David Fuller and Eoin Treacy's Comment of the Day
Category - General

    IBM thinks it's ready to turn quantum computing into an actual business

    This article by Mike Murphy for Quartz may be of interest to subscribers. Here is a section: 

    As it stands, IBM’s largest quantum computer has five qubits. By contrast the average laptop has hundreds of millions of bits in its processors, although the two types of computers are not directly comparable. IBM hopes, however, to continue its research with the aim of building quantum computers with roughly 50 qubits. For comparison, an IBM spokesperson told Quartz, you can simulate the computational power of a 25-qubit quantum computer on a regular laptop. At about 45 qubits, you’d need the world’s fastest supercomputers, and above 50, “you couldn’t build large enough classical computing systems to simulate that size of a quantum system.”

    In IBM’s vision of the future, quantum computers could be used for discovering new drugs, securing the internet, modeling the economy, or potentially even building far more powerful artificial intelligence systems—all sorts of exceedingly complicated tasks. One area the company is looking at right now is in chemistry, attempting to simulate what’s going on in a molecule. “Even for simple molecules like caffeine, the number of quantum states in the molecule can be astoundingly large,” the spokesperson said, “so large that all the conventional computing memory and processing power scientists could ever build could not handle the problem.”

    When Quartz visited IBM’s quantum computing lab in Yorktown Heights in 2015, the work being done was viewed as fundamental—research for the sake of research—rather than anything tied to specific business goals. But then again, so was the research that has since led to the creation of Watson. Originally conceived of to take on the question-as-answers gameshow of Jeopardy!, which researchers saw as a “unique and compelling AI question,” Watson has become a set of machine-learning and AI services that IBM sells, and intends to invest $1 billion into.


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    Email of the day on Continuous Professional Development credit at The Chart Seminar:

    Can you please elaborate on the part of the sentence marked in red below taken from your advert in Fuller Treacy  Comment of the Day? Is this only for those who are members of the CFA or does it apply to delegates in general?

    “The CFA Institute has once more agreed to co-host the Singapore event and I will also provide certificates for continuous professional development to anyone who wants one.” 


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    The Rise of the Useless Class

    Here is the opening of a brief excerpt from this fascinating new book, Homo Deus, by Yuval Noah Harari, published by Harper Collins.

    Historian Yuval Noah Harari makes a bracing prediction: just as mass industrialization created the working class, the AI revolution will create a new unworking class.

    The most important question in 21st-century economics may well be: What should we do with all the superfluous people, once we have highly intelligent non-conscious algorithms that can do almost everything better than humans?

    This is not an entirely new question. People have long feared that mechanization might cause mass unemployment. This never happened, because as old professions became obsolete, new professions evolved, and there was always something humans could do better than machines. Yet this is not a law of nature, and nothing guarantees it will continue to be like that in the future. The idea that humans will always have a unique ability beyond the reach of non-conscious algorithms is just wishful thinking. The current scientific answer to this pipe dream can be summarized in three simple principles:

    1. Organisms are algorithms. Every animal — including Homo sapiens — is an assemblage of organic algorithms shaped by natural selection over millions of years of evolution.

    2. Algorithmic calculations are not affected by the materials from which the calculator is built. Whether an abacus is made of wood, iron or plastic, two beads plus two beads equals four beads.

    3. Hence, there is no reason to think that organic algorithms can do things that non-organic algorithms will never be able to replicate or surpass. As long as the calculations remain valid, what does it matter whether the algorithms are manifested in carbon or silicon?

    True, at present there are numerous things that organic algorithms do better than non-organic ones, and experts have repeatedly declared that some things will “for ever” remain beyond the reach of non-organic algorithms. But it turns out that “for ever” often means no more than a decade or two. Until a short time ago, facial recognition was a favorite example of something that babies accomplish easily but which escaped even the most powerful computers. Today, facial-recognition programs are able to identify people far more efficiently and quickly than humans can. In 2004, professor Frank Levy from MIT and professor Richard Murnane from Harvard published research on the job market, listing those professions most likely to undergo automation. Truck driving was given as an example of a job that could not possibly be automated in the foreseeable future. A mere 10 years later, Google and Tesla can not only imagine this, but are actually making it happen.

    In fact, as time goes by, it becomes easier and easier to replace humans with computer algorithms, not merely because the algorithms are getting smarter, but also because humans are professionalizing. Ancient hunter-gatherers mastered a very wide variety of skills in order to survive, which is why it would be immensely difficult to design a robotic hunter-gatherer. Such a robot would have to know how to prepare spear points from flint stones, find edible mushrooms in a forest, track down a mammoth, coordinate a charge with a dozen other hunters and use medicinal herbs to bandage any wounds. However, a taxi driver or a cardiologist specializes in a much narrower niche than a hunter-gatherer, which makes it easier to replace them with AI. AI is nowhere near human-like existence, but 99 percent of human qualities and abilities are simply redundant for the performance of most modern jobs. For AI to squeeze humans out of the job market it need only outperform us in the specific abilities a particular profession demands.

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    Janet Yellen Hints at March Rate Hike and More Later in Friday Speech

    Here is the opening of this topical article from CBC News:

    Federal Reserve chair Janet Yellen gave investors a pretty clear sign on Friday that the U.S. central bank is likely to raise its benchmark interest rate later this month — and more hikes to follow later this year.

    In a speech on the central bank's economic outlook at the Executives' Club of Chicago on Friday, the Fed chair told the gathered audience that a slight increase to the federal funds rate would be "appropriate" when the bank next meets for a two-day policy meeting on March 14 and 15.

    "At our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," Yellen said.

    In Fed terms, that's as close as it gets to a bright green light.

    And more interest rate increases could follow, she said: "We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect."

    Yellen noted that the U.S. economy is chugging along, cranking out an average of about 180,000 jobs a month at the moment. That's well above the range of between 75,000 and 125,000 that shold be expected just from growth in the labour force — and another sign the world's largest economy is heating up and finally ready to stand on its own two feet.

    Yellen is the most recent Fed official to muse opening about rate hikes in recent days.

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    If Philip Hammond Cannot Deliver a Radical Conservative Budget Now, When Will He ever be Able to?

    To be Chancellor of the Exchequer is, normally, to be the second most important politician Britain. The Blair-Brown years can be seen as a double act, followed by a catastrophic solo act. The Thatcher-Lawson years were an age of Tory radicalism, setting the conditions for the prosperity that followed. But no one speaks about a May/Hammond axis - in fact, not many speak about Philip Hammond at all. Our Chancellor has a gift for invisibility, honed throughout his political career. Unkind souls dismiss him a nodding dog, appointed for loyalty rather than ability.

    Being underestimated in this way suits Mr Hammond rather well because over the last few months, he has been perhaps the most consequential member of the Cabinet, vetoing some of Theresa May’s stranger ideas. She has suggested making it harder for foreigners to buy British companies, for example, and capping the pay of chief executives. She raises such ideas in a sub-committee of her Cabinet members where Mr Hammond kills them off. I’m told that he is a sight to be behold in such meetings, speaking more bluntly than anyone else would dare. Outside No10 he’s seen as the dull-but-dutiful “spreadsheet Phil”. Inside, he has been Hammond the Hammer.

    So it’s unfair to judge him by his first, rather underwhelming mini-Budget. His achievement so far lies in what he has saved us from: a 1970s-style industrial strategy, or a set of diktats forcing companies to put random workers on their boards. Barely a word of his resistance has leaked to the press, so the Prime Minister still trusts him and is guided by him. To her immense credit she’s serious about the Cabinet committee process, as is he. For mistakes not made, the record (so far) is excellent. But the record in radicalism? This is another matter entirely.

    With the Labour Party a danger only to itself, there might never be a better time for Tory boldness. Instead, Mr Hammond seems fearful. He started his Chancellorship in the foetal position, waiting for the Brexit crash that he and other Cabinet Remainers warned about: the 500,000 job losses, the instant recession, the house price crash. Instead, economic growth accelerated and tax revenues have surpassed forecasts made even before the referendum. This hasn’t cheered him one bit. In the Cabinet Brexit committee, he rolls his eyes when Andrea Leadsom tries to suggest that everyone should lighten up because things will be fine. Even now, the Chancellor genuinely believes that they won’t.

    To be sure, Britain faces plenty of uncertainty as we untie the knot with the European Union. It’s either thrilling or terrifying, depending on your point of view – calling for either daring or caution. And Mr Hammond is choosing caution: radicalism, he thinks, can wait.

    This fits a depressingly familiar theme. Under David Cameron, the Conservatives were haunted by fear of the Labour Party and signed up to its ruinous levels of tax-and-spend. In government, Cameron was hamstrung by coalition with the Liberal Democrats. Even after winning a majority, Osborne somehow felt the need to implement Labour policies such as the minimum wage – almost as an apology for victory. It has been so long since we saw a confident Tory budget that even the Tories seem to have forgotten what one looks like.

    The basics are pretty simple. Conservatism is a belief the countries and communities are stronger and fairer if more money and power are left in the hands of the people, rather than by government. That individuals take wiser decisions for themselves than any politician can take on their behalf. This isn’t an ideology, as such, just an observation that lower taxes, regulatory restraint and sound money is a formula that has worked everywhere that it’s been tried.

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    Email of the day

    On Dyson, cats and dogs:


    The reporting and your comments about Dyson were interesting, but my wife said that her experience in the years when we lived in England was that the Dyson appliances were obviously brilliant in engineering terms and would last forever, but they were VERY user-unfriendly -- heavy and clumsy.

    As South Africans, we thought that Brits (unlike us and Americans), often made the mistake of paying too highly for socially-highly-rated products (AGA is a good example), that were not worth it. I remember our disappointment at the poor range of "upper middle class" products (usually Japanese and German brands) that we were used to in Johannesburg. Our perception of what was on offer was an avalanche of cheap products (especially the cheapest and nastiest), topped off with very upper-class, overpriced status brands. Of course, that was a long time ago... ten years or more that we've lived in Chiangmai.

    Trust you and family are now well... including Ishmael and Willow. Liz and I are now enslaved by an Asian lady we call Tong.


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    US Economy: No recession in sight Policy uncertainty enormous

    Thanks to subscriber for this report by Torsten Slok for Deutsche Bank. Here is a section:

    1. The fact that the Fed wants to raise rates three times this year tells us that they are worried about the economy moving towards overheating
    2. The economy is already at full employment, confirmed by anecdotes of higher minimum wages and labor shortages across industries
    3. Average hourly earnings have trended higher since 2014
    4. US may be reversing on the “strong dollar” policy to boost US exports
    5. Import prices are trending higher
    6. Producer prices are trending higher
    7. Breakeven inflation expectations are trending higher
    8. Lower corporate taxes will boost growth and hence also inflation
    9. Increased infrastructure spending will lift growth and hence also inflation
    10. Lower household taxes will raise growth and hence also inflation

    All variables in the Fed’s model of inflation point to higher inflation in 2017:
    Inflation = F(Inflation expectations, unemployment rate, oil prices, import prices

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    NBCUniversal Invests $500 Million in Snap IPO Amid Digital Push

    This article by Gerry Smith and Alex Barinka for Bloomberg may be of interest to subscribers. Here is a section:

    Comcast Corp.’s NBCUniversal invested $500 million in Snap’s initial public offering, expanding its reach into digital media by acquiring a stake in the $28 billion disappearing-photo service popular with millennials.

    NBC Chief Executive Officer Steve Burke, in a memo to staff Friday, called the move a “significant milestone” in the media company’s partnership with Snap. The Comcast unit will be subject to a 12-month lockup period as part of its investment, meaning it can’t sell Snap’s shares for a year, according to a person familiar with the matter.

    Snap surged 44 percent Thursday on their first day of trading, and gained another 12 percent Friday.

    With the latest investment, NBC has now committed over $1.5 billion to digital businesses in the last 18 months, including two separate $200 million investments in BuzzFeed, and a $200 million investment in Vox Media, the online publisher of the Verge, Eater and Recode.

    Last summer, NBC produced a Snapchat channel featuring Olympic content run by BuzzFeed, which generated over two billion views, Burke said in the memo. With the Snap investment, NBC will expand its partnership with the social-media network and BuzzFeed for the 2018 Winter Games in South Korea, and launch more shows with additional NBC brands in the coming weeks, he said.


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