1. The new Panama Canal is opening soon and will cause an
'evolution' in a vital US industry
May 8, 2016 – Business Insider
On October 9, 1913, President Woodrow Wilson opened the Panama Canal by dynamiting the
final dikes holding the water at bay.
He did it from the comfort of the White House, keying a telegraph transmitter that set off the
explosion from over 2,000 miles away.
In the 103 years since Wilson pushed that button, the Panama Canal has become an international
shipping bottleneck, as container ships grew too large for its aging locks.
Much of that will change in June, when a $5.25 billion effort to expand the canal reaches its
long-delayed conclusion, allowing ships more than 2 1/2 times the size of the current limit to
pass through the waterway.
The increased capacity could have profound effects on the US transportation industry, as the cost
of shipping from Asia to ports in the eastern US would drop significantly. Simply put, bigger
ships are more economically efficient and have lower per-unit costs.
Larger ships and lower costs meant importers traditionally chose to bring in goods from Asia at
West Coast ports and then to the eastern US by rail.
But if the canal's increased capacity lowers shipping costs to the East Coast by enough, it could
mean a sizable loss of freight volume over time for western American railroads, Nerijus Poskus,
an expert on international shipping at the booking company Flexport, told Business Insider.
If shippers chose to go through the canal, western railroads such as BNSF, best known as a
subsidiary of Warren Buffett's Berkshire Hathaway, and Union Pacific could suffer a drop in
freight volume, while eastern railroads like Norfolk Southern, CN, and CSX could see an
increase, Poskus said.
Places in the US likely to see the biggest change areLouisville, Kentucky; Memphis, Tennessee;
Nashville, Tennessee; and, most immediately, the Gulf Coast.
"Cargo going to Houston used to go to the West Coast," Poskus said, adding that it "will now be
going through the Panama Canal."
Already, the shipping giants Maersk and MSC have announced a service to Mobile, Alabama,
beginning early next month in anticipation of the canal expansion. Other companies are likely to
follow suit.
The ports at Los Angeles and at Long Beach, California, whose port is undergoing a $4.6 billion
expansion, may see a drop-off in traffic.
'A lot of moving parts'

2. Union Pacific, the largest American railroad by freight volume, operates exclusively in the
western half of the US. During the company's first-quarter earnings call last month, executives
dismissed the potential effects of the expanded canal.
"I think the West Coast ports still will remain a very strong, viable competitor," Eric Butler,
executive vice president for marketing and sales at Union Pacific, said on the call. "And
fundamentally we're not changing our perspective and our outlook that we've had over the last
couple years."
Some industry watchers are also unconvinced that the expanded canal can change the game.
"Even bigger ships are going to be going to the West Coast than are going to be going through
the Panama Canal," David Vernon, a transportation analyst at Bernstein, told Business Insider.
Just last year, behemoth container ships like the CMA CGM Benjamin Franklin, which can carry
18,000 20-foot containers, began serving West Coast ports. Ships able to pass through the new
canal will be limited to a capacity of 13,000 containers.
And in the short term, many East Coast ports cannot yet accommodate even that limit.
Savannah, Georgia, already one of the busiest ports in the US, began a $706 million project to
dredge its main waterway by 5 feet, but the project will not be concluded until 2021,
the Associated Press reported.
In New York, container ships are limited by the height of the Bayonne Bridge, which straddles
the port's entrance. A project to raise its roadwaywill finish in 2019, according to the Port
Authority.
"The other thing that many folks don't incorporate into any analysis of this is the boxes," Vernon
said.
A shift in the amount of cargo taking a one-to-two-week-longer trip though the Panama Canal
and to the East Coast would mean that much more cargo is at sea at any given time, requiring
cash-strapped shipping companies to buy more shipping containers to maintain the flow of goods
— an investment they are unlikely to want to make, Vernon said.
In terms of exports, railroads west of the Mississippi River may even benefit from the expanded
canal, as Business Insider reported in 2014.
Agricultural goods from the American heartland, as well as oil and natural gas from a booming
industry in the upper Midwest, will have a dramatically shorter trip from the Gulf Coast to ports
in eastern Asia, and it could increase demand for railroads that move cargo from the Midwest
south and toward the Gulf.
The ultimate impact of the canal on other industries depends on many unpredictable elements,
including the weather. The canal is restricted by the water levels in Lake Gatun, which are low
because of El Niño.
"There are a lot of moving parts," Butler, the Union Pacific executive, said.

3. Add all of this together, and it may be years before the canal once again causes an upheaval in
international commerce.
"The change will be an evolution rather than a revolution," Poskus said.
A manufacturer you've never heard of just unveiled an
airplane that could change the world
May 27, 2016 – Business Insider
A small Denver, Colorado, manufacturer has rolled out the first prototype of a new all-electric
aircraft, suggesting that the same revolution currently sweeping through the auto industry may
soon become airborne.
The Sun Flyer, the brainchild of engineer and pilot George Bye and his Aero Electric Aircraft
Corp. (AEAC) , is designed to be the perfect training aircraft with three hours of endurance and a
30-minute recharging time.
The change could very soon have profound effects on general aviation — a term for the world of
private and non-airline aviation — and, one day, proper airlines.
Energy costs for an hour of flight training could be as little as $1, while maintenance costs on an
engine with a single moving part could be significantly lower, Bye told Business Insider.
The aircraft has yet to be certified by the Federal Aviation Administration, a long, exhaustive
process that Bye believes will be completed within three years.
He also estimates that the final unit cost will initially be about $250,000 per aircraft.
That may sound like a lot for a small, two-seat aircraft, but a new, gasoline-powered Cessna 172
— long the standard in flight training — costs around $300,000, and most flight schools will
charge more than $100 per hour for renting one and at least $30 per hour for instruction.
An electric power plant with effectively one moving part should also have dramatically lower
maintenance costs than a traditional, gasoline-powered engine of more than 1,000 components,
Bye said.
Tom Haines, editor-in-chief of AOPA Pilot, told Business Insider that a revolution in pilot
training was long overdue.
"If it's truly that inexpensive, it could be a real pivotal moment in general aviation at a time when
we really need it," Haines said.
He continued: "The pilot population has been dwindling for so long, and it would be nice to have
something new to show to people who express an interest in aviation and get turned off by the
cost."

4. In fact, pilot shortages have plagued the industry for the past few years, and recently forced
regional airline Republic Airways to declare bankruptcy when it could not fill its cockpits and
several major airlines to begin training their own pilots in-house.
Electric aircraft like Bye's Sun Flyer could therefore have an immediate effect on the airline
industry, though the time when the technology makes it into airliners might also not be very far
away.
European airline manufacturer Airbus has already entered a partnership with engineering and
technology company Siemens to research electric propulsion.
"We believe that by 2030 passenger aircraft below 100 seats could be propelled by hybrid
propulsion systems," Tom Enders, CEO of Airbus Group, said in a press release in April.
At a conference in Germany that same month, Siemens unveiled an electric power unit mounted
to an Extra EA-330, a small, two-seat aerobatic trainer aircraft.
The company believes that the technology can very soon be scaled up to include multiple-
passenger aircraft.
"We'll probably look back in some years, maybe by 2030, and wonder, 'What took so long?'"
Haines of AOPA said.
Jerry Seinfeld's Porsches shine at an auction that might be
the peak for classic car market
March 9, 2016 – Business Insider
Ferrari remains the top dog in the collector car market. It has been that way since prices began to
take off, and remains so during the current decade, as prices began to outperform most other
asset classes.
But at a Gooding & Company auction at the famous Amelia Island Concours d'Elegance next
week, it will be Porsche that steals the show.
This will in large part be due to comedian Jerry Seinfeld, who will sell 16 Porsches from his
personal and extensive collection, considered to be one of the finest Porsche collections in the
world.
"It's really unprecedented," Hans Wurl of Gooding & Company said.
But what the auction means for the incredible growth rate of collector car prices — or the market
for Porsches alone — is a matter of debate.
"I really think the Porsche market is expanding ... but it's a wave that's going to crest," Phil
Skinner, senior market editor at Kelley Blue Book said.
And that crest, Skinner said, may take place at the Amelia Island auction — meaning Seinfeld
has picked the perfect time to sell.

5. Wurl agrees, and expects that to a certain degree the market will experience a "correction" in the
near future.
But while prices on most models will fall, certain cars will likely remain immune to such a
correction.
"We're at a time where collectors are paying top, top money for every top, top example that
comes up," Garth Hammers, also of Gooding & Co, said. "Those are cars that will continue to
accelerate."
And that is pretty much the consensus among experts; the very best models will likely not settle,
even if the rest of the market does.
"We are still in a market that can set records," Hammers said.
Even within widely-produced models, examples that have a notable heritage or are immaculately
restored or original create their own kind of rarity, inoculating them from the market's ebb and
flow. And smart collectors know this.
"We have always advised our clients to look for the best possible examples," Wurl said. And
Seinfeld's collection is made — almost exclusively — of some of the best possible examples of
each model represented.
As for the rest of the market, the astronomical growth in prices is most likely a thing of the past.
"You're not going to pick up a classic 911 for $40,000 soon. There could be a 30 to 40 percent
dropoff [in prices]," Skinner said. "The guy with the great '57 Chevy — worth $100,000 to
$120,000 this year — might next year be $80,000."
Blanket expansion of prices, even for middle-of-the-road examples, is a pretty good indicator of
a bubble in any asset class. It's a symptom that has even been displayed by market-king Ferrari
— or for a precise example, its short-lived attempt at a low-cost sports car.
"Look at the Dino, a car that doesn't actually say Ferrari anywhere on it," Skinner said. "It's a
$30,000 car that is going for six figures."
That, Skinner thinks, is almost certainly unsustainable.
The four major auctions in Scottsdale Arizona this year were down about 15 percent in total
sales, but it is difficult to extrapolate from one data point.
Sales of that size can be affected by a large number of factors ranging from the prominence of
the collections offered, the state of international exchange rates, or even the performance of the
stock market during the weeks previous to the sale.
But the flat results were enough to make many market-watchers nervous.
For Seinfeld, a man whose knowledge of Porsche and the collector market is unquestionable, the
timing may be perfect for a big sale.