The Market Ticker
Commentary on The Capital Markets
2014-09-19 06:15 by Karl Denninger
in Technology , 181 references


Given the materials suggested, the Apple Watch Sport with aluminium at $349 is a reasonable price. It’s the pricing for the second and third tier watches that are far too low. As John Gruber points out on Daring Fireball, the stainless steel watch with a sapphire screen could easily reach $1,000. If Apple releases a solid gold Apple Watch, the raw gold alone could cost a few thousand dollars. Apple traditionally looks for high margins with its products, so there’s no reason why the entry-level Apple Watch Edition, made with 18-karat gold, could command a starting retail price of $5,000, with further customisation options reaching $10,000.

What makes anyone think that's going to "disrupt" anything, other than the careers of the people who planned and executed that abortion?

Something akin to Rolex?  


First off, this is a "watch" that really isn't a watch -- it's a wrist computer that happens to display time.  And that sounds great until you realize that the same problem that buggers phone (pocket computers) does the same here, but writ really large -- energy density, space, and thus battery lifetime.

Charge daily if not heavily used?  Oh yeah, that'll go over well.  And if heavily-used?  You'll go to that swanky dinner and..... it's a brick on your wrist.  

There goes that "aspirational cachet."

I'll make a prediction right here and now -- this is a niche product that has less appeal than a Garmin running watch.  It's fancier and more-expensive, yet does less than the Garmin for fitness buffs (try Sunnto's current models as a comparison) and anything with Apple on it as a brand is no Rolex -- and never will be.

I call flop, here and now.

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I really hate people who lie by omission.

Even cops with a warrant to pull private user data off of someone's fancy new iPhone or iPad might be out of luck—Apple says that with the release of iOS 8, it's now not physically possible for even the company itself to access that info, reports the Washington Post.

In an open letter posted yesterday on the Apple website, CEO Tim Cook explains the company's commitment to customer privacy, facilitated by a new encryption process that will hopefully keep at bay attacks like the recent celebrity nude-photo hack (which, incidentally, Apple says wasn't its fault).

It "wasn't before either", unless Apple was lying before.

Here's the underlying problem as I've pointed out before: pairing records.

Your i{Phone|Pad|whatever} creates one when you connect it to a computer to sync music and similar to it.  In fact you have to create one to activate it, since that's done through iTunes.

That pairing record is effective even on a locked device and once created it is indelible and will work even if you change the passcode.  The only way to invalidate one is to do a hard reset, wiping everyone from the unit.

It doesn't have to work like this.  That's a design decision Apple made.  They could change it tomorrow.  Then, if you plugged in a locked iPhone to your computer, it would demand the passcode (or that you unlock it) before iTunes could update it.

That would solve the problem -- no passcode, no access, the pairing record is worthless standing alone without the passcode.

This, by the way, is how BlackBerry does it.  You plug the phone into Link and if it's locked it demands the password and cannot go further until you provide it.  The reason is that there is no back door in the software to "do things" to a locked device.

This is not true for Apple, even under iOS 8.

Now what Apple did apparently do is narrow the scope of what can be accessed without said passcode.  However, they didn't remove it, and application data and your camera roll are still part of the list -- it's not just your music.

If Apple was serious about privacy and security a pairing record would be useless against a locked phone.

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Oh oh.

I've been dubious of the claims that "common" artificial sweeteners are "identical or worse" in terms of metabolic effects to sugar.  The connection just doesn't make sense, and anecdotes don't cut it.  You simply never know (short of putting someone in a prison cell where you can control everything they can eat and drink) whether there's a brownie or three being eaten and not reported.

But now we have a study that, if it proves up and is repeatable, appears to put be not just damning but ******ning evidence that the so-called "GRAS" (generally recognized as safe) designations on all of these artificial sweeteners, or at least the most-common ones, are demonstrably a fraud.

The scientists gave mice water laced with the three most commonly used artificial sweeteners, in amounts equivalent to those permitted by the U.S. Food and Drug Administration (FDA). These mice developed glucose intolerance, as compared to mice that drank water, or even sugar water. Repeating the experiment with different types of mice and different doses of the artificial sweeteners produced the same results -- these substances were somehow inducing glucose intolerance.

This one we've heard before.  But what came next, and where these folks went, was the killer.

First, they treated the mice with antibiotics that killed off a lot of bacteria in the gut.  The glucose intolerance disappeared.

Then, they went further -- they took some of the resistant mice and transferred the bacteria from their gut into mice that had not consumed the artificial sweeteners.  The intolerance was transferred.

That's a smoking gun folks, provided the results can be duplicated.

It may be time to get rid of not only the sugar but also the artificial replacements for it.

Like it or not, facts are what they are.

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Here's an interesting take on the whole "Scotland" breakaway issue, and it directly bears on the United States as well.

We often hear that a state "can't" secede successfully, for the simple reason that the Federal Government controls too much of the economy and that if, say Texas, was to say "**** you" the result would be the immediate collapse of the Texan-cum-nation economy.

Not so fast, kemosabe.

There is a downside to massive debt accumulation by a sovereign and so-called "modern finance", and it is the rise of derivatives at gross multiples of the debt outstanding.

"Gross" means 10x, 100x, even 1000x the underlying actual amount of debt out.  And all of these derivatives have trigger events at which point they become payable.

Said "credit events" virtually always include a "reorganization" clause, which includes secession or partition of the underlying political entity.

So who's got the hammer?  It's not the Federal Government and most-importantly it does not matter whether or not the Federal Government recognizes the secession or whether they try to show up with guns and put it down.

No, rather it is the States that have said hammer, just as Scotland has said hammer.

The reason the UK is freaking out is because if Scotland secedes all of the derivatives on UK sovereign debt trigger, and while that may not sound all that awful since they haven't defaulted (yet) the protection evaporates and that triggering means that holders of said derivatives can force delivery on the derivative contract!

This also means that should any US State, or collection of States, decide to do the same thing the US Government's ability to deficit spend is likely to instantly end irrespective of whatever threats are made to send in the tanks.

This is not the 1800s and all the bleating about indivisible political unions is in fact about the drunken, addicted fashion that our nation (and England) have been intentionally destroying currency value via deficit spending.

Secession, whether ultimately put down by force of arms or not, instantly ends the ability to do that and that is more-frightening to these politicians than Satan himself appearing in the Capitol Rotunda.

It is well beyond the point where someone needs to call the US Federal Govermment's bluff -- the question is which state(s) have the balls to do it?

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Oh now this sounds like a good idea -- not:

A New Jersey father whose 12-year-old daughter was senselessly killed by a 15-year-old boy is suing the killer’s parents and pushing to enact a law that would punish parents of violent juveniles.

In October of 2012, 15-year-old Justin Robinson murdered 12-year-old Autumn Pasquale, who lived just 14 houses away, and dumped her body in a trash can.

Now, the girl’s father is suing Robinson’s parents and has started a movement to create “Autumn’s Law” to punish parents of violent juvenile offenders.

“Where were the parents?” asks Autumn’s dad, Anthony Pasquale. “Parenting comes with responsibilities, and one of those is to raise your kids right, to pay attention and know when they’re a danger to someone else. That’s a parent’s job.”

So what is a parent to do these days?

Said 15 year old is probably quite-capable of simply erecting the finger and walking out.  A parent who tries to physically prevent that is, under current law, charged with abuse.

This is really about trying to get someone -- anyone -- to pay, since trying the 15 year old for murder isn't enough.  No, we can't just cage someone (although they certainly deserve it!) and they have no money, and we're grieving and we deserve to be able to get something from someone.

Never mind that life isn't fair.

“If the minor who murdered my daughter was properly treated, parented, disciplined, and supervised my daughter would probably be alive today.”

And how does that happen if said minor doesn't want to be parented or disciplined?  You can't physically restrain or punish said kid any more; that's felony child abuse.

Never mind that said kid could deck you (as the parent) and there isn't **** you can do about it.  A "kid" willing to commit homicide would certainly be willing to punch your lights out -- yes?

The story on this sounds like a kid who's dad was a piece of ****; they got divorced after allegations of domestic abuse.  There's a psychologist who says the kid has multiple problems, but I'm not buying that crap.  Get me a forensic psychiatrist with a similar opinion and I might change my mind, but psychology is IMHO nothing more than snake oil and talking, and while the latter isn't a bad thing it sure as hell doesn't work when the target is actively evasive instead of wanting help.

“The law says broadly that I don’t owe my neighbors very much when taking care of my own children,” says Martin Guggenheim, a professor at NYU School of Law. “That’s the way it’s been forever. That’s the way it should be. The world is not better off if we impose on parents this extra fear of being made bankrupt or imprisoned because of their child’s misconduct.”

I agree -- especially in the namby-pants world we live in today, where any attempt to impose severe discipline for severe behavioral issues has good odds of resulting in you as a parent being prosecuted.

I know there are people who think corporal punishment is never appropriate, but I counter with the fact that there are people who understand only violence and the threat thereof.  ISIS head-cutters are one example -- admittedly an extreme example, but I only need one example for the point to be valid.

I'd love to latch on to and agree that it's the parents fault when something like this happens, but that clearly is not true.  We all know someone who had two or more kids and one turned out to be a five-alarm nightmare while the other or others were great.  Some turned their act around at some point but others do not. 

It is certainly true that some monsters are made, but I suspect just as many are born -- and it is manifestly unjust to hold someone accountable for a thing they no lawful means of addressing.

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