47: Living in the woods is overrated, apparently

By DONUTS DONUTS

By DONUTS    2 weeks ago

So the Fed raised rates, just as everyone expected.

One thing that people weren’t totally sure about was the Dutch election. For those keeping score, a win by far right politician Geert Wilders would have been another notch in the belt for the populist revolt percolating around the world alongside Brexit and Trump’s unlikely presidential victory.

Despite polling drama leading up to election day, Prime Minister Mark Rutte ended up winning handily (though his VVD party still lost parliamentary seats). For the establishment, the result allowed a collective sigh of relief, perhaps a welcome respite, if only temporary with French and German elections still looming later this year.

And so the battle for the status quo continues.

One thing we did learn, however, is that the anti-establishment movement’s global success isn’t yet a foregone conclusion.

Wsup with Icahn

Back stateside, where the unexpected challenger did win out, things continue to be kind of… messy? But at the same time, when is change not messy?

A Hawaiian judge rejected Trump’s second travel ban and as you might expect, he’s none too pleased.

Anyway, Bloomberg has a new feature on Carl Icahn, who, as we know, has Trump’s ear. Of course, there are certain to be plenty of people who are unhappy about and will communicate it through concepts like “conflict of interest.”

But does Carl care? Not really, apparently:

Icahn makes no apologies for this. Sipping a glass of pineapple juice in his 47th floor corner office on March 9, the 81-year-old investor says he’s surprised by all the controversy, which he sees as a fake issue generated by well-funded opponents. “I have a right to talk to the president like any other citizen,” he says. “Especially if I think he respects me, why the hell shouldn’t I call him?. … It may sound corny to you, but I think doing certain things helps the country a lot. And yeah, it helps me. I’m not apologizing for that.”

Wsup with the bull market

We live in uncertain times, but one thing that has never seemed more certain is this current continuing bull market, which has raised a question or two.

Finally someone has an interesting theory, that it’s driven completely by stock buybacks:

Corporations have spent hundreds of billions annually in recent years buying back their own stock. But what if, after netting out all the supply and demand flows in the equities market, the corporations are the only ones on balance buying their stock?

That’s the conclusion, at least for 2016, of Ed Yardeni of Yardeni Research. “The bottom line is that the current bull market has been driven largely by corporations buying back their shares,” he wrote on Tuesday. Mr. Yardeni and his team combed through last week’s release from the Federal Reserve of its quarterly report on the national wealth, the Financial Accounts of the United States. This massive trove of data is a comprehensive tally of every debt that’s been issued, stock that’s been bought, and loan that’s been made.

One person who is probably OK with this is Jamie Dimon, who thinks we could juice this bull even further by repatriating all those overseas corporate treasure chests so they can buyback even more stock. And then we can just go ahead and call it QE4:

“If all companies did [with repatriated funds] was pay dividends and buy back stock, think of that as QE4 … and far cheaper, in my opinion,” Dimon said, comparing the stimulative effect to that of the Federal Reserve‘s multiyear monetary easing. “The shareholder will decide what to do with it. It’s not like it disappears after that. It is fuel to the system.”

Wsup with Uber

Uber has had a really bad 2017 so far.

But in chatting over the situation with some friends the other week, we decided that in the grand scheme of things, it’s a minor quibble. Because the biggest existential threat to Uber isn’t necessarily bad corporate culture or a maverick CEO.

The biggest existential threat to Uber is self-driving cars.

And Travis Kalanick knows this:

Self-driving technology has become a fixation for Kalanick. Developing a driverless car, he’s often said, is “existential” to Uber. If a competitor managed to get there first, it could easily replicate Uber’s core service (shuttling passengers) without its single largest cost (paying drivers). Over the course of a few weeks in 2015, Kalanick poached 40 researchers from the Carnegie Mellon University robotics lab, one of the country’s top autonomous vehicle research centers. Then, last summer, Uber became the first company to operate a fleet of autonomous taxis, in downtown Pittsburgh. On the day it announced that service, Uber also said it had acquired Otto, a self-driving truck startup founded in January 2016 by a former Google employee, Anthony Levandowski. The 37-year-old engineer was an original member of Google’s car team and a protégé of its creator, Sebastian Thrun.

As you can imagine, Google is not too happy about this development, which they are suing Uber over. And so now the greatest existential threat to Uber is… Google!

This was funny though:

“Google is the Xerox Parc of self-driving cars,” says George Hotz, the founder of Comma.ai, another autonomous car startup. It’s a backhanded compliment: Although Xerox’s Palo Alto Research Center invented the modern computer operating system, it didn’t bring the invention to market; Apple Inc. did. “The real question is, why hasn’t Google shipped?” Hotz asks. He regards Google’s lawsuit as a deliberate conflation of two different beefs. The first—the accusation that Levandowski stole documents—is serious. The second, Hotz says, “just signals weakness on Google’s part.” In Silicon Valley, and at the Googleplex, litigation is looked upon as the last refuge of the undisruptive.

Anyway, I was watching a WIRED documentary about Shenzhen the other day, and the culture there is decidedly open source. As in everyone steals everyone else’s shit and everyone is basically kewl with it:

As it happens, one of the reasons why Silicon Valley is so competitive when it comes to tech and innovation is because in California, non-compete clauses aren’t enforceable (which is another thing we talked about during that conversation).

Boston was actually quite the hip tech enclave back in its heyday, but development slowed to a halt due to onerous legalese that prevented fast-paced competition.

And now the place that truly embodies this hacker and maker mentality happens to be in China.

Wsup with living in the wilderness

Here’s a fun story about a guy who lived alone in the woods for 27 years:

Knight was finally arrested, after 27 years of complete isolation, while stealing food at a lakeside summer camp. He was charged with burglary and theft, and taken to the local jail. His arrest caused an enormous commotion – letters and visitors arrived at the jail, and approximately 500 journalists requested an interview. A documentary film team showed up. A woman proposed marriage.

Stuff

Virtu wants to buy KCG.

Speeding train + snow = OMG AMAZING

The Russians who hacked Yahoo

Why a Matrix reboot is a terrible idea.

Epic Navy scandal that involves wild sexy parties!

Lack of banana biodiversity is anti-antifragile.

How much do you spend on wine every month?

On the hunter-gatherer/agricultural revolution debate: do wild animals live worse than farmed animals?

Malcolm Gladwell has a chat with Tyler Cowen.

Our friend Noah Smith writes about equal marriages.

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DONUTS

Delightfully indulgent.