Under the Hood: June 2011 Extended Edition

Here's a few more graphs on where the auto market is right now.

Sales are up from the crisis year of 2009, but still below 2008.

This graph shows market share by brand home country (as opposed to country of manufacture).  The Japanese share fell in April and May, probably because of the effects of the tsunami on supply chains in Japan.

In this graph the decline of the Japanese brands can be seen again.  Despite the impact of the recession on the industry, the same five brands still dominate sales.

Lasting Relief

I had been planning to write a post on the end of the Space Transportation System (STS), a.k.a. the Space Shuttle once the Atlantis landed successfully.  But mistermix beat me to it, hitting all the points I was going to make.

• Thank FSM it's over.  Ever since the Challenger disaster, and even more so after the Columbia disaster, I gritted my teeth during each flight.  The STS program ended up being the most deadly manned program in history (not counting related on-the-ground accidents), killing 14 astronauts, vs. 4 during the entire course of the Soviet Union/Russian program.
• It was a Frankenstein.  I don't know the history of how the program evolved, so I don't know if the Shuttle could have been designed better.  But the additional weight of a man-rated reusable vehicle made launches of satellites and robotic missions much more expensive.  The Shuttle was approximately three times heavier than its payload capacity.
• Ease up on the jingoism.  The pride element of objecting to using a Russian rocket is silly.  They have a reliable launch vehicle and space capsule, so it makes sense to use it now that there is no requirement to launch large ISS components.
• Kill the ISS already.  The International Space Station is the most expensive thing on Earth built by humans, and is unlikely to yield scientific or technological results that will come anywhere close to justifying its immense cost.  It should be flown into the Pacific Ocean.  But because it's an international program, doing the sensible thing won't happen until at least 2020.
• Crowds are no fun.  Money is always an issue, and the extraordinary expense of the STS and ISS probably crowded out a lot of more rewarding robotic missions.  The caveat is necessary because there is no way of knowing if any of the money spent on the manned missions over the past three decades would have been spent otherwise, but I think it's likely that a good portion of it would have been.
• It ain't over 'til its over.   Space is still out there, and there are incredible things yet to discover.  The gee-wiz factor of putting men into space is gone, at least for the time being.  But robotic mission can yield fantastic results, as programs like Voyager, Hubble, and the Mars Rovers have shown.  There's no reason to equate the end of the Shuttle program with the end of space exploration.

 So what should NASA be doing in the near future?  This is how I see it:

• Minimal support of the ISS.  Because it is an international program, keeping the ISS alive is necessary for political reasons.  But the US should do no more that meet its obligations.
• Minimal development of COTS capsules.  Currently, three different unmanned supply vehicles are available to take cargo and fuel to the ISS: the European Automated Transfer Vehicle, the Japanese H-II Transfer Vehicle, and the Russian Progress vehicle.  They have completed 2, 2, and 46 trips respectively.  Since there is no immediate need, NASA should provide limited funding to American companies for developing similar capabilities, or manned capsules.
• General spaceflight research and development.  This would be NASA's slush fund for interesting but not immediately applicable technology development.  One specific goal I would recommend is to find a way to capture and de-orbit space debris.
• Aeronautics research and development.  The first "A" in NASA is usually an afterthought.  But given how important air travel and freight are, some effort should be put into research applicable to atmospheric vehicles.  The emphasis should be on fuel efficiency.
• Robotic exploration.  This should be the main focus of NASA for the next decade.  While there have been mishaps, the list of successful missions is much, much larger.  The missions can be divided into three categories
  1. Solar system exploration.  This includes missions to planets or other bodies, and Sol observation.  Dawn and SOHO are two such missions.
  2. Earth observation.  Any mission to observe the Earth not undertaken by NOAA or the military falls here.  The Aqua/Terra satellites comprise one notable program.
  3. Astronomy and physics.  The Hubble is the most famous example of this type of mission, but there are many others.  The James Webb Space Telescope is the next big one scheduled for launch, but it may be canceled due to budget cuts.
• Heavy lift development.  This is admittedly the most dubious item in the list.  As of 2011, the Atlas V HLV is the largest available launch vehicle, with a claimed capacity to LEO of 29,000kg.  In contrast, the Saturn V was able to launch 118,000kg into orbit.  The STS was able to launch as much as 109,000kg to LEO, but most of that was the Shuttle itself.  There has been talk for years about developing an unmanned launch vehicle from the STS components, and NASA appears to be on the verge of announcing they intend to do just that.  But no one has identified a need to lob anything that weighs 70,000kg or more into orbit, either right now or in the foreseeable future.  So there are reasons for putting the program on hold.  To me, there are two arguments for the program.  One is that nobody else is likely to do it.  Other space agencies and various commercial organizations have slowly raised the capacity of their systems over the years.  But a much bigger rocket would have to be designed from scratch, and I think it's unlikely that anyone but the Chinese government would be willing to make such a huge and largely speculative investment.  The other is that most of the components are already available in the US from the existing Shuttle infrastructure.  They would have to be re-integrated after a new fairing system is designed, and then tested.  But if NASA plans and executes wisely, it should be able to have the new system ready in less than a decade and for a reasonable-ish cost (leaving aside the issue that it is pointless right now).

No discussion about NASA is really complete without noting that it still receives indirect support from the Department of Defense.  The two programs are largely separate, but they often use the same contractors and the same launch vehicles, which reduces NASA's costs over being the sole customer government customer.  Occasionally there is some direct cooperation, though its nothing like what took place in the 1960s.  In addition, NOAA is in charge of a satellite fleet, but they are purchased, not built in-house, and are launched on commercial rockets.

Et vos, Italia?

People have been talking about Italy's problems for years, but about two weeks ago they suddenly burst into the news for some reason - due to either a coordinated attack by speculators or squabbling within the governing coalition.  And the by now predictable response: an austerity package, passed on Friday.  Early in the week an important part of the bond mafia indicated that the markets would be reassured by such budget-cutting moves.  But that wasn't the case in Ireland or Greece, so such declarations seem premature.

As in Greece, and Ireland, and the other countries in trouble, there are real problems in Italy.  The net national debt is currently over 110% of GDP.  The current Prime Minister, Silvio Berlusconi, manages to combine all the negative aspects of Rupert Murdoch, George Bush, and Anthony Weiner in one human body.  The country is easily the most corrupt major EU country; only Greece ranks lower out of the 27 countries in the union.

Of course, that's not the whole story.  While the Italy has a high level of debt, it has been able to sustain it for over a decade now.  Because the country has had a relatively high savings rate, the debt is mostly internally financed and its net foreign investment position is nearly neutral.  Despite pervasive corruption and a political culture that is a complete mess, it has still managed to raise its citizens' (adjusted) per capita income to over 30,000 dollars, and it is a top 25 country in the Human Development Index.

I would say that like America, Italy's problems are mostly politi-cultural.  But that doesn't mean that market forces can't force a crisis.  Italy is a relatively populous country, and its bond float isn't trivial.  But it doesn't necessarily take that much money to move markets.   So the "crisis" is likely to continue as long as bond traders are able to exploit the market for personal gain at the expense of taxpayers.

Update 2011.07.22: Calculated Risk reproduces a Bloomberg chart that illustrates the futility of bailout packages (which included austerity measures) in other countries.

Update 2011.08.06: The Economist said it better.  And it turns out that Italy has the third largest sovereign bond market (or sub-sovereign, because Italy doesn't issue its own currency).  However, the amount that is likely to be traded could be much smaller.

Under the Hood: June 2011 Edition

It's been a while since I've looked at auto sales.  As should be expected for a number of reasons - a weak economy, the end of housing-bubble induced wealth effect, and perhaps even a slight trend away from driving - sales haven't recovered to their pre-recession levels.  The spike caused by the Cash for Clunkers program is pretty obvious.  But the falloff in the first months after the program ended was less than I expected.

The data for registration lags by over a year, so it's too soon to tell if the downtick in registered vehicles is actually a trend.  But this article from a few months ago suggests that the number of cars on the road has continued to decline.

Fleet Street Cheatsheet

Most Americans probably don't realize that the newspaper ecosystem in the United Kingdom is quite a bit different than in the US.  Except for the specialist-oriented Wall Street Journal and the McPaper, US newspapers are tied to a city or metropolitan region.  In much smaller England, the national newspapers (which are all based in London) dominate.  These are divided into three separate groups according to their perceived level of journalistic standards: quality, mid-market, and tabloid.  Something else for Americans to note is an odd tradition (to this American) of having a mostly separate staff for the Sunday edition of the papers, most of which also have different names.  In Scotland, Wales, and Northern Ireland, most of the English national papers run regional versions, and there are also a few regionally significant papers.  Here's a rundown of the national titles ordered by circulation as of March 2011 (or Sunday circulation where appropriate).

Daily Title	Sunday Title	Format	Market segment	2010 election endorsement	Circulation daily / Sun.	Owner	Notes
The Sun	n/a	tabloid	tabloid	Conservative	2,817,857 / n/a	News Corp.	Murdoch; soon to launch a Sunday edition
n/a	News of the World	tabloid	tabloid	Conservative	n/a / 2,664,363	News Corp.	Murdoch; defunct as of July 9
Daily Mail	The Mail on Sunday	tabloid	mid-market	Conservative	2,039,731 / 1,888,040	Daily Mail and General Trust, PLC
Daily Mirror	Sunday Mirror	tabloid	tabloid	Labour	1,155,896 / 1,063,096	Trinity Mirror
Daily Star	Daily Star Sunday	tabloid	tabloid	Conservative	699,216 / 293,489	Northern & Shell
The Daily Telegraph	The Sunday Telegraph	broadsheet	quality	Conservative	626,416 / 481,941	Barclay brothers
Daily Express	Sunday Express	tabloid	mid-market	Conservative	620,616 / 533,192	Northern & Shell
n/a	The People	tabloid	tabloid	none	n/a / 477,185	Trinity Mirror
The Times	The Sunday Times	tabloid / broadsheet	quality	Conservative	446,109 / 1,031,727	News Corp.	Murdoch
Financial Times	n/a	broadsheet	quality	Conservative	381,658 / n/a	Pearson, PLC	Financial focus
The Guardian	The Observer	mid-size	quality	Liberal Democrats	261,934 / 296,023	Scott Trust	Not-for-profit
The Independent	Independent on Sunday	tabloid	quality	anti-Tory	181,934 / 153,183	Alexander Lebedev
“i”	n/a	tabloid	mid-market	anti-Tory	171,415 / n/a	Alexander Lebedev	downsized version of the Indy
Morning Star	n/a	tabloid	mid-market	none (tactical for Labour)	15,000 (?) / n/a	People's Press Printing Society	Voice of the Communist Party of Britain

Note 2011.07.15: A lot of people consider the now-defunct News of the World as the Sunday edition of The Sun. I've kept NotW separate because it is being wound up (or down), and the staff let go instead of being moved to The Sun.

Update 2011.07.15: Added the Morning Star, which is national but very small.

Predictable Expectations

ATHENS (Reuters) - A deeper-than-expected recession caused Greece's central government deficit to widen by almost one third in the first half of the year, widely missing an interim budget target under the country's bailout plan, the finance ministry said on Monday.

...

Hurt by austerity, the Greek economy contracted at an annual pace of 5.5 percent in the first quarter. The Greek government revised downwards its 2011 growth forecast for this year to 3.9 percent.

Hoo-boy, another nobody-could-have-predicted moment.  Of course, it's not.  The Greek economy is going to contract until the cutting is stopped, or until it re-adopts its own currency.

Update 2011.07.12: As always, I'm hardly the first one to make the observation.

Hacktacular

The ongoing phone-hacking scandal in the UK is just mind-blowing.  Kudos to the Guardian and its staff, whose dogged investigative work has brought all of this to light.