Saturday, November 15, 2008

The World's First 21st Century Leader

The World's First 21st Century Leader

On Tuesday Barack Obama made history as the first black man to be appointed President-elect of the US. In the years and months ahead, he will make more history as he tackles unprecedented challenges: two bloody wars, a global financial crisis, the US's tarnished reputation, domestic security and healthcare reform.

But as the euphoria of his victory gives way to the hard work of transitioning to the White House, we should perhaps pause for a moment to reflect on Obama's other achievement: his emphatic arrival as the world's first 21st Century leader.

Let me explain what I mean by this. For much of the 20th century, academics, politicians and business leaders have researched, debated and tried to quantify leadership, the elusive quality that separates great men and women from the merely good. Yet a century on, apart from a few critical moments in history, the ideals of leadership remain little more than theories in textbooks or concepts to be debated in lecture theatres of business schools.

Yet this week, Obama changed the game: he has emerged as the living, breathing exemplar of leadership for our times. The first decade of the 21st Century has been a wake-up call to leaders everywhere: globalisation, war, geopolitical shifts, climate change, financial and economic crisis have rendered the old paradigms of leadership obsolete. Times of rapid change and uncertainty demand new qualities of flexibility, humility, adaptability, resilience and what I call "negative capability" (coping with the unknown).

The first defining event of the 21st Century was, of course, the 9/11 terrorist attacks on New York and Washington in 2001. During that crisis new leaders emerged, such as Mayor Giuliani, who presented a calm, dignified and moral face of leadership. Yet few other leaders responded to the call to change.

Just after 9/11, I conducted my own research into leadership in crisis. I wanted to find out what effective leaders did to keep their people, communities, and businesses on track during a period of catastrophic change. I surmised that this could yield valuable lessons for leaders during times of less extreme change.

I discovered that change and crisis bring very different leaders than those who flourish in ordinary times - and this is why I believe Obama is the first leader to demonstrate the range of qualities needed to deal with our complex age and conditions.

First, let's examine what some of the most forward-thinking writers of the last century had to say on the subject of leadership. One of the central ideas of leadership in the last half of the 20th century was Max Weber's concept of charismatic leadership. In 1968 the German sociologist wrote that social crisis was precondition for charismatic leadership, a combination of intelligence, purpose, grace under pressure and consideration for their followers.

US academic Noel Tichy built on his work in the eighties and nineties, identifying transformational leaders - courageous, value-driven, visionary people who were comfortable with uncertainty. Transformational leaders emerge in times of crisis or change, in contrast with transactional leaders who manage in steady times, preserving the status quo and strengthening existing structures, cultures and strategies.

Other researchers believed that the measure of a true leader was the ability to display both transformational and transactional styles as the circumstances demanded.

Around the same time, Warren Bennis advanced the argument that in a complex and uncertain world, leadership can only be exercised by self-directed, strong, creative, purposeful and self-actualising leaders - those who have listened to their inner voice. Bennis later added that one of the most reliable indicators and predictors of leadership was the ability to learn from traumatic circumstances: emerging from these 'crucibles' of change, leaders were stronger and with a more defined purpose

In the 1990s, Peter Vaill of Antioch University added that values were the primary organising principle for action in a turbulent climate. When it is impossible to set goals, leaders need to rely on their inner resources, drawing on non-rational as well as rational abilities, in other words, their deepest convictions.

So how does all this theory relate to Obama and why do I believe that he is the world's first true 21st century leader? 
The answer is that he embodies most of the qualities described by these great writers on leadership.

Although he remains untested in high office, Obama has nevertheless displayed a remarkable breadth of qualities.

As a man, he remains true to the values of his humble background. Raised by a single mother in Hawaii and Indonesia, he was no doubt tested by his circumstances. Yet he has matured into a thoughtful, considerate, inclusive, relaxed and level-headed man. He has shown humility and connectedness with ordinary people, remaining gracious under attack and undistracted by innuendo and smears.

As a charismatic leader, he has revealed a soaring eloquence, fierce intellect, gravitas, passion, conviction and a rare ability to mobilise and inspire diverse groups of people in the US and around the world.

As a transactional leader, he is a consummate professional, intellectual, dynamic, with tenacity, focus, grasp of detail, breadth of knowledge and intellect. His campaign demonstrated superb organisational ability, skilled use of technology, tenacity, focus, grasp of detail and breadth of knowledge.

Most important of all, he has emerged as a beacon of hope, showing unwavering faith in his country and its people. His willingness to step up to the plate, despite threats to his life and deep-rooted problems at home and abroad.

As he said in his victory speech, his aim is to restore the US's enduring ideals of democracy, hope, opportunity and liberty, rather than the recent attractions of wealth and arms. On a more practical level, his challenge is to unite Republicans with Democrats in the new administration, something he appears to be tackling as I write.

What are your views on Obama's leadership? Do you believe he is uniquely well-placed to meet his challenges? Where are his strengths and what are his blind-spots? What resonates with you and what advice do you have for him?

Thursday, November 13, 2008

China shows big growth in solar power

13 November 2008

China shows big growth in solar power

China has become the largest photovoltaic industry base in the world, and the solar power generation capacity jumped to 1.1 gigawatts (GW) at the end of 2007, representing 27.5% of the total solar generation in the world, said Rongqiang Cui, executive director of the Chinese Renewable Energy Society.

All of this happened in five or six years, Cui said. In recent years, the photovoltaic industry in China has had an annual growth rate of 300% and jumped to the top of the world the first time last year. In the first half of this year, the photovoltaic industry in China achieved growth of nearly 100% again, and the total capacity in photovoltaic generation could surpass 2 GW by the end of this year, helping to maintain its leading position in the world.

China currently has several hundred enterprises engaged in research and development as well as manufacturing in the photovoltaic industry.

To show its growth, these companies have successfully listed on the stock exchanges of oversea markets, including Suntech Power Holdings Company Limited (NYSE: STP) and LDK Solar Company Limited (NYSE: LDK). Although young in the energy industry, the market value of these companies is equivalent to the sum of all coal industries listed in China, Cui said.

Rockwell deals for Chinese integrator

13 November 2008

Rockwell deals for Chinese integrator

Rockwell Automation Inc. will acquire Xi’An Hengsheng Science & Technology Company Limited, a privately held engineering firm.

Located in Xi’an, China, Xi’An Hengsheng Science & Technology Company Limited covers the power, petrochemical, coal mining, chemical, and oil markets. The company conducts much of its business in the middle and western China with an installed base of approximately 300 customers.

“Xi’An Hengsheng Science & Technology’s process solutions expertise and heavy industry knowledge strengthens Rockwell Automation’s ability to deliver complete systems in one of the fastest growing markets in the world,” said Terry Gebert, vice president and general manager, Rockwell Automation Systems & Solutions business. “Xi’An Hengsheng Science & Technology’s management team and its 85 employees will join our business.”

“The relationship with Rockwell Automation will strongly enhance our ability to deliver automation solutions and technology to heavy process industries throughout China,” said Han Liqing, Xi’An Hengsheng Science & Technology Company co-founder.

Terms of the deal were not immediately available, and the companies expect to close on the deal in the first quarter next year.

New AMD Chip Intended To Restore Credibility.

New AMD Chip Intended To Restore Credibility.

The Wall Street Journal (11/13, B4, Clark) reports, "Advanced Micro Devices Inc. (AMD) overpromised and underdelivered on its last big product launch. It is determined to reverse that pattern this week, with a new chip dubbed Shanghai." The new element "of AMD's Opteron product line, which serve as calculating engines in server systems, is a successor to a chip called Barcelona that was late to market when announced in September 2007 and had early technical problems." Notably, "AMD's missteps with the Opteron family -- which commands higher prices and profit margins than chips for personal computers -- contributed to big losses for the company this year and helped rival Intel Corp."

The AP (11/13, Robertson), explains that "AMD's new Opteron processors are AMD's first chips based on 45-nanometer manufacturing technology. That means the company has shrunken the tiny parts of the circuits to an average of 45 nanometers wide, or 45 billionths of a meter." Smaller circuitry translates into cheaper chips, which also "can hold more transistors," and, as e result, "boosts performance. "AMD developed its manufacturing process in a partnership with IBM Corp." According to the AP, "AMD still lags Intel in that department, however. Intel has been selling its 45-nanometer chips for a year, an advantage that allowed Intel to maintain healthy profits despite pressure on the chips' selling prices and economic gloom."

IDG (11/13, Shah) notes, "The delay cost AMD market share and credibility, and it must now build back up its reputation as a reliable chip supplier. Some customers may still be a little wary, said Rob Lineback, senior market analyst with IC Insights." Additionally, "the down economy and slowing server shipments could also go against AMD's momentum, said Jack Gold, principal analyst at J. Gold Associates." But "AMD says the problems are all behind it. It hardened the testing process for Shanghai to avoid the bumps that Barcelona faced, said Pat Patla, vice president and general manager of AMD's server and workstation division."

Nathan Brookwood, a semiconductor analyst at Insight64, agrees that "AMD is back on track with the release of Shanghai, (11/13, Oreskovic) adds. But, Brookwood notes, AMD doesn't have any products in its pipeline that will deliver the type of performance advantage to leave Intel in the dust."

According to ZDNet (11/13, Dignan), "overall, AMD is claiming a 35 percent performance boost with up to a 35 percent power decrease -- in certain conditions. AMD has been shipping the chips to original equipment manufacturers for weeks and hardware giants such as HP, Sun, IBM and Dell have systems ready." Sally Stevens, director for platform marketing at Dell For instance, said that "Dell will update eight of its servers with Shanghai." Stevens added that "the latest AMD systems deliver a 49 percent performance boost over their Barcelona counterparts."

GM Claims Profitable Operations In China.

GM Claims Profitable Operations In China.

AFP (11/12) reported, "General Motors (GM) said on Nov. 12 that it was making money in China and was continuing its investments in the large Asian market." A Shanghai-based spokesman "said that various investment projects GM had committed itself to in the past were 'all on target and on track,'" and that GM is "not withdrawing or holding back any investment in China." Notably, also "on Nov. 12, GM chief executive Rick Wagoner said the U.S. auto maker was in such dire financial straits that it needed to line up a federal aid package before president-elect Barack Obama took office in January." The company "has said it needs cash reserves of between $11 and $14 billion to cover the cost of its operations.

Expert Outlines Driving Forces Behind Future Factories.

Expert Outlines Driving Forces Behind Future Factories.

In an article about "the factory of the future," IndustryWeek (12/1, Teresko) reports, "At the highest level, three essential trends are the driving forces behind tomorrow's factories, says Georgia Tech's Leon McGinnis, associate director of the university's Manufacturing Research Center." First, "globalization of the supply chain" is greatly "increasing the number of 'non-transparent' interfaces and presents the challenge of integration between functions that are dispersed across many corporate entities." McGinnis said that "the production and assembly process for Boeing's 787 Dreamliner as a typical example." Another trend is "technology that simultaneously de-materializes the product while vastly increasing complexity." For example, "electrical actuation is replacing the bulky physical presence of cumbersome hydraulics in automobile power steering and aircraft landing gear." Lastly, "demographics and the impact on demand patterns. In the factories of the future McGinnis predicts shorter product lifecycles, more 'nameplates' per unit sold and faster transitions between products."

Manufacturers Seeking More Flexible Factories, Shorter Product Lifecycles.

Manufacturers Seeking More Flexible Factories, Shorter Product Lifecycles.

IndustryWeek (12/1, Teresko) reports, "Today's automation solution providers are working closely with their customers, helping manufacturers achieve their goals of more flexible factories with shorter product lifecycles." Furthermore, "machine tool builders are...developing a strategic direction to facilitate the factory of the future." Brian Papke, president of Mazak Corp., advised: "First of all consider the growing challenges inherent in future product evolution. As manufacturing proceeds into the future, we anticipate the growing rate of product change to continue, even accelerate." Papke "expects to see more and more production work coming back to the US" as a result of "new developments in factory automation." He "sees product design continually moving products toward a new approach to simplicity -- fewer, but more complicated parts." During "planning and projecting a new facility's product mix, don't overlook the most basic question -- concerning where the proposed factory of the future will be located, says Papke. His advice: Know your production costs, and before selecting an offshore site be sure to factor in the logistical costs and supply delays in chasing lower labor rates. Also determine the cost reduction potential of part redesign."

Deutschland steckt in Rezession

13. November 2008, 08:07 Uhr


Deutschland steckt in Rezession

Die deutsche Wirtschaft ist in den vergangenen drei Monaten stärker als erwartet geschrumpft. Im Quartalsvergleich sei das Bruttoinlandsprodukt um 0,5 Prozent gesunken, teilte das Statistische Bundesamt am Donnerstag mit. Damit befindet sich die Bundesrepublik in der Rezession.

Wiesbaden - Die deutsche Wirtschaftsleistung ist im dritten Quartal erneut gesunken. Gegenüber dem Vorquartal fiel das Bruttoinlandsprodukt (BIP) um 0,5 Prozent geringer aus, teilte das Statistische Bundesamt am Donnerstag mit.

Opel-Mitarbeiter: In der technischen Rezession

Opel-Mitarbeiter: In der technischen Rezession

Den Rückgang im zweiten Quartal korrigierten die Statistiker leicht von minus 0,5 auf minus 0,4 Prozent nach oben. Auch das starke Wachstum des ersten Quartals wurde von 1,3 Prozent auf 1,4 Prozent korrigiert. Dennoch befindet sich die deutsche Wirtschaft nunmehr mit zwei aufeinander folgenden Negativ-Quartalen in einer sogenannten technischen Rezession.

Vor allem die sich abschwächenden Exporte haben negative Folgen für die BIP-Entwicklung gehabt. Von Juli bis Ende September brachen die Ausfuhren als wichtiger Wachstumsmotor weg. Da die Importe zugleich stark zulegten, trug der Außenhandel nicht zum Wachstum bei. Aus dem Inland verzeichneten die Statistiker zwar einige positive Impulse: Die privaten und öffentlichen Konsumausgaben stiegen leicht und die Firmen bauten ihre Lager auf. Dies konnte aber den Exporteinbruch nicht ausgleichen.

"Wir haben es schwarz auf weiß"

Den Einbruch im dritten Quartal hatten Experten prognostiziert. Sie hatten jedoch im Schnitt nur mit einem Minus von 0,2 Prozent gerechnet.

Berg- und Talfahrt: Die BIP-Entwicklung der vergangenen Jahre

Berg- und Talfahrt: Die BIP-Entwicklung der vergangenen Jahre

"Der Rückgang ist stärker, als wir erwartet hatten. Die wesentliche Botschaft ist: Wir haben es schwarz auf weiß, die Rezession ist da", sagte Sebastian Wanke, Ökonom bei der DekaBank. Er geht davon aus, dass sich die Konjunktur in der zweiten Jahreshälfte 2009 wieder beleben wird. "Gleichzeitig heißt eine Bodenbildung zu diesem Zeitpunkt, dass es eine überdurchschnittlich lange Rezession wäre", so Wanke. "Leider deuten die Frühindikatoren darauf hin, dass es im vierten Quartal nicht besser wird", erklärte auch Dirk Schumacher, Konjunkturexperte bei Goldman Sachs.

"Das sieht überhaupt nicht gut aus. Es zeichnet sich ab, dass der Außenhandel gebremst hat, vor allem wegen schwächerer Exporte. Auch die Inlandsnachfrage dürfte schwach geblieben sein. Das vierte Quartal wird sehr schlecht ausfallen", ergänzte Ralph Solveen von der Commerzbank die negativen Einschätzungen. Auf einen weiteren Abschwung deuteten die Industrieaufträge und die Stimmungsindikatoren wie der Ifo-Index hin. "Der Rückgang des Ölpreises ist nicht stark genug, um die anderen negativen Faktoren auszugleichen. Auch die Zinssenkungen der EZB beginnen erst Ende 2009 zu wirken", sagte Solveen.

Bereits gestern hatten die fünf Wirtschaftsweisen für das kommende Jahr eine Rezession vorausgesagt. Ein besonders düsteres Bild hatte zuletzt der Internationale Währungsfonds (IWF) gezeichnet: Demnach wird Deutschlands Wirtschaft 2009 sogar um 0,8 Prozent schrumpfen.


Deutsche Wirtschaft stürzt in die Rezession

Drittes Quartal

Deutsche Wirtschaft stürzt in die Rezession

13. November 2008, 08:03 Uhr

Nun ist es traurige Gewissheit: Die deutsche Wirtschaft befindet sich in der Rezession. Das Bruttoinlandsprodukt ist zum zweiten Mal in Folge geschrumpft – um 0,5 Prozent im dritten Quartal. Vor allem die Exporte brachen in den vergangenen Wochen weg und belasteten die gesamte Wirtschaft.

Foto: DPA

Hamburger Containerhafen: Der deutschen Wirtschaft geht es schlecht - sie befindet sich nun offiziell in der Rezession

Deutschland befindet sich in der Rezession. Das Bruttoinlandsprodukt ist im dritten Quartal dieses Jahres um 0,5 Prozent gegenüber dem Vorquartal geschrumpft, wie das Statistische Bundesamt mitteilte. Das ist das zweite Quartal in Folge mit einem Rückgang: Im zweiten Quartal war die Wirtschaftsleistung in Deutschland um 0,4 Prozent gesunken. Das Bruttoinlandsprodukt (BIP) misst den Wert der im Inland erwirtschafteten Leistungen der Volkswirtschaft.

Damit ist die gängige Definition einer "technischen" Rezession erfüllt. Diese sehen Ökonomen, wenn die Wirtschaft eines Landes mindestens zwei Quartale in Folge schrumpft. Im ersten Vierteljahr 2008 hatte die Wirtschaft in Deutschland noch deutlich um 1,4 Prozent zugelegt. Dies war allerdings unter anderem Folge des warmen Winters und des daher frühen Baubeginns gewesen. Diese Bautätigkeit fehlte dann in der Folgezeit.

Von Juli bis Ende September brachen die Ausfuhren als wichtiger Wachstumsmotor der deutschen Wirtschaft weg. Da die Importe zugleich stark zulegten, trug der Außenhandel nicht zum Wachstum bei. Aus dem Inland verzeichneten die Statistiker zwar einige positive Impulse: Die privaten und öffentlichen Konsumausgaben stiegen leicht und die Firmen bauten ihre Lager auf. Dies konnte aber den Exporteinbruch nicht ausgleichen. Viele Bankvolkswirte hatten lediglich einen Rückgang der Wirtschaftsleistung um 0,1 Prozent vorhergesagt.

Die Wirtschaftsleistung im dritten Quartal 2008 wurde von 40,5 Millionen Erwerbstätigen erbracht, das waren 582.000 Menschen oder 1,5 Prozent mehr als ein Jahr zuvor.

Energieagentur erwartet Ölpreis von 200 Dollar

Energieagentur erwartet Ölpreis von 200 Dollar

Von Ulrich Friese, Gerald Braunberger und Arnd Hildebrand

13. November 2008 Die entspannte Lage am internationalen Markt für Rohölpreise täuscht: „Die Phase des billigen Öls ist endgültig vorbei“, heißt es im aktuellen Bericht der Internationalen Energieagentur (IEA). Sagte die renommierte Organisation der 30 größten Industrienationen bislang noch einen durchschnittlichen Preis für Rohöl von 108 Dollar je Barrel (159 Liter) bis zum Jahr 2030 voraus, sollen es nun bis dahin mindestens 200 Dollar je Barrel sein.

Die deutliche Korrektur der IEA-Prognose begründete Chefökonom Fatih Birol mit dem steigenden Energiehunger in Asien. So werde allein auf China und Indien in den nächsten 20 Jahren mehr als die Hälfte des weltweiten Wachstums bei Primärenergien entfallen. Um den stark steigenden Bedarf zu decken, seien auch weiterhin hohe Investitionen in die Infrastruktur wie Raffinerien oder Pipelines erforderlich.

Bedeutung staatlicher Ölkonzerne wird zunehmen

Bei den größten Öl- und Gasproduzenten der Welt haben sich die Investitionen in die Förderung zwischen 2000 und 2007 auf 390 Milliarden Dollar verdreifacht. Dieses Volumen muss nach der IEA bis 2012 auf 600 Milliarden Dollar steigen. Doch viele staatliche und private Produzenten zögern, weil sich die meisten Großvorhaben bei einem niedrigen Ölpreis nicht rechnen. Birol schlägt deshalb Alarm: „Wenn viele Investitionsvorhaben jetzt verschoben oder gar gestrichen werden, ist ab 2030 mit Engpässen bei der Energieversorgung zu rechnen.“

Erschwerend kommt aus Sicht der IEA hinzu, dass die Bedeutung der staatlich geführten Ölkonzerne wachsen wird. Damit bestimmen immer mehr die politischen Interessen der Förderländer, ob sich die Investitionen in die Infrastruktur oder neue Energievorkommen rechnen. Gegenwärtig decken westliche Produzenten wie Exxon Mobil, Shell oder BP nur 15 Prozent der Förderung an Öl und Gas ab. Der Rest entfällt auf Staatskonzerne in Saudi-Arabien, Russland oder China.

Benzin günstiger als Rohöl

Aktuell sinkt der Preis für Rohöl weiter. Ein Ende der Baisse ist nicht abzusehen, wenngleich auffällt, dass die Dynamik der Abwärtsbewegung nachlässt. In New York hat die auf Termin gehandelte Ölsorte West Texas Intermediate (WTI) die als psychologisch bedeutsam geltende Marke von 60 Dollar je Barrel unterschritten. Am Mittwoch notierte WTI mit rund 56 Dollar und damit auf dem niedrigsten Niveau seit Anfang 2007.

Nach den Angaben des ADAC sind die Preise für Kraftstoffe zu Wochenbeginn auf ein neues Jahrestief gefallen. Ein Liter Superbenzin kostete mit durchschnittlich 1,23 Euro knapp 5 Cent weniger als in der Vorwoche. Der Preis für einen Liter Diesel ermäßigte sich um fast 3 Cent auf ebenfalls 1,23 Euro. „Am Weltmarkt kostet ein Liter Benzin heute manchmal weniger als ein Liter Rohöl“, sagt Klaus Picard, Hauptgeschäftsführer des Mineralölwirtschaftsverbands. Picard erklärt dies mit einem Nachfragerückgang nach Benzin in Europa. Alleine in Deutschland ist der Benzinverbrauch in den vergangenen fünf Jahren um 20 Prozent zurückgegangen.

Hausse am Ölmarkt vorerst beendet

Dagegen ist die Nachfrage nach Diesel im gleichen Zeitraum um 4 Prozent gestiegen. „Daher kostet ein Liter Diesel an der Tankstelle heute trotz des Steuervorteils manchmal sogar etwas mehr als ein Liter Superbenzin“, erläutert Picard. Wegen der Nachfrageverschiebungen importiert Europa mittlerweile 28 Millionen Tonnen Diesel und Dieselvorprodukte aus Russland im Jahr, während jährlich 32 Millionen Tonnen Benzin in die Vereinigten Staaten exportiert werden. Picard bestreitet die Behauptung, dass die Veränderungen der Rohölpreise von den Tankstellen nicht voll weitergegeben würden.

Technische Analysten sehen die Hausse am Ölmarkt vorerst als beendet an. So gelangt Barclays Capital angesichts des rapiden Verfalls des Ölpreises zu dem Schluss, dass der Haussezyklus von 2007/08, der Teil eines langjährigen Zyklus steigender Preise sei, ausgelaufen ist. Die Notierungen könnten zunächst auf die Marke von 50 Dollar fallen, bevor eine größere Erholung zu erwarten sei.

Die Nachfrage sinkt

Merrill Lynch bleibt bei der Auffassung, dass selbst ein Rückgang in den Bereich von 50 Dollar die langjährige Hausse nicht in Frage stellen würde, obgleich die mittelfristige Tendenz nun eindeutig nach unten weise. Diese Investmentbank weist darauf hin, dass die jüngsten amtlichen Zahlen über die Aufteilung der offenen Terminengagements in New York eine weitere Zunahme der Netto-Baisse-Positionen auf Seiten der großen spekulativen Marktteilnehmer (Hedge-Fonds) auswiesen. Diese Engagements hätten aber noch keine Extremwerte erreicht, die auf massive technische Auftriebskräfte schließen ließen.

Die Nachfrage nach Rohöl und Nachprodukten sinkt nach Darstellung von Fachleuten inzwischen in allen bedeutenden Verbraucherregionen messbar. Wegen des zum Teil erheblichen zeitlichen Nachlaufs der Daten aus den einzelnen Ländern könne nun rückblickend festgestellt werden, dass diese Tendenz bereits vor einigen Monaten entstanden sei. Ursache dafür ist die immer schwächer werdende Weltkonjunktur. Die Experten sehen keine Anhaltspunkte dafür, dass diese Entwicklung in absehbarer Zeit zum Stillstand kommen oder sich sogar ins Gegenteil verkehren könnte.

Benzinmarkt aus dem Gleichgewicht gekommen

Die vorlaufenden Konjunkturindikatoren kündigten vielmehr an, dass sich die Schwäche bis weit ins nächste Jahr hinein fortsetzen werde. Dabei wird hervorgehoben, dass nun auch die chinesische Wirtschaft Anzeichen bedrohlicher Schwäche erkennen lasse und dass daher auch die Nachfrage in diesem Land nach Öl und Ölprodukten spürbar sinken werde.

In der Gesamtbetrachtung wird unterstrichen, dass der Benzinmarkt allem Anschein nach aus dem Gleichgewicht gekommen ist. Grund dafür sei vor allem in Amerika das Zusammentreffen deutlich rückläufiger Nachfrage mit zu hoher Produktion. Da die Raffinerien bei der Benzingewinnung mit Verlusten arbeiteten und sie diese bei der Herstellung anderer Nachprodukte kaum noch auffangen könnten, dürften sie ihre Ölverarbeitung bald einschränken. Dies wiederum würde die Nachfrage nach Rohöl zunächst sinken lassen und den Preisdruck an diesem Markt noch verstärken.

Text: F.A.Z.
Bildmaterial: MWV; Th. F. Datastream

Siemens mit tiefroten Zahlen im vierten Quartal

Hohe Umbaukosten

Siemens mit tiefroten Zahlen im vierten Quartal

Rote Zahlen im vierten Quartal

Rote Zahlen im vierten Quartal

13. November 2008 Die Milliarden-Belastungen aus dem radikalen Konzern-Umbau und dem Korruptionsskandal haben den Elektrokonzern Siemens im Schlussquartal des abgelaufenen Geschäftsjahres tief in die roten Zahlen gedrückt. Nach Steuern sei im vierten Quartal 2007/08 (30. September) ein Minus von 2,4 Milliarden Euro verbucht worden, nach einem Verlust von 74 Millionen Euro im Vorjahreszeitraum, teilte das Unternehmen am Donnerstag in München mit. Den Umsatz konnte Siemens dagegen um 7 Prozent auf 21,7 Milliarden Euro steigern, und der Auftragseingang legte um vier Prozent auf 22,2 Milliarden Euro zu.

Im Gesamtjahr schaffte Siemens dank des Verkaufs seiner Autozuliefersparte VDO an Continental trotzdem einen Gewinnzuwachs um fast die Hälfte auf 5,9 Milliarden Euro. Die Aktionäre werden davon aber wenig haben: Die Dividende soll bei 1,60 Euro je Aktie stagnieren. Der Umsatz sei um sieben Prozent auf 77,3 Milliarden Euro geklettert, teilte Siemens mit. Löscher erklärte, der Konzern habe den größten Teil des Umbruchs hinter sich. „Wir haben unsere Hausaufgaben erledigt. Damit sind wir schneller vorangekommen als erwartet.“

Die weltweite Konjunkturflaute macht sich bei Siemens noch kaum bemerkbar. Selbst im vierten Quartal kletterte der Auftragseingang noch um vier Prozent auf 22,2 Milliarden Euro. Löscher bekräftigte, Siemens werde im laufenden Geschäftsjahr doppelt so stark wachsen wie die Weltwirtschaft. Nach wie vor gehe er von einem operativen Gewinn der drei Sektoren Industrie, Energie und Medizintechnik ohne Sonderlasten von 8,0 bis 8,5 Milliarden Euro aus. Im abgelaufenen Geschäftsjahr betrug das vergleichbare Ergebnis gut 6,8 Milliarden Euro.

Löscher zeigte sich dennoch angesichts des schwierigen wirtschaftlichen Umfeldes etwas vorsichtiger. „Es ist sicher ambitionierter geworden, unsere Ergebnisprognose für das Geschäftsjahr 2009 zu erreichen. Doch sie bleibt bestehen.“ Dabei wolle man „quartalsweise die Auswirkungen der Finanzkrise bewerten.“ Die Konjunkturflaute werde Siemens nicht so hart treffen wie andere Firmen, da sich der Konzern dank seiner Position in Schwellenländern und dem ausgebauten Servicegeschäft vor Zyklen weitgehend gefeit sieht, sagte Löscher. In der Krise gehe es für Siemens darum, Marktanteile zu gewinnen. Dabei stehe allerdings organisches Wachstum im Mittelpunkt. Im vergangenen Quartal habe Siemens in der Medizintechnik auf vergleichbarer Basis erstmals seinen Erzrivalen GE als Weltmarktführer abgelöst.

Löscher hat darüber hinaus mehr Weiblichkeit im Konzern und mehr Vielfalt im Vorstand als Ziele ausgegeben - und beginnt bereits dies umzusetzen: Zum ersten Mal in mehr als 160 Jahren Konzerngeschichte hat Siemens eine Frau in den Vorstand berufen. Die 54 Jahre alte Barbara Kux übernimmt ab 17. November die Verantwortung für den weltweiten Einkauf des Konzerns, teilte Siemens am Mittwoch mit. Zudem werde die Schweizerin auch für Nachhaltigkeit und das Marketing des Umweltportfolios zuständig sein (siehe dazu auch: Bei Siemens in die frauenlose Zeit vorbei).

Bildmaterial: AP

Exploring Old Rome Without Air (or Time) Travel

Exploring Old Rome Without Air (or Time) Travel

© 2008 Procedural Inc.
An image from Ancient Rome 3D, a new destination being made available on Google Earth. More Photos >
Published: November 12, 2008

ROME — First Google Earth turned millions of Internet users into virtual travelers who could fly to any spot on the globe. Then its Sky feature took them to other galaxies. Now Google Earth has embraced a frontier dating back 17 centuries: ancient Rome under Constantine the Great.

Soaring above a virtual reconstruction of the Forum and the Palatine Hill or zooming into the Colosseum to get a lion’s-eye view of the stands, Google Earth’s 400 million users will be able to explore the ancient capital as easily “as any city can be explored today,” Michael T. Jones, chief technology officer of Google Earth, said Wednesday at a news conference at Rome’s city hall.

Ancient Rome 3D, as the new feature is known, is a digital elaboration of some 7,000 buildings recreating Rome circa A.D. 320, at the height of Constantine’s empire, when more than a million inhabitants lived within the city’s Aurelian walls.

In Google Earth-speak it is a “layer” to which visitors gain access through its Gallery database of images and information. “In this case the layer is above ground and not below where it should be” from an archaeological point of view, said Bernard Frischer, the director of the University of Virginia’s Institute for Advanced Technology in the Humanities.

Google had planned to activate the feature on Wednesday morning, but a spokesman said there would be a short delay because of technical difficulties. (Web visitors in the United States can watch a video demonstration of the feature at

For nearly three decades Professor Frischer has been the driving force of an effort to bring ancient Rome to virtual life. The Google Earth feature is based on his Rome Reborn 1.0, a 3-D reconstruction first developed in 1996 at the University of California, Los Angeles, and fine-tuned over the years with partners in the United States and Europe.

Of the 7,000 buildings in the 1.0 version, around 250 are extremely detailed. (Thirty-one of them are based on 1:1 scale models built at U.C.L.A.) The others are sketchier and derived from a 3-D scan of data collected from a plaster model of ancient Rome at the Museum of Roman Civilization here.

Archaeologists and scholars verified the data used to create the virtual reconstruction, although debates continue about individual buildings. “We’re happy when scholars disagree with us,” Professor Frischer said. “It makes for good scholarship.”

The Rome Reborn model went through various incarnations over the years as the technology improved. Originally it was developed to be screened in theaters for viewers wearing 3-D glasses or on powerful computers at the universities contributing to the project, rather than run on the Internet. That all changed in June 2007, when Professor Frischer presented Rome Reborn at a news conference in Rome. The next day he received a call from Google Earth.

“The poetry was good, but it was caught in a tree,” said Mr. Jones of Google Earth. “So we asked if we could help to make it better.” It took several months for Google engineers to format the data “and do Google things so that everyone can see it,” he said.

To experience Ancient Rome 3D, a user must install the Google Earth software at, select the Gallery folder on the left side of the screen and then click on “Ancient Rome 3D.”

Past Perfect Productions, a company that specializes in 3-D cultural heritage models, owns the global and exclusive commercial rights to Rome Reborn and collaborated with the Institute for Advanced Technology in the Humanities and Google Earth on this project.

Joel Myers, Past Perfect’s chief executive, said the Roman theme had proved popular for his company. “Ancient Rome is a symbol of Western civilization, but it’s also got that fantasy element, what with gladiators, centurions and brutal or crazy emperors,” he said. He cited an audio guide that Past Perfect produced with 3-D reconstructions of the Colosseum and another it plans to release soon on the Forum.

In recent years films like “Gladiator” and the HBO series “Rome” have also stirred popular interest in the city. And on Nov. 20 “3D Rewind Rome,” a high-tech show based on the University of California simulation, is to open in a theater near the Colosseum.

Rome’s mayor, Gianni Alemanno, suggested Wednesday that the Google Earth feature could gratify tourists who are disappointed to find that the city’s ancient monuments are in ruins. “They may not be enough to involve the tourist in the experience of Roman civilization,” he said. “The public needs the hook-up with virtual reality.”

Information bubbles in the Google Earth feature provide details for more than 250 buildings, and more advanced information is also available through links to Platner and Ashby’s Topographical Dictionary of Ancient Rome, Stanford’s Digital Forma Urbis Romae Project, the German Archaeological Institute catalog and many other scholarly sources

Professor Frischer said that now that Ancient Rome 3D would be available to millions, he hoped it would become a scholarly work in progress, open to changes and contributions from other scholars. “The great thing about digital technology,” he said, is that it can be updated constantly “and supports different opinions.”

Mr. Jones of Google Earth said that the company would like to present 3-D tours of other historical cities but that it was up to historical experts to provide the scholarship. “When archaeologists rise up, we’re ready to share their research with the world,” he said. “There’s no shortage of cities or civilizations that deserve to be understood in the same way.”

Meanwhile a 2.0 version of Rome Reborn is under development, and the project could expand to show Rome in different eras. “There’s always something to discover,” Professor Frischer said. He paused, then added, “Please don’t make me say it, but, after all, Rome wasn’t built in a day.”

Will the Next Ice Age Be Permanent?

November 12, 2008, 3:59 pm

Will the Next Ice Age Be Permanent?

return of the iceWill the next ice age be permanent? Here, the ice sheet on Greenland. (Credit: Andrew C. Revkin for The New York Times)

A new analysis of the dramatic cycles of ice ages and warm intervals over the past million years, published in Nature, concludes that the climatic swings are the gyrations of a system poised to settle into a permanent colder state — with expanded ice sheets at both poles.

In essence, says one of the two authors, Thomas J. Crowley of the University of Edinburgh, the ice age cycles over the past million years are a super-slow-motion variant of the dramatic jostlings recorded by a seismograph in an earthquake before the ground settles into a new quiet state. He and William T. Hyde of the University of Toronto used climate models and other techniques to assess the chances that the world is witnessing the final stages of a 50-million-year transition from a planet with a persistent warm climate and scant polar ice to one with greatly expanded ice sheets at both poles.

Their findings have stirred a lot of skepticism in the community of specialists examining ancient records of past climate changes and how they might relate to variations in Earth’s orbit and orientation toward the Sun and other factors. I’ll be adding some of their reactions overnight (I’m on the road).

The Nature paper goes on to propose that humans, as long as they have a technologically powerful society, would be likely to avert such a slide into a long big chill by adding greenhouse gases to the atmosphere. That doesn’t obviate the need to curb such emissions and the prospect of dangerous climate warming in the short run, Dr. Crowley said. But it is more evidence that like it or not, the future of conditions on Earth is likely to be a function of human actions, whether chosen or not.

The idea that human actions can dominate the climatic influence of things as grand as shifts in a planet’s orbit is hard to grasp, but quite a few climate specialist say it’s pretty clear this is the case. In 2003, I wrote an article exploring when scientists think we’ll slide into the next ice age (the conventional variety). James Hansen of NASA echoed Dr. Crowley, saying that as long as we’re technologically able, we’ll be able to keep the big ice at bay. Strange, wonderful stuff, climate science.

German Economy Falls Into Recession

November 14, 2008

German Economy Falls Into Recession

BERLIN, Nov 13 (Reuters) — German gross domestic product contracted by 0.5 percent in the third quarter, putting Europe's largest economy in recession for the first time in five years, Federal Statistics Office figures showed on Thursday.

The bigger than expected quarter-on-quarter drop in growth, adjusted for seasonal, calendar and price effects, was marked by a negative contribution from foreign trade as exports weakened. This more than offset a rise in private and public consumption.

The office also revised up the second-quarter GDP figure to show a contraction of 0.4 percent, compared with 0.5 percent previously reported. The last time the economy shrank for two straight quarters was in the first half of 2003, it said.

"If you think today's numbers are already bad, just wait for the next quarter," said ING Financial Markets' Carsten Brzeski. "The headwinds of the financial crisis and the global economic slowdown are blowing right in the face of the German economy."

"So far, there is only dim light at the end of the tunnel. At the earliest, a recovery can be expected in the second half of 2009."

The mid-range forecast of 40 economists polled by Reuters last week was for a quarterly contraction of 0.2 percent in the third quarter.

"A negative effect on gross domestic product came from foreign trade, with a strong increase in imports and weakening exports," the Statistics Office said.

On the year, German GDP increased by 1.3 percent in the third quarter after annual growth of 3.3 percent in the April-June period, the figures showed.

Adjusted for working days, GDP expanded by 0.8 percent on the year. There was one more working day in the third quarter of 2008 than in the same period in 2007.

The GDP data followed a run of weak data on the German economy. Industrial production posted its biggest drop in nearly 14 years in September, when manufacturing orders fell more sharply than at any time since reunification in 1990.

In a sign of how even flagship companies are suffering, carmaker Daimler said last month it would shut two big German plants for a month due to a sharp drop in demand.

Auto parts maker Robert Bosch GmbH said last week it would shorten the working week for 3,500 workers at a plant in Germany for six months.

The office is due to publish a breakdown of the third-quarter GDP figures on Nov. 25.

AMD Unveils a Server Chip Called Shanghai

AMD Unveils a Server Chip Called Shanghai

The new computer chip is more versatile than a comparable one that Intel will release in a few days, giving AMD an important advantage

November 13, 2008, 12:01AM EST ---

Advanced Micro Devices is releasing a computer chip that could give it a much-needed boost against bigger rival Intel (INTC).

On Nov. 13, AMD (AMD) unveiled a processor, code-named Shanghai, for use in servers, the powerful computers that run corporate networks. Unlike other recent chips from AMD, Shanghai is being released on time, and it will be more versatile than a comparable chip due to be released from Intel in the coming days.

AMD says Shanghai will perform 35% better than its previous generation of server chips while decreasing power requirements by 35%, a combination that should help customers reduce operational costs while boosting efficiency. Best of all, it's been met with rave reviews from customers that have tried it in their machines. "It's been tested by enough people who say it performs very well," says Brian Piccioni, an analyst at BMO Capital Markets in Toronto.

Market Share Is Slipping

AMD needs all the good news it can get. The company's share of PC and server chips tumbled to 17.7% in the third quarter, from 23% a year earlier, while Intel boosted its share to 82.1%, according to Mercury Research. The company is also reeling from a price war with Intel and crippling debt associated with the poorly timed purchase of graphics chipmaker ATI, hurdles that have resulted in quarterly losses, a share price collapse, and the replacement (, 7/17/08) of CEO Hector Ruiz with Dirk Meyer. AMD shares tumbled 13% on Nov. 12 to close at 2.57.

With Shanghai, to be sold under the Opteron brand, AMD hopes to show it's got some of its operational mojo back after the disaster that was the previous server line, Barcelona. Introduced in September 2007, but not generally available until April 2008, Barcelona was not only seven months late, but slower than had been expected, damaging AMD's reputation and allowing Intel to recapture much of the market share it had lost to AMD in the server chip business.

Intel's new chip, code-named Nehalem, is due to be released Nov. 17. Sold under the name Core i7, Intel's new chip will resemble Shanghai in an important way. It will sport, directly on the silicon of the chip itself, a component that connects directly with the memory chips in the computer. Known in chip industry lingo as an "on-chip memory controller," the part helps speed performance in what has always been a key bottleneck. AMD's chips have boasted this on-chip memory controller since 2003, while Intel had generally resisted the approach for years.

AMD Has the Advantage

AMD's use of the on-chip memory controller gave it an important leg up on Intel when it rolled out its first generation of Opteron server chips in 2003, and it managed to win business (, 5/3/06) among key server vendors, including Dell (DELL). But that performance lead was short-lived as Intel improved its chips and AMD's began to lag. Then came the Barcelona debacle.

By finally embracing on-chip memory controllers, Intel is expected to produce a series of chips based on the Nehalem design that will deliver screaming performance and over time probably beat AMD on many metrics. But in the short term, AMD has an important advantage. Intel's first Nehalem chip will be suitable for use only in single-chip computers like desktops.

Chips for use in two-chip and four-chip servers will follow in the next few months, and it may be a year before chips for four-chip systems are ready. "AMD will have an advantage of anywhere from a few months to almost a year," says Nathan Brookwood, head of research firm Insight64. "Nehalem will win many of the benchmarks, but it's going to be a while before Intel has qualified them to run in the multiprocessor systems."

IT Spending Slowing

However impressive their chips, both companies face a common challenge. The economic slowdown is forcing customers to curtail IT spending. On Nov. 12, Intel slashed its fourth-quarter sales forecast (, 11/13/08), saying "revenue is being affected by significantly weaker than expected demand in all geographies and market segments." The typical customers for the kinds of servers AMD is targeting with Shanghai are just the financial-services companies and other large corporations responsible for warnings like Intel's.

Market research firm IDC said on Nov. 12 that IT spending worldwide will grow only 2.6% in 2009, significantly less than the prior forecast of 5.9%. The cuts will be worst in the U.S., where spending is expected to grow only 0.9%. "The market is shrinking pretty quickly," says Doug Freedman, analyst at American Technology Research in San Francisco. "Demand is going to be pretty soft next year."

Hesseldahl is a reporter for

September 29, 2008 7:00 PM PDT

AMD says new 'Shanghai' chip is ready to go ---

AMD said Monday it is set to roll out its next-generation "Shanghai" chip--minus the mistakes of the last generation.

The No. 2 processor maker wants to make one thing crystal clear: Shanghai is not Barcelona. The latter chip was rolled out in September 2007 to great fanfare only to be delayed a whopping eight months (or more, depending how the delay is calculated) due to production glitches and bugs. The chip was also hampered by speed (core clock frequency) limitations. This gave Intel an opportunity to regain ground it had lost to AMD in the server chip market.

"We had some mis-starts in getting Barcelona to market and wanted to bring as much velocity to Shanghai as possible. Learn from our mistakes and, as a company, never do that again," said Pat Patla, general manager of AMD's server and workstation chip business.

Shanghai--a quad-core product targeted at servers--will be AMD's first 45-nanometer processor. (Barcelona is 65-nanometer.) Typically, the smaller the geometries, the faster and more power efficient the chip. Intel has been shipping 45-nanometer processors since last year and these processors now make up most of Intel's offerings.

AMD needs Shanghai to succeed. It is reeling from a string of losses and is on the verge of announcing a major restructuring. "To bring it back to profitability the execution of the server product line is absolutely critical," said Ashok Kumar, an analyst at investment bank Collins Stewart. "That is really their only profit pool."

AMD's server chip roadmap includes a six-core Istanbul processor in Q4 2009

AMD's server chip roadmap includes a six-core Istanbul processor in Q4 2009

(Credit: AMD)

To ensure this, AMD designated a lead engineer to take over the entire Shanghai project to establish goals for the "health of the silicon, the schedule for the silicon, and the confidence level of the silicon," Patla said. AMD had to make sure that "the product that we put in the hands of our partners is going to be of substantial stability so they can do lots of early validation," he said.

As a result, the schedule for Shanghai has been pulled in. "Originally the plan was that Shanghai would launch in Q1 of '09 and we were able to pull that into Q4," according to Patla, adding that the product will not only be announced in the fourth quarter but vendors will be shipping servers in the fourth quarter.

"We're in full production right now in the factory," he said. "People will start getting first silicon from the final production very shortly."

Patla asserted that Shanghai is a "very power efficient product" and will perform much better than Barcelona because the smaller 45-nanometer process yields "a lot more (clock) frequency."

At the same frequency (speed), Shanghai will outperform Barcelona by about 20 percent, Patla said.

AMD is also boosting the size of the cache memory, which typically speeds performance, from 2 megabytes to 6 megabytes. Another speed improvement will come from increasing "instructions per clock," Patla said.

"We're also turning on HT3 (HyperTransport 3) and you'll see partners start to validate that in the Q1 time frame," Patla said. HyperTransport is a high-speed communication link technology between silicon.

Shanghai will be followed by a 45-nanometer desktop processor code-named Deneb, which is due to launch in the fourth quarter of this year or first quarter of 2009, AMD said.

In the fourth quarter of 2009, AMD will add a six-core processor. "We'll take what we've learned from our 45-nanometer process and Shanghai core and bring out an Istanbul six-core product," Patla said. Like Shanghai, this will be targeted at servers with up to eight processor sockets.

Brooke Crothers is a former editor at large at CNET, and has been an editor for the Asian weekly version of the Wall Street Journal. He writes for the CNET Blog Network, and is not a current employee of CNET. Contact him at Disclosure.

Is Now the Time to Buy Stocks?

Is Now the Time to Buy Stocks?

Here is what the historical evidence suggests.

The markets are chaotic. The stock market (S&P 500) is down 34% for the year, and 17% in October alone. Volatility, which measures how much stocks move unexpectedly in a year, is even more dramatic. It's usually around 15%, but daily volatility in October was 75% on an annual basis. Meanwhile, the financial crisis continues. Is this the prelude to further losses, as in 1929? Or is it the mother of all buying opportunities? Even if we think the market is a bit undervalued, does huge volatility pose an unacceptable risk of catastrophic losses?


No one knows for sure -- but 30 years of research does offer some experience and insights. Consider the top line in the chart nearby, which depicts the dividend/price ratio for NYSE stocks. Dividends are stable over time, so this ratio lets us compare stock prices at different points in time. Read it as an upside-down price chart. When prices rise, as in the boom of the 1990s, you can see the dividend yield decline, and vice versa. The lower line is the following seven-year return; it tells you how much total return, if you invested $1 on a given date, you would have made in seven years.

The correlation is obvious: When prices are low relative to dividends, subsequent seven-year returns are likely to be high. Stocks do not follow a "random walk." More deeply, price declines above and beyond declines in dividends over the following year have entirely rebounded. This finding is confirmed by 30 years of research, ranging from "behaviorists" such as Robert Shiller and Richard Thaler to "efficient marketers" such as Eugene Fama and Ken French, to "economists" such as John Campbell and myself. The same pattern also appears in price/earnings, book/market and other ratios, and in many other markets.

The interpretation is pretty clear too. In a recession, or following losses, many investors become more averse to holding risks. They want to sell. But we can't all sell -- a fact routinely ignored in much financial advice and commentary. Instead, prices must fall and prospective returns rise until some investors are willing to buy. Unsurprisingly, upward spikes in the dividend yield came in bad economic times.

History is not a guarantee -- this time could be different. Rather than a higher return going forward, this price decline could reflect a consensus opinion that a massive depression is coming -- a 34% permanent decline in earnings and dividends and a massive wave of bankruptcies.

But as I read the news, the "risk aversion" story seems more plausible. We are in, or headed for, a recession. Anyone whose job or business will be impacted can't take stock-market risks, and should be selling despite low prices. We are seeing lots of "deleveraging," "disintermediation" and "forced selling." As losses mount, investors or institutions that have borrowed money must sell to avoid bankruptcy. Others, such as some university endowments or defined-benefit pension funds, have backstop commitments that must be honored, and they too must "capitulate" at some point. Still others may just be less willing to take risks after suffering a huge loss, a sensible "once burned, twice shy" mentality.

All of these actors become more averse to holding risks as the market declines, so they sell. This increasing risk aversion amplifies an initial price decline -- coming from bad earnings news or the huge rise in credit spreads -- into a rout.

If this is indeed what's going on, it also means that unleveraged, long-term investors should be buying, since prospective returns are better. They must be able to suffer through further mark-to-market losses, and not have recession-sensitive jobs or businesses. They must still have some money left to invest, so they can exchange some of their valuable Treasurys for assets that the suddenly risk-averse are trying to unload. The more these investors can understand and digest slightly exotic securities being dumped by leveraged intermediaries, the better. Warren Buffett is in the news, and he should be.

But this line of thought still does not justify wild optimism. The dividend yield and S&P 500 P/E are barely back to long-term averages, and dividends and earnings will surely fall next year, justifying some of the recent price decline. (Crazy yields in debt markets are another story.)

And what about volatility? Stocks could easily fall a lot more. The standard portfolio rule says that your stock percentage should rise with the expected return (stocks and bonds) divided by squared return volatility. So, if you were happy with a 50/50 portfolio with an expected return of 7% and 15% volatility (standard numbers), 50% volatility means you should hold only 4.5% of your portfolio in stocks!

Now, I might answer that, knowing this, everyone has tried to sell, pushing down prices and pushing up expected returns. But expected returns would need to rise from 7% per year to 78% per year to justify a 50/50 allocation with 50% volatility. Prices have not fallen anywhere near enough to make this a sensible forecast. Many sophisticated investors and hedge funds who use this standard formula are getting out, waiting for at least a return of lower volatility before getting back in.

The answer to this paradox is that the standard formula is wrong. It assumes that stocks are a random walk, and the chart tells us otherwise. Stocks act a lot like long-term bonds -- when prices decline and dividend yields rise, subsequent returns rise as well.

Good bond investors know this. If you have a 10-year Treasury indexed bond, and a 10-year liability (say, you want to retire in 10 years), and you desire complete safety, you can ignore quarterly statements. If you see interest rates rise, bond prices tank, and bond volatility go through the roof, you would be foolish to call your broker and cry, "We've got to sell! I can't take any more losses." If bond prices go down more, bond yields and long-run returns will rise just enough that you face no long-run risk. (Foolish or not, many bond investors pay far too much attention to short-term returns.) Stocks are much riskier, of course. But the same logic explains why you can ignore "short-run" volatility in stock markets.

The average person must end up holding the stocks and bonds that are out there. Therefore, you should only ever buy, sell or rebalance if you're different than the average person. We all like to think we're smarter than average, but at least half of us are deluded, so that's a dangerous way to invest.

If you're less leveraged, less affected by recessions, and have a longer horizon than the average, it makes sense to buy. If you're more leveraged, more affected by recession or have a shorter horizon, it might be the time to sell, even though you might be cashing out at the bottom. If you're about the same as everyone else, do nothing and relax. If you're wrong, at least you will have excellent company.

Mr. Cochrane is a professor of finance at the University of Chicago Booth School of Business.

Sick Searchers Help Track Flu

Wednesday, November 12, 2008

Sick Searchers Help Track Flu

Google releases a tool to track the intensity and spread of the flu.

By Robert Lemos

Credit: Technology Review

On Tuesday, search giant Google released an experimental tool that tracks the intensity and movement of the influenza virus across the United States by monitoring the number of times that people search the Web using terms related to the disease.

The tool, known as Google Flu Trends, makes use of the fact that, before they go to the doctor's office, many people will search for information about what ails them. Using aggregate data on the number of searches for terms such as "flu" and "flu symptoms," software engineers from Google and researchers from the Center for Disease Control (CDC) found a strong link between these searches and reports from doctors of flu outbreaks a week to 10 days later.

"We found that there's a very close relationship between the frequency of these search queries and the number of people who are experiencing flu-like symptoms each week," Jeremy Ginsberg and Matt Mohebbi, both software engineers at Google, write in a blog post describing the work. "As a result, if we tally each day's flu-related search queries, we can estimate how many people have a flu-like illness."

The result could allow the CDC to respond to outbreaks of influenza more than a week earlier than it could using intelligence based on trends in reports from doctors, the federal agency's top flu tracker says. "Influenza has a very short incubation period," says Lyn Finelli, lead for influenza surveillance at the CDC. "You can have a lot of transmission in a very short time, so the more warning you have, the more you can do to prevent an outbreak of the disease."

The Google researchers worked closely with the CDC for more than a year to improve their model. The tool reveals a close match between historical increases in searches related to the flu and increases in reports from doctors, Finelli says.

The idea of mining data that people leave behind through their electronic existence is not new, says Nathan Eagle, a research scientist with the Media Lab at MIT. "This isn't the first example of it, by any means," Eagle says. "Virtually any type of trace that you, as a user or as a citizen, leave could be mined for all sorts of purposes."

Eagle and other researchers have published research on tracking students' movement patterns using GPS to better understand how a disease can spread through a population. Another system, called HealthMap, plots news and blog reports related to different diseases on Google Maps. And Philip Polgreen, an assistant professor at the University of Iowa, recently published a paper that used Yahoo search data to correlate searches for flu symptoms with the incidence of reports of the disease. "Every day, people search for information on health on the Internet, and we thought that the pattern of searches could give some information about future expectation or current incidents," Polgreen says.

Keeping track: Flu Trends uses Google search data to estimate flu cases for 2008-2009 and previous years (top) and shows the current flu-related search activity for individual U.S. states, with more activity shown in darker blue (bottom).
Credit: Google

Gunther Eysenbach, a health-policy professor with the University of Toronto, says that three years ago, he proposed to Google the idea of analyzing search data in the same way that Flu Trends does. However, he claims that he did not receive a response. Without direct access to Google's data, Eysenbach decided to take out an AdWords advertisement on the site. The ad not only gave him access to search data for the terms "flu" and "flu symptoms," but it also showed the number of people who clicked on the advertisements.

"If you count the number of clicks, then you can get a better prediction," Eysenbach says. "You can weed out the number of people who have flu symptoms from the number of people who just hear about the disease from media reports."

In a paper published in 2006, Eysenbach showed a strong positive link between Internet users' searches and the incidence of influenza in a certain region--in this case, Canada. While Eysenbach's work is briefly mentioned in Google's paper, the researcher says that he was "in a mild state of shock" that Google had decided not to collaborate with him.

In its announcement, Google tried to head off any concerns that the tool would impact users' privacy, stressing that, while the research "aggregates hundreds of billions of individual searches," the information is anonymized and therefore cannot be employed to track an individual user.

MIT's Eagle, however, says that people should expect that their data will increasingly be used in the future. "At the end of the day, this type of data is a fact of life in the 20th century," he says. "We could ignore it and pretend it doesn't exist, or we could use this data, without compromising privacy, in ways that can help people."

Better Wind Turbines

Thursday, November 13, 2008

Better Wind Turbines

A more efficient generator could convert more of the wind's energy into electricity.

By Kevin Bullis

Power housing: Copper wiring stretches from a prototype of a new kind of generator, which was designed with the variability of wind speed in mind.
Credit: Exro Technologies

ExRo Technologies, a startup based in Vancouver, BC, has developed a new kind of generator that's well suited to harvesting energy from wind. It could lower the cost of wind turbines while increasing their power output by 50 percent.

The new generator runs efficiently over a wider range of conditions than conventional generators do. When the shaft running through an ordinary generator is turning at the optimal rate, more than 90 percent of its energy can be converted into electricity. But if it speeds up or slows down, the generator's efficiency drops dramatically. This isn't a problem in conventional power plants, where the turbines turn at a steady rate, fed by a constant supply of energy from coal or some other fuel. But wind speed can vary wildly. Turbine blades that change pitch to catch more or less wind can help, as can transmissions that mediate between the spinning blades and the generator shaft. But transmissions add both manufacturing and maintenance costs, and there's a limit to how much changing the blade angle can compensate for changing winds.

ExRo's new design replaces a mechanical transmission with what amounts to an electronic one. That increases the range of wind speeds at which it can operate efficiently and makes it more responsive to sudden gusts and lulls. While at the highest wind speeds the blades will still need to be pitched to shed wind, the generator will allow the turbine to capture more of the energy in high-speed winds and gusts. As a result, the turbine could produce 50 percent more power over the course of a year, says Jonathan Ritchey, ExRo's chief technology officer. Indeed, in some locations, the power output could double, says Ed Nowicki, a professor of electrical engineering at the University of Calgary, who has consulted to ExRo.

The generator works on the same principles as many ordinary generators: magnets attached to a rotating shaft create a current as they pass stationary copper coils arrayed around the shaft. In ordinary generators, all of the coils are wired together. In ExRo's generator, in contrast, the individual coils can be turned on and off with electronic switches. At low wind speeds, only a few of the coils will switch on--just enough to efficiently harvest the small amount of energy in low-speed wind. (If more coils were active, they would provide more resistance to the revolving magnets.) At higher wind speeds, more coils will turn on to convert more energy into electricity. The switches can be thrown quickly to adapt to fast-changing wind speeds.

Inside look: Two rings of magnets (blue-gray), one within and the other outside a series of copper coils (red and green), turn to generate electricity.
Credit: Exro Technologies

Another part of the design makes the generator more responsive to changing wind speeds. Harvesting large amounts of energy requires many coils. These could be arranged inside a very-large-diameter generator, but then the rotor on which the magnets were mounted would have to be larger, too. That would make it harder to get the rotor moving, or to change its rotation speed. (The greater distance between the center of the generator and the coils increases what's known as the moment of inertia.) The ExRo generator instead distributes the coils among several small-diameter generators--which the researchers call stacks--along the length of the shaft. Smaller diameters make it easier to change rotational speeds. The multiple-stack design also makes customizing the generator for a particular wind site easier. For a site with low-speed winds, few stacks would be needed. For a site with high-speed winds, more could be added, allowing the generator to convert more energy into electricity.

Other companies have developed designs that incorporate multiple generators, which can be activated separately, depending on wind speed. But these have to be engaged and disengaged mechanically, adding weight and complexity to the generator and increasing costs. Reducing maintenance and weight by eliminating the need for mechanical gears and clutches could allow ExRo to keep costs down. And that, says Paul Sclavounos, a professor of mechanical engineering at MIT, is the key consideration in determining whether to try to capture more of the wind's energy. ExRo may have an advantage, he says, because the key to its technology is electronic control, which is inexpensive. Indeed, the company claims that a wind-turbine operator could make 57 percent more money from a turbine over the course of a year by using the new generator.

ExRo has developed and tested a lab-scale prototype. Its estimates of increased power production come from models that use data from existing wind-turbine sites. By the end of this year or early next year, the company will begin field-testing a small, five-kilowatt wind turbine. Ritchey says that the company won't have firm figures for power production until those tests are complete. The next step will be to install larger, megawatt-scale generators in existing wind turbines.

One Account to Rule Them All

Thursday, November 13, 2008

One Account to Rule Them All

A new service combines many ways of communicating.

By Erica Naone ---

Multitasking: VoxOx software, pictured above, allows users to make phone calls; send e-mails, instant messages, and text messages; post to social networks; share files; and host video conferences.
Credit: VoxOx

Thanks to the constant advance of communications technology, there are now more ways than ever to reach the people you know. But this doesn't necessarily mean that life's more convenient. Checking every account for new messages can be tedious and time consuming, and nowadays many people have multiple telephone numbers, e-mail addresses, and instant-messaging accounts--even several social-networking identities. VoxOx, a company based in San Diego, hopes to untangle this mess by providing a single piece of software that can be used to communicate with contacts in a wide variety of ways.

Unifying communications tools is hardly a new idea. Over the years, several popular instant-messaging clients have been developed to let users from one network chat with those from others. And as cell-phone use has grown, companies like Grand Central (now owned by Google) and Ribbit (now owned by BT) have focused on bringing together multiple phone numbers. The idea has proved especially popular in the business world, with companies such as IBM building products that combine a variety of communications tools--voice mail, IM, Web conferencing--with business applications like Lotus Notes.

VoxOx continues this trend but offers a more exhaustive list of services. It allows users to send e-mail and instant messages, send text messages, host video conferences, make phone calls, post messages to social networks, and even share files--all from the same place.

Rebecca Swensen, a research analyst with IDC, says that the product is interesting and ambitious. She cautions that "they're still working out the kinks in terms of how to make it easy to use." Swensen also questions whether consumers will be willing to put in the effort required to configure a service like this. Although ultimately, the service might make one's life a little easier, she says, it's a fairly big commitment to start using a new service, and to get all contacts loaded in and sorted out.

Michael Faught, chief financial officer with VoxOx, says that the service is, initially at least, aimed at younger users who "are confronted with this chaotic world of many kinds of communication tools." Faught sees social networks as compounding the problem and says that there's no simple, efficient solution.

A preview release of VoxOx was launched last week and can be downloaded for free for both Windows and Mac computers. After signing up for an account, a user is given a free VoxOx phone number and configures the rest of the service by providing usernames and passwords for compatible IM, e-mail, and social-networking accounts. VoxOx pulls in these contacts, allowing the user to scroll through a composite list and select whom to talk to and how. In some ways, VoxOx functions like a powerful instant-messaging application. Whether messages are sent as texts, instant messages, or e-mails, the conversation pops up onscreen like an IM. A user gets two free hours of calling time within the United States and Canada when she signs up, and has the option to pay for more minutes or earn them by watching ads.

VoxOx can afford to hand out phone numbers for free because it is owned by TelCentris, a communications company with existing infrastructure, says CEO Bryan Hertz. The center of the company's technology, Hertz adds, is a hub that includes support for a wide variety of communications protocols, which can be extended to include many more. "For every type of communications protocol that's an open standard, we either support it already or are integrating it into the platform," he says.

Hertz believes that the real power of the service is its ability to unify different mediums--for example, when a VoxOx user creates a three-way conference call, adding one person on a mobile phone and another on a VoIP call. However, the company acknowledges that there are bugs to be worked out. Some users have reported problems making and receiving calls, while others have posted requests on the company's forums for support for Linux and Facebook Chat. Hertz says that the company is now focused on responding to this feedback and plans to introduce more features and support soon. The company also plans to launch a version of the application for business users in early 2009.