1 Be worried about commodity slip ups (Shelley
Goldberg in Gulf News) The world has become more efficient both in commodity
production and consumption over the last few decades. As a result of better
technology, it costs less today to produce many commodities than it did even a
few years ago.
In energy, horizontal fracking provides much greater
output then ever imagined when we were drilling straight down into the earth’s
surface. Today, workers will venture 2.5 miles deep to extract from a 30-inch
wide vein of gold-rich ore.
The world’s deepest oil well, known as Z-44 Chayvo
in Russia’s Far East, extends over 40,000 feet into the ground — equal to 15 of
the world’s tallest skyscraper, the Burj Khalifa, stacked on top of each other.
Industrialised farming is yielding crops faster and larger than ever while
utilising less land.
On the consumption side, energy usage has dropped as
office buildings, homes and appliances become more efficient. We utilise energy
from sunlight, wind, ocean waves and biomass without having to drill for it.
And our ability to recycle has increased substantially as we aim to close the
loop in what’s referred to as the “circular economy.”
Thus, even in a world where the population increases
daily, it still makes sense that commodity prices are falling. Consider an
industry that isn’t a heavy consumer of commodities, such as financial
services. Why should it care? Because they most likely have a solid client base
that is negatively affected by lower commodity prices.
Lower commodity prices are indicative of an economy
that is slowing, and portend a domino effect that negatively impacts the
broader capital markets. Now is the time to question the assumptions behind the
rosier economic forecasts — are they real and where are they coming from and
can they be sustained under the current landscape of too much supply and
insufficient demand?
2 Toyota ‘backs flying car project’ (BBC) Japanese
carmaker Toyota has announced its backing for a group of engineers who are
developing a flying car. It will give 40 million yen (£274, 000) to the
Cartivator group that operates outside Toyota city in central Japan.
The Nikkei Asian Review reports Toyota and its group
companies have agreed in principle to support the project. So far crowdfunding
has paid for development of the so-called Skydrive car, which uses drone
technology and has three wheels and four rotors.
Measuring 9.5ft (2.9m) by 4.3ft (1.3m), Skydrive
claims to be the world's smallest flying car. It has a projected top flight
speed of 100km/h (62mph), while travelling up to 10m above the ground. The team
of 30 volunteers developing the Skydrive car hopes its prototype could be used
to light the Olympic flame when Tokyo hosts the summer games in 2020.
3 Can millennials own homes? (Anurag Mathur in Straits
Times) A recent survey by CBRE found that almost two-thirds of Asia-Pacific
millennials are still living with their parents and 18 per cent have no plans
to move out, with unaffordable real estate cited as the common factor.
So is home ownership simply beyond reach for
millennials or do they just have no desire to take on the responsibility and
commitment to finance a property? According
to HSBC's recent global survey - Beyond the Bricks - 83 per cent of millennials
(those aged between 18 and 35) who do not own a home intend to buy one in the
next five years. In other words, young people strongly value home ownership.
But buying a home is never easy. The HSBC report
showed that globally 69 per cent of young people said that saving enough for a
deposit was their biggest barrier to home ownership and 64 per cent cited the
need for a higher salary.
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