Larry Page Shares His Vision of the Future

“Google CEO Larry Page envisions a future in which computers plan your vacations, drive your cars, and anticipate your whims. Audacious? Maybe. But Page’s dreams have a way of coming true.

Note: On Jan 3, as Fortune published this article, the Federal Trade Commission ended its investigation of Google’s search practices saying it found no evidence that the company manipulated search results in violation of antitrust laws. The European Commission and other regulators continue to investigate the issue.

FORTUNE — When Sir Martin Sorrell, CEO of WPP Group, the giant advertising agency, visited Google this past fall, CEO Larry Page sent a car to pick him up at the Rosewood Hotel about 20 miles away. Only this was no ordinary car. The Lexus SUV drove itself thanks to a slew of high-tech tools, including radars, sensors, and a laser scanner that takes more than 1.5 million measurements every second. For about 20 minutes, while navigating I-280 and the area’s busy State Route 85, the car cruised on autopilot, making quick course corrections, slowing down here when traffic loomed ahead, speeding up there to get out of the blind spot of a neighboring vehicle. “It was pretty incredible,” says Sorrell.

Page’s chauffeurless car service is no mere parlor trick. It is, as Page will tell anyone who’ll listen, the future of transportation. Never mind that most people think the mere idea of computer-driven cars is (1) preposterous, (2) dangerous, or (3) not much fun. Page makes the case for self-driving cars with the dispassionate logic of an engineer. The father of two young children, Page insists that his pet project, when ready, will actually enhance safety. Soon Google (GOOG) will be able to simulate your driving, “but just make sure you don’t die and kill anybody else,” he tells me during an interview in the private “bullpen” where he meets with his top lieutenants. He methodically enumerates the other advantages of driverless cars. There are energy savings (traffic would flow more efficiently) and productivity gains (commuting hours reclaimed). There will be cost savings too — in the millions of dollars at Google alone. The Googleplex, he says, is short on parking, and quotes for new garages have come in at $40,000 per car. Why not let the car drop you off and go park itself offsite? Page asks. “Whenever you need it,” he adds, “your phone notices that you’re walking out of the building, and your car is there immediately by the time you get downstairs.”

MORE: Google – No. 1 on Fortune’s 100 Best Companies to Work For ….”

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A light bulb that transfers bandwidth without competing with WiFi…

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“Morgan Creek Capital Management, an investment management firm with offices around the world, released its 2013 market outlook, entitled “Peering Over the Precipice.”

The presentation was delivered at the North Carolina Bankers Association yesterday.

The slideshow presentation focuses on the three big risks facing the market: the Euro crisis, possibility of a downturn in China, and fallout from the Fiscal Cliff.

Of these three, the firm is most bearish on the U.S. economy — to the point of predicting a recession starting in April. Morgan Creek believes that U.S. equities are overvalued, and notes that bear markets generally perform poorly in a post-election year.

The team is most bullish on precious metals and the Nikkei. In particular, they believe monetary easing will boost the Japanese market, and have a short-term target of $2,000 for gold.

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“FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.

The Market Advance Has Been Short Covering (Gluskin Sheff)

The stock market had its worst post-Christmas performance since 1937, and the biggest rally on record while kicking off the new year. “The myth is that we are now seeing the clouds part to the extent that cash will be put to work. Not so fast. It is very likely that much of the market advance has been short-covering and some abatement in selling activity.”

The market can celebrate that the worst impact of the fiscal cliff has been avoided but the spending cuts are still up for debate. “So as equities now retest the cycle highs, it would be a folly to believe that we will not experience recurring setbacks and heightened volatility along the way. This makes for a terrific backdrop for nimble trading but beyond that long-only strategies would be well advised to hedge with calls on volatility given how cheap this insurance is right now.”

The Three Scenarios For The Political Economy Of 2013 (Project Syndicate)

The link between politics and economics will continue in 2013, according to PIMCO’s Mohamed El-Erian….”

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“….Historically US dollar cycles persist for an average of seven years, hence the current bear cycle in the US dollar is in its 11th year, and consequently should be viewed as long in the tooth. This has important implications for commodity markets not least given the growing correlation between risk assets since the onset of the financial crisis. Turns in the US dollar following bear cycles can be violent. For example, when the dollar turned in July 1980, the dollar appreciated by just over 40% within the following 12 month period. Given the ongoing weakness in the US basic balance we expect a turn in the dollar is some way off and that the US dollar will display weakness in the first half of this year.

Below is a chart showing the U.S. dollar’s decline over the last decade:

…”

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“….Various members stressed the importance of a continuing assessment of labor market developments and reviews of the program’s efficacy and costs at upcoming FOMC meetings.

In considering the outlook for the labor market and the broader economy, a few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013, while a few others emphasized the need for considerable policy accommodation but did not state a specific time frame or total for purchases.

Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted.

This language lends to the argument that the Fed may actually be moving toward tightening policy. …”

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“Developments in Financial Markets and the Federal Reserve’s Balance Sheet
The Manager of the System Open Market Account (SOMA) reported on developments in domestic and foreign financial markets during the period since the Federal Open Market Committee (FOMC) met on October 23-24, 2012. He also reported on System open market operations over the intermeeting period, including the ongoing reinvestment into agency-guaranteed mortgage-backed securities (MBS) of principal payments received on SOMA holdings of agency debt and agency-guaranteed MBS; the operations related to the maturity extension program authorized at the June 19-20, 2012, FOMC meeting; and the purchases of MBS authorized at the September 12-13, 2012, FOMC meeting. By unanimous vote, the Committee ratified the Open Market Desk’s domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System’s account over the intermeeting period.

The Committee considered a proposal to extend its liquidity swap arrangements with foreign central banks past February 1, 2013. All but one member approved the following resolution:

“The Federal Open Market Committee directs the Federal Reserve Bank of New York to extend the existing temporary dollar liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank through February 1, 2014. In addition, the Federal Open Market Committee directs the Federal Reserve Bank of New York to extend the existing temporary foreign currency liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank through February 1, 2014.”

Mr. Lacker dissented because of his opposition to arrangements that support Federal Reserve lending in foreign currencies, which he viewed as amounting to fiscal policy.

Options for the Continuation of Asset Purchases..”

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“Federal Reserve policy makers said they will probably end their $85 billion monthly bond purchases sometime in 2013, with members divided between a mid- or end-of- year finish.

“A few members expressed the view that ongoing asset purchases would likely be warranted until about the end of 2013” while a few others specified no time frame, according to the record of the Federal Open Market Committee’s Dec. 11-12 gathering released today in Washington. “Several others thought that it would probably be appropriate to slow or stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet.”

Four years after cutting the main interest rate to near zero, policy makers are expanding their third round of so-called quantitative easing to boost economic growth and cut thejobless rate, now at 7.7 percent. In prior rounds of bond purchases, the central bank bought $2.3 trillion in securities.

The minutes show a divide among FOMC participants on how long the purchases should last. Participants who provided estimates were “approximately evenly divided” between those who said it would be appropriate to end the purchases around mid-2013 and those who said they should continue beyond that date.

“They’re willing to do more QE on the premise that the net benefits outweigh the costs,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank AG in New York. “But they’re more willing to entertain the thought that these actions are going to lose a bit of their efficacy.”

Erased Gains..”

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“Bullish jobs data collided with hawkish Fed comments.

First the scoreboard:

Dow: 13,390, -22.4, -0.1 percent
S&P 500: 1,458, -4.2, -0.3 percent
NASDAQ: 3,099, -13.7, -0.4 percent

And now the top stories:

• It’s jobs week in America.  According to ADP, the private sector added 215k jobs in December.  This was much higher than the 140k expected by economists.  This is a good sign because many consider this to be the preview for the official employment situation report, which will be published by the Bureau of Labor Statistics tomorrow morning at 8:30 AM ET.
• According to Challenger Gray And Christmas, announced layoffs plunged in December from November and December from the year prior.  However, this number tends be noisy.  In November, the number spiked due to the Hostess bankruptcy.
• Initial claims, however, were disappointing.  Claims for the week ending December 29 jumped to 372k, which was higher than the 360k expected by economists.  Also, the prior week’s number was revised up to 362k from a preliminary reading of 350k.
• The big story of the day was certainly the minutes from the December Federal Open Market Committee meeting.  This was the same meeting when the Fed announced it would employ unemployment rate and inflation rate targets to guide monetary policy.  Many saw this as an extremely dovish move.  However, according to the minutes today, we learned that several members of the FOMC actually wanted to halt or cut quantitative easing programs before the end of 2013, which is much sooner than most would’ve expected.
• Stocks and gold instantly tanked on the news…”

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Vice President Joe Biden got a little frisky with the wife of Senator Angus King at today’s ceremonial swearing-in at the Capitol:

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Phones are down with all sorts of data issues.

Developing…

Update: NASDAQ Saying UTP SIP Investigating an Issue with Stale Data on the UQDF, UTDF Feeds Across Multiple Channels from benzinga

“Analyst Gartner has increased its forecast for worldwide IT spending in 2013, revising its Q3 2012 figure up from 3.8 per cent growth to 4.2 per cent higher than last year’s figure. The analyst is now forecasting that worldwide IT spending will hit $3.7 trillion in 2013. Much of this spending increase is down to projected gains in the value of foreign currencies versus the dollar, said Gartner, noting that when measured in “constant dollars”, 2013 spending growth is predicted to be 3.9 per cent.

“Uncertainties surrounding prospects for an upturn in global economic growth are the major retardants to IT growth,” said Richard Gordon, managing vice president at Gartner, in a statement. “This uncertainty has caused the pessimistic business and consumer sentiment throughout the world. However, much of this uncertainty is nearing resolution, and as it does, we look for accelerated spending growth in 2013 compared to 2012.”

Gartner’s forecast for worldwide devices spending — which includes PCs, tablets, mobile phones and printers — is expected to reach $666 billion in 2013, up 6.3 per cent from 2012. Despite this rise, the forecast is a “significant reduction” on Gartner’s previous 2013 outlook forecast of $706 billion in worldwide devices and 7.9 per cent growth. The analyst noted that its long-term forecast for worldwide spending on devices has been reduced as well, with “growth from 2012 through 2016 now expected to average 4.5 per cent annually in current U.S. dollars (down from 6.4 per cent) and 5.1 per cent annually in constant dollars (down from 7.4 per cent)”…”

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“T-Mobile has just announced the BlackBerry Curve 9315, which will be available January 23 for the price of $49 on a 2-year agreement. They’re touting it as the most affordable BlackBerry on the T-Mobile network, and it is, but it’s also maybe the worst deal in smartphones right now. The Curve 9315 is essentially just the Curve 9310, which was launched in July 2012 and is RIM’s low-end phone. To see it rebranded for T-Mobile and introduced at this price on contract, hitting shelves a week before BB10 is officially unveiled is baffling.

BB10 is set to debut officially at a launch event January 30, taking place at a number of different locations worldwide. Reports and rumors suggest that the first phones using that operating system could go on sale shortly after that, possibly as early as February if not before. The Curve 9315 is being marketed as a low-cost device, and in fact “the most affordable BlackBerry smartphone” on T-Mobile’s network, but it will still come with a $49.99 “out-of-pocket down payment,” followed by 20 equal monthly payments of $10 and require that customers sign up for a 2-year special value agreement on T-Mobile’s Equipment Installment Plan. Or, if you’re going with a traditional contract plan (not the value variety), it’ll still cost you $49.99 (and that’s after a $50 mail-in rebate)…”

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“Americans are using more gadgets, televisions and air conditioners than ever before. But, oddly, their electricity use is barely growing, posing a daunting challenge for the nation’s utilities.

The Energy Information Administration is projecting that electricity use in the U.S. will rise an average of just 0.6% a year for industrial users and 0.7% for households through 2040.

That’s a far cry from the middle decades of the past century, when utilities could rely on electricity consumption growing by more than 8% a year. Even after the Arab oil embargo in 1973, the growth in electricity demand averaged 2% to 4% annually. But those days may be long gone.

In response to tepid demand, electricity production in the U.S. fell in 2008 and 2009, amid the recession, then ticked up slightly in 2010 before falling again in 2011.

For decades, electricity use was viewed as a barometer of economic growth, but the link has become less clear cut in recent years, partly because of a big push to make major appliances and other products, such as compact fluorescent lightbulbs and high-efficiency motors, that use less electricity.

The erosion of U.S. manufacturing also has contributed to the consumption slowdown. Industrial electricity use, which includes manufacturing, accounts for about a quarter of the nation’s total. From 1998 to 2010, the electricity used for manufacturing fell 18% as industrial processes grew more efficient and companies produced fewer goods in the U.S…..”

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“DEARBORN, Mich., Jan. 3, 2013 /PRNewswire/ —

• Ford Motor Company delivers U.S. sales gains across its lineup in 2012 – with cars up 5 percent, utilities up 7 percent and trucks up 2 percent
• F-Series sales up 10 percent for year; now America’s best-selling pickup for 36 years and best-selling vehicle for 31 years
• Ford commercial truck sales up 7 percent in 2012, marking the best sales year since 2008
• December total company sales up 2 percent – with the strongest December since 2006

Ford Motor Company’s U.S. sales grew across the board in 2012, with cars up 5 percent, utilities up 7 percent, and trucks up 2 percent for the year. Overall, the Ford brand ended 2012 with 2,168,015 vehicles sold – the only brand to top 2 million U.S. sales.

“Ford finished 2012 strong, with retail sales showing improved strength as more customers returned to dealer showrooms,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service. “Ford’s fuel-efficient cars and hybrid vehicles showed the most dramatic growth for the year, and we achieved our best year for commercial vehicle sales since 2008.”

Sales of Ford’s small cars were up 29 percent in 2012, with 316,006 vehicles sold, and overall car sales were up 5 percent in 2012, with 760,646 sold. Focus sales gained 40 percent during the year, and the all-new C-MAX continues its strong selling rate. In the first four months of sales, 13,309 C-MAX vehicles were sold, making it the fastest sales start of any hybrid vehicle in the industry.

Ford again became America’s best-selling brand of utility vehicles in 2012, with 619,470 vehicles sold. Escape broke its 2011 record sales levels with 261,008 vehicles sold, up 3 percent. Explorer gained 17 percent for the year, with 158,344 vehicles sold….”

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“There are a lot of “rules” in the stock market that don’t seem to die because more often than not, they work.

Take for instance the S&P 5-day rule, which comes from the Stock Market Almanac.  According to the rule, the S&P 500 ends the year positive if it ends the first five trading days of the year positive.

It has worked between 80 to 90 percent of the time.

And it worked last year.

And according to Art Cashin, UBS Financial Services Director of Floor Operations, traders are chatting about it again.

From this morning’s Cashin’s Comments: ”

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“The S&P 500 ended 2012 up a solid 13 percent, which was brutal for the bears shorting the market.

Maybe the shorts will have better luck this year.

We compiled a list of the 25 stocks with the highest short interest as a percentage of float.

The list includes retail giants and major homebuilders.

For your reference, we also included 1-year stock performance. ”

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“(Reuters) – Some major U.S. retailers had a tough December, with chains like Target and Family Dollar feeling the pinch as consumers were cautious in their holiday spending.

The economy took a toll on shoppers in the most important quarter of the year for retailers. The holiday season was never expected to be stellar, but even the single-digit growth anticipated by chains and analysts came under pressure as Superstorm Sandy, the ever-present headlines about the “fiscal cliff” and the Connecticut school shootings affected consumers’ moods.

“The consumers’ confidence is off a bit, and I don’t think you can point to a single individual thing. It’s a culmination of things that hit their psyche,” said Madison Riley, managing director of retail consulting firm Kurt Salmon.

Among the chains reporting December sales at stores open at least a year on Thursday, Costco Wholesale Corp stood out with growth that topped expectations. Limited Brands Inc’s sales rose less than anticipated, marking a rare miss for the owner of the Victoria’s Secret chain.

Target Corp’s same-store sales were essentially flat, while analysts anticipated a 0.8 percent increase, according to Thomson Reuters I/B/E/S.

Target said fourth-quarter earnings should meet or somewhat exceed the low end of its forecast. It said the number of transactions at existing stores slipped in the quarter, while the average transaction size increased. Food was its best seller.

Overall, analysts looked for 3.3 percent same-store sales growth for December across 17 chains, down from 4.2 percent growth in December 2011, according to Thomson Reuters I/B/E/S.

Chains also had a somewhat rough November, with same-store sales up a disappointing 1.6 percent.

Still, Kurt Salmon’s Riley predicted that if the upcoming debt ceiling debate goes better than the Washington wrangling to avoid the cliff, there could be a bigger uptick in consumer spending in 2013.

HITS AND MISSES…”

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“SAN FRANCISCO (AP) — Gap Inc. said Thursday that its December revenue at stores open at least a year increased 5 percent, with a big sales jump at its North American Old Navy stores.

The increase beat Wall Street’s prediction for a 3.5 percent gain, and shares rose more than 4 percent in premarket trading.

The metric is a key measure of a retailer’s health, because it excludes revenue at stores that recently opened or closed.

Gap also on Thursday said that it was adding a luxury division to its brand line-up with the purchase of women’s clothing boutique Intermix. Gap bought the chain for $130 million on Monday. Intermix runs 32 stores in the U.S. and Canada and a website.

For the five week period ended Dec. 31, North American Gap revenue at stores open at least a year rose 2 percent. The metric rose 1 percent at North American Banana Republic and 13 percent at North American Old Navy stores. It fell 6 percent at international stores….”

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“AUSTIN, Minn. (AP) — Hormel Foods apparently has a hankering for a peanut butter and bacon sandwich. The company primarily known for cured, smoked and deli meats said Thursday that it’s buying Skippy, the country’s No. 2 peanut butter brand, for about $700 million.

Skippy, which was introduced in 1932 and is a staple in American pantries, is intended to increase Hormel’s presence in the center of the supermarket where shelf-stable foods are sold. It also gives the Austin, Minn.-based company a clearer path for growth overseas; Skippy is sold in about 30 countries and is the leading peanut butter brand in China, where Hormel is also looking to expand its Spam line….”

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