Author Archives: Admin

Silicon Shift

February 6, 2009 ,

Take a look at this 40 minute interview with Jen-Hsun Huang, CEO of graphics chip maker Nvidia. It’s a non-technical discussion of a very important topic in the large world of computing and the Internet. Namely, the rise of the GPU — the graphics processing unit.

Almost 40 years ago the CPU — or central processing unit — burst onto the scene and enabled the PC revolution, which was mostly about word processing (text) and simple spreadsheets (number crunching). But today, as Nvidia and AMD’s ATI division add programmability to their graphics chips, the GPU becomes the next generation general purpose processor. (Huang briefly describes the CUDA programmability architecture, which he compares to the x86 architecture of the CPU age.) With its massive parallelism and ability to render the visual applications most important to today’s consumers — games, photos, movies, art, photoshop, YouTube, GoogleEarth, virtual worlds — the GPU rises to match the CPU’s “centrality” in the computing scheme.

Less obvious, the GPU’s attributes also make it useful for all sorts of non-consumer applications like seismic geographic imaging for energy exploration, high-end military systems, and even quantitative finance.

Perhaps the most exciting shift unleashed by the GPU, however, is in cloud computing. At the January 2009 Consumer Electronics Show in Las Vegas, AMD and a small but revolutionary start-up called LightStage/Otoy announced they are building the world’s fastest petaflops supercomputer at LightStage/Otoy’s Burbank, CA, offices. But this isn’t just any supercomputer. It’s based on GPUs, not CPUs. And it’s not just really, really fast. Designed for the Internet age, this “render cloud” will enable real-time photorealistic 3D gaming and virtual worlds across the Web. It will compress the power of the most advanced motion picture CGI (computer generated imaging) techniques, which can consume hours to render one movie frame and months to produce movie sequences, into real-time . . . and link this power to the wider world over the Net. 

Watch this space. The GPU story is big.

Posted in: Cloud Computing, Exaflood, Silicon, Video , Tagged: , , ,

“the worst bill since the 1930s”

February 5, 2009 ,

Harvard’s Robert Barro interviewed about Keynesian spending, tax cuts, Paul Krugman, and. . .

Tax cuts are bound to be better. I think the best evidence for expanding GDP comes from the temporary military spending that usually accompanies wars — wars that don’t destroy a lot of stuff, at least in the US experience. Even there I don’t think it’s one for one, so if you don’t value the war itself it’s not a good idea. You know, attacking Iran is a shovel-ready project. But I wouldn’t recommend it.

Posted in: Economics, New New Deal, Taxes

Good idea

February 5, 2009 ,

Futurist and The Singularity Is Near author Ray Kurzweil and the very impressive X-Prize Foundation chief Peter Diamandis launch Singularity University with the goal of “preparing humanity for accelerating technological change.”

Posted in: Uncategorized

Globalization & Monetary Policy

February 4, 2009 ,

The Dallas Fed announces a conference on the topic I’ve been writing about lately — namely, the intersection of globalization, capital flows, asset prices, China, and monetary policy.

Posted in: Globalization, Monetary Policy

New banks, not government banks

February 3, 2009 ,

Niall Ferguson’s latest:

The critical point is to avoid the nightmare of a state-dominated financial sector. The last thing America needs is to have all its banks run like the rail company Amtrak or, worse, the Internal Revenue Service. State life-support for moribund dinosaur banks is an expedient designed to avert the disaster of a generalised banking extinction not a belated victory for socialism. It should not and must not impede the formation of new banks by the private sector. So recapitalisation must be a once-only event, with no enduring government guarantees or subsidies.

Posted in: Finance, financial crisis

Pulling rabbits out of hats

February 3, 2009 ,

How has debt-laden Level 3 survived (at least so far) two crashes now? Dennis Berman tells the story.

Since 2001, it has been paying $500 million to $600 million a year in interest. Yet it has never been able to cut its long-term debt load below $5 billion. Even worse, Level 3 hasn’t made a penny of profit since 1999. Its stock has traded below $8 for the past eight years. It closed at 98 cents on Monday.

Level 3 seemed a prime target to get pulled into today’s great credit maw, where decent but otherwise cash-strapped companies go to die. By November, bond investors were seriously doubting the company’s ability to pay off $1.1 billion in debt coming due this year and next, valuing its bonds as low as 30 cents on the dollar.

But the company has convinced large equity holders to bail them out of the crushing debt load, at least for the next year. 2010 and beyond will still be rough. Berman’s article did not mention the angel who saved Level 3 during the tech/telecom crash of 2000-02: Warren Buffett.

Posted in: Finance, Internet

What’s lost vs. what might be gained

January 30, 2009 ,

David Malpass with a typically cogent column on the crisis of lost capital and plunging consumption, but also the more important factors that drive the future.

Losses in U.S. wealth and self-confidence have been massive, with job conditions still worsening. But a long downtrend into 2010 isn’t inevitable, even assuming a systematic lurch to bigger government. A starting point for optimism is to realize that the creation of new capital is more important than the loss of old capital. This is hard to absorb emotionally during a crisis. The world’s past wealth creation is outstripped every generation by innovation, human progress and the rapid growth of the above-subsistence population.

Consumption may also prove less important to the recovery than asserted in the warnings of another Great Depression. Consumption crashed after theLehman Brothers bankruptcy. With consumption equaling 70% of GDP, a downsizing there would decimate GDP if the economy were static. Yet GDP itself means production, not consumption. A lot of U.S. consumption has been idle or is sourced abroad and won’t be missed. The GDP issue is whether the Crash of ’08 will cause people to work fewer years, less hard or less productively. That’s unlikely.

Even for those deeply worried about old capital and weak consumption there are grounds for optimism. So far most of the banking sector losses have been accounting writedowns, not cash losses. Layoffs would slow and consumption resume if the Fed sped its asset purchases and Washington stopped imposing arbitrarily low prices on equity holders and regulatory capital in the blind assumption that crisis markets are accurately priced.

Posted in: capitalism, financial crisis

“Fraud anxiety” and other modern mysteries

January 30, 2009 ,

How does the Net boost “fraud anxiety”? How is workplace equality responsible for income inequality? Here’s Elisabeth Eaves of Forbes on modern times and one of its rising explicators, Dalton Conley:

David Kirp, a public policy professor at UC, Berkeley, who has known Conley since Conley was a postdoctoral student, calls Elsewhere, USA “audacious in its scope” and says that Conley’s goal is to become one of his generation’s public intellectuals.

At the age of 39 he appears to be well on his way. His books include a memoir, Honky, about growing up white in a black and Latino neighborhood, an academic study of the relationship between race and wealth and another on the effects of sibling birth order.

“He is the wunderkind,” says Kirp, noting that Conley won tenure at New York University when he was 29 and became chairman of the sociology department when he was 36. Married with two children, Conley says he is also his family’s “primary caregiver.” On the day he misplaced his BlackBerry, he had just come from walking one of his kids to school. He’s got another memoir, unpublished, in the drawer, and is studying for a Ph.D. in biology. In other words, ever distracted and ever working, he’s the living embodiment of the thing he describes.

As for income inequality:

The arrival of women in the paid workforce, meanwhile, dramatically affected mating habits. Conventional wisdom, as promulgated by Maureen Dowd, holds that highly paid professional men want to marry their secretaries. In fact, the research shows they want to marry someone of around their own income level, which means that low earners end up mating with other low earners. It turns out that marrying the secretary, so to speak, was a good way of redistributing income across society. The changing nature of marriage, writes Conley, probably explains about 40% of the rise in income inequality.

Posted in: Books

The Econ Team

January 30, 2009 ,

Noam Scheiber navigates the waters between Larry Summers and Tim Geithner and . . . Hillary Clinton?

Posted in: Economics

“Alexander Hamilton was right”

January 29, 2009 ,

Steve Forbes with a resounding call for stable, low-entropy money.

Greenspan truly began to think he was a monetary philosopher king who could fine-tune economic activity by manipulating short-term interest rates. Greenspan’s Louis XIV “I am the state” proclivities were intensified when he fell under the sway of a strange theory of Ben Bernanke’s. Bernanke joined the Fed as a governor in 2002 and posited that the world was plagued by “excess” savings. China, India and other countries were saving too much money. Preposterous! In a properly functioning global financial system there can be no excess savings. The whole purpose of finance is to direct savings from one party to be invested with another party. The enormous amounts of liquidity that led to the housing and commodities bubbles of recent years cannot be blamed on thrifty Chinese but on the excess money creation of Greenspan and Bernanke. If their central goal had been a steady value for the buck, those bubbles would never have reached the sizes they did, and volatility in the financial markets would have been only a fraction of what it is today.

Here’s Forbes making the point from Davos.

Posted in: Economics, Globalization, Monetary Policy

Weak Dollar = Sad Stocks

January 27, 2009 ,

John Tamny at RealClearMarkets weighs in on the dollar-yuan China trade debate.

Posted in: China

Quote of the Day

January 27, 2009 ,

“it is hard to imagine unemployed investment bankers driving bulldozers on highway projects.”

— Arnold Kling, January 27, 2009, debating the size (or existence) of the Keynesian “multiplier” effect

Posted in: Quote of the Day

China, the Dollar, and the Crash

January 26, 2009 ,

See my latest on the nexus of China trade, monetary policy, and our current crisis in Monday’s Wall Street Journal. Contrary to the new conventional wisdom, which is gaining considerable steam, I argue that:

America did not underreact to the supposed Chinese threat. It overreacted. The problem wasn’t “global imbalances” but a purposeful dollar imbalance. Our weak-dollar policy, intended to pump up U.S. manufacturing and close the trade gap, backfired. Currency chaos led to a $30 trillion global crash, an energy shock, bank and auto failures, and possibly a new big government era. For globalization and American innovation to survive, we must first understand the Chinese story and our own monetary mistakes.

A “more competitive currency” and monetary “stimulus” cannot create new wealth. Only technology and entrepreneurship can do that. The “China currency” issue distracts America from all the important things that could actually make us more competitive –e.g., better K-12 education, much lower corporate tax rates, cutting-edge broadband networks, less (not more) centralization and power in Washington, and, of course, a stable dollar.

Posted in: capitalism, China, Economics, Monetary Policy, Trade

Quote of the Day

January 24, 2009 ,

Environmentalists love the idea of milking Mother Nature for power, but they hate the hardware needed to make it work: huge windmills, acres of solar panels, high-voltage transmission lines to connect them to the places where people live. Of course, they still totally, absolutely, wholeheartedly support green energy — as long as it gets built where someone else goes yachting.

— editorial, The Wall Street Journal, January 24, 2009

Posted in: Energy, Quote of the Day

Geithner: Here we go again

January 23, 2009 ,

It looks like incoming Administration official Tim Geithner will continue the long line of clueless protectionist currency policy at the Treasury Department. In written responses to the Senate Finance Committee, Geithner asserted what even the disastrous Snow/Paulson Treasury’s wouldn’t say officially: that China is “manipulating” its currency, the yuan.

Mere journalist James Fallows understands the issue much better than technocrat Geithner:

to boil it down to the bald assertion that “China is manipulating its currency” ignores, vulgarizes, and misconstrues a lot more than it clarifies. 

Gold promptly rocketed $40 today, as the American weak-dollar policy resumes.

Updates: here and here.

Posted in: China , Tagged: , ,

Quote of the Day

January 16, 2009 ,

we may be approaching a tipping point for democratic capitalism.

— Peter Wehner and Paul Ryan, January 16, 2009

Posted in: capitalism, Quote of the Day

Getting real about oil

January 14, 2009 ,

Mark Mills reminds us of the fundamental physics of energy and why the difference between atoms, electrons, and photons is so important. 

But in the world of atoms and aircraft, not bits and YouTube, things tend to expand, not shrink. The energy needed to move a ton of people, or heat a ton of steel (or silicon), is fixed by properties of Mother Nature. Moving 1,000 pounds 1,000 miles at 50 or 500 mph has a specific, knowable, and immutable minimum energy requirement, dictated by laws of gravity, inertia, friction, mass, heat transfer, and the like. An aircraft’s or car’s engine is not about to shrink in size a thousand-fold and be etched onto a sliver of silicon, or increase in power similarly.

Posted in: Energy

Life imitates art

January 10, 2009 ,

Steve Moore with a good retro-and-possibly-pro-spective on Atlas Shrugged.

Posted in: capitalism , Tagged:

Genome, Proteome, now “Peptidome”

January 10, 2009 ,

My friend George Gilder discovers important bio advances on a recent trip to Israel:

Gerstel reports that the results are in and that of the 30 peptides found by the model 8 were validated.

Gerstel told me: “The average in the entire industry is two a year. We found 8” in one processing of the peptidome through the algorithm.

Posted in: Medicine , Tagged: ,

Quote of the Day

January 7, 2009 ,

Better yet, Washington might spend its time profitably examining its own role in the recent housing blowout, which has destroyed more wealth than a hundred Madoffs, and about which Mr. Frank himself is an expert.

— Holman Jenkins, January 7, 2009

Posted in: Quote of the Day
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