What is the Internet of Things?

You probably didn't notice anything different when you accessed the web on June 7th 2012, but a new and improved internet had replaced the old one virtually overnight. The new version, referred to as Internet Protocol Version 6 (IPv6), had been in the works for years and will shepard in the next generation of internet usage where the various and sundry items of everyday life are connected. This is what is being referred by the moniker “The Internet of Things” as potentially every “thing” can be connected over the web.

To get to the point where the next generation of “things” could be connected, the old internet with a paltry 4.3 billion URLs available had to be replaced with the current version, which has trillions more addresses available, according to Vint Cerf, one of the original inventors of the internet. The explosion in available addresses paves the way for next paradigm of internet connectivity where everything from cattle on the north 40 to the refrigerator in the kitchen can be accessed.

The key to this new paradigm is the evolution of sensor technology, which has dramatically reduced prices while increasing their functionality to enable the assessment of local environments, provision of location data, and the ability to transmit information over the internet via wireless technology. The number of “things” that will be connected to the internet is estimated to reach 50 billion by the year 2020, which could spur the development of new industries, products and services dedicated to the simplification of connecting items in homes and business. In other words, the Internet of Things, despite its current low profile could be one of the biggest things to hit the web in a long time.

Anthony Ricigliano Blog - The Evidence Rolls In

Anthony Ricigliano - Anthony Ricigliano News and Advice: Within days of each other, two extreme events occurred on opposite sides of the planet; the 2000 mile wide snowstorm that saw 25 foot waves in Lake Michigan and a monster cyclone that smacked into Australia. It increasingly appears that 200 years of burning coal, oil and gas and dumping their carbon byproduct into the atmosphere is now bringing the chickens home to roost.

The planet has always had extreme events, but what makes them extreme is the fact that they are rare. The change that is occurring before our eyes is that extreme is actually becoming the new normal. In 2010, 19 nations set new all-time temperature records. The 19 new records was also a record. While Big Oil and Big Coal may be denying it, Munich Re, the biggest insurance company on earth, summed up recent events with this clinical phrase: "The high number of weather-related natural catastrophes and record temperatures both globally and in different regions of the world provide further indications of advancing climate change." In the case of Munich Re, it’s hard to deny something that seems to be taking money out of your pocket on a weekly basis.

The common perception of global warming is that the Earth will turn into a massive desert. While that may be true in some areas, a warmer atmosphere can also hold more water vapor. With studies showing that the warmer atmosphere is 4 percent moister than it was 40 years ago, the stage is also set for massive storms which bring record breaking levels of rain and snow. In this light, it’s fascinating to watch global warming deniers gleefully stating that all this rain and snow is actually proof of global cooling. If you unfamiliar with this, you’re apparently not watching Fox News.

According to studies, atmospheric temperatures have been raised by one degree, which may not sound like a lot. Unfortunately, atmospheric warming tends to magnify other temperatures, like those in the oceans. This magnification has caused the Atlantic current, which flows into the Arctic, to increase by over 10%. This has been enough to melt the sea ice in the Arctic. Without dramatic action to reduce the use of fossil fuel, the popular consensus is that atmospheric temperatures will increase by five degrees by the end of the century. Considering that a one degree increase has melted the Arctic, what will be happening on planet Earth at five degrees warmer?
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Anthony Riciglaino News - Laissez Faire in Hi Tech by Anthony Ricigliano

Anthony Ricigliano - Latest Anthony Ricigliano News and Advice:
With an economy burdened by a slow recovery from the great recession and the government hamstrung by skyrocketing deficits, the suggested solutions for getting us back on track seem to be coming from all directions. The thing is, the answer for hi-tech lies in the same model it has operated on for the last few decades, not a new plan based on theoretical economics.

This model is based purely on building the best mousetrap possible, and if there is intense competition, so be it. Using this model, U.S. companies kept high value talent in-house and outsourced the lower value skill sets. In this model, product designers would stay in-house while tasks like assembly would be outsourced.  
 
The environment in hi-tech has always been one of high risk and high reward with promising companies attracting funding from venture capital firms and the like. Successful companies reaped huge rewards as they either went public or were acquired by other hi-tech companies. This bred an environment that encouraged risk taking with rewards that reached into the billions of dollars.

The highly competitive nature of the field meant that there were losers in the process as well. For the uninitiated, the industry felt like it was made up of parts from the Wild West combined with a healthy serving of anarchy. The system worked however, enabling start ups to get to market and then compete and win against slower moving competitors.

The foundation of this model is still basically intact, but the recession and credit crunch have tamed the industry to an extent. With capital more difficult to come by, the appetite for risk has been muted as well. The financial crisis has changed the political winds as well with a seeming preference to focus resources on past industries as opposed to advancing tomorrow’s technology winners.

At this point, the best thing that can happen is for small innovative companies with great products to rack up a few “wins” to start re-building that appetite for risk which will in turn start bringing capital back to market.

It’s quite possible that the environment could remain somewhat muted as confidence is rebuilt in the industry but once it begins building momentum money will surely start flowing back in. America has the talent, the capital, and the guts to innovate our way back in hi-tech. As soon as the industry is being compared to the Wild West again we’ll know we’re back in full swing.


By Anthony Ricigliano

Anthony Ricigliano - EPA Chooses Political Expediency over Doing the Right Thing

Anthony Ricigliano - News by Anthony J Ricigliano: In exempting up to twenty industrial facilities from new federal controls on air pollution and the gases blamed for global warming, the Environmental Protection Agency (EPA) has signaled that the Obama administration does not have the political will to move aggressively on any kind of global warming initiatives.

This cave-in was confirmed recently when a high ranking EPA official told a federal court that a California power plant which had been delayed would not have to comply with the rules. The agency rationalized in statement, that “…it was not fair or appropriate to require facilities with applications in the final stage of the review to comply with standards that have just recently taken effect.”

The delay for the facility was originally caused by the EPA’s demand to the federal court that the Avenal Power Center, LLC in central California would have “…to prove that its 600-megawatt, natural gas-fired power plant would not cause violations of a new standard on smog-forming nitrogen oxide”. The Avenal Power Center sued the EPA, citing prolonged delays on approving its permit, which was first submitted in February 2008.

The EPA’s reversal comes as Republican leaders in the House and Senate continue their attacks on the Obama administration’s proposed air pollution regulations which, the Republicans say, will kill projects and jobs. In their continuing efforts to neuter the EPA, these same leaders recently proposed legislation that would prevent the agency from regulating greenhouse gases under the Clean Air Act.

The EPA announced that between ten and twenty new facilities waiting for air pollution permits could also receive exemptions from the new pollution requirements.

After reviewing the court documents Michael Gerrard, an environmental law professor at Columbia University said, "It creates a strong argument for 'treat us the same way you treat this guy." Gerrard also said the move "is part of the administration's effort not to stop or be accused of stopping too many new projects."

The issue now is that removing the restrictions on up to twenty new facilities could open the door for hundreds of other projects to challenge the EPA’s pollution restrictions. If the administration and the EPA think that this reversal will quell the ongoing political attacks, they’ll be in for an unpleasant surprise as emboldened Republican leaders fight to lift restrictions on every plant waiting for a permit to be approved. 
   
If, as it looks now, the agency and the administration lack the political will to make a stand the legislation will be effectively gutted. That would be to detriment of everyone, including the Republicans who seem so intent on heating the globe.
By Anthony Ricigliano

Anthony Ricigliano News - Four Industries Where China has Passed the U.S

By Anthony Ricigliano: America was known for the better part of the last century as the single greatest producer of just about everything in the world. It was during the 70’s that we started to cede our dominance in major industries to other areas of the world.

Oil production went to the Middle East, automobile production went to Japan, and the cracks in America’s manufacturing dominance began to grow by the year. Since that time, U.S. manufacturing has eroded but in total, we still lead the world.

China has had one of the fastest growing large economies in the world for the past several years.  China passed Japan in total manufacturing to take the number two spot in the world. Economists are now going about forecasting not if but when China will pass U.S. in total manufacturing output.

The U.S. is now trying to stay competitive in the global arena across a wide spectrum of industries, handicapped in the fight by annual deficits, expanding national debt, and an unemployment rate which stubbornly remains well above 9%. 

Here are four industries that illustrate how far the U.S. has fallen behind in industries that it used to dominate. In each industry China, the world’s second largest manufacturing economy, has taken a huge lead:

* High-tech – China manufactured $381 billion in 2008 versus U.S. production of $231 billion. If current trends remain in place, the U.S. is going to have a tough time catching up as China’s exports of high-tech products grew by 78% between 2005 and 2008 while the U.S. saw a 21% increase over the same period.

* Coal production – Once the world leader in coal production, the U.S. has fallen far behind China. In 2009, the U.S. produced a little over 1 billion short tons of coal, less than one-third of China’s production which totaled 3.3 billion short tons. Trends indicate again that China should remain firmly entrenched as the leader with production growing by 34% since 2005. U.S coal production actually decreased slightly during the same timeframe. 

* Pork production – While the U.S. is still the world leader across a broad range of agricultural commodities, pork production isn’t one of them. Due to heavy demand for the commodity by its own population, China produced 51.5 million metric tons of pork in 2010, more than five times America’s production of 10.2 million metric tons.

* Beer – The U.S. led the world in beer production at the turn of the century but has now ceded the leadership to China. Since that time, China has doubled its production to 423 million hectoliters, while production decreased slightly in the U.S. to 232 million hectoliters.

Competing globally while hindered by financial issues, the U.S. looks like it has its work cut out for it. One area that could play a growing role is innovation at the micro-level which then ramps up from there. Without government assistance, mass innovation looks to be our best hope for remaining competitive in the global arena.  

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BP Pays a Crony - News by Anthony Ricigliano

Anthony Ricigliano - Latest News: BP's much publicized compensation fund for Gulf oil spill victims has received over 91,000 requests for final damage settlement payments from people and businesses across the Gulf but has only issued one. Give them credit, it was for a hefty sum of $10 million dollars but it comes with one caveat; the recipient is an existing BP business partner that was paid only after BP intervened on their behalf.

BP has not divulged the name of the recipient due to disclosure issues. BP has admitted that it went to bat for their partner to make it the first one to be paid from the $20 billion compensation fund, known as “The Gulf Coast Claims Facility”.  The amount paid to BP’s partner company dwarfs the stopgap payments which have been parceled out while people wait for final settlements.

Another galling aspect of the $10 million payment is that final payments to the remaining 91,000 claimants won’t begin until February at the earliest, according to the administrator of the facility. The fund's administrator is Washington lawyer Kenneth Feinberg, whose firm is being paid $850,000 per month to run the facility. To no one’s surprise Feinberg’s firm has come under intense criticism as well by lawmakers, plaintiffs’ attorneys and claimants who have repeatedly complained that Feinberg’s the facility has no transparency, is running at the behest of BP, has shortchanged claims, and is dragging its feet on payments. You can’t blame Feinberg for this; he is currently negotiating with BP to revamp the pay structure and extend the administration of the facility through August 2013.

While a BP spokesperson claimed that the funding facility "reviewed our positions and made an independent decision regarding the outcome of the claim," Feinberg was independent enough to say on Monday that the facility was never requested to review the claim that BP lobbied for. Feinberg stated that BP struck an outside deal with the business and told the fund to make the payment.

Feinberg told AP that, "At the request of the parties, the settlement reached between BP and the other party was paid out of the GCCF fund. It was a private settlement and we paid it, but we were not privy to the settlement negotiations between BP and that party.”

There is also an appeals process which runs through the U.S. Coast Guard for disgruntled claimants, but that agency isn’t doing claimants any favors either. Of 264 appeals that have been processed, the finding in every one of them was that the facility acted correctly in either denying claims or paying small fraction of what was requested.

It appears that residents and businesses that incurred damages from BP’s blowout are still being held in complete disregard by the people with the money. It’s still rough, unless of course you’re a crony of BP.
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Anthony Ricigliano News - Amazing and Depressing Stats on our National Debt

Anthony Ricigliano -  Anthony Ricigliano Business Advice: The national debt is the amount that the United States has borrowed and is currently paying interest on. The national debt of the U.S. is now over $14 trillion, a number that is larger than the gross domestic product of China, the United Kingdom, and Australia combined.

Here’s a list stats that are amazing but that you may not want to read:

* In 2010, the United States accumulated over $3.5 billion in new debt each and every day. That’s more than $2 million per minute.

* The cost of executing the wars in Iraq and Afghanistan is well over $1 trillion and counting.

* The Treasury Department estimates that our debt to China is approximately $843 billion and counting.

* According to the January 2010 Congressional Budget Office (CBO) report, the federal budget deficit in 2009 was $1.4 trillion (9.9% of GDP). The 2010 deficit was approximately $1.3 trillion (9.1% of GDP). Not since 1945 have deficit been that high relative to GDP.

* According to the March 2010 CBO report, at proposed spending levels, the national debt will increase to 90% of GDP by 2020, at about $20 trillion.

* The government is also borrowing from itself, having borrowed from Social Security and Medicare, which have had surpluses.

* In 2009, according to the CBO, $187 billion of tax receipts were used to pay interest on the national debt. This is interest only and does nothing toward reducing the debt.

* The share of the national debt for each employed American is more than $90,000.
Recession and extended war efforts have exacerbated the numbers attached to the national debt as tax receipts have decreased while war and entitlement spending have increased. It’s entirely possible that these expenditures could be decreased (by ending the war effort) while tax receipts increase in an improving economy.

The issue at this point is that both parties seem intent on blowing up the national debt regardless of the factors in play at the present time. Politicians seem intent on continually delivering the message to their constituents that spending can continue and that we’ll deal with the debt monster at a later date. This shifts the debt burden to future generations who will suffer as the debt piled on by earlier generations consumes the lion’s share of the country’s GDP. It seems that everyone is living for today while leaving the bill for our kids, grandchildren, and the generations that follow.    

Author Anthony Ricigliano

Anthony Ricigliano - China Sneezes and the World Catches a Cold

Anthony Ricigliano News - The powers that be in China, after seeing growth heat up to 11.9 in the first quarter of the year, decided that is cooling down the economy with lending and investment curbs was needed to prevent overheating. These curbs went to work immediately, slowing the growth rate more sharply than expected with a result of reducing demand for U.S. and European factory machinery, industrial components from Asia and iron ore as well as other raw materials from Australia and Africa.

The timing of China’s slowdown comes at a bad time for exporters that have seen sales go slack just about everywhere else. Already a huge trading partner for many of these countries prior to the recessions that hit the U.S., Europe and others, China had taken a role as the only game town due to a stimulus-driven expansion program designed to compensate for slowing sales elsewhere.
Even with slowing growth China overtook Japan as the second-biggest economy in the second quarter. It is a buyer of 28 percent of Taiwan's exports, 25 percent of South Korea's and more than 20 percent of Australia's mining and raw materials production. Japan just reported sharply lower growth for its second quarter as the growth of exports was almost halved from the first quarter
That being said, it is the producers of iron ore for steel production and other construction-related raw materials which are expected to take the hardest hits from China’s self imposed slowdown. The winding down of a construction boom pushed by China's $586 billion stimulus program as well as billions of dollars in of bank lending is already being felt. These producers include Australia, Indonesia, Malaysia, Brazil and parts of Africa.

New construction projects dwindled as Beijing wound down its stimulus and tightened credit in the second quarter to take the air out of inflating bubbles in real estate and stock prices, slashing demand for steel, cement and other construction related materials. Factory output slowed as well and is expected to head lower in the third quarter as well.

Overall, China’s import growth slowed by about one-third in July, sending tremors throughout the world as the most robust buyer of imported goods for many countries took a step back from the table. An example of the bind China’s slowdown is putting countries in is Taiwan, a major source of components for Chinese factories that make televisions and other electronics, which are in turn sent as finished products United States. China’s slower growth, combined with slowing sales in the U.S. at the same time could hit Taiwan’s manufacturing industries particularly hard.

China, at this point, sits in the enviable position of trying to restrain growth while the rest of the world either relies on them for their relatively healthy economies, such as Australia or tries to recover from recession, like the U.S. With China expecting slower growth over the next several quarters, it could be a rough ride for everyone. 

Author Anthony Ricigliano

Anthony Ricigliano - The Fed, Wall Street, and the Unemployed

News By Anthony Ricigliano: With so much going on around it, the Fed appears to have forgotten one of its two mandates; the forgotten one being to promote full employment. The last time anybody there looked, the unemployment rate was and still is 9.5%. This number is very likely to head higher in the second half of the year. The economy lost another 130,000 jobs last month and estimates for the GDP range from a slip back into negative territory to around 1% to the positive over the next four quarters.

With these circumstances the Fed, if they were following their mandate, would be taking aggressive steps to bring the economy back to full employment. With inflation numbers hovering around one percent, there are no worries that prices are going to run away anytime soon. In fact, inflation numbers in the 3 to 4% area would probably go a long way toward getting companies to begin hiring again due to a sharp decrease in real interest rates. 

The issue keeping the Fed from pursuing its employment mandate is that those levels of inflation would be very unpopular with Wall Street. Superseding the needs of Americans who are out of work, 3 to 4% inflation would be devastating to Wall Street by hammering the massive amounts of mortgage debt on which they’re currently sitting. So who is the Fed listening to?

The fact is that Ben Bernanke’s Fed has had Wall Street’s back all along, going back to the beginning of the banking crisis when, by their own doing, Wall Street’s banks teetered on the edge of bankruptcy. That time Bernanke conned Congress into passing the Troubled Asset Relief Program (TARP) by saying that the commercial paper market was in jeopardy of freezing up, with a near term result of denying access to short-term credit necessary to operate through the meltdown. What he didn’t mention was that the Fed could have opened its own lending facility for that purpose. Coincidentally, he announced the establishment of a lending facility to buy commercial paper the weekend after Congress approved TARP.

That the Fed had a direct responsibility for inflating the housing bubble goes without saying. Even as signs of overheating were becoming obvious, Alan Greenspan himself was talking up adjustable rate mortgages as a means buy a home. These were the same types of mortgages that started the housing debacle but the Fed stuck to its guns as long as possible.

What the country needs at this point is a truly independent Fed that is not beholden to Wall Street and remembers its mandate of promoting full employment for the citizens of this country. We don’t have that now and it’s hard to imagine getting something like that anytime soon. One thing is for certain, with the Fed behind it, Wall Street knows it can mess up big and the Fed will be there with a shovel to clean it up.

Author Anthony J Ricigliano