Burst of Volume at the Port of Los Angeles

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Significant volume surge at the Port of Los Angeles with a rise in containers of nearly 14% per today’s news release,

The Port of Los Angeles has released its June 2014 containerized cargo volumes. In June 2014, overall volumes increased 13.89 percent compared to June 2013. Total cargo for June was 736,438 Twenty-Foot Equivalent Units (TEUs), the largest volume in monthly containers since September 2012.

Container imports rose 16.55 percent, from 328,324 TEUs in June 2013 to 382,666 TEUs in June 2014. Exports rose 8.51 percent, from 148,203 TEUs in June 2013 to 160,823 TEUs in June 2014.

Combined, total loaded imports and exports increased 14.05 percent, from 476,528 TEUs in June 2013 to 543,489 TEUs in June 2014. Factoring in empties, which increased 13.4 percent year over year, overall June 2014 volumes (736,438 TEUs) rose 13.89 percent compared to June 2013 (646,650 TEUs).

For the first six months of calendar year 2014, overall volumes (4,052,227 TEUs) have increased 9.2 percent compared to the same period in 2013. June closed out the Port’s 2013-2014 fiscal year with a total increase of 5.55 percent compared to the previous fiscal year.

Good news with one interesting footnote from DC Velocity that could account for part of the volume,

Phillip Sanfield, a port spokesman, said last month’s strong import volumes were due in part to cargo entering U.S. commerce earlier than usual ahead of a possible labor strike or management lockout at West Coast ports…Sanfield said there is no way at this time to quantify the role of labor concerns in influencing June’s traffic data. “Perhaps we’ll know more about the impact after July and August volumes come in.”

Irrespective of this potential impact, the same article reports that terminal operators expectations are, “to see an increase in the number of mega-container ships calling the port.” Here is the monthly table:

POLA TEU

CYNK: The “NINJA Loan” of the Capital Market

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Do we remember the NINJA loans? Or has it been too long – six or seven years? You know, loans made to folks with no income, job or assets for that matter. Does THAT sound familiar, and for that matter completely insane? Investopedia explains just why such loans are so risky,

While the specifics of any NINJA loan can change, most offer the lender a low initial rate, which is then increased after a few periods of payment. The borrower is hoping for the value of their property to appreciate significantly, allowing them to repay the loan with the newly found equity. However, when the property doesn’t appreciate, many borrowers cannot make the repayment.

This of course explains the full implications on the CDO market as outlined in an IMF paper which, oddly enough, seems less filtered by hindsight as it was written in 2008, so close to the mayhem and actually written in June of that year preceding the Lehman bankruptcy:

The damage was propagated at each stage of the complicated process in which a risky home loan was originated, then became an asset-backed security that then formed part of a collateralized debt obligation (CDO) that was rated and sold to investors.

The paper is worth a re-read as it underscores the fundamentals of the madness of the crowds, the reckless history of much lending activity (not the first time there has been a banking crash), followed by an absence of liquidity, panic, crash and finally, a backstopping by the government.

Of course the case of CYNK is quite different from the CDO market crisis mentioned above. But there are similarities of behavior, especially as they relate to knowingly engaging in fraudulent behavior, and the predictable irrationality of the crowd. And unfortunately, in the case of a pump and dump (or whatever this is), no backstopping is on the way.

Outside of those flipping round turns based on oscillators, algorithms and signals – the assumption is that this crowd knows what they’re doing – does anyone ostensibly investing in a security like this actually read, or even glance at the financial statements? And what about the qualitative data that should accompany the quarterly and annual reports, such as an absence of filing? No, unfortunately, all of the handwringing and analysis is pretty much foolishness. All you needed to know was the basic ‘NINJA’ equivalent found right there in the SEC filings:

No Income:

CYNK No Income

No Assets:

CYNK No Assets

No filing.

No dice.

And finally, this, the footnote on going concern (emphasis mine):

The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company include: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

Enough said. All the other anecdotes and, “meet the mysterious executives” behind the mythical unicorn, is just noise.

Procrastination: An Overwhelming Sense of Dread

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Sometimes when I procrastinate, I find it is out of a sheer overwhelming sense of dread.  This dread is knowing what needs to be done, and for whatever reason, perhaps outside pressure, truncated schedule, the mental or physical output of energy needed, or maybe all contribute to coming up with any and every rationale for not concentrating on the most important thing to be doing right now. An article that appeared in the Journal of Psychology from a decade ago asserts that this “self-regulatory avoidance reaction” or our inability to exercise the willpower or self-control needed to concentrate or direct our energies to the right task, is “core central to procrastination.” It is suggested that part of the resolution to procrastination is associated with understanding the behavior and then avoiding it. In other words, admit it with the intention of quitting it.  

In my early college years, the need for self-control in time management was self-obviating, and I regularly admitted it.  And the discovery of the to do list was nothing short of revelatory.  This was first suggested to me by a professor my very first finals week when I was feeling a bit overwhelmed.  The reasoning was, “get all these items you are thinking about ‘out of your head’ so you can concentrate on the most important task right now, then, move on to the next one and so on.”  The very practical (and in some ways original work in modern time management), How to Get Control of Your Time and Your Life, outlines various tests and exercises for coming up with goals, objectives, and prioritization, and listing them out in different groupings, with each group having a special purpose, a similar method. Followed by the addition of monitoring safeguards similar to those set forth in the Journal of Psychology. 

For everyone within the organization from the admin to executive leadership and everyone in between, these principals are important. But for the executive leader, self-control in one’s use of time has tremendous implications. And this is our leverage: prioritization, improvement and innovation for the purpose of actually working smarter, rather than longer and longer. It’s one or the other. I have observed many over the years who put in excessive hours and sadly, this does not automatically translate into a great team builder, great leader, or someone who really takes advantage of the of the resources available to them, just someone who seems to be defined by long hours. I have also worked in these environments and have put in excessive hours myself because the whole culture and system required it, and I really do not think it has benefited me at all, besides reinforcing my work ethic. Learning to leverage available resources (the most significant by far being people) is critical to success. Time has it’s limitations – 168 hours per week – leverage is potentially limitless. As Alan Lakein encouraged his readers forty or so years ago to answer, “what is the most important thing to be doing right now?” Stop procrastinating and do it now.

Labor Participation Rate Unchanged – Third Month

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From the Atlanta Fed this week:

The unemployment rate declined from 6.3 percent in May to 6.1 percent in June, its lowest level in nearly six years (since September 2008). The decline to 6.1 percent was a result of a 325,000 decline in the number of unemployed persons, reaching roughly 9.5 million people. The labor force participation rate was 62.8 percent for the third consecutive month.

Unemployed-Participation

Yet there is still the very stubborn number of those not in the labor force (that continues to climb) reaching its current high of 92.1 million according to the BLS:

BLS Not In Labor Force 16 & Older

Population Shifts After Ten Years: 2002-2003 and 2012-2013

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According to the U.S. Census, population shift has occurred for the following reasons:

Spurred in part by growth of the energy sector, some metropolitan and micropolitan statistical areas in North Dakota and west Texas are now experiencing rapid population gains, while growth has slowed or halted for some formerly fast-growing areas in the South and West.

What you immediately notice are the dark green shaded areas (representing 3+ percent growth), many of which that were, of course, where the height of the madness was occurring during the real estate boom. Some of these areas were the southwest states and especially California (generally anywhere east of the San Andreas Fault). As well as selected areas in southern states, and even a few high-growth inland areas that saw a tremendous ramp up during the early to mid-2000s such as Idaho.

The last ten seconds of the video shows a contra trend, practically wiping out growth area by area in the same manner that it appeared ten years prior. Corresponding to the quote above regarding the impetus for the current migration in recent years, you see 3+ percent growth in North Dakota as well as the current popularity of Texas. Another very interesting shift is from the north western, Reno area of Nevada to the north eastern area of the same state. What was driving that growth?

At the risk of sounding a bit like Pudd’nhead Wilson for pouring over such things, additional data sets and customizable maps for metropolitan and micropolitan statistical areas can be found here, the interactive map here.

Innovation Is Not Invention

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“Above all, innovation is not invention. It is a term of economics rather than of technology. Non-technological innovations – social or economic innovations – are at least as important as technological ones.” Peter Drucker

Based on Drucker’s definition of innovation, when we as an organization, identify community needs and convert them into real-life solutions that affect the health, well being and happiness of a community, that is organizational innovation. This is what is particularly satisfying about working in the public or the non-profit sectors of business. These areas of work lend to mission oriented, values driven activity. But it does not have to be limited to there. With a different application of course, private sector (while a little less public mission oriented), can  be just as values driven and possibly contribute even more in certain contexts. This is the very positive side of understanding how we used to describe commercial activity years ago: business and society.

The Myth and Romance of Los Angeles – Available at Last

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What is ostensibly the best documentary on the City of Los Angeles (and a 95/90 Tomatometer) has at long last, been scheduled to be released on DVD. If you had not heard of the film, there is this, and little else according to IMDB,

In this documentary, Thom Andersen examines in detail the ways the city has been depicted, both when it is meant to be anonymous and when itself is the focus. Along the way, he illustrates his concerns of how the real city and its people are misrepresented and distorted through the prism of popular film culture. Furthermore, he also chronicles the real stories of the city’s modern history behind the notorious accounts of the great conspiracies that ravaged his city that reveal a more open and yet darker past than the casual viewer would suspect.

In addition to being an excellent descriptive paragraph, that’s the kind of stuff myth is made of.

But what is really driving the cult status is the film’s elusive nature as noted in a post today:

Los Angeles Plays Itself is a story of how L.A. has been portrayed on screen, its thesis unfolding through hundreds of iconic film clips. But the biggest reason that Thom Andersen’s legendary documentary has reached a near-cult status is that, due to copyright issues, the film has never been properly released in theaters or on DVD. Until now.

In a remarkable statement, the post goes on to punctuate just how interesting this film is, “it’s probably the most important media study ever conducted on the city—maybe any city!—and no one has been able to see it.” It’s remarkable that business and legal wranglings could eclipse something like this, for a decade.

 

Improvement, Interdependence, Innovation

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A cardinal principle of Total Quality escapes too many managers: you cannot continuously improve interdependent systems and processes until you progressively perfect interdependent, interpersonal relationships – Stephen Covey

 

I have always believed in continuous improvement, even before I knew of the technical origins of the concept. Appropriate stress in the form of a stretch for the improvement of the mind, reaching for goals and working hard is what keeps us going. And it makes life and work interesting, because our work is an extension of ourselves.  Do I really want to reach a point where I’ve gone about as far as I can go in terms of learning, working and improving? Frederic Wheelock quotes Roman satirist Juvenal as suggesting “the highest good in life is, mens sana in corpora sand – “a healthy mind in a healthy body.” ASICS company, maker of my favorite running shoe (used while struggling through a few marathons) adopted this phrase which comprises an acronym, and uses this as a guiding principal in its mission, translating to “concept…ideas…and innovation…to create the best product.”  I personally want to be continuous taking a healthy stretch, reaching for a challenge, and will this always find its context in moving beyond ourselves and where we are in our present state. More Wheelock’s can be found here, see ASICS mission here.

 

The Employment Report and Government Hiring

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Here are a few notes on government employment trends, and how they relate to the recent employment report. All graphs are interactive.

From the BLS Labor Report,

Government employment changed little in June (+26,000). During the first half of 2014, employment at the federal level declined by 23,000, continuing its long-term downward trend, while local government added 76,000 jobs. State government employment changed little in June, and has changed little, on net, in 2014.

Illustrated graphically, the trend over the last fifty years shows and uneven decent, which not only correspond to recessions, but are most likely the result of technology, innovation and consolidation:

Yet other FRED data seems to indicate that, taken on the whole, government (all levels) are hiring and adding to some of the employment numbers:

Additionally, the rebound of the “all government” measurement of employees has occurred in less than two years:

And  consistent with the BLS report, local government surged, adding to the employment numbers by 76,000:

Finally, the rebound for state and local government shows a different picture in terms of length of time to recover:

Which illustrates this final graph demonstrating over the long haul, which agencies were hit the hardest – the ones where all of us live:

More Notes on Tesla’s Patent Sharing

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Tesla surprised most readers with its blog post announcing in essence, and open source of its patented technology,

Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.

Immediately, our minds [rightly] go to the risk this represents, but in a post last month, the point was made that by tapping into the sharing power of the social era, Tesla may diffuse billions in costs it now shoulders alone:

Lured by the higher volumes, auto suppliers would also develop new parts, components and systems —software, brakes, charging devices—that would make Teslas run more effectively and lower production costs. Gas stations, start-ups, office buildings would build many more charging stations to accommodate the larger number of electric vehicles on the road. Utilities and real estate developers would start making home-charging stations standard rather than expensive extras. All of this would be a boon to Tesla. And the company might find it could start charging drivers of other electric vehicles for access to the super-charging network it has already built. And if electric vehicles were to rise in popularity, the government would likely offer increased support. Imagine if every rest stop on an interstate housed a rapid-charging station.

Navigant Research shows the following projections with a few continued, sluggish years that may be followed by a ramp up as collaboration pays off:

EV Sales Projections - Navigant Research

In a post on this topic, Navigant shares the possible benefit of collaboration among large manufacturers:

While the patent release by Tesla will surely increase collaboration with the major car manufacturers already producing EVs, it’s much less clear that open patents will move the dial on the major automakers who have largely steered clear of EVs in the past. Toyota, GM, and several other major players are hedging their bets on EVs, and Tesla’s patent release is unlikely to change their position…Increased collaboration between the major EV players could lead to this figure being achieved ahead of schedule.

Only time will tell of course, but this example of a fundamentally different way of doing business will be interesting to watch and hopefully, will turn out to some degree as expected.

The Future of Problem Solving

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In our time, there is a new requisite skill set: being a futurist. A futurist was once only an avocation among the best of thinkers, and somewhat of a novelty and a subset of sociological and economic studies. It is very interesting to read authors like Alvin Toffler or Peter Drucker (along with a number of others) and observe how they saw things sometimes dimly, but often very clearly that were seemingly hidden to others. But it has been decades now since the advent of the information age and the decline of the industrial era. What this has created is an environment where it is no longer an option but to take charge of one’s future, in terms of actively, deliberately and even aggressively engaging in activity that is inherently future in its benefits. To a certain degree, success means understanding the future is simply not an option.

Problem solving has always been a core skill of leadership, but increasingly, this skill as a requirement has migrated to the average employee. To make this even more complex, the motif we hear regarding the next generation of leaders is the ability to solve problems that do not yet exist. Just to name a few, an article from futuristspeaker.com from several years ago cites:

Alternative Currency Bankers – According to Javelin Strategies, 20% of all online trades are already being done with alternative currencies. The stage is being set for next-gen alt-currency banks.

Waste Data Managers – To insure data integrity in today’s fast evolving information storage industry, multiple redundancies have been built into the system. Achieving more streamline data storage in the future will require de-duplication specialists who can rid our data centers of needless copies and frivolous clutter.

Privacy Managers – If you think you have lost most of your privacy already, we’ve only scratched the surface. We are all terminally human, and as such, we do not always make good decisions. Striking the perfect privacy-transparency balance will require far more than amateur insights. It will require a privacy professional.

Government Agency Dismantlers

See the full post from 2011 here. Some of these ideas might have seemed absurd a few years ago, but have already come began to be put into practice. Years ago Alvin Toffler warned,

Perhaps the greatest cost of wave conflict in America will be paid by the millions of children currently compulsorily enrolled in schools that are attempting to prepare them – and not very successfully at that – for jobs that won’t exist. Call that stealing the future.

The takeaway? Try something new as an antidote to paralysis or as Toffler also warned,“if you don’t develop a strategy of your own, you become a part of someone else’s.”