The Year of Recalls

Toyota has just announced it is recalling another 1.5 million of their vehicles for fuel pump and brake issues. This is on top of the 8.5 million they recalled earlier this year for unintended acceleration. Honda has the same brake issues and Ford has engine fire problems which will also lead to recalls for those companies. All the recalls are making drivers tune some of it out, especially if the problems are viewed as non-threatening.

(Why are the leading car companies having such a hard time making cars that function properly? How are recalls determined?)

Holding Banks Accountable

Interview with Peter Swire, law professor at Ohio State University:
Peter Swire says that a way to hold banks more accountable so a bailout is not needed again in the future is to have top officials in banks sign their names to say that they have the system back under control and operating smoothly. The idea is that if they have them personally certify the banks operations, they will be more diligent to see that the bank is operating appropriately.

(What would the penalty be if an official signed their name and did not have the banking under control for their company? They're needs to be a harsh penalty to for this to work.)

Overpaying for bonds?

Gist: Investing government bonds is the same as lending money to government. Instead of getting the interest paid by government, people need to pay a little extra at front. That means starting out at a loss. This is rational, because this particular bond offers a guaranteed protection against inflation. These investors are betting the prices will rise, eventually. Although inflation marks the price up, the producers can make profit on that in order to keep the company surviving. Because of that, the Federal Reserve is expected to pour hundreds of billions of dollars into the economy and hope the deflation will not happen.

The investment on bond is similar the concept of time value of money we discussed. However this time, people hope the price will rise.

Good news from auto industry

Gist: When U.S. economy may still be struggling to recover, Ford Motor Company said it earned $1.7 billion in the third quarter. It is going to pay down more its debts and cut cost. They also build more cars that customers want to buy. They are selling more cars in U.S. because they are introducing new products like fuel-efficient small cars, Fiesta, and heavy-duty pickup trucks. These are the vehicle that people are willing to pay for and want to drive. Ford has a full line for model segments that customers are willing to pay for, and that is going to make profit for it. Ford precisely catches the trend of the market.

Technology means to human

Gist: Kevin Kelly, co-founder of Wired magazine, was talking about how the technology change people’s life. How technology is used by human or how human is controlled by technology? The technology invented by human not only changes the lifestyle of human, but also transform human itself physically. For example, the invention of cooking changed our bodies, it changed our teeth and jaws. Human remakes us with our own technologies. New technology is a possibility that will allow somebody’s talent can be fully expressed. If the technology has not been invented in the right time for the right person, there would be much great loss for human assets. Technology is a background, an environment for human to solve the problems. To solve a problem, people will not stop thinking about any possible ideas, they will come up any ideas even if it is bad. So does better technology will come out to help human to solve problems.

Bureaucratic government, venture capital style

Gist: X prize, Google, and Department of Education suddenly have working style in common. Stephen Dubner, the co-author of the book and host of the podcast of Freakonomics Radio, has shown the common of these three. The X prize Foundation is willing to give people who can solve the problem a large amount of money as reward. Google allows its engineers to have 20% of their working time to practice their creative idea. DOE has launched the program “Race to the top ”, which is trying to give states a lot of money on their efforts on the ways to innovate. This acting is kind of like venture capital firm. Try to get as many ideas as they can and most of them are failed. The last one survived rises to the top, and get the rich reward. If this acting could also be used on their work efficiency, it would be another surprising thing.

Will the federal reserve actions help the economy?

Gist: To further help the economy, the federal reserve will probably buy a lot of bonds which will push interest rates down. This will allow people to buy homes which will increase the demand for construction workers. Businesses might build more factories and more jobs will be created.

Economist Steven Leaves doesn't think it will help the economy to great extent. He says that previous attempts to do that ended with banks and companies "sitting on the money" instead of using it to hire new employees. Leaves believes that the problem isn't interest rates but confidence in the economy. Other economists think it will eventually turn around confidence and companies will start thinking about hiring new employees. Furthermore, they think if the federal reserve won't do anything the economy will suffer.

Unemployment rates, are we getting better?

New jobs are created in a rate of ninety five thousand a month but this rate is just enough to prevent the unemployment rate from going up. So are we at a stable state? Not really! new jobs pays slightly above minimum wage, most of them are entry level positions in food preparation or for temp employees. On the other side, people are getting fired from a higher paying professions like construction.

Companies and Their Cash

Gist: They are not hiring more employees with it. They are buying back their own stock. This year, almost twice as many companies bought their own stock than last year. Companies are still resistant to hiring more people because they aren't selling as much. However, they aren't selling as much because people aren't buying as much and people aren't buying as much because they don't have a job or are worried about the one they have. It goes back and forth. Also, companies were able to squeeze more productivity out of fewer employees this year.

Foreclosure Mess

Gist: President Obama will not pass a bill that both the House and the Senate passed. It is a bill that would require state courts to recognize foreclosure documents that were notarized in other states. This would make it harder to challenge foreclosures when the documents were put together out of state--as they often are.

Furthermore, more than half of the mortgages in this country are in an electronic tracking system called MERS (Mortgage Eletronic Registration System). It was set up by banks who wanted to be able to trade mortgages more easily. MERS' role in the foreclosure process is now in doubt. The legal system will be tested on whether MERS has the authority to foreclose on a home, or not.

Augmented Reality

Gist:  As smartphones become more ubiquitous and powerful, Augmented Reality (real-time layering of audio or visual by a computer over an image of your environment) will become mainstream.

This segment gives examples of how toy companies, fast food restaurants, astronomers, and app-builders are incorporating AI into the user experience of various devices, most notably smartphones.  AI will probably become ubiquitous (and expected) by users of all types of technologies.

http://marketplace.publicradio.org/display/web/2010/10/11/pm-we-are-now-entering-an-augmented-reality/

Bring the deficits down

Gist: Politicians want to cut spending, but they don't say which spending. They want fundamental tax reform, but they don't explain how that will bring down the deficit. There are four policies that people should choose one of them when they go against deficit. One, cuts to Medicare. Two, cuts to Social Security. Three, military cuts. Four, tax increases. Clamp down the spending on Medicare that does not make people healthier. Raise the retirement age for social security. Reduce wasteful spending on military budget. Increase tax rate. These options may bring the deficit down.