the digital edition of the Wall Street Journal (or other online publications) using Safari.

2. I can not make entries to my blog, ingehygd.blogspot.com, using Safari.

3. I can not view Google Analytics to get some of my web statics.

Further, Apple advertises Safari for iPad as equivalent to the other applications of Safari. This is simply not true.

Given these limitations, I think Apple has created a new type of Internet device, the situational browser (Safari). It only works under certain conditions!

According to Apple, these issues will go away when web pages are converted to HTML 5.0. However, this diffusion is happening slowly.

The only other limitation of iPad is a lack of a USB port. However, there is a way to connect the iPad to an iMac and use the iTunes software for transfers and updates. This is a nice feature, if folks have an iMac!

Greenspan Talk II

This is my previous post:

Greenspan Talk

Below, I provide some additional comments based on the following article:

Derby, Michael S., 2010. Greenspan: fiscal stimulus worked far less than expected. The Wall Street Journal, Sept. 15.

This quote quote from Mr. Greenspan sums up many of my concerns:

“'To the extent the evidence suggests very large deficits concurrently crowd out capital investment, there is a debit to the stimulus program that is somewhere between a third and a half of what the gross stimulus is,' he said."

I am not sure where he gets "a third and a half" as no references are cited. However, I do know that as government gets larger economic growth goes down. This probably has something to do with crowding out private investment.

The same theme is part of the following post:

Financing Capacity

Another aspect of Mr. Greenspan's speech that is interesting to me is the following quote made by the WSJ:

"Greenspan has himself said he overestimated the market’s willingness to understand and price for risk."

I think information is critical to make markets perform in a more efficient manner. However, as I tell the students often, I am wary that financial risk can ever be accurately calculated. This is a great concern in the adequate functioning of large-scale markets.