October 24, 2016

Another shot has been fired in the minimum wage battles:

Just around the corner from Google’s GOOGL +0.26% main campus in Mountain View, California sits a nondescript concrete building. Inside the building, the future of fast food is being developed and refined. This is the headquarters of Zume. Founded by former Zynga Studio head Alex Garden, Zume wants to revolutionize the $9.7 billion pizza delivery world. Their plan is simple; no humans, all robots. From the production line assembly of the pizza to the eventual delivery, robots are the primary labor ingredient.

The process is not completely human free at this point, with humans adding the cheese and toppings, but it is only a matter of time before robots are able to take over that process as well. Currently the robots add sauce to the dough (the sauce robot is named “Marta”) which travels on a conveyor belt to humans who add toppings and cheese. Bruno the robot then places the pizzas in an oven. A couple of Fiats driven by humans (for now) deliver the pizzas locally.

Here’s an interesting piece on drone taxis:

Mass transit, the lifeblood of cities worldwide, is under threat from the biggest innovation in automotive technology since Henry Ford’s assembly line first flooded streets with cars.

The self-driving vehicles being pioneered by Tesla Motors Inc., Alphabet Inc.’s Google and others are poised to dramatically lower the cost of taxis, potentially making them cheaper than buses or subways, according to a joint report by Bloomberg New Energy Finance and McKinsey & Co. Having no driver to pay could reduce taxi prices to 67 cents a mile by 2025, less than a quarter of the cost in Manhattan today, the report found.

It’s a change with the potential to reshape commuting patterns, transforming urban life. As prices fall, the challenge for cities is that the cars may become too popular. Instead of complementing public transit, they may lure commuters away from buses and trains, inundating streets with drone cars.

I find it very worrisome that US tribalism is increasing:

The divisions over Peter Thiel and his support for Donald Trump are deepening in Silicon Valley.

Dismay over the billionaire venture capitalist’s stance on the Republican candidate has been showing up all across the technology landscape — from a startup founder saying he regrets taking a Trump backer’s money to a prominent diversity group refusing to work with any company associated with Thiel. In one recent case, it also throttled the flow of cash into a fledgling VC fund.

Arlan Hamilton, managing partner at Backstage Capital, said she rejected a potential investor because the person refused to disavow and sever ties with Thiel, a co-founder of PayPal and Palantir Technologies Inc. She declined to name the investor, saying the person offered to put $500,000 in her Los Angeles-based technology seed fund.

While the amount is tiny by industry standards, it is significant to Hamilton’s year-old seed fund, which has about $5 million in commitments, according to a report by Inc. The stymied deal reflects the growing divisiveness in the run up to the U.S. presidential election, which is spilling into everyday business. Hamilton took to Twitter to air her political protest.

“Because of my Peter Thiel stance, my company just lost half a million $ in new funding,” Hamilton wrote on Twitter. “Couldn’t have Thiel money flowing through our company. Hard problem. Easy decision.”

The market report will be delayed.

Update, 2016-10-26:

HIMIPref™ Preferred Indices
These values reflect the December 2008 revision of the HIMIPref™ Indices

Values are provisional and are finalized monthly
Index Mean
Current
Yield
(at bid)
Median
YTW
Median
Average
Trading
Value
Median
Mod Dur
(YTW)
Issues Day’s Perf. Index Value
Ratchet 0.00 % 0.00 % 0 0.00 0 -0.9673 % 1,705.6
FixedFloater 0.00 % 0.00 % 0 0.00 0 -0.9673 % 3,115.7
Floater 4.40 % 4.53 % 41,928 16.36 4 -0.9673 % 1,795.6
OpRet 0.00 % 0.00 % 0 0.00 0 0.0330 % 2,904.2
SplitShare 4.82 % 4.55 % 38,680 2.09 6 0.0330 % 3,468.2
Interest-Bearing 0.00 % 0.00 % 0 0.00 0 0.0330 % 2,706.0
Perpetual-Premium 5.34 % 3.47 % 73,104 0.10 23 -0.0142 % 2,705.8
Perpetual-Discount 5.12 % 5.12 % 97,730 15.24 15 -0.0170 % 2,908.8
FixedReset 4.86 % 4.25 % 165,450 6.90 93 -0.1057 % 2,094.5
Deemed-Retractible 5.02 % 2.96 % 111,585 0.43 32 -0.1506 % 2,809.1
FloatingReset 2.87 % 3.79 % 42,403 4.95 12 0.0302 % 2,267.2
Performance Highlights
Issue Index Change Notes
TRP.PR.H FloatingReset -2.02 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 10.68
Evaluated at bid price : 10.68
Bid-YTW : 4.13 %
BIP.PR.A FixedReset -1.72 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 21.39
Evaluated at bid price : 21.71
Bid-YTW : 4.96 %
BAM.PR.B Floater -1.50 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 10.52
Evaluated at bid price : 10.52
Bid-YTW : 4.53 %
IFC.PR.A FixedReset -1.15 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 15.42
Bid-YTW : 9.66 %
MFC.PR.L FixedReset -1.12 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.52
Bid-YTW : 7.58 %
MFC.PR.J FixedReset -1.10 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 19.77
Bid-YTW : 6.85 %
SLF.PR.G FixedReset -1.05 % YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 14.15
Bid-YTW : 10.09 %
BAM.PR.C Floater -1.05 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 10.41
Evaluated at bid price : 10.41
Bid-YTW : 4.58 %
MFC.PR.O FixedReset 1.01 % YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-06-19
Maturity Price : 25.00
Evaluated at bid price : 26.88
Bid-YTW : 3.97 %
BAM.PF.A FixedReset 1.23 % YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 19.75
Evaluated at bid price : 19.75
Bid-YTW : 4.68 %
Volume Highlights
Issue Index Shares
Traded
Notes
BMO.PR.B FixedReset 529,555 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2022-02-25
Maturity Price : 25.00
Evaluated at bid price : 25.71
Bid-YTW : 4.29 %
TD.PF.H FixedReset 461,080 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2021-10-31
Maturity Price : 25.00
Evaluated at bid price : 25.70
Bid-YTW : 4.26 %
RY.PR.L FixedReset 417,634 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2022-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.20
Bid-YTW : 3.52 %
BNS.PR.H FixedReset 357,756 YTW SCENARIO
Maturity Type : Call
Maturity Date : 2022-01-26
Maturity Price : 25.00
Evaluated at bid price : 25.86
Bid-YTW : 4.25 %
RY.PR.J FixedReset 198,575 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 20.95
Evaluated at bid price : 20.95
Bid-YTW : 4.10 %
TRP.PR.D FixedReset 168,236 YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 18.25
Evaluated at bid price : 18.25
Bid-YTW : 4.36 %
GWO.PR.Q Deemed-Retractible 111,700 YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 25.03
Bid-YTW : 5.22 %
There were 34 other index-included issues trading in excess of 10,000 shares.
Wide Spread Highlights
Issue Index Quote Data and Yield Notes
IFC.PR.D FloatingReset Quote: 18.55 – 23.00
Spot Rate : 4.4500
Average : 4.2914

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 18.55
Bid-YTW : 7.40 %

TRP.PR.H FloatingReset Quote: 10.68 – 11.14
Spot Rate : 0.4600
Average : 0.3224

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 10.68
Evaluated at bid price : 10.68
Bid-YTW : 4.13 %

GWO.PR.N FixedReset Quote: 13.77 – 14.17
Spot Rate : 0.4000
Average : 0.2774

YTW SCENARIO
Maturity Type : Hard Maturity
Maturity Date : 2025-01-31
Maturity Price : 25.00
Evaluated at bid price : 13.77
Bid-YTW : 10.37 %

RY.PR.P Perpetual-Premium Quote: 25.95 – 26.14
Spot Rate : 0.1900
Average : 0.1325

YTW SCENARIO
Maturity Type : Call
Maturity Date : 2025-02-24
Maturity Price : 25.00
Evaluated at bid price : 25.95
Bid-YTW : 4.66 %

TRP.PR.B FixedReset Quote: 12.09 – 12.28
Spot Rate : 0.1900
Average : 0.1339

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 12.09
Evaluated at bid price : 12.09
Bid-YTW : 4.13 %

ELF.PR.G Perpetual-Discount Quote: 22.87 – 23.11
Spot Rate : 0.2400
Average : 0.1842

YTW SCENARIO
Maturity Type : Limit Maturity
Maturity Date : 2046-10-24
Maturity Price : 22.62
Evaluated at bid price : 22.87
Bid-YTW : 5.22 %

6 Responses to “October 24, 2016”

  1. malcolmm says:

    I think public transit may eventually go anyway once driverless cars become the standard.

    In Vancouver, where I live, most of our buses are diesel so they aren’t environmentally friendly. Skytrain is but only serves very limited areas and is extremely costly to build and maintain.

    I envision a future of driverless, electric powered cars that you don’t own, only rent. Recharging would be taken care of automatically and you would only need or want to rent as big a vehicle as you required. With most vehicles being driverless you could have higher traffic density without congestion.

  2. jiHymas says:

    It leads to interesting questions about how public transit could change to reflect the new reality.

    I suggest that that the need for commuter trains and subways will be largely unaffected. They’re a good method for taking the same long-ish journey that a lot of other people are taking. Then, once you get to your station, the train is met by a swarm of self-driving taxis that – at a somewhat higher cost per kilometer – take you to your door.

    But busses? Yes, busses will go. And good riddance.

  3. stusclues says:

    Yes. Busses will go. Super-efficient trains, etc, may stay. Taxis and rental cars effectively become the same thing when no driver is present. Personal autos will only exist in the sense that “enthusiasts” might own them but they won’t make practical/financial sense (they also won’t be allowed everywhere).

    The swarms of autonomous vehicles will be owned and managed by a cadre of global and local brands (like rental cars and car shares today). The emerge of fleet ownership will eliminate whole business segments that cater to personal ownership (think car washes, fuel stations, Mr. Lube, tire shops, car parks, etc.).

    Since autonomous vehicles will talk to each other and the transportation infrastructure, they will be much more efficient at using the space available, perhaps by as much as 10X. Cities will be able to reclaim vast amounts of land and avoid future road replacements (goodbye infrastructure deficit).

    Oh yeah and they won’t kill people. Human drivers kill one person every 25 seconds around the world. How is this not the PRIMARY reason we don’t hurry toward this future?

  4. brian says:

    I imagine a time in the not too distant future when everyone has solar panels on their roof and an electric car in the garage. The car will be an autonomous vehicle but rather than a cheap fleet vehicle it will be outfitted as my personal luxury suite. With the marginal cost of driving extremely low, many more people will be on the roads at the slightest whim and I see our current road infrastructure as inadequate to meet this huge new demand.

    We shall see… interesting time ahead!

  5. stusclues says:

    While time will tell indeed Brian, I humbly suggest that the pimped up, private, luxury autonomous vehicle will belong to the 1% and enthusiasts. The rest will simply punt on ownership and use the cheap fleet owned by others.

    In the spirit of #famouslastwords James, I think Elon is wrong. Who wants the hassle of ownership and sharing when the alternative is so cheap? After all, unless it is the pimped up, luxury version alluded to above, cars are not vacation properties worth with ancillary benefits. One late night user after a pub crawl will put that one to bed.

Leave a Reply

You must be logged in to post a comment.