When scientists look closely at living designs, they think, Wow! That’s cool! I wonder if we could copy that?Frog computing (PhysOrg): Can computer programmers learn something from slimy green amphibians? Yes! This article says that their trick of “lyrical desynchronization” is informing algorithms for Twitter and Facebook.Back to the future with nature’s own construction materials? (PhysOrg): The arrival of October 21, 2015 made this a big week for Back to the Future fans: the date in Episode II when Doc rocketed Marty and Jennifer into 10/21/15 from the year 1985 in his DeLorean time machine. European researchers used the movie reference to discuss their high-tech bio-based building materials that conjure up nostalgic times. People have used clays for construction for thousands of years. The new bio-based clays from German startup Claytec, though, will be better engineered: environmentally friendly, economically feasible and equipped for good insulation. Will they be used for flying cars and hoverboards? Time will tell.A skin-inspired organic digital mechanoreceptor (Science): The smart guys at Stanford are after your skin. Did you know your skin does analog-to-digital conversion when you reach out and touch someone? That’s what they say:Human skin relies on cutaneous receptors that output digital signals for tactile sensing in which the intensity of stimulation is converted to a series of voltage pulses. We present a power-efficient skin-inspired mechanoreceptor with a flexible organic transistor circuit that transduces pressure into digital frequency signals directly. The output frequency ranges between 0 and 200 hertz, with a sublinear response to increasing force stimuli that mimics slow-adapting skin mechanoreceptors. The output of the sensors was further used to stimulate optogenetically engineered mouse somatosensory neurons of mouse cortex in vitro, achieving stimulated pulses in accordance with pressure levels. This work represents a step toward the design and use of large-area organic electronic skins with neural-integrated touch feedback for replacement limbs.Silk attraction (PhysOrg): This article tells about scientists who are still trying to figure out the marvels of silk. When humans process it, they basically kill it, making it less resilient. Silkworm silk is hard enough to mimic, but spider silk is much more complex. It would be the perfect stuff for medical implants if they succeed.Sealing a prey’s fate (Science Daily): A cute photo of a harbor seal in this article tempts you to read about what these animals have to offer engineers. The answer: whiskers—and not just big hairs sticking out, but whiskers that do the slalom when they whisk. “Artificial whisker reveals source of harbor seal’s uncanny prey-sensing ability,” the headline reads; “Study finds a whisker’s ‘slaloming’ motion helps seals track and chase prey.” Watch them next time you see them; those whiskers aren’t just for looks. They’re “amazingly fine tuned” sensors that function as antennae. Performance factoid: “Even when blindfolded, trained seals are able to chase the precise path of an object that swam by 30 seconds earlier.”Smart grid (PhysOrg): Have you noticed the difference between recognizing a familiar place and having a sense of direction? That’s because you have specialized neurons for each: place cells for the former, grid cells for the latter. Your body comes equipped with a superb navigation system that robot designers at A*STAR are trying to imitate.Long jump record (PhysOrg): Check out the graphic in this article. A good long jumper can jump about 6.4 feet. If a cricket were human sized, it could leap across a football field lengthwise! “When it’s time to design new robots, sometimes the best inspiration can come from Mother Nature,” the article says. “Take, for example, her creepy, but incredibly athletic spider crickets.” These wingless crickets can leap 75 to 80 times their body lengths and land right side up. Watch them leap in slow-mo like ballet dancers to the Blue Danube Waltz in a video clip that has students at Johns Hopkins mesmerized. “They really are masters of aerodynamics,” JHU professor Rajat Mittal remarks. “I want to understand the engineering aspects of these creatures, and how they’re able to do what they do,” he explains, marveling at “the beauty and the intricacy in the way they move.” He and his students hope to build tiny robots that can leap over uneven surfaces, for instance to find survivors in earthquake debris. This is a very good illustration of biomimetics: taking a lowly creature, becoming inspired by it, studying it, and applying it.High-performance mussel-inspired adhesives of reduced complexity (Nature Communications): This paper tells about researchers at UC Santa Barbara flexing mussels to learn about wet adhesives. When you can’t copy nature directly, simplify: “This study significantly simplifies bio-inspired themes for wet adhesion by combining catechol with hydrophobic and electrostatic functional groups in a small molecule.” They found a way to simplify the process nature uses by identifying “zwitterionic surfactants” that adhere to a variety of surfaces when wet. Zwitterions have both positive and negative charges.Puffin stuff (Science Daily): In 1939, a Russian engineer dreamed of creating a vehicle that could both fly and swim. Why didn’t he just look at puffins, seabirds that do this every day? Harvard engineers are doing that at the Wyss Institute for Biologically Inspired Engineering. “The birds with flamboyant beaks are one of nature’s most adept hybrid vehicles, employing similar flapping motions to propel themselves through air as through water.” Their first attempt to mimic this is the Harvard Robobee, a tiny insect-like device that can transition from air to water. First attempts were disappointing; the robots sank to the bottom. It’s a start, though, and success will enable ramping up the scale to bird-size models.“Bioinspired robots, such as the RoboBee, are invaluable tools for a host of interesting experiments — in this case on the fluid mechanics of flapping foils in different fluids,” said Wood. “This is all enabled by the ability to construct complex devices that faithfully recreate some of the features of organisms of interest.“Mother-of-pearl’s genesis identified in mineral’s transformation (PhysOrg): Nacre is back in the news. “How nature makes its biominerals—things like teeth, bone and seashells—is a playbook scientists have long been trying to read,” this article begins. Humans have used nacre from oysters for years, but scientists at the U of Wisconsin want to know how the shell makes it. “Amazing chemistry happens at the surface of forming nacre,” a professor says. Calcium carbonate is common, but with mother-of-pearl, “It is how the atoms are arranged that matters.”Snake’s belly slides on fatty film (BBC News): Many of us cringe at these slithering beasts, but we should take the attitude of Oregon State researchers who are intrigued by that smooth, gliding motion. Studying non-venomous California kingsnakes, they learned a secret: snake scales are slippier on the belly than on the back. Apparently this lubricates the snake, reducing wear and tear and also making it easy to move. Looking at the scales with an electron microscope, they noticed a well-ordered array of lipids. “It’s extremely, extremely well ordered,” chemical engineer Joe Baio says. “It’s not just some grease they picked up; it’s there for a reason.” That’s the spirit! Expect a reason, and you will find. Usually inspiration follows. “You could make very slippery surfaces by mimicking what’s going on in these scales,” Baio said.Material inspired by nature could turn water into fuel (PhysOrg): If we can’t turn water into wine, how could we turn it into fuel? This surprising headline begins a story about scientists at the University of Reading who are fascinated by how plants use the sun’s energy. We can’t do that yet. “Splitting water into hydrogen and oxygen is an energy-intensive process, which currently requires much more energy in from electricity than comes out in usable fuel.” The fuel they seek is not oil, but hydrogen for fuel cells—a “clean, storable and transferrable source of energy.” Now, if they can just find the right catalyst and mass-produce it. Porphyrins look promising. “Our research is inspired by nature, as porphyrin is related to chlorophylls, the green pigments which allow plants to convert sunlight into chemical energy.”Clathrin as a biotech substrate: Immobilization and functionalization (PhysOrg): Clathrin? What’s that? You have lots of it. It’s a triskelion-shaped protein in your cells that wraps vesicles in geodesic domes for transporting cargo inside the cytoplasm. English and German researchers are considering using it for immobilizing nanomaterials to surfaces. “Furthermore, the clathrin lattice can be stored and re-activated without losing its functionality, making it a practical substrate for molecular devices.”So there you have it: another baker’s dozen of news stories that illustrate the promise of biomimetics. (But wait! There’s more! “Researchers design ‘biological flashlight’ using light-producing ability of shrimp” that might image cancer cells, reports Science Daily). Need a solution to a problem? It’s probably in something alive that might be right under your nose. Now try to catch that spider cricket in real time.Bob Enyart has a good line in his Real Science Radio broadcasts: “This program is brought to you by God, maker of heaven and earth and other fine products.” In all rights, these scientific papers should include Genesis 1 as their first reference.These stories are encouraging. They are positive. They are practical. They make science fun again. Without any Darwinian baggage, they make design central to the search for understanding about the world. “It’s there for a reason!” — what a great attitude for approaching mysteries in nature.If you only have time for one of these, watch the video clip in the spider cricket story on PhysOrg. It’s fun to watch, and the professor and students make good statements about the value of imitating nature’s designs. They’re inspired by it. They think it’s beautiful. And what they are doing with what they learn could save people’s lives some day. That’s the design revolution. (Visited 46 times, 1 visits today)FacebookTwitterPinterestSave分享0
Motsoaledi met with members of Busa in Johannesburg this week, giving them an overview on how HIV/Aids is affecting South Africans, and urged them to help the government with resources to fight it. He appealed to Busa members for help “in cash or kind” to raise awareness about HIV testing, and also to help with the distribution of condoms. ‘Breath of fresh air’ During his presentation, Motsoaledi focused on the HCT campaign, which was launched in April this year, and aims to test 15-million people by June 2011. He added that there were certain health care companies that have already embarked on assisting with resources to help with the HCT campaign. “The business sector found Motsoaledi’s passion for this issue a breath of fresh air and we are very supportive of him and need to find a consolidated approach to take this issue forward and consult amongst ourselves,” Vilakazi said. Source: BuaNews Raising testing awareness He added that in the coming months the department would be re-launching the campaign, where preliminary results on how many people had got tested since the launch of the campaign would be released. 17 August 2010 “Business could help with funding of gloves, needles and other equipment with an effective advertising campaign that will get the country recommitting to fight the HIV and Aids scourge, which is still on the rise in South Africa,” Motsoaledi said. Busa CEO Jerry Vilakazi commended Motsoaledi for getting SA business re-energised on the issue of HIV/Aids, adding that the minister was “a breath of fresh air” and that they were keen on the partnership. The Department of Health will be partnering with Business Unity South Africa (Busa) to help strengthen the government’s HIV Counselling and Testing (HCT) campaign, says Health Minister Aaron Motsoaledi.
Top Reasons to Go With Managed WordPress Hosting Related Posts Why Tech Companies Need Simpler Terms of Servic… A Web Developer’s New Best Friend is the AI Wai… audrey watters Tags:#Internet of Things#web Wish you could add a “clap on” and “clap off” option to more devices in your house? Want to be able to program your coffee pot to sound an alarm when it’s done brewing? A Rutgers University project aims to make those sorts of automations easy for anyone to add to their household appliances, with a little help the graphical programming language Scratch. Scratch is often cited as one of the best introductory languages for teaching kids – or anyone, really – to code. So it’s no surprise that a Rutgers University honors class called “Programming for the Masses” would utilize Scratch as part of its goal of making programming a more accessible, everyday skill. What is unique – and if I may say so, pretty fun – is the direction that a research project, an outgrowth of the class, has taken since. The project is called Scratchable Devices, and with it, computer science Professor Michael Littman and some of his students are working to make it easy for anyone to program their household devices by using Scratch.Build Your Own Home Automation System These devices use the BYOB (Build Your Own Blocks) offshoot of Scratch as the user interface. This way, the end-user can drag and drop blocks with commands instructing the device what to do (such as “turn on”), when or under what conditions. Ideally, people without any programming experience will be able to learn to program their devices by using this simple interface. On the back-end, the programs that users write in Scratch are converted into radio transmissions received by the Scratchable Device. The devices are equipped with an XBee module connected to Arduino microcontrollers. The latter are programmed to read the messages and perform the necessary hardware actions. The group has already built “Scratchable” lamps, alarm clocks, fans, and coffee makers, and they say they have more devices in the works. 8 Best WordPress Hosting Solutions on the Market
The 28-year-old Cray, who is regarded as a rock star here even by foreign media, was even looking at the giant screen of Bukit Jalil Sports Stadium after the last hurdle.READ: SEA Games: Cray strikes gold in 400m hurdles FEATURED STORIESSPORTSWATCH: Drones light up sky in final leg of SEA Games torch runSPORTSSEA Games: Philippines picks up 1st win in men’s water poloSPORTSMalditas save PH from shutoutAnd as he eased up on the way to the finish, muscle-bound Vietnamese Quach Cong Lich made things interesting by mounting a last-ditch chase and was soon breathing down the Filipino-American’s neck.They ended the race in a photo finish—and Cray needed to crane his neck forward to gain whatever edge he could. But even then, both runners needed to wait for more than five minutes before the judges officially declared that Cray had successfully defended his title. Catriona Gray spends Thanksgiving by preparing meals for people with illnesses WATCH: Streetboys show off slick dance moves in Vhong Navarro’s wedding His stint in the Worlds was because of his recent triumph in the Asian Championships in India. Don’t miss out on the latest news and information. LOOK: Venues for 2019 SEA Games Read Next Cray, though, seemed to already know what the result would be. While Lich was listless throughout the wait for the official result, Cray was lying down on the track.READ: Cray not concerned with tight schedule aheadFrom lane No. 5, Cray led most of the way until the final turn to finish the race in 50.03 seconds, while the Vietnamese turned in an official time of 50.05 seconds.The Texas-based Cray could have been refocusing as he would need it in an hour when he competes in the 100m dash—where he is also the defending champion.Cray just came from the World Championships in England, where he was disqualified in the 400m hurdles for a false start.ADVERTISEMENT LIST: Class, gov’t work suspensions during 30th SEA Games LATEST STORIES SEA Games in Calabarzon safe, secure – Solcom chief Eric Cray of the Philippines competes in the men’s 400-meter hurdles event of the 29th Southeast Asian Games. Cray clocked 50.03 seconds to win the gold medal. INQUIRER/ MARIANNE BERMUDEZKUALA LUMPUR—It could have been out of sheer confidence or an act of self-preservation. But Eric Cray noticeably, inexplicably decided to slow down after making the final leap in the men’s 400-meter hurdles final Tuesday night.“I can’t be bothered right now, I was focusing on the 100 meter dash,” Cray later told reporters after the race, referring to the century dash final he needed to run an hour later.ADVERTISEMENT View comments Filipino athletes get grand send-off ahead of SEA Games PLAY LIST 01:27Filipino athletes get grand send-off ahead of SEA Games03:04Filipino athletes share their expectations for 2019 SEA Games03:07PH billiards team upbeat about gold medal chances in SEA Games00:50Trending Articles01:35Panelo suggests discounted SEA Games tickets for students02:49World-class track facilities installed at NCC for SEA Games05:25PH boxing team determined to deliver gold medals for PH00:45Onyok Velasco see bright future for PH boxing in Olympics02:25PH women’s volleyball team motivated to deliver in front of hometown crowd Yu ends medal drought for PH swimmers with bronze Brace for potentially devastating typhoon approaching PH – NDRRMC SEA Games: PH’s Alisson Perticheto tops ice skating short program MOST READ UPLB exempted from SEA Games class suspension
APTN National NewsA grassroots campaign is underway in Winnipeg to get Indigenous people out to the polls in this fall’s municipal election.“Indigenous Rock the Vote” is a social media campaign to raise awareness ahead of the October election.Indigenous people make up more than 10 per cent of the population of Winnipeg, but many have never voted before.As APTN’s Dennis Ward reports, one of the mayoral candidates is trying to inspire Indigenous people to cast their ballot, even if it isn’t for him.
The Ohio State men’s basketball team is coming off arguably its biggest win of the season, taking down archrival Michigan, 56-53, but I still don’t care. OK, it’s not that I don’t care, but I just am not nearly as interested as I have been in previous years. Teams led by Jared Sullinger, Evan Turner and Greg Oden were the things my life revolved around. School, work, even relationships took a back seat to watching these teams play. Whatever the record, although they were typically fantastic, I would find the Buckeyes on television and shut out all else. But this season I have found it harder and harder to get really into OSU basketball games. Although the turnout at Woody’s for those students who couldn’t attend the Michigan game might tell you otherwise, there are many students who are dealing with the same indifference. The passion and pure unadulterated joy that came to campus last year after home victories against Duke and Indiana just has not been matched this season. But what is it that is keeping this talented team from garnering the following that previous Thad Matta-led squads have had? It is hard to pinpoint an exact reason as to what has changed from such a short time ago since there are so many factors contributing to the decline in interest. Potentially most clear of all is the inflated expectations this team has suffered from. Ranked No. 4 overall in the preseason AP poll, OSU hasn’t quite lived up to these lofty beginnings, dropping three games to some very talented teams in Duke and Illinois and at home against Kansas. But the drop-off from where they began to where they are now has been a rude awakening for fans who have become accustomed to a consistent top-10 team. Add the lack of new recruits this year, a perfect football season stealing the spotlight from basketball and what I am terming as the Jared Sullinger hangover, it is no wonder fans are showing a lack of enthusiasm this year. With the depth of the conference this year, every game is going to matter and home-court advantage will play into the Buckeyes’ chances at competing for the Big Ten Championship. The fans could by key down the stretch for OSU. Looking ahead, the Buckeyes will travel to Michigan State for another tough test against the Spartans Saturday at 6 p.m. before returning to Columbus to take on the Iowa Hawkeyes.
Cooch Behar: Cooch Behar district administration is set to organise street plays to launch a massive awareness campaign for the Swasthya Sathi project.Kaushik Saha, district magistrate and Sumit Ganguly, chief medical officer (health) launched the campaign and flagged off the tableaux. The main purpose will be to inform the people about the Swasthya Sathi project. Saha said that in Cooch Behar, the total number of beneficiaries has crossed 4.66 lakh. Attempts are on to bring more people under the scheme. Samir Karmakar, head of Natya Dal, said that they will enact street plays to create awareness among the people, over the next 10 days.
There’s an old story about a trucker driving north on the Montreal highway in Vermont. Seeing an average of three gas stations per mile, he concludes that there must be plenty of gas all the way to the North Pole. Urban legend doesn’t say what became of him (or why he thought he could drive to the North Pole), but I’m guessing he ended up stranded on a desolate stretch of highway somewhere in northern Manitoba. Our trucker’s mistake is an admittedly extreme example of what statisticians call extrapolation error, which occurs when you wrongly assume that current conditions will continue into the future. It happens in investment markets all the time, only instead of a frigid night alone in a truck, the markets will punish your bad judgment with a deluge of red ink in your brokerage account. As today’s guest author David Hunter will explain, extrapolation is all the rage right now—as it often is when markets are hot. He says that those who assume the stock market will rise in 2014 just because it rose in each of the five years prior are suffering from an acute case of Extrapolation Fever—a wealth-threatening disease whose symptoms include over-confidence, loss of judgment, and ultimately, a lighter wallet. As some background, David Hunter has been in the investment business for 36 years, working his way up to Chief Investment Officer of a billion dollar money management firm. Today, he’s Chief Investment Strategist of KCCI, where he uses cycle analysis to predict where major investment markets are headed for readers of his newsletter The Contrarian Value Investor. As the name of his newsletter implies, David is a contrarian to the core. You’ll read his take on precious metals, stocks, bonds, and much more in his 2014 forecast below. Be warned: you won’t agree with everything you’re about to read. But David’s analysis is sound and well-reasoned, so take heed nonetheless. The US dollar will be another beneficiary of the “flight to safety” trade. I know that a lot of investors are concerned about the long-term prospects for the dollar, given the lack of fiscal discipline in our government and the seemingly reckless expansion of QE in this cycle. There is also talk that the dollar could lose its reserve-currency status or at least see it greatly diminished. While that may happen, it is not going to happen anytime soon. World investors will still flock to the dollar in a crisis. I am forecasting the dollar index to rise by 20-25% in 2014. I think we may see the dollar and the euro trade at parity at some point later this year. I am also near-term bearish on the commodity currencies, such as the Australian and Canadian dollars. I expect their economies to be hit particularly hard, as commodities take it on the chin during the bust. The Japanese yen has declined by over 25% versus the dollar in the past 15 months. There is undoubtedly more downside ahead, but I am not sure I would want to be short the yen here, given the nearly universal view that it will continue to trade lower. There are far too many traders short the yen right now for me to be comfortable with that trade. It wouldn’t take much to trigger a short-covering rally here. I don’t think I want to be either long or short the yen right now. I continue to be a bear on precious metals and commodities. I turned bearish on gold in September of 2012, when it hit $1,800 and have had a target of $1,000 ever since. This is still my target, although I believe it could spike as low as $800 in a washout trade before reversing. I believe gold is likely to put in a major bottom in the first half of this year, but right now there are still far too many people trying to call a bottom every time we get an uptick. We need to see more capitulation and more panic selling before any kind of major bottom can be called. By the time we get to a true bottom, I expect to see some of the so-called gold bugs and many of the inflationists throw in the towel. We’re getting closer, but I think that bottom is still months away. I continue to expect silver to track gold. My downside target for silver remains at $13. Copper, on the other hand, is not nearly as far along in its downtrend. I think copper prices could drop in half this year. China is still overproducing, and demand for copper is likely to be hit hard in the upcoming global contraction. I see a lot of analysts promoting the copper producers, particularly Freeport McMoran, suggesting these stocks offer great value here. I would just caution that a sharp drop in copper prices would cause earnings to disappear. Under this scenario, the dividend would likely be cut or eliminated. From both a technical and fundamental perspective, I can see these stocks falling 50-70% from here. Energy is another area where prices could come under severe pressure in 2014. I am looking for WTI crude to fall below $50 and natural gas to decline to $2. We may be on the verge of the first global deflationary cycle in some 80 years. That is not likely to be an environment where commodities thrive. I would caution investors against evaluating commodity stocks here using normalized earnings. The environment these producers will be operating in will be far from normal. Weak earnings and questions about future demand will take a toll on these stocks. Conclusion It is not often that we see such unanimity on Wall Street. As the market has marched higher, more and more investors have joined the ranks of the bulls. As a 40-year observer of the markets, I have seen the same thing happen at each market top. Essentially, the momentum of the tape begets more momentum and causes perception to change from glass half-empty to glass half-full. Lots of fundamental rationale is provided to explain a bullish viewpoint, but more often than not, it is the momentum of the market that is driving the crowd’s bullishness at or near a top. What I have also observed over the years is that the sentiment can quickly shift into glass half-empty if and when momentum shifts decidedly to the downside. In other words, momentum works both ways. Shifts from bullish to bearish can lead to dramatic declines when coming off a major top. I think this might be even more the case this time around. More than ever before, we have investors all watching for the same technicals on their computers in an effort to spot a reversal. This means that more than ever before, we will likely have investors all acting on those signals at essentially the same time, creating a stampede for the exits. This long market run, without so much as a 10% correction, has conditioned investors to make every effort to stay fully invested until there are clear signs of a momentum break. My guess is that we will see a high-volume reversal once the market definitively crosses under the 200-day moving average. For the S&P, the 200-day moving average is around 1,695. Until the market breaks that level, weakness will be bought. However, once that line is penetrated in a decisive manner, we are likely to see the sell-off accelerate. The setup is such that a reversal this time around could be faster and steeper than what we witnessed in 2008. Investors hoping to have their cake and eat it too by staying fully invested until the momentum reverses are likely to learn an age-old lesson: the market rarely accommodates. Extrapolation fever is alive and well on Wall Street, and most pundits are forecasting another positive year, fueled by accelerating economic growth and another good year of corporate profit growth. This contrarian obviously disagrees. I think 2014 may well turn out worse than 2008-‘09 from both an economic and market perspective, with corporate profits cut in half. If that proves to be the case, 2014 will go down as the worst year in the post WWII era. My targets remain 500 on the S&P and 5,000 on the Dow. This is certainly an outlier forecast, one that most investors will consider highly unlikely. I have been here before. At every major cycle top, my forecasts have been received skeptically and viewed as outliers. It is the nature of investor psychology. As much of a bullish consensus as there is regarding equities, there is an even larger bearish consensus regarding long-duration Treasuries. When an asset is as hated as the long bond is today, it is usually a good time to go against the crowd and buy. In my opinion, we are looking at one of the great relative value trades in history. If we get the global deflationary contraction that I am forecasting, we could see as much as a 10,000 basis-point spread between equity returns and the 30-year Treasury bond, in favor of the bond. Ironically, investors are about as bearish of the long bond as they have ever been. I remain near-term bearish of gold and continue to expect it to trade below $1,000 in upcoming months. However, gold is still in a secular bull market and will likely undergo a major reversal to the upside later this year. Overall, 2014 is likely to be a year of many major reversals, some for the better and some for the worse. Danger and opportunity are two sides of the same coin the editors at Casey Research are very familiar with. To protect yourself from the first and seize as much as possible of the second, diversification is key. Right now, you can get the ultimate diversification—by receiving all eight of our monthly newsletters for one low price—with our limited-time Casey OnePass offer. Click here for the details. The point to all this history is that at cycle tops, investors get caught up in the momentum and develop a rationale to explain why that momentum will continue despite historically full valuations. It is interesting that this time around there does not seem to be one dominant sector. Rather it is the market in general, along with various unrelated groups. Among the popular groups in potentially unsustainable uptrends are social media, biotechnology, private equity, REITs, consumer staples, and health care. Other groups could probably be listed as well. The theme this time around is not as clearly defined as we saw in the other five cycles. I think that is because this cycle is very different from previous cycles. We have had a subpar recovery driven by unprecedented levels of QE and historically low interest rates. This cycle, investors flocked to areas that could provide growth that was not dependent on a robust economy, as well as to stocks that could provide superior income. Another defining characteristic of this cycle is the substantial flows into exchange-traded funds (ETFs). When the market does begin a major reversal, ETFs will undoubtedly accelerate the decline, as the funds are forced to unload stock positions to meet liquidations. This cycle differs from all of the other cycles in the post WWII era. Not only have we experienced subpar growth, the economy is very close to deflation. I think these differences are causing many analysts to misjudge the risks and timing of a cycle turn. I keep hearing analysts say interest rates are still so historically low that despite the sharp rise last year, rates are not at levels that will hurt the economy. In previous cycles, that would likely have proven true. However, in this subpar recovery, where inflation is almost nonexistent, the 150 basis-point rise in rates last summer may be enough to put the economy in reverse. It certainly has already had a significant impact on mortgage refinancing and housing. In addition, general merchandise sales are slowing. On the other hand, autos sales are being propped up by the same kind of loose financing that led to the credit crisis five short years ago. Some lessons are never learned, I guess. Personal disposable income has gone negative for the first time since 2008. I expect overall retail sales will soon follow. Some economists are forecasting a pickup in capital expenditures, but with end demand slowing, there is little chance that we’ll see that. Exports can also be expected to weaken given the problems in the emerging markets as well as China and Europe. The consensus may believe the economy is gaining strength, but more likely, we are about to see economic weakness. Recession, not normalized growth, will be the story of 2014, and that’s certainly not on most investors’ radar screens. A US recession would be bad enough, but add in the potential for some major global problems and there is the real possibility of a downturn that is worse than the credit crisis of 2008-‘09. I recognize that many analysts are making the case that Europe is on the mend and will see recovery this year. Of course that is possible, but I think it is more likely that global weakness triggers a sharp reversal there, accompanied by a banking crisis and an involuntary liquidation cycle. The ECB has done little more than move debt around. The banks are loaded with risky sovereign debt, particularly the banks in Spain and Italy. It is difficult to understand why we are not yet seeing the Italian and Spanish sovereign debt spreads widen, given the state of their finances. Perhaps it is because the banks there have loaded up on that debt, as has Japan. The ECB shovels out the money, and the banks load up on their own country debt. Despite the current relative calm, no one should doubt that Europe is a house of cards. China is another accident waiting to happen. I know most investors assume China will successfully manage its transition from an export-based manufacturing economy to one that relies more on domestic consumption, and do so without growth slipping below seven percent. I think that is unlikely, particularly given the huge credit imbalances that are plaguing the country. In the past five years, credit there has grown from $9 trillion to $24 trillion. The Chinese credit bubble is far bigger than was the 2008 bubble here in the US. If it bursts this year, as I think is quite possible, it will send China’s economy, as well as the global economy, into a tailspin. There have been a few signs of late, indicating that China is finding it difficult to contain the problem. Whenever the authorities have attempted to rein in the shadow banking credit, they have been forced to quickly reverse themselves. More and more non-accruing loans are piling up on bank balance sheets. The Chinese authorities have a very difficult balancing act which they are trying to execute. The odds are very much stacked against them pulling it off successfully. The emerging-market economies are also coming under pressure and facing some significant capital outflows. These countries, as well as Japan, are accidents waiting to happen. We may not know precisely what the catalyst will be or when a crisis will be triggered, but we do know that the risks of a global deflationary bust are quite high, and contrary to current consensus opinion, I think those risks are rising, not falling. Dan Steinhart Managing Editor of The Casey Report 2014 Outlook By David A. Hunter, CFA Investors entered the new year in a very positive frame of mind. The consensus view on the Street is for another good year for the equity markets, albeit not as strong as what we witnessed in 2013. Most forecasts have the US markets up somewhere between high single digits and low double digits. The current conventional view is that the economy is finally reaching escape velocity and moving into a more normalized phase. The expectation of many investors is that this stronger economic growth will fuel better top- and bottom-line growth and propel the equity markets to ever-higher levels. The belief is that with this improved growth, the markets can move higher, even if interest rates move gradually higher and even if the Fed continues to taper. Generally, investors believe that the bull market is nowhere near a top, given that valuations are not stretched, at least by some measures, and that inflation and interest rates are still historically low. Over and over, one hears that a correction could come at any time, but that such a correction would be healthy and would not likely exceed five to ten percent. “Buy the dip” remains a common theme, but now we are hearing more and more pundits advise that investors buy now and not wait for a dip. The justification for buying now, rather than waiting for a pullback, is that prices could move even higher before any pullback were to occur. It is very clear that the Street is now as bullish as it has been in many years. In fact, the Investors Intelligence Survey is indicating a level of bullishness that is typically seen at tops. In the history of the Survey, the recorded level of bearishness has never been lower than it is today. This is just one of many reasons why this contrarian believes a major top is near at hand, with a historically significant bear market to follow. Between 1973 and today, we have had five cycle tops: 1973, 1980, 1991, 2000, and 2007. Each of those cycles was driven by a different sector that went parabolic in the later stages of the cycle, indicating that the end of the cycle was drawing near. In 1973, it was the so-called “nifty 50,” a group of 50 stocks that represented the dominant companies of that time. Valuations were driven up to irrational levels as the pension fund managers bought into the idea that these companies were so dominant that their returns would remain superior to the rest of the market for years to come. They became known as “one decision” stocks because portfolio managers considered them buy and hold stocks. These stocks got bid up to unheard-of valuations. The problem was that institutional portfolios became so concentrated in these stocks that when the economy and fundamentals turned negative, the stocks came under severe selling pressure as everyone headed for the exits at once. In 1980, it was the energy and other commodity stocks that captured the fancy of Wall Street. Inflation was soaring, propelled by oil and commodity prices that were rising to levels never seen before. As a result, investors piled into these stocks, and they went straight up. The assumption was that commodity price inflation was going to allow these companies to produce above average returns for many years. Then recession came, and the stocks plunged. In 1991, the big-name consumer growth stocks went parabolic. They had appreciated many-fold during the disinflation of the ‘80s, as their steady growth rates were capitalized at ever lower rates. At the height of their popularity, their valuations relative to capital goods stocks were at 60-year highs, a clear sign of excess. The ‘90s were all about technology and capital goods stocks rising from that 60-year relative low and ultimately ending in a speculative valuation bubble unlike any that had preceded it. As everyone is well aware, a tech bust soon followed. After that came the credit bubble that drove financials and other credit-related stocks to unsustainable levels, only to see these same stocks collapse when the bubble burst. As bullish as Wall Street is toward equities, they are even more bearish of long-duration Treasury securities. Rarely do we see the kind of unanimity of opinion that we have now regarding the direction of interest rates. It is a foregone conclusion in most investors’ minds that the 30-year bull market in bonds has ended, and that interest rates are going up from here. The fact that the Fed has begun to taper, along with the current consensus view that the economy is accelerating, has solidified in investors’ minds that the path of least resistance for rates is up. The forecasts vary as to how sharply rates will rise from here, but most forecasters are projecting 10-year rates to rise to 3% this year, with some analysts suggesting they might rise to 4% or higher. Throughout my career, my most successful calls have come when virtually nobody agrees with me, and that is certainly the situation now regarding interest rates. I continue to forecast rates falling to new lows. I think 10-year rates could fall below 1% and 30-year rates to as low as 1%. For many, perhaps most investors, this forecast will be seen as highly improbable, if not outlandish, but let me assure you, there is logic behind this forecast. If my prediction of a sharp global deflationary contraction proves accurate, we will see US Treasuries bid up aggressively in a “flight to safety” trade. If we are experiencing a financial crisis equal to or greater than the 2008 crisis, something akin to “2008 on steroids,” investors everywhere will be seeking shelter from the storm. Treasuries are still viewed by most as the safest security in the world. If we do see the economy go into steep decline, there is no doubt the Fed will ramp up QE to even higher levels. In fact, I believe we are likely to see QE expand by $10-$15 trillion in the next two years, as panicked policymakers do all they can to prevent a global economic and financial collapse. With the Fed buying trillions of Treasury securities at the same time that investors are also looking to buy, it is easy to see how rates could fall to 1%. Some might find it hard to believe that anyone would consider investing for 30 years at 1%, but remember we are likely to be looking at deflation of 3% or more. Thus, even at 1%, these bonds would be yielding at least 4% in real terms, and this at a time when most assets are delivering sharply negative returns. I am not nearly as sanguine about the rest of the bond market. In a bust, spreads will widen dramatically. I would focus on the highest quality bonds and fight the urge to trade down the risk curve to pick up yield. I would stay far away from the high-yield area, as there is great potential for this market to implode were a bust to occur. I also think there is a lot of potential trouble ahead in the municipal market. If we see a sharp reversal in the residential real estate market, it is likely to have a major impact on municipalities, which rely so heavily on property taxes to fund their operations.