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The darkest hour is just before dawn, but midnight looks just as dark

The AP reported last week that â''Retail sales fall unexpectedly in March.â'' Really? Was it really unexpected?

Iâ''m continually amazed at the relative optimism being expressed on Wall Street, in Washington D.C., and in the business press.

According to the AP, analysts expected a 0.3 percent increase in retail sales. In fact, they dipped 1.1 percent. The analysts predicted the Producer Price Index to rise 0.1 percent, in fact it went unchanged.

Who are these analysts and why canâ''t I get that job? Throwing darts at a cork board would seem to have about the same accuracy, and I could go to the movies for the other 39 hours of my workweek. Or maybe 36, assuming my hours were to get cut, as they are for many employees.

Actually, the business world has a reason for this relative optimism, itâ''s just not a very good one. Typical is this quote from U.S. Fed Chair Ben Bernanke:

"Recently we have seen tentative signs that the sharp decline in economic activity may be slowing," Bernanke said. "A leveling out of economic activity is the first step toward recovery.â''

Yes, Ben, the curve that sees us bottoming out would show negative indicators slowing down before the economy goes into recovery. However, the curve that sees us heading into depression might also show a slowing. Hell, the pessimists believe that the downturn has so much momentum, even with the brakes on, weâ''ll coast into depression.

We know from the polynomial theorem that an infinite number of curves are consistent with any finite set of datapoints. You would think an MIT-trained PhD economist who won his stateâ''s spelling bee at age 11 would know these things. In fact, you would think everyone would know it, at least intuitively, but the Washington Post had a nice, um, post, about The Shape of the Recession.

Will it be V-shaped, as in a steep decline followed by a rapid recovery? How about U-shaped, with a longer downturn and slower upswing? Or even L-shaped, featuring a quick plunge that flatlines forever?

An alternative forecast taking hold around town sounds (but only sounds) like a swipe at the former president: the W-shaped recession, in which the economy falls and bounces back quickly, only to decline again.

The W shape provides a single theory that is consistent with both the crazy optimistic V ideas spouted by Bernanke, and the pessimistic view that the economy is in much worse shape than the optimists think.

To put it mildly, thereâ''s a lot more bad news than good. As was widely reported, March was the first deflationary month in more than 50 years in the U.S. The Guardianâ''s story was typical.

The consumer price index fell at an annual rate of 0.4% in March, the first decline since August 1955, figures from the US labour department showed today. It was bigger than the 0.1% drop expected by economists.

Compared with the previous month, consumer prices dipped by 0.1%.

The decline was mainly caused by lower energy costs, which offset a surge in tobacco prices, the biggest since 1998. If energy and food costs are excluded, the annual inflation rate stands at 1.8%.

Energy costs fell by 3% on the month and gasoline prices were down 4%. Food and housing costs both edged down by 0.1%.

Even the quasi-optimistic AP story reported that â''wholesale prices plunged 1.2 percent in March as the cost of gasoline, other energy products and food fell sharply.â''

Worse, companies are freezing and even decreasing salaries, particularly in high-tech, where HPâ''s much-publicized 5% cut back in February has been typical.

A Houston Chronicle article earlier this month quoted John Challenger, of recruitment firm Challenger, Gray & Christmas, as saying â''The number of pay cuts weâ''re seeing around the U.S. is unprecedented.â''

Unprecedented. Consider that, business columnist Robert J. Samuelson, who, like Bernanke, ought to know better but who wrote in todayâ''s Washington Post, â''Given today's economic crisis, our renewed fascination with the Depression is natural. But we ought not stretch the parallels too far.â''

If youâ''re wondering how bad things can get, Eric Savitz over at Barronâ''s says we should â''Ask FSI International.â''

FSI International (FSII) is now a company that almost no one follows. But the latest results from the tiny Minneapolis-based semiconductor equipment firm offers a sobering snapshot of conditions in the industry.

For its fiscal second quarter ended February 28, FSI posted revenue of $8.6 million, which is down 60% - 60%! - from the $21.4 million reported in the year-earlier quarter.

Ask FSI when the economy will recover and you wonâ''t get one of these rosy Bernanke V-shape answers.

In a statement, CEO Don Mitchell gives the explanation youâ''d expect: â''the global economic downturn is continuing to adversely impact credit availability, consumer confidence and technology spending,â'' which in turn has caused â''low factory utilization levelsâ'' at most semiconductor manufacturing companies, resulting in reduced or delayed capital spending.

And despite some optimism on the Street, Mitchell does not see any early recovery. â''Even though it is reported that several device producers have recently started to experience improved utilization levels, we anticipate that this situation will persist until at least early calendar 2010,â'' he says.

We Finally Have a U.S. CTO


Most high-tech professionals haven't heard his name before, but soon, many will be talking about Aneesh Chopra, the latest appointment to the Obama administration, as the federal Chief Technology Officer. After months of speculation, Chopra, announced by the president on Saturday, is on the job.

Chopra is known as being intelligent, engaging, and effective. Having served as Secretary of Technology for the State of Virginia since 2003, his focus has been on statewide technology strategy, government form, and technology-related economic development, all of which apply directly to the tasks he will be performing at the federal level. As Tim O'Reilly puts it, "Chopra has a real focus on measurement, and on figuring out what really works."

With a Masters in Public Policy from Harvard and experience in streamlining healthcare technology, it looks as if the administration will be leaning heavily on Chopra for expertise in how to tackle some of our most challenging national problems. Working closely with Vivek Kundra, the new federal CIO and Jeffrey Zients, the Chief Performance Officer, Chopra will be part of a tight team in the White House Office of Science and Technology Policy. If there's any area where people expect results, it's technology innovation.

Although some have reported the appointment as a slap in the face of Silicon Valley and established tech industry professionals, as O'Reilly points out, "industry experience does little to prepare you for the additional complexities of working within the bounds of government policy, competing constituencies, budgets that often contain legislative mandates," etc. According to the Wall Street Journal, experienced technology leaders like Eric Schmidt of Google and Mitch Kapor of Lotus (and co-founder of the Electronic Frontier Foundation) applaud the choice.

In the days and months to come as the Obama administration lays out their agenda for technology, we can expect Chopra, along with Kundra, to be behind much of those plans. On top of lofty goals of transparency and reform, they will need to prove their strategies work on an unprecedented scale.

â''Sarah Granger

Recession Forcing U.S. to Reconsider Retiring Space Shuttle Fleet

The economic downturn is causing U.S. lawmakers to pressure the Obama administration to change its plans to end the space shuttle program next year, according to an article in The Wall Street Journal.

With unemployment reaching record levels, legislators from states such as Alabama, Florida, and Texas, where the space program employs thousands of advanced engineers, are speaking out on the need to keep the shuttle fleet flying into the near future.

NASA's current plans call for mothballing the three shuttles comprising the Space Transportation System after the last major component of the International Space Station (ISS) is delivered in 2010. That would free up funds for the space agency to concentrate on its next-generation rocket program known as Project Constellation, expected to need about a decade to perfect.

While Constellation is creating new jobs and many involved in the shuttle program will find employment working on the new project, prominent voices in the U.S. Congress are unhappy that the transition looms in the midst of an economic slump in which engineers are already facing tough times.

Grounding the shuttle fleet will give thousands of more engineers little to do for years while the rockets and crew vehicles of Constellation are being developed, those representing the most affected states worry. Indeed, the current plan calls for missions to the ISS to be assumed by the Russian space program, which would see additional flights assigned to that nation's workhorse Soyuz spacecraft.

Sen. Bill Nelson (D-Fla.), a former astronaut, has included language in the federal budget bill now under debate to provide an extra US $2.5 billion to keep the shuttles flying through 2011, even though NASA opposes the move.

Complicating matters, the Obama administration has yet to settle on a nominee for a leader for NASA to replace longtime chief Michael Griffin, who retired in January to give the new president a free hand to pick someone of his own liking.

In a report released yesterday by the congressionally created Aerospace Safety Advisory Panel, the group strongly endorsed NASA's 2010 retirement deadline, concluding that planning to fly longer "not only would increase the risk to crews, but also could jeopardize" funding for future exploration efforts, according to the Journal.

Still, there is considerable room for debate in the month's ahead, with input coming from public officials and industry leaders alike, before the last chapter of the storied history of the space shuttle program is written.

Stay tuned for much, much more to come.

Nano Hype Appears, After Long Last, Finally To Be Getting Its Comeuppance

The recently dubbed â''enfant terribleâ'' of nanotech, Tim Harper, has neatly wrapped up a package of comeuppance for nanotechnology-hype masters. Now we just need to wait and see if circumstances actually allow the package to be delivered.

Harper relates how he recently received an e-mail from the NanoBusiness Alliance (NBA) asking about how many jobs have been created by nanotech. It seems the Senators and government types that have been pouring government funding into nanotech with the expectations it was going to fuel a new economy want to see what the impact has been 8 years into the program.

Uh ohâ'¿Daddy wants to know where his car is. In keeping with his â''enfant terribleâ'' reputation, Harper puts it in terms that are stark and at the same time ring quite true.

Well the lesson for today, ladies and gentlemen, is it doesnâ''t matter whether you are hyping nanotech or running a Ponzi scheme, if you canâ''t deliver and you stick around too long youâ''ll get caught out. Most of the early nanotech boosters are now boosting clean tech, or synthetic biology, or geoengineering. While not many of them have a clue what they are talking about, at least they had enough sense to skedaddle before any of the predictions came true.

Or not true, as the case may be. And what has been delivered, according to Harper, amounts toâ'¿not much, if you insist on measuring only those jobs that have been created in a so-called â''nanotech industryâ''. â''The number of sustainable jobs created will be under a thousand, as most â''nanotech companiesâ'' seem to subsist on SBIR and DARPA grants without showing any signs of real growth,â'' he says.

But will the NBA be able to go back to their Senators and explain that they need to consider jobs created in textiles, pharmaceuticals and computers that are involved with working on the nanoscale after spending years talking about a â''nanotech industryâ''? Well sometimes Daddy just likes to sound tough but is really just a pushover. So, who knows?

1959 welcomes U.S. to modern era of high-speed rail


CNN is reporting that the Obama administration has unveiled a â''blueprint for a new national network of high-speed passenger rail linesâ''

saying such an investment is necessary to reduce traffic congestion, cut dependence on foreign oil and improve the environment....

The president's plan identifies 10 potential high-speed intercity corridors for federal funding, including California, the Pacific Northwest, the Midwest, the Southeast, the Gulf Coast, Pennsylvania, Florida, New York and New England.

A map is available here.

These links make a great deal of sense, because they replace short-haul (1-2 hour) air links that are a complete waste of energy as well as being personally exhausting.

For example, at 300 k/h, a 480 km St. Louis-Chicago trip would take a little less than 100 minutes. Thatâ''s a bit more than the 75 minute air travel time, until you take into account the time it takes to get through security, air traffic congestion, and, for longer stays, baggage handling.

Trains also have infinitely more comfortable seating, better electrical connections for laptops, cellular and increasingly Wi-Fi connectivity, and the ability to transport more than 3 ounces of water or toothpaste.

Even longer trips can make sense. Take for example the 800 km Minneapolis-Chicago trip, which by train would probably be about 2 hours plus about 10 minutes for a single stop in Milwaukee. By air, itâ''s about the same as the 480 km trip (1:17 by the United Airlines schedule), but still makes sense when you consider all the extras of air travel.

Where the breakpoint is will vary from traveler to traveler, because we plan our trips by door-to-door times, not flight schedules. If you're in the right suburb, the nearest airport may well be more convenient than the downtown-based train, but you have to figure in the destination as well â'' if you're headed downtown, you have to schlepp in from the suburban airport.

The rail points seems to be chosen largely on the basis of high-frequency single hops, and then it links them where it makes sense. Not that there arenâ''t some obvious missing ones. The absence of a Dallas-Houston link, which would make perfect sense in its own right but also connect what are called the Gulf Coast lines to the South Central lines, is astounding.

Political considerations seem to have played a role. How else do you explain the heavy weighting toward the southeast, and the lack of any lines in the Southwest?

For example, what about a line linking L.A.-Las Vegas-SLC-Denver (423 miles and 532 miles)? What about San Diego-Tucson-Phoenix-Grand Canyon? (And then link Las Vegas and the Grand Canyon as well.) This would do for the Southwest what Obamaâ''s plan does for the Southeast. After all, the smallest of {San Diego, Tucson, Phoenix} is still larger than the largest of {Meridian, Birmingham, Atlanta, Greenville}, by city if not by metro sizes.


Perhaps the administration relied on

a map of U.S. Population densities (by county, PDF) (thanks to Vicki Robinson for the link). Such a map obscures which point-to-point connections make the most sense, but it does show where a lot of political clout needed to pass such a plan can be found.

The plan would bring us up to somewhere between 1959 Japan, where and when construction on the Shinkansen began, and contemporary Europe, where seemingly every major city is connected to each other, and to everywhere else by dense networks of feeder rail and bus service. Unfortunately, those supporting networks are largely absent from the American landscape and without them, the current plan won't save nearly as much time and fuel as it might. It's as if I have broadband to Microsoft and MIT, but only a dialup connection to my executive editor and the art director. Still, it's a start.

Earth Day founder Denis Hayes on spring, Obama, and social networking


Yesterdayâ''s spectacularly sunny and windy weather here in Palo Alto, Calif., was a shoutout for renewable energy of all kinds. And it was the perfect setting to hear the organizer of the first Earth Day, Denis Hayes, speak at Stanford to kick off the universityâ''s Earth Week celebration.

Hayes was happy to be back on the campus where he was a student in the late 1960s.

â''Itâ''s particularly wonderful to be here in the spring,â'' he said, â''when I can remember my own youthful spring at Stanford, that time of the year when flower buds begin to peek up and birds begin to build their nests and young people all over campus have their thoughts turn to seizing and occupying buildings.â''

Well, not so much anymore. But Hayes is a blast from my personal past; the first feature article I wrote for Spectrum back in 1980 covered his arrival at the Solar Energy Research Institute (SERI). He said when I spoke to him back then, â''Solar is important right now.â''

At the time, believe it or not, that was a controversial statement. The previous administration of the three year old institute had been thinking of solar as something that would start having an impact in 15 or 20 years, and Hayes planned to promote the existing technologies available, not just do research in new ones.

The bad news for that plan was that Carter was voted out of office after only one term, and then Reagan shut down most of the environmental efforts Carter initiated. Hayes left SERI in 1981, going back to Stanford to get a law degree and become an adjunct professor of engineering. (SERI continues today as the National Renewable Energy Laboratory.)

Hayes is optimistic about the current administration. â''Most people would not have expected the first black president to be the most environmental president in American history, bar none,â'' Hayes said.â'' He recognizes that the old false dichotomy between jobs and the environment didnâ''t make any sense, that the economy is a wholly owned subsidiary of the environment. For the economy to continue to prosper, you have to make the energy transition, the carbon transition.

IMG_3061.JPGâ''[Obama] really seems at a gut level to get this stuff. I think we may be moving to an era that has the potential, if he can keep in there for eight years, to be a bold new era.â''

Hayes urged the students scattered on the grassy lawn to go forward and do what his generation failed to doâ''to leave their children with a world that is better off environmentally.

First on the agenda? Get Congress to pass a climate bill, because, Hayes said, the rest of the world wonâ''t act on global warming if the U.S. does nothing.

How to do it? Hayes urged the students to use their social networking tools, the new technology that they have available, to get people out to every meeting local congressmen have to bring up the climate issue.

â''Iâ''ve left stuff for the next generation to do,â'' Hayes said, â''I hope you all dig into it and get it done.â''

Photos: Denis Hayes at Stanford University on 14 April 2009, Spectrum's 1980 article on Hayes taking over the leadership of the Solar Energy Research Institute. Credit: Tekla Perry

NASA to Comedian Colbert: You Can Jump on This

The U.S. National Aeronautics and Space Administration this evening decided on the winner of an online contest to name its next module to fly to the International Space Station, announcing on a television show that comedian Stephen Colbert would not be the recipient of NASA's honors.

The space agency recently opened up naming rights for one of the crucial pieces for the completion of the space station (or ISS) to the American public in a poll on its website (please see NASA: You Name the Next Space Station Module). It offered a handful of suggested names but also included an option for participants to cast write-in ballots.

In response, Colbert last month launched an on-air campaign for viewers of his popular mock conservative talk show to pencil in his own name online for the prize. And the game was afoot. The comedian included his fictional crusade for recognition of his status as an American icon in every episode of his nightly show as a tweaking of the nerdy attempt by NASA to reach out to the public in the era of twittering Internet sensations.

The resulting publicity caught staid, old-fashioned NASA with its pants down. Online voters cast an enormous amount of write-ins for "Colbert," passing a somewhat disenfranchised community of sci-fi enthusiasts who flocked to the suggested name "Serenity" (after another popular TV franchise). Rules of the contest, though, stipulated that NASA reserved all rights to exercise its best judgment as to the winning entry.

Appearing as a guest tonight on Colbert's report on humorous topics in the news, called The Colbert Report, NASA Deputy Chief Sunita Williams (who spent over six months on the ISS as an astronaut) said that "Node 3 will be called Tranquility."

Colbert instantly feigned agitated disappointment (with boos erupting from his studio audience) but teasingly played out the sly cat-and-mouse intrigue with Williams. She winkingly noted that NASA had, indeed, listened to the snarky pundit's followers and respected their outcry.

"Your name will be in space, in a very important place," Williams announced. "The Combined Operational Load Bearing External Resistance Treadmill, the COLBERT."

The audience at the Comedy Central show then exploded in laughter at the denouement, previously orchestrated by TV producers and the space agency's public relations group.

"I understand that running on the treadmill will be what powers the space station," Colbert replied dryly.

Not missing a beat, Williams (who is famed for her long-distance running on treadmills in space) shot back at the acerbic actor that future astronauts and cosmonauts will be able to pronounce, "It's time for me to jump on COLBERT."

Finally succumbing to absurdity, Colbert grudgingly acknowledged defeat by whimpering, "Thanks to NASA for acquiescing to [my] demands. I will see you and my treadmill in space." And he led his audience in a round of applause for a real American space hero right in front of their eyes.

A spokesperson for NASA subsequently stated that the COLBERT treadmill will be installed this August on the science platform in orbit.

Prosthetic Arm on 60 Minutes

On Sunday night, CBS' 60 Minutes did a really good, detailed report on the Revolutionizing Prosthetics 2009 project.

Scott Pelley interviewed most of the project's major players: among them Dean Kamen, who is responsible for one of the two arms; Col. Geoff Ling, the neuroscientist who conceived the whole program from whole cloth and made it a reality, and Jon Kuniholm, who wrote Spectrum's March feature on opening prosthetics design.

The problem is, of course there is only so much time on a segment-based one hour news magazine. So they didn't get to cover what I think is the most important part of the RP2009 project: the control mechanism.

Itâ''s also the most complicated so I donâ''t fault them for not wanting to get into the hairy details. However, I canâ''t overstate the fact that this is the single most important part of what makes Col. Lingâ''s project so revolutionary.

People have been working up new prosthetics designs for centuries. Around 1509, this medieval arm prosthesis was made for Goetz von Berlichingen. More recent versions are pretty fancy and delve into robotics.

They all look great, but they are inert. Even the ones with motorized fingers are window dressing. None of these accoutrements have gotten real amputees past their go-to: the sturdy old split hook design created before WWII. Itâ''s simple and basic, but it does the job. You know why? Because you can control it. You shrug your shoulder to open it, you shrug your shoulder to close it. The response is immediate and intuitive, if not very complex.

Myoelectric arms--which use electrodes to read muscle signals from the surface of the skin and use them to drive a mechanical arm--use a similar idea. The point is to make it as intuitive as possible to control the arm. You donâ''t want to have to relearn things that are counterintuitive.

And so, where Dean Kamen's arm is a miracle of compact, sophisticated engineering, the control mechanism they showed for it is kind of rough. You move the arm with your feet; kind of a joy stick control pad inside the shoes that you press to activate certain features.

Veterans Health Administration head of prosthetics Fred Downs, himself an amputee, demonstrated that after 10 hours he was able to use the interface remarkably well.

But still: with foot pedals controlling your arm, you wonâ''t be able to use the arm while youâ''re walking anywhere. Youâ''ll have to remember to turn it in and off if you want to go for a jog. And though it will become intuitive with repeated use, it's a learning process that is not inherently intuitive.

And that, ultimately, is what makes the RP2009 project so unlike its previous ancestors. It allows for control and feedback.

The 60 Minutes show touched on the control aspect briefly, showing Jon Kuniholm using electrodes to drive one of the prototype arms. But the electrodes aren't the point: the point is that the new technologies can interface directly with the muscles and the nerves. And thatâ''s whatâ''s cutting edge.

The Johns Hopkins University Applied Physics Lab, which was not mentioned in the program, and the Chicago Rehabilitation Institute, work on ways of integrating the arm into the human nervous system, so we can truly get to the Luke Skywalker arm: their research includes peripheral nerve implants and rice-grain sized implanatable lectrodes that will one day take over for the external electrodes in controlling the ICs that drive the robotic arm. Not to mention the brain machine interface.

The omission is understandable-- it's hard to boil something so abstract and engineery down to a few minutes. Still it was too bad not even to see a nod to the people who makes this project so mind-blowing, like Stuart Harshbarger and Todd Kuiken.

I am most glad though, that this project is getting mainstream attention. More people need to know about it, and getting it out of the prototype phase and onto amputees means it needs funding, and it needs to be visible to get funding.

Nanotechnology's Promise of Virus-Enabled Lithium-Ion Batteries

Last week my rueful exposition on the state of applying nanotechnology to mobile phones received support and encouragement from Kristen Kulinowski, who was recently highlighted over at Andrew Maynardâ''s 20/20 blog.

In addition to the encouragement, I was asked about my supposition on the possibility of virus-enabled lithium-ion batteries being commercially available by the end of this year.

These batteries build on Angela Belcherâ''s research at MIT of getting organic materials, like a man-made virus, to attract inorganic materials like gold, or in the case of this battery technology the viruses coat themselves with iron phosphate.

But as far as this technology being in batteries by the end of year, I have to say I have not heard that. If I did hear someone say that I would have to laugh quietly (or silently) to myself.

You see, Dr. Belcher along with Evelyn Hu of the University of California, Santa Barbara set up Cambrios Technologies Corp. in 2002 to commercialize the early work that Hu and Belcher did in this area. Let me repeat: in 2002. And as far as I know, and I am open to correction here, there is no commercial use of their technology at this point.

It is difficult to do the kind of ground-breaking science Belcher and others have done, but its difficulty pales in comparison to getting lab work into a commercially available product. In other words, let's be prepared to hold our breaths past the end of this year.

Report: Venture Capital Drying Up in Early 2009

The lifeblood of start-ups is slowing to a trickle, according to a statement from the National Venture Capital Association (NVCA).

Like everything else, venture funding for prospective businesses is drying up in the doldrums of the global economic downturn. The NVCA said just 40 venture capital funds raised US $4.3 billion in the first quarter of 2009, the smallest number of funds raising money in a single quarter since the third quarter of 2003. Overall, though, the dollars committed to new firms reflected a slight increase over the previous quarter when $3.5 billion was raised.

"The first quarter fundraising data suggests two distinct dynamics currently taking place during the economic downturn," said Mark Heesen, president of the NVCA. "First, the majority of venture firms are not actively fundraising at this time because they have either recently raised a fund and are investing those dollars or are waiting until market conditions improve. Second, despite the recession, venture firms with solid track records continue to be able to secure sizable commitments from limited partners as there remains a great deal of promise for future returns from the venture capital asset class."

Market conditions nearly halted the formation of new venture capital funds in the first quarter of 2009, according to the NVCA. Just three new funds and 37 follow-on funds were raised in the first quarter, or a ratio of over 12-to-1 of follow-on to new funds, compared to 6-to-1 in the first quarter of 2008 (with a 'new' fund defined as the first such at a newly established firm).

The funding from venture capital firms has long been a measurement of the health of such important economic sectors as the software industry, and in recent years it has sparked to life such start-up success stories as Amazon, eBay, Google, and YouTube.


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