Smart Economy

When will the recession end? Part 7 False signals of recovery

Many hopeful economists and political analysts are desperate to find any source of good news signaling that we may be at the bottom of the recession / depression or starting to rebound to coincide with the Barack Obama inauguration. Many will point to the 300 basis point jump in the Baltic Dry Index-the obscure London based indicator that tracks the health of global maritime trade. The index,  measures the costs for shipping dry bulk commodities such as  iron ore, coal, coke, steel and grains, It topped out at over 13,000 basis points last May and by December nose-dived 96% back down to earth to 663 b.p.as global trade virtually collapsed, pushed down by a credit squeeze and sliding demand for global trade. Now it's started to rebound off its lows, inch up ever so slightly. Yesterday, the index climbed 9 b.p. to 920 points from 911 points on Tuesday.

Some analysts will jump for joy pointing at these Baltic Dry Index rebounds but ship-owners are apparently not as enthused.

 

This shows the danger of just tracking naked numbers, without digging deeper and exploring the reasons behind these moves. In the stock market they call it a dead cat bounce.

 

According to my sources, some oil companies are starting to use layed up dry bulk ships as storage vessels for oil. With no where to store & ship oil as it flows out of pipelines, these ships are tied up in dock. Oil companies are waiting it out until oil prices rebound to sell their commodities to overseas buyers-not an encouraging sign. So yes, these ships are consigned, but not actually traveling anywhere yet-so that's why the BDI has inched upward, giving you a false positive signal.

 

UPDATE- "Bloomberg is quoting Frontline Ltd, the world’s biggest owner of supertankers, as saying that about 80 million barrels of crude oil are being stored in tankers, the most in 20 years, as traders seek to take advantage of higher prices later in the year."

 

The financials around global maritime trade have not improved either, in fact in some cases have gotten worse.

 

-Shipping firms are increasingly canceling orders for new dry bulk carriers due to the uncertain business environment.

-Indian & Chinese shipowners are laying up more vessels that carry dry bulk commodities.

-Excess capacity in the business is a major problem says Purchasing.com...."even if demand comes back in 2009, there is still a strong chance of overcapacity due to the shipbuilding order boom that took place when rates were at their peak. According to the Wall Street Journal, in the last two years 50 million tons of capacity have been added to the global fleet of 420 million tons. "But in 2009 and 2010, over 175 million tons is due to come into service."

-Frozen credit lines have paralyzed the shipping trade since mid-September, drastically reducing shipments and, in turn, the use of dry bulk carriers.

-Also a lack of access to letters of credit, in which banks guarantee payment for merchandise, is another major barrier to the resumption of global trade. 

“It is not a sustained rally as of now,” said  India’s biggest ship-broking firm, Mumbai-based Trans Ocean Agency Pvt. Ltd. “It is momentary. The problems with letters of credit persist.”

Adding...."that given the extent of the fall over the past few months, a minor improvement of even 5% or 10% will not make a difference. ... “It could be a technical bounce-back.”  say news reports.

"Conditions should become clearer when China, the world’s biggest importer of iron ore, completes price negotiations with suppliers for its new annual contract beginning February." say shipping experts. Everybody will be waiting with anticipation.

Excess capacity is a problem in many industries including housing and the autosector, and we won't be heading out of the recession / depression until the supply/demand ratio evens out--that's basic economics 101,that all the optimist economists ignore and don't tell us.

Downstream Container traffic is no less robust

"Lloyd's List quotes the Drewry Container Forecaster, who now estimates that global container traffic totalled 153m teu last year, representing growth of 7.2% from 2007. A few months earlier, Drewry had been forecasting trade expansion of 8.6% for 2008.This year, growth is expected to slow to just 2.8%, with a few isolated trades such as the Asia-Middle East and Asia-Africa corridors likely to post some positive figures. The big east-west routes are in terrible shape, with Drewry forecasting that the Asia-Europe trade will shrink by 4.1% in 2009, following growth of just 1.9% in 2008. Pacific traffic is also very weak , with Drewry calculating that eastbound volumes from Asia to

North Americadropped 5.7% last year, with a further contraction of 3.2% forecast for 2009.

Trade data from Asia's export tigers has been disastrous over recent weeks, reflecting the collapse in US, UK and European markets. South Korea's exports fell 30% in January compared to a year earlier. Exports have slumped 42% in Taiwan and 27% in Japan, according to the most recent monthly data. Even China has now started to see an outright contraction in shipments, led by steel, electronics and textiles.
A report ING yesterday said shipping activity at US ports has suddenly plunged. Outbound traffic from Long Beach and Los Angeles, America's two top ports, has fallen by 18% year-on-year, a far more serious decline than anything seen in recent recessions. Source- Denmark's A.P."

Walter Derzko, Smart Economy, Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression featuring 45 opportunity scenarios.

Related Posts

82 Signposts to the current Recession Depression Summary from 2008

When will this recession end?

When will this recession end ? Part 2 Do you listen to the Optimists or the Pessimists in 2009?

When will the recession end? Part 3 The coming collapse of the American Middle Class into an Underclass

When will the recession end? Part 4 The double dip housing crash in the USA

When will the recession end? Part 5 Stop Auto Industry Bailouts, start buying Electric

When will this recession end? Part 6 The USA Paradox; Cheer vs Fear vs Transformation

When will the recession end? Part 7 False signals of recovery

When will the recession end? Part 8 Lessons Learned from the last Post 9/11 recession; designing brilliant winning business models

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page

When will the recession end? Part 5 Stop Auto Industry Bailouts, start buying Electric

Instead of offering more unconditional bailouts to the big three North American automakers, the Canadian government should shift from supply to demand and change its procurement policy to promote green electric vehicles. When it comes time to replacing fleet vehicles, vans, trucks and buses or trains they should purchase electric vehicles from local manufacturers including Bombardier, GM, Ford or Chrysler or Toyota or Honda if they are made in Canada. This procurement policy could be extended to the army, crown corporations, provincial governments, municipalities and utilities. That would provide a financial incentive to the auto industry to retool and take them through dificult recessionary / depressionary times as well as indirectly supporting the auto-parts manufacturers. Increased production runs should bring down the costs eventually to normal consumers.

Walter Derzko, Smart Economy, Toronto

Author of the soon-to-be-released book: Hard Times Golden Opportunities.. about opportunity recognition in a recession/ depression featuring 45 opportunity scenarios.

Related Posts

82 Signposts to the current Recession Depression Summary from 2008

When will this recession end?

When will this recession end ? Part 2 Do you listen to the Optimists or the Pessimists in 2009?

When will the recession end? Part 3 The coming collapse of the American Middle Class into an Underclass

When will the recession end? Part 4 The double dip housing crash in the USA

When will this recession end? Part 6 The USA Paradox; Cheer vs Fear vs Transformation

© 2005-2009

Walter Derzko -"Changing the world, one idea at a time"©

Expert, Consultant and Keynote Speaker on Emerging Smart Technologies, Innovation, Strategic Foresight, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

The Smart Technology Blog: The Smart Economy -- Read, enjoy, explore, speculate, comment !!

To arrange for an in house presentation or briefing on smart technology see here

To explore the opportunities and threats of any new smart technology in your industry - Contact Me or explore how we can work together

• ".....Strategy without action is a day-dream; action without strategy is a nightmare"-old Japanese proverb
• ".......Ours is the age that is proud of machines that think and suspicious of men who try to." -- H. Mumford Jones
• ".......Without changing our patterns of thought, we will not be able to solve the problems we created with our current pattern of thought."  --A. Einstein
• ".......Change is difficult, but complacency and stagnation are surefire showstoppers..." --Walter Derzko

• ".......Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has."  -- Margaret Mead

• ".......Small minds discuss people; Average minds discuss events; Great minds discuss ideas; --Anon

P. S. if this is your first visit to my blog, please go to our Welcome page 

Top 10 smart technologies for Obama and Harper to consider for their infrastructure / cyberstructure / cognistructure program

Both US president elect Obama and Canadian Prime Minister Steven Harper have promised "New Deal" like infrastructure programs for the USA and Canada to spend their way out of a depression / recession (pick one). A new term is needed to describe this type of new intelligence-infused infrastructure. I call it the cognistructure-an infrastructure that thinks for itself.

Here's my list of top 10 smart technologies that both Olbama and Harper should have their eye on and on their planning radar screens; (Niche applications 10-6, more ubiquitous applications 5-1)

10. Smart home fabrication (supersized 3D printer that prints your home on site) to improve construction efficiency and effectiveness and waste reduction in conventional house building (but there is little chance of seeing North American building codes reformed any time soon)

9. Smart sensors in bridges, levees, roads, buildings, vehicles, satellites  etc (smart dust) to provide a dynamic sense and respond environment- eco cities-earth with a fast track  nervous system

8. Move toward the electrification of transportation (GM, Ford, Chysler shifts production to electric cars and trucks)and smart road networks (ie smart retractable speed bumps, movable road mediums that adjust to traffic flow and congestion)

7.Biomimicry -- designing systems, objects and surfaces  based on natural biological models

6. Smart "emergent and self-organizing" traffic congestion systems that deal with natural complexity in unconventional ways

5.Infrastructure / congnistructure for Smart cities, that address and enforce  "system resilience" and mitigates the consequences future potential catastrophies (climate change, severe weather, man-made disasters, riots, etc)

4.Modermizing the electrical grid to accept consumer and commercial inputs from alternate energy and reducing power loss during distribution ( via super conductors and nanowires)

3.Adoption of smart alternate energy technologies (wind, water and sun) that approach price parity with gas, coal, nuclear and electricity. Move toward distributed and diversified energy production vs centralised energy production.

2. Energy harvesting- various smart technologies that convert latent heat, all light spectra and mechanical vibration into electricity. Objects that create their own energy

1. Internet of things (IofT) (or ObjectNet or O-Net) & the Internet of Services (IofS) or S-Net -Intelligent objects, systems and environments have their own unique IP address and are connected together, just like web pages are linked on the web today.

© 2005-2008

Walter Derzko

Expert, Consultant and Guest Speaker on emerging Smart Technologies, Strategic Planning, Business Development, Lateral Creative Thinking and author of an upcoming book on the Smart Economy "

To explore the opportunities and threats of any new smart technology in your industry - Contact Me

.....Strategy without action is a day-dream; action without strategy is a nightmare"

- old Japanese proverb

P. S. if this is your first visit to my blog, please go to our Welcome page

Smart Roads, Runways, Railways, Streetcar tracks that harvest energy

Researchers have already developed road ramps that harvest mechanical energy or smart cement walkways in high walking traffic areas to turn our steps into energy.

Now scientists at the Technion-Israel Institute of Technology have developed a piezoelectric crystal that is embedded under an asphalt roadway to convert vibration into green electricity. The spin-off company in Haifa called Innowattech, will start a pilot project to test the energy harvesting system in January 2009 on a 100 meter stretch of road. The company says that theoretically a one km stretch of a four lane highway can produce 400 kilowatts.

From their web site:

Innowattech has developed a new alternative energy system that harvests mechanical energy imparted to roadways, railways and runways from passing vehicles and converts it into green electricity. The system, based on a new breed of piezoelectric generators, harvests energy that ordinarily goes to waste and can be installed without changing the habitat.

About Innowattech

Innowattech is based in Ra’anana Israel, with research facilities in the Technion Institute, Haifa, Israel.

It specializes in the development of custom piezoelectric generators for specific purposes.

The company is privately held.

The Innowattech Green Energy Solution:

The piezoelectric phenomenon was first described by the Curie brothers.

They observed that certain materials generate electric current when they are deformed.

Today piezoelectric materials have multiple uses in industry, but most work efficiently only at high frequencies.

Innowattech has developed a new breed of piezoelectric generators with a mechanical electrical association that are ideally suited to harvest the mechanical energy imparted to roadways from passing vehicles.

In addition has developed a very efficient storage system to collect and store the electricity produced by these generators.

The accumulated energy can be used for local power needs or routed into the grid.

Innowattech’s solution is optimal.

It maximizes retrieval of wasted mechanical energy converting it into electrical energy.

It then stores the energy with minimal energy waste.

The energy is also produced close to its end users.

It does not require the use and development of vast new areas as do solar and wind farms.

Innowattech 's solution is capable of producing significant amounts of electricity.

Its solution has an economical and commercial advantage over other green alternatives.

The building costs and the expected return on investment time are estimated to be much lower than for solar energy.

The solution is applicable to any place with heavy vehicle travel and not confined to specific climate and geographic areas as are solar and wind energy.

Innowattech’s advantages

•  The movement energy of busy roads, railroads and runways all day long near population centers can be converted into electrical energy that can be supplied to nearby customers.

•  The electrical storage system which is integrated in the roads, railroads and runways does not take up any public space and functions in all weather conditions.

•  Innowattech's electrical storage system does not require any additional maintenance after its implementation.

•  Innowattech 's solution can serve as information gatherers in future "Smart Roads" and " Smart Airports".

Walter Derzko

IBM endorses smart technology and a smarter planet

A while back when I was at the Idea Lab at the Design Exchange, I remember sitting over a coffee and exploring a thought exercise with some clients.

The question under debate was: What are  the generic elements or activities that would accelerate any new technology platform, (such as smart technologies) and overcome the initial market interia. Simply put, Is there a generic technology evolution matrix?

We came up with over 25 items. (see related Post-Do you know how to spot opportunities?)

One was having cartoonists make fun of your technology ( No, smart technologies aren't on Dilbert's radar screen yet, but any day now I hope)  Another key event would be to have some influential CEO highlight the benefits of your technology in a milestone keynote speech (act as a complimentor-in business strategy terms. )

Well for smart technologies, that breakthrough event may have happened this month on November 6^th, when IBM’s CEO, Sam Palmisano, outlined a new agenda for building a smarter planet - during a speech at the Council on Foreign Relation. (hat tip to Adam Christensen at IBM HQ)

 

 

From IBM's blog:

"In the speech, he outlines a number of the challenges faced today by people, governments, businesses and organizations. A lack of clean water for a fifth of the world’s population. Energy systems that waste more energy than they produce. Traffic in our cities that clogs roads and chokes economic growth. 

Clearly there are no simple solutions for these problems.

Technology can play a big role in helping find answers to these problems. While the Internet currently connects more than a billion people, in just a few years, it will connect more than a trillion objects. Everything from cell phones, cars, roads, buildings, and even objects in nature itself, will have embedded technology and be connected to one another, enabling tremendous advances in how we understand how the world works and make smarter decisions to make it work better. 

But technology is just part of the solution. Without the people, policies and culture to inspire and execute the change, nothing ultimately gets done."

From Sam’s speech:

[...]   These collective realizations have reminded us that we are all now connected—economically, technically and socially. But we're also learning that being connected is not sufficient. Yes, the world continues to get "flatter." And yes, it continues to get smaller and more interconnected. But something is happening that holds even greater potential. In a word, our planet is becoming smarter.

This isn't just a metaphor.I mean infusing intelligence into the way the world literally works—the systems and processes that enable physical goods to be developed, manufactured, bought and sold… services to be delivered… everything from people and money to oil, water and electrons to move… and billions of people to work and live.

 What's making this possible?

• First, our world is becoming instrumented: The transistor, invented 60 years ago, is the basic building block of the digital age. Now, consider a world in which there are a billion transistors per human, each one costing one ten-millionth of a cent. We'll have that by 2010. There will likely be 4 billion mobile phone subscribers by the end of this year… and 30 billion Radio Frequency Identification tags produced globally within two years. Sensors are being embedded across entire ecosystems—supply-chains, healthcare networks, cities… even natural systems like rivers.
• Second, our world is becoming interconnected: Very soon there will be 2 billion people on the Internet. But in an instrumented world, systems and objects can now "speak" to one another, too. Think about the prospect of a trillion connected and intelligent things—cars, appliances, cameras, roadways, pipelines… even pharmaceuticals and livestock. The amount of information produced by the interaction of all those things will be unprecedented.
• Third, all things are becoming intelligent: New computing models can handle the proliferation of end-user devices, sensors and actuators and connect them with back-end systems. Combined with advanced analytics, those supercomputers can turn mountains of data into intelligence that can be translated into action, making our systems, processes and infrastructures more efficient, more productive and responsive—in a word, smarter.

What this means is that the digital and physical infrastructures of the world are converging. Computational power is being put into things we wouldn't recognize as computers. Indeed, almost anything—any person, any object, any process or any service, for any organization, large or small—can become digitally aware and networked.

With so much technology and networking abundantly available at such low cost, what wouldn't you enhance? What service wouldn't you provide a customer, citizen, student or patient? What wouldn't you connect? What information wouldn't you mine for insight?

The answer is, you or your competitor—another company, or another city or nation—will do all of that. You will do it because you can—the technology is available and affordable.

But there is another reason we will make our companies, institutions and industries smarter. Because we must. Not just at moments of widespread shock, but integrated into our day-to-day operations. These mundane processes of business, government and life—which are ultimately the source of those "surprising" crises—are not smart enough to be sustainable.

[...]

Leaders will need to hone their collaboration skills, because we will need leadership that pulls across systems. We will need to bring together stakeholders and experts from across business, government and academia, and all of them will need to move outside their traditional comfort zones.

I’m struck by the questions this raises. What investments need to be made by both public and private institutions? What policy issues need to be debated and resolved? What role can individual citizens and employees play in helping bring about meaningful change?

I’m also struck by the potential opportunities inherent in finding solutions to these problems. 

see full text of Sam Palmisano's speech

Walter Derzko

 

From IBM's blog:

"In the speech, he outlines a number of the challenges faced today by people, governments, businesses and organizations. A lack of clean water for a fifth of the world’s population. Energy systems that waste more energy than they produce. Traffic in our cities that clogs roads and chokes economic growth. 

Clearly there are no simple solutions for these problems.

Technology can play a big role in helping find answers to these problems. While the Internet currently connects more than a billion people, in just a few years, it will connect more than a trillion objects. Everything from cell phones, cars, roads, buildings, and even objects in nature itself, will have embedded technology and be connected to one another, enabling tremendous advances in how we understand how the world works and make smarter decisions to make it work better. 

But technology is just part of the solution. Without the people, policies and culture to inspire and execute the change, nothing ultimately gets done."

From Sam’s speech:

[...]   These collective realizations have reminded us that we are all now connected—economically, technically and socially. But we're also learning that being connected is not sufficient. Yes, the world continues to get "flatter." And yes, it continues to get smaller and more interconnected. But something is happening that holds even greater potential. In a word, our planet is becoming smarter.

This isn't just a metaphor.I mean infusing intelligence into the way the world literally works—the systems and processes that enable physical goods to be developed, manufactured, bought and sold… services to be delivered… everything from people and money to oil, water and electrons to move… and billions of people to work and live.

 What's making this possible?

• First, our world is becoming instrumented: The transistor, invented 60 years ago, is the basic building block of the digital age. Now, consider a world in which there are a billion transistors per human, each one costing one ten-millionth of a cent. We'll have that by 2010. There will likely be 4 billion mobile phone subscribers by the end of this year… and 30 billion Radio Frequency Identification tags produced globally within two years. Sensors are being embedded across entire ecosystems—supply-chains, healthcare networks, cities… even natural systems like rivers.
• Second, our world is becoming interconnected: Very soon there will be 2 billion people on the Internet. But in an instrumented world, systems and objects can now "speak" to one another, too. Think about the prospect of a trillion connected and intelligent things—cars, appliances, cameras, roadways, pipelines… even pharmaceuticals and livestock. The amount of information produced by the interaction of all those things will be unprecedented.
• Third, all things are becoming intelligent: New computing models can handle the proliferation of end-user devices, sensors and actuators and connect them with back-end systems. Combined with advanced analytics, those supercomputers can turn mountains of data into intelligence that can be translated into action, making our systems, processes and infrastructures more efficient, more productive and responsive—in a word, smarter.

What this means is that the digital and physical infrastructures of the world are converging. Computational power is being put into things we wouldn't recognize as computers. Indeed, almost anything—any person, any object, any process or any service, for any organization, large or small—can become digitally aware and networked.

With so much technology and networking abundantly available at such low cost, what wouldn't you enhance? What service wouldn't you provide a customer, citizen, student or patient? What wouldn't you connect? What information wouldn't you mine for insight?

The answer is, you or your competitor—another company, or another city or nation—will do all of that. You will do it because you can—the technology is available and affordable.

But there is another reason we will make our companies, institutions and industries smarter. Because we must. Not just at moments of widespread shock, but integrated into our day-to-day operations. These mundane processes of business, government and life—which are ultimately the source of those "surprising" crises—are not smart enough to be sustainable.

[...]

Leaders will need to hone their collaboration skills, because we will need leadership that pulls across systems. We will need to bring together stakeholders and experts from across business, government and academia, and all of them will need to move outside their traditional comfort zones.

I’m struck by the questions this raises. What investments need to be made by both public and private institutions? What policy issues need to be debated and resolved? What role can individual citizens and employees play in helping bring about meaningful change?

I’m also struck by the potential opportunities inherent in finding solutions to these problems. 

see full text of Sam Palmisano's speech

Walter Derzko

Why is Ford & GM booming in Brazil & bankrupt in the USA?

Guess which county has the most advanced Ford assembly plant in the world?

 

.... USA? wrong;

 

.... Asia? Guess again;

 

....EU? Sorry wrong again.

 

According to the 2007 video below, it’s in Camacari, Brazil which opened in 2001.

 

It can produce 5 different vehical platforms on the same assmbly line. Most suppliers have their own sub-assembly lines inside the Ford plant. According to the Detroit News:

"Ford sources said it is the sort of plant the company wants in the United States, were it not for the United Auto Workers, which has historically opposed such extensive supplier integration on the factory floor."

All staff wear the same uniforms (managers and production line staff alike) and they all eat at the same cafeteria. Everyone is encouraged to discuss ideas and problems during lunch. The same sort of team spirit is fostered at Four Seasons Hotel and Resorts head office,  which I will visit on Monday  (more on innovations at Four Seasons Hotel in a future post)

 

I got this email that’s been circulating on the internet (hat tip to Marko Yanishevsky at NRC, Ottawa)

"This is a video of a new Ford plant in  Brazil. One look at this and you will be able to tell why there will probably never be another Ford assembly plant  built in the  USA. It will also point out why more assembly plants will go offshore. The UAW opposes the almost fully automated assembly plants because this would eliminate some jobs even though a better built and less costly car could be produced.

The UAW wages are the highest in the world. CNN reported last night that UAW Ford and GM assembly workers make an average of $73.00 US (full package). Honda and Toyota workers make $48.00 US. Between the UAW and the Big 3 executives, it's no wonder the US auto industry is in dire straight.....and…… pay attention to the last few words in the video.  It says a lot!"        

 

A must see video  and special report-why Ford and GM prospering in Brazil

Walter Derzko

North American Auto Industry Bailout? Should it go bankrupt? Yes?

Both the US and Canada are currently exploring an auto industry bailout package. On the weekend, I predicted that we may find ourselves in a scenario where we might see a bankruptcy or a merger in the North American auto industry. Today Jack Welsh in Business Week continues that arguement in a story called: GM: The Case Against a Bailout

Jack Welch asks: Should the government bail out the U.S.auto industry to keep the players from going into bankruptcy?—

"How about this instead: The boards of Chrysler and General Motors (GM) put their companies into bankruptcy with the clear intent of reorganization and merger. As radical as that sounds, it's the best road we can see to a viable future for the industry.

And yes, the U.S. car industry does belong in the future. Free-market proponents have a point about the industry's "natural demise." Despite huge progress in American quality and design, well-run German, Japanese, and Korean companies have taken about half the U.S. market, and the competition—which will include China and India—is only getting tougher. But like many others, we believe that for the sake of jobs, national defense, and self-respect, America needs to keep its "true" domestic auto industry alive.

A government handout, however, isn't the way to make that happen. Washington would impose conditions and promise strict oversight, but it simply can't push through the kind of transformative change the industry needs. There would be too much political opposition, and regardless, the bailout sums being bandied about—$25 billion of taxpayer dollars, for starters—would only keep the Big Three heaving along, basically as they are. It's a life-support solution, not a cure.

That's why the boards of the automakers should take the courageous step of putting their companies into bankruptcy. Some creditors might make the case for liquidation, but given the diminished worth of the automakers' assets, that's an unattractive scenario. Instead, creditors would most likely opt for the government stepping in as the debtor-in-possession financier supporting the reorganization.

Talk about a fresh start. For more than a decade, U.S. carmakers have chipped away incrementally at massive legacy costs. But reorganization would open the doors to meaningful structural change through the renegotiation of contracts with creditors, dealers, and unions. And it would offer better odds of paying back taxpayers."

Self-balancing unicycle-The Unocycle

The Segway was a technology that was overhyped and a commercial failure. Now,19 year old Ben Gulak in Toronto has developed a prototype for a self-balancing electric “unicycle” which he hopes to perfect and sell for about $5000. See  http://www.popsci.com/node/21644 and http://www.the-uno-tomorrows-transportation.com/

If you are looking for something more conventional, Japanese engineers at Keio University in Yokohama, Japan are working on a self-balancing electric bicycle  (see Engineers design self-stabilizing electric bicycle )

Smart 'autonomous' helicopters teach themselves to fly

Stanford computer scientists have developed an artificial intelligence system that enables robotic helicopters to teach themselves to fly difficult stunts by watching other helicopters.  The result is an autonomous helicopter than can perform a complete airshow of complex tricks on its own.  The airshow is an important demonstration of "apprenticeship learning," in which robots learn by observing an expert, rather than by having software engineers write instructions from scratch.

Full press release

Self organizing smart traffic lights offer significant reductions in waiting times and fuel consumption

Society (and business schools) teach us that  being tidy is prefered to being  untidy, order trumps disorder and chaos.  We strive for regularity, vs erratic and irregular behavior in business.  Above all, we aim for predictability and especially control.

Dirk Helbing, a physicist at the Swiss Federal Institute of Technology (ETH) in Zurich, has been studying the seemingly chaotic movement of tens of thousands of cars on road networks. His conclusion? Complex systems seem to do better without us i.e without our helping hand of overarching control.

Problem:

Within the USA alone, the annual cost of congestion is estimated to be $63.1 billion US, caused by 3.7 billion hours of delays and 8.7 billion liters of “wasted” fuel, (according to D. Schrank and T. Lomax, Texas A & M University in College Station,The 2005 urban mobility report.  Texas Transportation Institute, 2005.)

In New Scientist recently, we see:

"Although the behaviour of individuals is often simple, the collective patterns to which it leads can be counter-intuitive, making common sense a faulty guide to what might happen.  For example, it is generally true that traffic jams become more likely as traffic density increases.  It's not always the case, though, as Helbing's group has shown."

Counter-intuitive example:

"Consider a two-lane road carrying both cars and trucks, where the cars are moving faster on average.  At low traffic densities, the cars have plenty of space to overtake and can easily pass the trucks.  As the traffic density increases, drivers find it more difficult to overtake because other vehicles are in the way.  However, evidence from simulations and real traffic flows shows that at a critical density of traffic, the obstruction to lane-changing begins to have a beneficial effect. Because drivers tend to stay in one lane, they disturb the flow of traffic less, leading to a higher total throughput of vehicles."

This would mean giving traffic lights a way to adapt their behaviour, which most of today's systems lack.  At the moment, engineers force traffic into patterns that appear favourable.  Lights on main roads stay green longer during peak hours, for example.  But it's the engineers who do this tuning based on average conditions observed in the past; most traffic lights don't have the flexibility to respond to changing conditions on their own. Engineers also take some things for granted, such as the notion that lights must be managed from a central control.

Smart Solution:

Self organizing smart traffic lights

Last year, Dirk Helbing and Stefan Lämmer at the Technical University of Dresden in Germany began exploring if traffic lights could be engineered, designed or intellivated (elevate intelligence) to cut congestion and reduce fuel use.

"Lights can do a better job, Helbing and Lämmer have found, if they are given some simple operating rules and left to organise their own solution.  To demonstrate this, they developed a mathematical model that assumed traffic flowed like a fluid, a well-established traffic engineering technique.  The model also describes what happens at road intersections, where traffic entering from one road has to leave by another, much like fluid moving through a network of pipes.

Of course, jams can arise if traffic entering a road overloads its capacity.  To avoid this, Helbing and Lämmer make the lights at each intersection respond to growing traffic pressure, like the people going through the passage.  Each set of lights carries sensors that feed information about the traffic conditions at a given moment into a computer, which then calculates the flow of vehicles expected in the near future.  The computer also works out how long the lights should stay green in order to clear the road and relieve the pressure.  In this way, each set of lights can estimate for itself how best to adapt to the conditions expected at the next moment.

Best left alone

This isn't enough, however, because the lights might adapt too much.  If they are only adapting to conditions locally, they might cause trouble further away.  To avoid this, Helbing and Lämmer have devised a scheme whereby neighbouring lights share their information so that what happens around one traffic light can affect how others respond.  By doing so, the self-organised lights prevent long jams from forming.

Despite the simplicity of these rules, they seem to work remarkably well.  Helbing and Lämmer have demonstrated in simulations that lights operating this way should achieve a significant reduction in overall travel times and keep no one waiting at a light too long (See diagram below). Nonetheless, the behaviour of the lights doesn't generally fit with human notions of what ought to be efficient.  "How long lights stay green is unpredictable," says Lämmer.  Yet the average journey times go down and become more predictable."

"What's more, the scheme eliminates other irritating problems that afflict traditional traffic control.  At quiet times, drivers typically have to wait far longer than is really necessary at intersections because the lights' schedules are designed to serve a large number of vehicles.  And in the middle of the night, lights keep stopping cars even when there is no need. The self-organising traffic scheme eliminates these problems because the lights remain responsive to local demands, for instance sensing an approaching car and changing to green to let it through."

"Town planners are beginning to look at self-organising lights as a practical solution to looming traffic congestion.  Helbing and Lämmer are working with a local traffic agency in Dresden, Germany, first to test and then hopefully to implement the idea.  In early simulations based on Dresden's road layout, they have had encouraging results.  "We've found significant reductions in waiting times and fuel consumption, and we can also accelerate public transport," says Lämmer.  Authorities in Zurich, Switzerland, have also been taken by the idea."

So, heads up...Toronto, Kyiv and Beijing...and other traffic-prone cities--Walter Derzko

Conclusion:

"The wider lesson is that we just can't trust our intuition when it comes to the super-complex systems that we depend on today.  We may never learn exactly how to control these systems in the traditional fashion and the best way to cope may be by learning new principles for letting them manage themselves." concludes New Scientist.

Source: New Scientist and Self-Control of Traffic Lights and Vehicle Flows in Urban Road Networks

Tomorrow: Adaptive Intelligent Cruise Control