Thursday, July 19, 2018

GV (né Google Ventures) Uses An Algorithm to Decide on Venture Investments

I shouldn't have automatically used the masculine né.
(formerly) Google Ventures could just as well have been the feminine née. Or maybe zée?

Moving on, using an algo for this purpose will get you clones and reboots and sequels. It's why big Hollywood does so little that's original, algos don't 'think' they just replicate what you've trained the a 'puter to recognize.

Now this will change when people start running machine learning programs on quantum computers, in fact that brainiacs seem pretty sure that people won't even understand what led to the output, akin to the Hitchhiker's Guide's Deep Thought laboring for 7 1/2 million years and spitting out:
 "The answer to the ultimate question of life, the universe and everything is 42." Okaaay.

On a more practical level companies like NVIDIA would not have been funded, with an initial $20 mil. round led by Sequoia, very large at the time. And then the company's first two products bombed.
And the current company's markets weren't even envisioned ten years ago.
What the algo would have funded would have been an Intel clone at a couple million which would have been smothered in the crib.

It's a toss-up whether Google itself would have convinced the algo to say yes. There were other search engines, Infoseek, Lycos and Alta Vista are the ones that come to mind so the algorithm would count that as a positive but they hadn't figured out how to make money. A big negative would have been the huge jump from the GOOG's initial $100 K outside funding in August 1998 to the $25 million Kleiner/Sequoia round 10 months later.

Anyway, rant over, here's Axios:
When most venture capitalists want approval to make a new investment, they go to their partners. When venture capitalists at GV do it, they go to something called "The Machine."
  • Axios has learned that the firm, formerly known as Google Ventures, for years has used an algorithm that effectively permits or prohibits both new and follow-on investments.
  • Staffers plug in all sorts of deal details into "The Machine" — which is programmed with all sorts of market data, and returns traffic signal-like outputs. Green means go. Red means stop. Yellow means proceed with caution, but sources say it's usually the practical equivalent of red.
  • It was initially designed and used as a due diligence assistant that could be overruled but, according to three sources, it has evolved into a de facto investment committee.
History: GV was formed in 2009 as one of the first venture firms to employ engineers whose primary job was to work with portfolio companies on technical challenges. But, in the early days, there weren't too many portfolio companies yet, so the engineers were tasked first with building a dealflow management tool dubbed "Vortex," and then with what would become "The Machine."
  • Another impetus was that few of the early GV investors had much, if any, investing experience. So "The Machine" would leverage the firm's strengths (engineering) as a bulwark against its weakness (proven VC chops).
  • The engineers also were asked to have "The Machine" help source deal opportunities, but that wasn't viewed as a terribly successful effort.
  • The first hints of this came in 2013, when then-GV CEO Bill Maris told the NY Times: "We have access to the world's largest data sets you can imagine, our cloud computing infrastructure is the biggest ever. It would be foolish to just go out and make gut investments."...

Using that biggest ever cloud infrastructure the algo didn't say "Amazon will have the world's largest cloud infrastructure in five years. Buy it today at $301 (July 1, 2013) and ride it for a six-banger with liquidity all the way."
Instead it said yes to Juicero, the $700 Wi-Fi enabled juice machine.

On the other hand even Sequoia seems to have left its best days behind it and the algo probably won't lead to headlines like this about Sequoia managing partner Michael Goguen a couple years ago:
Ex-stripper describes 13-year nightmare as tech titan’s sex slave

At least I hope not but who really knows? 

Watch Out Elon: Bezos' "Blue Origin successfully lands both booster and crew capsule after test launch"

This was the TechCrunch story I was going for when the piece on BuzzFeed broke my otherwise ice-cold heart.
From TechCrunch, July 18:
Today, at its Texas launch facility, Blue Origin performed its most critical test to date. It performed a live separation test of its crew capsule from the rocket booster and everything performed as expected. The crew capsule fired its escape motor at the right time, sending the capsule higher than it ever has gone before. This successful test is a huge milestone for Jeff Bezos’ rocket company, which previously stated that if the test went well it could put the rocket company in position to become operational by the end of the year....MUCH MORE
Screen Shot 2018-07-18 at 11.54.12 AM

"BuzzFeed launches a new website for its real journalism"

What the hell am I going to do with the "Wolf of BuzzFeed" clip?

I think this is retaliation for last year's "Plaintiff in Russia dossier suit argues BuzzFeed isn't a real news organization".
Dammit BuzzFeed, it was CNN's headline, not ours, that's what the quotation marks are for.

From TechCrunch:
It’s not news at this point that BuzzFeed has a serious news organization — one whose reporting on Russia made it a finalist for a Pulitzer Prize this year.

But it’s also a news organization whose stories are published alongside the social media friendly quizzes and lists that BuzzFeed remains known for — which can be confusing, or even provide easy ammunition to those who want to criticize the reporting.

Yes, the company has already taken steps to give the more serious reporting its own home and identity, with a BuzzFeed News app, a section on the main BuzzFeed site and a “BuzzFeed News” label on every story.

Still, Senior Product Manager Kate Zasada said the company’s own research has found that some readers “don’t completely understand” that while BuzzFeed is famous for GIF-filled lists, it also produces “deeply researched and fact-checked” journalism. (The snarky comments I get whenever I write about BuzzFeed seem to back this up.)

So the company is making that distinction clearer with the launch of a new BuzzFeed News website.
News stories will still run on the main BuzzFeed homepage, and the BuzzFeed News site will include links to other BuzzFeed content. But it looks and feels more like a standalone site, giving the team what Zasada said is “a new domain and a new brand.”...MUCH MORE
As noted in the outro from that 2017 post:

They grow up so fast. It seems like it was just yesterday (actually it was January 11, 2017, 12:52 pm PST) that we were posting:

Breaking--Buzzfeed Considers Itself Media--Breaking
The tweeter is a writer on media at HuffPo and adjunct professor at NYU.

I can't imagine what Andreessen Horowitz and NBC Universal are thinking about their BuzzFeed investments right now.
Maybe this will cheer them up:

1. 7 types of drunkard
From pages 52 to 60 of The Anatomy of Drunkenness (1834) by Robert Macnish
Okay, Who Sent Me the BuzzFeed SEC Form D?
Journalism: BuzzFeed Releases Internal Style Guide--Updated 
Arrrgh--Updated--Journalism: BuzzFeed Releases Internal Style Guide--Updated
BuzzFeed Appears To Be Buying The Guardian, One Employee at a Time
Study Showing "Fake News' Beating 'Real News'" Is Fake
"NBCUniversal Buys Big Chunks of Vox Media and BuzzFeed"
15 Cliches In Buzzfeed President's Departure Memo*
"Can Silicon Valley disrupt journalism if journalists hate being disrupted?"
The Onion Launches Clickhole to Take On BuzzFeed, Upworthy
Facebook To Decide Which News Sites Live, Which News Sites Die

"The NYTimes could be worth $19bn instead of $2bn"
Errrmmm, yes.
Should the risk-free rate go to negative 5%.

"That anti-straw movement? It's all based on one 9-year-old's suspect statistic" (we'll show you the real problem)

First up, USA Today, July 19:
The origin of the movement to ban plastic straws may come as a surprise: It began with a 9-year-old boy named Milo Cress and his 2011 campaign, "Be Straw Free," which launched to raise awareness about plastic waste.

His big finding? Americans use more than 500 million drinking straws daily, enough to fill 125 school buses. That figure has become highly touted since, referenced in straw ban coverage from The New York Times and National Geographic to reports from the National Park Service (and USA TODAY).

Now 16 years old, Cress just finished his junior year of high school and finds himself the face of a movement felt by global chains from Starbucks to McDonald's. But it's not without criticism — especially of his 500 million stat.

It started years ago when Cress noticed a trend while out to eat. He would see people take the plastic straws out of their drinks and put them on the table — never actually using them.
This didn't sit right with Cress. It felt like such a waste.

"I thought if restaurants were to offer a straw instead of serving them with every drink automatically, it could really reduce the number of straws that we use," he said. 

Not only was it a cost saver, but it also made customers more aware of plastic they use and eventually throw away, Cress said — especially straws, which have a short-use span but a 200-year lifespan. 
Cress talked to restaurants, politicians and peers. His philosophy picked up traction. The idea was digestible, easy enough to understand and practice.

But as Cress began to dig into research on plastics and the environment, he noticed there wasn't much data: "I couldn’t find anything on our use of straws in the United States," he said. 

So he called straw manufacturers himself, asking what they estimated to be the straw market in the United States per day. Some gave him a yearly estimate, which he divided by 365.

"Others gave an estimate of around 500 million straws," Cress said. "That was the number that I stuck to, because it seemed to be around the middle of what they were saying."

But with national coverage of Cress' statistic came criticism: Conservative-leaning outlets such as Fox NewsWashington Examiner, and Reason, aimed to debunk the figure.

The teen is aware of objections to the less-than-verified stat.

"Why I use this statistic is because it illustrates that we use too many straws," he said. "I think if it were another number, it still illustrates the fact that there is room for reduction. That’s really my message."

Eco-Cycle, a Colorado-based recycling nonprofit that partnered with Cress' campaign, trusts his statistic. If anything, said Eco-Cycle communications director Harlin Savage, 500 million straws per day could be too low. And if anyone has come up with a different figure, Savage  — plus a lot of other people, she said —  would like to see it. She applauded the teen's efforts.

“He saw a problem and it really bothered him, and he decided to do something about it,” Savage said. “He’s a wonderful role model.”...MORE
Corrections & Clarifications: An earlier version of this article misstated the estimated amount of plastic produced globally since the mid-1950s, which is 8.3 billion metric tons.
The fact of the matter is we have to stop plastic getting into the oceans. You've probably seen the pictures of the Caribbean:

New Images Show Plastic Pollution in Caribbean Sea - YouTube

That's water underneath the plastic.
World News Canada has video shot off the Dominican Republic on July 14. It is stunning.

And finally, from the World Economic Forum, June 8:

90% of plastic polluting our oceans comes from just 10 rivers
Over the last decade we have become increasingly alarmed at the amount of plastic in our oceans.
More than 8 million tons of it ends up in the ocean every year. If we continue to pollute at this rate, there will be more plastic than fish in the ocean by 2050.

But where does all this plastic waste come from?

Most of it is washed into the ocean by rivers. And 90% of it comes from just 10 of them, according to a study.

Rivers of plastic
By analyzing the waste found in the rivers and surrounding landscape, researchers were able to estimate that just 10 river systems carry 90% of the plastic that ends up in the ocean.
Eight of them are in Asia: the Yangtze; Indus; Yellow; Hai He; Ganges; Pearl; Amur; Mekong; and two in Africa – the Nile and the Niger.

"We were able to demonstrate that there is a definite correlation in this respect," said Dr. Christian Schmidt, one of the authors of the study from the Helmholtz Centre for Environmental Research. "The more waste there is in a catchment area that is not disposed of properly, the more plastic ultimately ends up in the river and takes this route to the sea."
Schmidt and his team found that the quantity of plastic per cubic metre of water was significantly higher in large rivers than in small ones.
Image: Statista
The rivers all had two things in common; a generally high population living in the surrounding region – sometimes into the hundreds of millions – and a less than ideal waste management process.
The Yangtze is Asia’s longest river and also one of world’s most ecologically important rivers. The river basin is home to almost 500 million people (more than one third of China’s population). It is also the biggest carrier of plastic pollution to the ocean....MORE

Declining Business Dynamism (birth, growth, death) And Information Technology

From VoxEU, July 19:

Evidence from the US indicates that business dynamism is declining, and that this affects overall productivity growth. This column explores business dynamism in Belgium between 1985 and 2014. The results show remarkable similarities to those from the US, suggesting that these changes are likely due to global trends such as the rise of information and communication technology.
During his 2005 commencement speech at Stanford University, Steve Jobs famously said that death is very likely the single best invention of life, as it clears out the old and makes way for the new. Business dynamism, or the fact that new firms arise, die, expand, and contract, is generally considered to play a key role for aggregate productivity growth. Using US establishment data, Davis and Haltiwanger (1991) were the first to document such a process of creative destruction, triggering a new stream of research documenting business dynamism for other countries (Haltiwanger et al. 2014). This research showed how old, sluggish firms make way for newer, more innovative, and more productive firms. It also shows how a high level of business dynamism implies that resources can easily be reallocated from low-productivity to high-productivity activities in the economy.

While it has been well documented that the level of business dynamism varies across countries, usually due to different levels of labour and product market regulation, little is known about its evolution over a long period of time that spans various business cycles. Recent work by Decker et al. (2016) shows that, for the US, business dynamism has been declining over the past decades and that the nature of the decline changed around 2000, with a decline in (young) high-growth firms. High-growth firms are firms that have experienced an annualised growth greater than 20% over a three-year period, with at least 10 employees at the start of the growth period. Typically, young high-growth firms invest more in innovation than other firms and are thus responsible for a disproportionate share of employment and productivity growth (e.g. Acemoglu et al.2017, Haltiwanger et al.2016). High-growth firm activity is therefore often seen as a good proxy for the level of entrepreneurship in an economy.

While the decline in business dynamism has been well documented for the US, there is no work using the decades of data available for other countries. In a recent paper, we fill this gap by studying the business dynamism of Belgium’s small, open economy using 30 years of data from 1985 to 2014 (Bijnens and Konings 2018). We find a similar decline in business dynamism as in the US, which also sets in around 2000. This is remarkable as firms in the US face a far less rigid institutional environment than the ones located in Belgium.
The same secular decline in business dynamism in a small, open, European economy as in the US
In our paper we use various measures to study business dynamism. Predominantly, we based our analysis on the statistical distribution of firm employment growth rates and their evolution. In particular, we calculated the dispersion of the distribution as the difference in growth rate between a firm at the 90th and a firm at the 10th percentile of the distribution, also referred to as the 90-10 differential. The higher the dispersion, the more reallocation between firms. A second measure looks at the entry and exit of firms, which is a good indicator of creative destruction in an economy. A third indicator looks at high-growth firm activity. ....MUCH MORE

"US venture capital activity so far this year in 15 charts"

From PitchBook:
There's been more venture capital invested through the first six months of 2018 in the US than any six-month period in recent history, which highlights the new normal in the industry: more capital concentrated into fewer, larger deals. On the exit end of the spectrum, there's been improved access to the IPO market, particularly for enterprise tech companies.

The 2Q 2018 PitchBook-NVCA Venture Monitor, created in partnership with Silicon Valley Bank, Perkins Coie and Solium, provides a snapshot of the VC landscape by delving deep into data on fundraising, exits, valuation trends and more. For a summary, we've put together a collection of charts from the report, which is available to download for free.

Deal value is on pace to reach decade-high record 
Through the end of 2Q 2018, $57.5 billion has been invested in US VC-backed companies, a number that exceeds the full-year total for six of the past 10 years. During the first half of the year, 94 financings have totaled more than $100 million and 42 have been at unicorn valuations.
A look at the last two quarters 
There was more venture capital invested during 1Q 2018 than any quarter since at least the beginning of the decade, and it's followed closely by 2Q 2018.  
PE investors continue to join large rounds 
This year is on pace to be the fifth consecutive year that more than 1,500 deals are completed with participation from nontraditional investors, including private equity firms. PE firms alone have been involved in 368 VC deals so far this year. 
Exits are slightly quicker than last year 
For VC-backed companies, time to exit reached a decade high in 2017. Time to exit is still relatively high, but it has dropped a bit since last year....MUCH MORE

"Amazon Is Pure Madness: It's Going to Destroy Almost Every Industry Alive and It Must Be Stopped", Bezos Denies Being Satan's Minion

This is a year old but the underlying theme is evergreen.
First posted July 17, 2017:

 "Amazon Is Pure Madness: It's Going to Destroy Almost Every Industry Alive and It Must Be Stopped", Bezos Denies Being Satan's Minion
"I ain't nobody's bi...minion" a remarkably buff Bezos was overheard saying.
Here's who didn't even get to the biggest new bizopp for Bezos, link below:

Amazon Is Pure Madness: It's Going to Destroy Almost Every Industry Alive and It Must Be Stopped
New day, a new business Amazon (AMZN) wants to dip its toes in.

The latest looks to be the meal kit space, TheStreet reports.

In a July 6 trademark application, Amazon subsidiary Amazon Technologies Inc. revealed it is planning "prepared food kits composed of meat, poultry, fish, seafood, fruit and/or and [sic] vegetables... ready for cooking and assembly as a meal," as well as primarily grain-based offerings....MORE
The latest Amazon/US Patent & Trademark Office award comes just in time to frighten the striking Spanish warehouse workers; in the style of airline baggage handlers crossed with dwarf tossers.

From GeekWire, July 18:

Heads up! Amazon wins a patent for robotic arms that toss warehouse items

Robots are nothing new for Amazon’s fulfillment centers, but a newly issued Amazon patent envisions robots that could toss items around those centers.

The 27-page patent, published Tuesday, describes robotic arms or manipulators that can use sensors to identify objects, figure out how best to grab onto them, calculate the required trajectories and fling the objects into chutes or bins....MORE
Amazon's July 26 Earnings Report Is Make-or-Break For the Bull Market (AMZN)

"With its new lineup of funded news shows, Facebook sure does look like a media company" (FB)

A couple weeks ago, after years of vehemently denying it was a publisher the company found it expedient to claim in court that it was indeed a publisher. Guardian link after the jump, here's the headliner from Slate, July 16:

And it’s going to have a tougher time explaining why traditional media regulations shouldn’t apply to them.
Facebook has been trying awfully hard to repair the past two years of damage to its reputation. It’s been running apologetic ads on TV. It’s sent CEO Mark Zuckerberg to testify before Congress. It’s rolled out new privacy settings. It’s employed new and improved content-moderation algorithms and filtering technologies, and hired more people to weed out the undesirable content that slips through the cracks. Advertisers are now under more rigorous scrutiny, and Facebook users must be informed about who paid for each political ad they see in their news feeds. 

In the midst of all of this, Facebook has decided to launch a new initiative that will air exclusive TV-news programming from a range of content providers, including household names like Fox News, CNN, Univision, and BuzzFeed. In the view of the social media behemoth, this represents not just a way to get users to spend more time with the platform, but also another way to combat what it has dubbed “false news.” But the term for the problematic media the platform helped spread isn’t best captured by false news, or the more ubiquitous fake news. Instead, it’s a category of content that Oxford University’s Computational Propaganda Project calls “junk news,” which its researchers say provides a more accurate description, since it also applies to all sorts of information that—while not completely fake—still contributes to problematically uninformed, misinformed, bigoted, and hyperpolarized views. It’s an important distinction in the diagnosis of Facebook’s problems—and helps explain why the company’s new, sanctioned news programming may end up causing more trouble than good. 

Facebook famously does everything it can to avoid being categorized as a media company. It doesn’t want to subject itself to the many regulations that apply to traditional media companies. Nor does it want to play the editorial gatekeeping role of evaluating which content is factual and relevant enough to be considered newsworthy—or, at least, it doesn’t want to be held responsible for doing so (part of the reason why the company did away with its Trending Topics). While Facebook has started demoting posts that users and fact-checkers flag as false, the outsourcing of this judgment task allows it to keep insisting it’s just a technology company providing a forum for the exchange of viewpoints and information. Zuckerberg himself has said that making content decisions on behalf of users makes him “fundamentally uncomfortable.”...MORE 
And from The Guardian July 3:

Is Facebook a publisher? In public it says no, but in court it says yes
In its defense against a former app startup, Facebook is contradicting its long-held claim to be simply a neutral platform


This is the second time in a year we've seen testimony in a British court wildly at variance with the public pitch.
Cognoscenti of American politics can probably guess the other case. 
Further, your affiant sayeth naught.

"Gold slips to 1-year low as U.S. dollar firms"

Continuing its stately decline:

From Reuters via Kitco:

Dollar holds firm after Fed Chairman's testimonies
* Silver hits 1-year low 
Gold prices sank to a fresh one-year low on Thursday as the dollar powered higher following comments from U.S. Federal Reserve chairman Jerome Powell which reaffirmed expectations for more interest rate rises in the world's largest economy. Powell, in a closely watched two-day congressional testimony, said he believed the United States was on course for years more of steady growth, and carefully played down the risks to the U.S. economy of an escalating trade conflict. The Fed raised rates in June and policymakers indicated they expect two more rate increases this year. Powell said nothing in his testimony this week to undermine that, and said the economy was poised for several more years of growth. Gold is highly exposed to interest rates, particularly in the United States, as higher rates lift the opportunity cost of holding non-yielding assets and boost the dollar, in which gold is priced. Spot gold fell 0.8 percent to $1,216.61 per ounce by 0940 GMT, having touched its lowest since July. U.S. gold futures for August delivery were 0.9 percent lower at $1,216.56 an ounce. "It's a tough environment for gold," said ETF Securities associate director Anneka Gupta, adding that growth in the U.S economy and stronger corporate earnings undermined the yellow metal.

"Gold is not being used as a safe haven right now despite the ongoing trade war and the stronger dollar is dominating the story amidst the rate-rising environment." Gold is generally regarded as a safe and stable store of value during times of global uncertainty....MORE
Platinum has broken below $800 ($797 down $20) but as mentioned a couple weeks ago, it has its own set of problems:
"As Diesel Dies, One Commodity Is Crashing"

"How Russian gas became Europe’s most divisive commodity"

As the kids say: Find someone to look at you the way Putin looks at Gerhard Schröder. 
They also hug a lot.
 A lot.

From the Financial Times:

FT Big Read, July 17:
Nord Stream 2 will pipe energy to Germany but critics warn of political tensions
Lubmin is a picturesque resort on Germany’s Baltic Sea coast that boasts a long stretch of sandy beach bordered by soft dunes and a lush pine forest. Located a few hours north of Berlin, the town offers tourists a postcard version of seaside tranquility. Or it would, were it not for the fleet of excavator barges that sails out from the local port every day, and the large building site hiding behind the pines.

Both are part of a fiercely contentious project that has split Europe down the middle, and set Germany on a collision course with some of its closest allies. Out in the sea, the excavator barges are digging a massive underwater trench that runs in a straight line towards the building site on land. If all goes to plan, that trench will soon hold a pipeline filled with the most explosive commodity in European politics today: Russian gas. 

The Nord Stream 2 pipeline has been in planning since 2015, and is due for completion in late 2019. Its defenders argue the project makes perfect commercial sense: the pipeline will connect the world’s biggest exporter of natural gas with the largest economy in Europe, doubling the capacity of the existing trans-Baltic link, Nord Stream 1, which has been operational since 2011. Together, the two pipelines will eventually be able to carry 110bn cubic metres a year of natural gas, enough to meet almost a quarter of total demand across the EU.

Critics regard the pipeline — and Germany’s role in it — as an act of betrayal and a geopolitical folly of the first order. Countries such as Poland and Ukraine have denounced it as a blatant attempt to marginalise their own gas pipelines — and a reckless move that will leave them and the rest of Europe at the mercy of Moscow. The European Commission is another opponent of Nord Stream, arguing the project undermines its push for greater energy independence and more diversified supplies.

The most formidable adversary, however, sits in Washington. President Donald Trump has made clear repeatedly that he wants to stop the €9.5bn project — and that he is ready to impose tough sanctions to achieve that goal. Last week, Mr Trump launched a blistering attack on the new pipeline at the Nato summit in Brussels, warning that Germany had become “captive to Russia, because it’s getting so much of its energy from Russia”.

Kirsten Westphal, an energy analyst at the German Institute for International and Security Affairs, likens Nord Stream 2 to an “onion” — you peel away layer after layer of controversy only to discover that the next one is more contentious still. At its core, however, the pipeline poses a simple but crucial question: should the west trust Russia or not?

 “Russia’s annexation of Crimea in 2014 and the war in Ukraine have changed everything,” says Ms Westphal. “For many people in the west, the idea that Russia is a dependable partner has gone. There is doubt: given all the geopolitical tensions, should we further expand our energy relationship with Russia? Should we make a bet, despite it all, to keep the channel open?”....


The monster-icebreaker that might reshape Arctic shipping

From The Barents Observer:

Yards fight for the right to build the nuclear-powered vessel that will be able to break through 4 meter ice and open wide shipping lanes across Arctic waters. But the biggest resource developers in the region might not really want it.
The 120 MW icebreaker «Lider» is not only super-powerful, but also super-expensive, and questions have been raised about Russia’s ability to cover the bill.

However, the country’s authorities continue to assure that the vessel will be built.

Several yards are now competing over the right to build the ship. On the one hand is the Baltic Yard in St.Petersburg, which might ultimately join efforts with the nearby Severnaya Yard. On the other hand is the Zvezda, the new yard under construction near Vladivostok, newspaper Kommersant reports.

A decision is expected soon. Russian nuclear power company Rosatom earlier this year confirmed that an investment decision will be taken late 2018 or early 2019.

«This unique icebreaker - which is without analogues in the world - will allow us to develop northern fields at a speed which meets the objectives of natural resource developers like Novatek», Rosatom leader Aleksey Likhachev told President Vladimir Putin in a meeting in the Kremlin.

The 209 meter long and 47 meter wide vessel, designed by company Iceberg, has a draft of 13 meter and will be able to break through four meter thick ice at 12 knots speed. It will be powered by two RITM-400 reactors with a total 120 MW capacity.  It has unlimited range and can operated round-the-year, Rosatom informs in a presentation of the vessel.

The ship is needed for Russia to strengthen its presence in the global markets of liquified natural gas, as well as to provide for Arctic expedition, Vyacheslav Ruksha, leader of Rosatomflot told RIA Novosti. The powerful head of the company that manages the country’s fleet of nuclear-powered icebreakers maintains that the «Lider» will enable Russia to open a «direct access» to the Asian-Pacific countries....MORE

Wednesday, July 18, 2018

"'Yield-Curve Inversion' Consensus Rouses Contrarian in Me"

That's Wolf Richter speaking although, for slightly different reasons, we agree with his conclusion.
From Wolf Street: 

Markets have a way of blowing this type of consensus out of the water.
The phrase “yield curve inversion” may not be up there with “Taylor Swift” or “Kim Kardashian,” but it has by now cropped up in the media so often that people are Googling it all of a sudden:
Markets are by now taking this “yield curve inversion” for granted. It’s going to happen, it’s just a matter of time, they say, and whether it’ll be next week or at the next rate hike is not crucial.
This idea that the yield curve must invert is based on the principle that the Fed is raising its target range for the federal funds rate, an overnight rate, and that these higher rates are filtering into short-term Treasury yields, such as the one-month yield, the three-month yield, or the two-year yield. Meanwhile, the 10-year and 30-year yields are doomed to be stuck. And when the two-year yield gets pushed above the 10-year yield, that’s the moment of “inversion.”

An inversion of the yield curve, which happens rarely, has become a popular and accurate recession indicator over the past decades. The last time it inverted was followed by the Financial Crisis.
Today, the two-year yield closed at 2.62%, the highest since July 2008. The 10-year yield closed at 2.86%. The difference of 24 basis points is the narrowest spread since before the Financial Crisis.
The chart below shows the yield curves on December 14, 2016, when the Fed got serious about raising rates (black line); and today (red line). Note how the red line has “flattened” compared to the black line. The spread between the two-year and the 10-year markers, at just 24 basis points today, is minuscule compared to the 127-basis point spread on December 14, 2016:
If the 10-year yield remains at 2.86%, and if the two-year yield rises 25 basis points to 2.87% (likely by the next rate hike), the two-year yield would be higher than the 10-year yield, and the curve would be inverted.

The chart below shows how the spread between the two-year yield and the 10-year yield appears to be headed to zero – a flat yield curve – or below zero, which would be the inversion moment:...MUCH MORE
Dancing on the Edge of a Volcano: "The yield curve needs to be respected"—Jeffrey Gundlach
ICYMI: "U.S. Yield Curve to Invert in Mid-2019, Morgan Stanley Says"
"As the Yield Curve Flattens, Threatens to Invert, the Fed Discards it as Recession Indicator"
"Who’s Afraid of a Flattening Yield Curve?"

News You Can Use: How To Launder Money Via Mobile Gaming

Criminals are so creative.
From Bleeping Computer:

Open MongoDB Database Exposes Mobile Games Money Laundering Operation 
The US Department of Justice, Apple, and game maker Supercell, have been warned of a money laundering ring that uses fake Apple accounts and gaming profiles to make transactions with stolen credit/debit cards and then sells these game premiums on online sites for the group's profit.
This operation came to light in mid-June when security researchers from Kromtech Security came across a MongoDB database that had been left exposed online without authentication.

"As we examined the database we rapidly became aware that this was not your ordinary corporate database," said Kromtech researcher Bob Diachenko.
"This database appeared to belong to credit card thieves (commonly known as carders) and that it was relatively new, only a few months old," he added.

Group was using automated tools to buy game premiums
Diachenko says the group was using a special tool to create iOS accounts using valid emails accounts, then was adding a stolen payment card's details to one of these new iOS accounts.
The group then ran another automated tool on jailbroken iOS devices to install various games, create in-game accounts, and purchase game features or premiums that they later re-sold online for real money.

The expert says crooks targeted mobile games such as Supercell's Clash of Clans, Supercel's Clash Royale, and one game by Kabam named Marvel Contest of Champions....MUCH MORE
Here's a handy schematic:

House rep suggests converting Google, Facebook, Twitter into public utilities (FB; GOOG; TWTR)

From TechCrunch, July 17:
Amidst questions about how conspiracy theorists’ accounts are treated during today’s House Judiciary hearing with Facebook, Google and Twitter on social media filtering practices, Representative Steve King (R-Iowa) dropped a bombshell. “What about converting the large behemoth organizations that we’re talking about here into public utilities?”
King’s suggestion followed his inquiries about right-wing outlet Gateway Pundit losing reach on social media and how Facebook’s algorithm worked. The insinuation was that these companies cannot properly maintain fair platforms for discourse.
The representative also suggested there may be need for “review” of Section 230 of the Communications Decency Act that protects interactive computer services from being treated as the publisher of content users post on their platforms. If that rule was changed, social media companies could be held responsible for illegal content, from copyright infringement or child pornography, appearing on their platform. That would potentially cripple the social media industry, requiring extensive pre-vetting of any content they display.
The share prices of the tech giants did not see significant declines upon the representative’s comments, indicating the markets don’t necessarily fear that overbearing regulation of this nature is likely.
Here’s the exchange between King and Google’s Global Head of Public Policy and Government Relations for YouTube Juniper Downs:
King: “Ms. Downs, I think you have a sense of my concern about where this is going. I’m all for freedom of speech, and free enterprise, and for competition and finding a way that competition itself does its own regulation so government doesn’t have to. But if this gets further out of hand, it appears to me that Section 230 needs to be reviewed.
And one of the discussions that I’m hearing is ‘what about converting the large behemoth organizations that we’re talking about here into public utilities?’ How do you respond to that inquiry?”
Downs: “As I said previously, we operate in a highly competitive environment, the tech industry is incredibly dynamic, we see new entrants all the time. We see competitors across all of our products at Google, and we believe that the framework that governs our services is an appropriate way to continue to support innovation.”
Unfortunately, many of the representatives frittered away their five minutes each asking questions that companies had already answered in previous congressional hearings or public announcements...

Thinking of a Career Change? There Are Options You May Not Have Considered

From National Public Radio's Planet Money:

Japan's Ninja Shortage
Iga, a small Japanese city and the birthplace of the ninja, is facing a serious problem — there aren't enough people training to be ninjas, not even for $85k a year. Today on the show, Sally Herships goes to Iga to discuss the city's plan to use ninjas to fight depopulation....MORE (podcast)
HT: MetaFilter whose comments, as always, are interesting.

There Is Something Weird Going On With Google's Sidewalk Labs Project In Toronto (GOOG)

We've been posting on 'smart' cities' in general and Alphabet's Sidewalk Labs in particular for a bit over three years, with quite a few of the stories (see after the jumps) being techno-dystopia stuff.
Here's another, but more important are the links immediately following.

From Politico, July/August 2018: 

Google Is Building a City of the Future in Toronto. Would Anyone Want to Live There?
It could be the coolest new neighborhood on the planet—or a peek into the Orwellian metropolis that knows everything you did last night.
TORONTO—Even with a chilly mid-May breeze blowing off Lake Ontario, this city’s western waterfront approaches idyllic. The lake laps up against the boardwalk, people sit in colorful Adirondack chairs and footfalls of pedestrians compete with the cry of gulls. But walk east, and the scene quickly changes. Cut off from gleaming downtown Toronto by the Gardiner Expressway, the city trails off into a dusty landscape of rock-strewn parking lots and heaps of construction materials. Toronto’s eastern waterfront is bleak enough that Guillermo del Toro’s gothic film The Shape of Water used it as a plausible stand-in for Baltimore circa 1962. Says Adam Vaughan, a former journalist who represents this district in Canada’s Parliament, “It’s this weird industrial land that’s just been sitting there—acres and acres of it. And no one’s really known what to do with it.”
That was before Google.

This past October, a coalition of the Toronto, Ontario and Canadian governments contracted with Sidewalk Labs, a sister company of Google, to come up with a $50 million design for a dozen acres on the waterfront’s far eastern end. The idea is to reimagine Toronto’s derelict waterfront as “the world’s first neighborhood built from the internet up,” as Sidewalk describes it. The neighborhood, called Quayside, would leapfrog the usual slow walk of gentrification to build an entire zone, all at once, as a “smart city,” a sensor-enabled, highly wired metropolis that can run itself.

Toronto’s choice of the Google-affiliated firm immediately captured the attention of urban planners and city officials all over the world; magazine stories trumpeted “Google’s Guinea-Pig City” and “A Smarter Smart City.” Still in its early days, the partnership has left people curious but wary. Google? What does a tech company know about running a real live city?

In one sense, what’s perhaps surprising is that it has taken this long. Silicon Valley’s innovators have long had side obsessions with making the world a better place, driven largely by the confidence that their own brainpower and a near-total disregard for tradition can break old logjams. PayPal co-founder Peter Thiel helped seed the “seasteading” movement to create offshore libertarian paradises; the tech incubator YCombinator is currently running a public-policy experiment in Oakland, California, giving residents a guaranteed monthly stipend to see how it might improve their quality of life.

The notion of the feedback-rich “smart city” has circulated for years, and in practice has mostly taken the shape of centuries-old cities like New York or Boston adopting sensor-enabled stoplights or equipping their residents with an app for spotting potholes. But the real dream, a place whose constant data flow lets it optimize services constantly, requires something different, a ground-up project not only woven through with sensors and Wi-Fi, but shaped around waves of innovation still to come, like self-driving cars. Thanks to a host of technological advances, that’s practical now in a way it never has been before. Mass-produced sensors now cost less than a dollar apiece, even for hobbyists; high-speed broadband and cheap cloud computing mean that a city can collect and analyze reams of data in real time.

In Toronto, Sidewalk sketches out a picture of a neighborhood where intelligent “pay-as-you-throw” garbage chutes separate out recyclables and charge households by waste output; where hyperlocal weather sensors could detect a coming squall and heat up a snow-melting sidewalk. Apps would tell residents when the Adirondack chairs on the waterfront are open, and neighbors would crowdsource approvals for block-party permits, giving a thumbs-up or thumbs-down based on the noise the gathering was expected to produce. Traffic signals could auto-calibrate to ease pedestrian congestion during public events, or to ensure a smooth rush hour. The data from such systems would feed back into the city, which would constantly learn, optimizing its own operations from month to month, year to year. Sidewalk promises “the most measurable community in the world.”...MUCH MORE
It's a very solid overview of most of the issues.
On a more granular, and thus more useful-for-analysis level, there is Jamie Powell's series at FT Alphaville.
Spoiler Alert: there are some deep problems.
In chronological order (the sting is in the tail):

March 9
Embracing waterfront Google-fication in Toronto
March 22 
Google-fication, an update
May 9 
Google-fication, continued
July 1 
Sidewalk Toronto: delays and NDAs
July 6
Waterfront Toronto CEO departs

What we are guessing happened was that after the Facebook/Cambridge Analytica story broke at the NYT and Guardian on March 17 and was further investigated and disseminated in April and May the  backlash made the original big data business plan socially and politically untenable.

The model Sidewalk was using was to get one revenue stream from consulting/managing, another revenue stream from software (and even hardware, think GOOG's TPU's for AI) and the third and largest revenue stream from monetizing all the data collected.

And there's the rub.
And it's such a big part of what makes the project interesting to Google that unless they can figure out how to replace that leg the stool falls over.

Thanks Jamie.

And just to hammer the point home, this is our guess, Sidewalk has not invited us to any of the meetings and we could be way, way off.
And for the factual reporting, all glory and honor is Mr. Powell's.

Some of our previous posts, in no particular order:

Smart Cities: "Welcome to the neighbourhood. Have you read the terms of service?"
"London mayor Sadiq Khan taps ex-NYC mayor Michael Bloomberg's consultancy to help draft smart city strategy"
As we've mentioned, there are some gigantic financial interests behind all of this....
"Google’s plan to revolutionise cities is a takeover in all but name"
Smart City Report: Sidewalk Labs and Data In Toronto (GOOG)
NVIDIA Wants to Run Your City: Smart City Control Centers (NVDA)
Here's Google's Sidewalk Labs' Pitch To Insert Itself Into America’s Urban Transportation Infrastructure (GOOG) 
"Alphabet is plotting a digital city full of Google cars, high-speed Internet and maybe more!" (GOOG) 
As former Deputy Mayor to Michael Bloomberg, Doctoroff pretty much epitomizes the intersection of big money/big politics. That Medium post is not quite a blueprint but interesting nonetheless. 
"Nvidia's Slightly Terrifying Metropolis Platform Paves the Way for Smarter Cities" (NVDA)
Although this article is 11 months old it is a good introduction to one piece of what we were foreshadowing with Tuesday's "NVIDIA Wants to Be the Brains Behind the Surveillance State (NVDA)". In fact the camera surveillance integration AI is only one part of the Metropolis platform which is itself only one part of what the rest of NVIDIA's offerings will consist of....
And many more, use the 'search blog' box upper left, if interested.
The reason we're paying attention?
Profit motive.
From Cision PR, March 6:
Smart Cities Market Size Worth $2.57 Trillion by 2025 | CAGR: 18.4%: Grand View Research, Inc.

Amazon's July 26 Earnings Report Is Make-or-Break For the Bull Market (AMZN)

It's a function of the cap weighting in the S&P 500.
Slope of Hope was the first analyst we've seen mention, albeit just in passing, how the market's uptrend could hit the wall.

First up:

Triple Long View
16, Jul 2018 5:54:15 AM
...Equities have not broken their nearly decade-long uptrend, and the cyan tinted area is what my recent “drum roll, please” anticipatory posts have been related to. A breakout above this would give the bull run yet another lease on life. At the immediate moment, the 2809.50 zone has been repelled again. It would take a LOT of bad news to break the uptrend (although I will say, out of thousands of companies, a single reversal on the part of a giant like AMZN based on earnings would go a long way toward that).

...MORE (oil and bonds, we agree with one take, disagree with the other)

And later that day, a bit more 'on the nose' as they say in Hollywood:

It Wasn’t Supposed to Be Like This
16, Jul 2018 2:45:07 PM
It is understandable why people would be long Netflix going into earnings. (You can press Ctrl-E in SlopeCharts to see all historical earnings events). After all, NFLX reliably vaults higher every time they announce. This trend continued until……….it didn’t. As I said earlier, give me this same result with Amazon in 10 days, and this goose is cooked.

Amazon reports after the close on the 26th  Via NASDAQ the last four reports were:

Quarter End
Per Share
EPS* Forecast
Mar2018 04/26/2018   3.27 1.22 168.03
Dec2017 02/01/2018   2.16 1.85 16.76
Sep2017 10/26/2017   0.52 0.01 5100
Jun2017 07/27/2017   0.4 1.4 -71.43

...According to Zacks Investment Research, based on 14 analysts' forecasts, the consensus EPS forecast for the quarter is $2.49. The reported EPS for the same quarter last year was $0.4.

Also via NASDAQ the dates for the other behemoths:

Company Expected Report Date
AAPL Jul 31, 2018
MSFT Jul 19, 2018
 FB           Jul 25, 2018

The Journo Who Interviewed Bernie Madoff

Initiative is a good thing, it gets stuff done.
Patience also helps, especially for getting what you want from sociopaths.

From TalkingBizNews:

How Gelles got an interview with Bernie Madoff
Sam Goldman of the Cal-Berkeley Graduate School of Journalism profiled New York Times business reporter David Gelles, who had a prison interview with Ponzi schemer Bernie Madoff.

Goldman writes, “Gelles was at The Financial Times when Bernie Madoff was arrested. Almost immediately after, the reporter happened to find out that a friend of a friend of a friend ‘had an in with the Madoff family.’ With no expectation it would reach Madoff, Gelles passed along a message: ”Tell him, that if he ever talks to someone, talk to me.’’

“Two years later, an email appeared in his inbox from Madoff, by then behind bars. For six months, they corresponded. His application to visit Madoff was rejected twice by the prison before it was approved. ‘It was not a layup,’ Gelles said. ‘It took a combination of luck and persistence and persuasion on my part.’

“Finally, in 2011, he and FT managing editor Gillian Tett had their two hours with Madoff. Gelles’ takeaway? ‘As far as I can tell he’s a sociopath, in that he just doesn’t feel empathy.’...MORE

WEF "China is among the 20 most innovative economies for the first time"

From the World Economic Forum:
In the last few decades, China has made huge progress in science and technology. This new age of innovation has seen the birth of ‘unicorn’ tech companies like media giant Tencent, the ‘Uber of China’ Didi Chuxing, and the world’s biggest drone builder, DJI.
Now, for the first time, China has broken into the top 20 of a global list of the most innovative economies.

The latest Global Innovation Index singles out China for its rapid transformation into an innovation powerhouse. It has risen consistently up the rankings, in 2015, it was in 29th place, the following year it rose four places to 25th place and in 2017 up three places to 22nd.

Key drivers behind this upward trend include a high level of spending on research and development and the high number of patent applications made by Chinese companies and institutions.

China’s innovation trajectory has been dynamic, says the report, which is compiled by the INSEAD business school, Cornell University and the World Intellectual Property Organisation (WIPO).

China riding high
Image: UNESCO Institute for Statistics
The report finds that China has the highest concentration of researchers, the highest number of patent applications submitted, and the number of scientific and technical publications is well ahead of the US.
Meanwhile, the latest figures (2016) from the UNESCO Institute of Statistics shows China has 1,200 researchers per million inhabitants, and a total of around 1.6 million researchers....MUCH MORE

Tuesday, July 17, 2018

M.R.D. Alert: "Uber CEO Believes Profitability Not Critical to Launching IPO"

Well he would say that, wouldn't he?*

When I saw the story this morning I had to take a moment to compose myself and then make a judgement as to whether this headline was funnier than last August's:
Somehow missed this one: "Uber, Seeking a Female CEO....
...has narrowed the list to three men.
Your call, the bookies won't touch it.

From MarketWatch:

Published: July 16, 2018 11:45 p.m. ET
Uber CEO believes profitability not critical to launching IPO
Search for CFO continues
Uber Technologies Inc.’s Chief Executive Dara Khosrowshahi on Monday confirmed that the ridesharing company’s initial public offering is likely to take place in 2019 as originally planned even if its profitability does not improve by then.

Khosrowshahi said he doesn’t believe it’s necessary to make money before the IPO but the company will need to demonstrate a clear road to profitability. What is important, however, is cash generation as he doesn’t want Uber to be dependent on public or private markets for funds to expand, he said, speaking at the Fortune Brainstorm conference.

The public appearance comes as news broke that the Equal Employment Opportunity Commission is investigating the company over a complaint about gender inequity....

For our younger readers M.R.D. was Mandy Rice-Davies.
From a 2012 post:

*For British politicians of a certain age [often referred to as octo or nona-genarians -ed] the scandal surrounding Secretary of State for War John Profumo's affair with the alleged mistress of a Russian spy was highlighted by the testimony of Miss Rice-Davies, a friend of the alleged mistress, Christine Keeler.
From Wikipedia:
...While giving evidence at the trial of Stephen Ward, charged with living off the immoral earnings of Keeler and Rice-Davies, the latter made a famous riposte. When the prosecuting counsel pointed out that Lord Astor denied an affair or having even met her, she replied, "Well, he would, wouldn't he?
We've tried to keep the phrase alive, using it about once per year:...
...One of my favorite usages:

Lord McIntosh of Haringey: My Lords, I am proud of many things that this Government have done. 
I pause to anticipate the interjection—"He would say that, wouldn't he?"...
Lords Hansard text for 6 Feb 2002

"DARPA Plans a Major Remake of U.S. Electronics"

This is a pretty big deal.

From IEEE Spectrum:

The defense department’s research wing is pouring $1.5 billion into projects that could radically alter how electronics are made
The U.S. Defense Advanced Research Projects Agency is launching a huge expansion of its Electronics Resurgence Initiative, boosting the program to US $1.5 billion over five years. And while some of the research efforts will be just what you’ve come to expect from the agency that brought you disposable drones, self-driving cars, and cameras that can see around corners, a lot of this new money is going toward ideas that could fundamentally change how chips are designed.
If it all works out, the effect could be to make small groups of engineers capable of feats that would take 100 engineers to achieve today. “We envision a much more specialized, secure, and heavily automated electronics community, which will change how everything is done in electronics, top to bottom,” says DARPA’s ERI director Bill Chappell. And that means your job is probably going to feel the effects.

The agency will kick off the initiative and reveal some of the winning proposals at a summit in San Francisco from 23 to 25 July, headlined by bigwigs like Nvidia’s Bill Dally and Intel’s Mike Mayberry. Chappell spoke to IEEE Spectrum ahead of the conference about the initiative’s aims and potential impacts.

Bill Chappell on:
  1. Why the electronics industry needs a push now
  2. Hardware that can figure out what it needs to be in the next millisecond
  3. Making two engineers feel like 100
  4. Design tools that learn from you
  5. How to make open-source hardware happen
  6. Making old fabs compete with new ones
  7. What it all means for the future of engineering
IEEE Spectrum: What are the problems with the U.S. electronics industry that prompted this massive effort?
Bill Chappell: I think it’s a unique point in time. We’ve got underlying trends where the physics is already hard and getting harder. And that’s expressing itself in the cost across the board, whether that’s design, manufacturing, or even writing the software on top of a system-on-chip. Most aspects of electronics are getting more expensive, and larger design teams are needed to manage the underlying complexity. That has consequences across commercial industry and across the defense industry.

IEEE Spectrum: What is it about the problem that prevents industry from solving it on its own?
Chappell: Industry is very good at solving immediate problems. Where the government has stepped in in the past, and is trying to step in now, is at moments where there’s a larger leap ahead required. We’re aiming for 2025 to 2030 timelines. And oftentimes, industry isn’t looking out across those timelines as they have more immediate pressures and concerns.

They also don’t always do what’s best for the collective industry. One thing the government has done well in the past is build communities to tackle big problems as an aligned group, as opposed to just having individual entities tackle smaller problems.

IEEE Spectrum: Has this community building become more important as the original version of the semiconductor road map ended?
Chappell: That’s true. When it was quite clear what the road map was, everybody in the electronics industry could pull in the same direction and know that it would be best for the collective if they kept the road map going. That was true for DARPA as well. We were sponsors of the Sematech consortium, and when it was clear what the goals were, it was an easier time in terms of building the collective.
IEEE Spectrum: Why make this big push now, and why organize it as a high-level summit?
Chappell: Typically, we run individual projects. DARPA’s been doing projects in the electronics space since its inception. In this case, we felt that an initiative was important, first because we’re concentrating on the electronic sector more than ever, and second because it’s the connectivity of many different projects. The teaming that can happen between projects, we think, is where a lot of innovation can happen.

We kicked six programs off simultaneously last summer. So it was a good opportunity to pull the entire electronics community together, to be able to see what we’ve invested in, and then to help brainstorm what the next round of investments should look like.

IEEE Spectrum: What’s the best possible outcome from the summit?
Chappell: There are two aspects that we’re hoping for. First, that we realize the synergy between the individual projects, so that new teams form from universities, companies, and federal labs that might otherwise not partner. And second, that we get a basis for new and exciting ideas for a next round of funding that we hope to announce in the fall.

IEEE Spectrum: One of the three major efforts DARPA is backing centers around chip architecture. Why is that, and what do you hope it will accomplish?
Chappell: In architectures, we believe that aggressive specialization is a part of the answer to what happens next. That’s mapping applications to the specific architectural choices. And you already see that in machine learning, where there’s a really hot field in terms of deep neural nets and other implementations. [See “IBM’s Do-It-All Deep Learning Chip” for an example of this.]
But a lot of our applications are much broader than that. We’re looking to collect the different applications where it makes sense to commit specific specialized resources.

IEEE Spectrum: Can you give an example?
Chappell: We started a year ago in a program called Hive, where we took a look at sparse graph parsing; that’s making associations across data sets which aren’t densely connected. An example application would just be logistics, where you’ve got lots of connections that didn’t map to the way computing architectures were laid out. In that program, Intel and Qualcomm are doing base-level designs; doing things like updating memory access patterns, updating the type of cores that would be doing the processing, and working across the software stack to do a hardware/software codesign for a variety of applications.

That was step one. Step two, to be kicked off at the summit, is something we call “software-defined hardware.” That’s where the hardware is smart enough to reconfigure itself to be the type of hardware you want, based on an analysis of the data type that you’re working on.

In that case, the very hard thing is to figure out how to do that data introspection, how to reconfigure the chip on a microsecond or millisecond timescale to be what you need it to be. And more importantly, it has to monitor whether you’re right or not, so that you can iterate and be constantly evolving toward the ideal solution.

IEEE Spectrum: Is any of that possible now?

"IBM Is Helping Launch a Price-Stable Cryptocurrency Insured By the FDIC"

The Crypto wouldn't be FDIC insured just the fiat in the bank and only up to relatively small limits per account.
And despite the (sometimes) pain-in-the-butt delays you can experience with SWIFT it's pretty good for sending the signal to move size.
Alternatively you have SEPA in the Eurozone and both Russia and China have their own message systems, Mir and CIPS respectively.

So again, why?

From Coindesk:

The latest attempt to create a cryptocurrency pegged to the U.S. dollar, or "stablecoin," combines 21st-century technology with an invention from the Great Depression.
Announced Tuesday, a startup called Stronghold is launching USD Anchor, which will run on the rails of the Stellar blockchain and use its consensus mechanism to verify transactions. The token will be backed one-for-one with U.S. dollars held at a Nevada-charted trust company called Prime Trust, which in turn will deposit the cash at banks insured by the Federal Deposit Insurance Corp.
New York City-based Signature Bank was originally expected to be providing the federally insured backing of the stable coin, but it appears to have backed out of the partnership at the eleventh hour, according to IBM.

IBM is partnering on the initiative with Stronghold, and said it will explore various use cases for the token with its financial institution clients. 
"What we really want to do is enable all sorts of digital transactional networks to settle their transactions with digital fiat currency on the same blockchain networks," Jesse Lund, IBM's head of blockchain services for financial institutions, told CoinDesk.

Stronghold acts as an "anchor," or on- and off-ramp, to the Stellar network. The startup will issue the digital asset, which represents a claim on U.S. dollars deposited with Prime Trust and ultimately insured by the FDIC, the U.S. agency created in 1933 whose sticker on the doors of bank branches has long reassured Americans their money is safe....MORE