Alexa: Amazon’s Operating System (AMZN; MSFT; GOOG; FB)

From Stratechery:

The concept of an operating system is pretty straightforward: it is a piece of software that manages a computer, making said computer’s hardware resources accessible to software through a consistent set of interfaces.

Operating systems have a special allure to technology companies because of the unique properties that come from being at the center of this diagram:

• First, by abstracting away the hardware an operating system reduces the plane of competition for hardware providers to pure performance (as opposed to, say, lock-in). In the short term this increases competition amongst hardware providers, which benefits the operating system, and in the long run, when performance becomes “good enough”, hardware is effectively commoditized allowing the operating system to capture the majority of profits in the value chain.
• Second, by providing a consistent set of interfaces for software, operating systems create network effects: the more users there are of an operating system the more software applications that are developed for that operating system; this in turn drives more users which increases the addressable market for developers further still. In the long run this results in lock-in for both developers and users.
• Third, operating systems by definition have a direct interface with end users, and owning the user relationship is massively valuable for the leverage it creates over entire ecosystems.

Much of the history of technology, particularly in the consumer space, is about owning the operating system.

Windows: The Perfect Business Model
The most famous operating system, of course, is Windows, which remains the best example of just how powerful owning an operating system can be:

• Windows fostered and benefited from competition for nearly every piece of hardware in PCs, resulting in massive increases in performance and massive decreases in price.
• Meanwhile, thanks to IBM, Windows (well, DOS to be precise, Windows’ command line interface-driven predecessor) was the default operating system for enterprise, which meant there was nearly immediately a huge and rapidly growing market for developers, which increased the desirability of Windows in the sort of virtuous cycle I described above.
• Windows then leveraged its ownership of users to build out two other massive businesses: first its Office franchise, and then its Windows Server line of products.

The end result was one of the most perfect business models ever: commoditized hardware vendors competed to make Windows computers faster and cheaper, while software developers simultaneously made those same Windows computers more capable and harder to leave. And, all along, Microsoft collected a licensing fee that was basically pure profit.

Mobile Operating Systems
On mobile Microsoft tried to repeat the trick, only to have its market stolen by Google’s Android, which was not only better than Windows Mobile but also free; unfortunately for Google, Android was so successful in its goal of ensuring Microsoft could never profit from the operating system chokepoint on mobile that Google itself was handicapped when it came to making money. Android provides valuable data and indirectly contributes to Google’s search-based profit-engine, but it is not nearly the business that Windows was.

Apple, meanwhile, has always had a different business model: selling hardware. That hardware, though, is differentiated by its own operating system; thanks to the sheer size of the smartphone market this has led to far greater revenue and profits than even Microsoft in its heyday, but the model is ever so slightly more fragile than Windows’ was: Apple has to not only bear the risk inherent to building hardware, but also by definition can only ever own a minority of the market. First, no company could ever build enough phones for the world, and secondly, to serve every customer would ruin the profit margins that make the business model so successful. That, by extension, has meant a duopoly with Android, resulting in most developers serving both markets; Apple still has a moat, but it’s not nearly as deep as Microsoft’s used to be.

Google and the Internet Operating System
This brief history of consumer operating systems is less complete than it seems: Android and iOS have replaced Windows in importance, but in fact Windows lost its lock-in well before Steve Jobs launched the modern smartphone era in 2007. The Internet made the operating system of the computer used to access it irrelevant, and the most dominant company on the Internet was Google.

Of course Google is not an operating system according the strict definition of the term, but in effect Google was the operating system of the Internet. Consider the qualities of operating systems I noted above:

• While websites could be accessed directly by typing a URL, in practice most websites in the desktop era were reached via search, akin to how computer hardware was accessed via a common operating system. And, just as hardware vendors had no choice but to commoditize themselves, websites had no choice but to make themselves as Google-friendly as possible....

 ...MUCH MORE

"CES 2017: The Year of Voice Recognition"

From IEEE Spectrum:

The beeping, flashing, pulsating glory of the world’s largest consumer electronics trade show has returned to Las Vegas. The first batch of new products and services went on display at CES on Tuesday, and startups and industry giants will debut more gadgets and technologies throughout the week.

Just a few of the curious wares spotted by IEEE Spectrum editors last night include a battery-powered scarf that filters air pollution, a hairbrush that uses sound waves to analyze dryness and frizz, a smart cane that detects falls, and a connected cat feeder that avoids overfeeding by recognizing felines by implanted microchips. Also, a US $120 camera that lets you stare at the inside of your refrigerator, should you ever choose to do that (assuming the milk isn’t blocking the view).

Major technology companies have also begun to make their announcements about new products they will launch in 2017. Qualcomm released its newest chip, the Snapdragon 835, which, rumor has it, could turn up in Samsung Galaxy 8 smartphones later this year. Huawei said its newest Honor smartphone, called the 6X, which boasts a battery life of 2.1 days and costs only $250, is now available in the United States. And Faraday Future unveiled its long-awaited self-parking FF 91 electric car, which integrates more than 30 sensors including cameras and a retractable lidar system to navigate into a parking space all on its own.

Looking at deeper trends, several experts said the most meaningful long-term developments will come from the companies scraping away at voice recognition. Once we master it, they believe, voice-recognition capabilities will fundamentally change the way we interact with and build electronics.

This was a strong element of Tuesday’s analysis of the global consumer market by Shawn DuBravac, chief economist, and Steve Koenig, senior director for market research, of the Consumer Technology Association (CTA), which runs CES.  In DuBravac’s opinion, voice-recognition technology has improved enough in the past few years that it is now poised to usher in an era of so-called faceless computing.

In particular, the word error rate for voice-recognition systems dropped from 43 percent in 1995 to just 6.3 percent this year, and is now on par with humans. “We have seen more progress in this technology in the last 30 months than we saw in the first 30 years,” DuBravac said. Another analyst attending CES that I spoke to was Ronan de Renesse, a consumer technology analyst for the business intelligence firm Ovum, who said he was watching a startup called Voicebox, which has worked on voice recognition for partners including Samsung, AT&T, and Toyota.

In addition to redefining the traditional computer interfaces, voice recognition could improve a host of products that are already on the market. CTA estimates total sales of voice-activated digital assistants such as Google Home or Amazon Echo to be about 5 million units to date, and expects that to double to 10 million in 2017. With all of these products, clarity and functionality are key. DuBravac figures there are currently about 1,500 apps (called “skills” in Amazon-speak) that can interact with Alexa, Amazon’s voice-activated personality and says he would not be surprised to see 700 new ones announced just this year at CES....MORE

The Complexity Theory Problem Strikes Back

From Quanta Magazine:

The legendary "graph isomorphism problem" may be harder than a 2015 result seemed to suggest.

The theoretical computer scientist László Babai has retracted a claim that amazed the computer science community when he made it just over a year ago. In November 2015, he announced that he had come up with a “quasi-polynomial” algorithm for graph isomorphism, one of the most famous problems in theoretical computer science. While Babai’s result has not collapsed completely — computer scientists still consider it a breakthrough — its central claim has been found, after a year of close scrutiny, to contain a subtle error.

“In Laci Babai, you have one of the most legendary and fearsome theoretical computer scientists there ever was, and in graph isomorphism, one of the most legendary and fearsome problems,” wrote Scott Aaronson, a theoretical computer scientist at the University of Texas, Austin, in an email. “A year ago, Laci threw an unbelievable knockout punch at [graph isomorphism], and now the problem itself seems to have gotten off the mat and thrown a counterpunch.”

The graph isomorphism problem asks for an algorithm that can spot whether two graphs — networks of nodes and edges — are the same graph in disguise. For decades, this problem has occupied a special status in computer science as one of just a few naturally occurring problems whose difficulty level is hard to pin down.

Roughly speaking, most computer science problems fall into one of two broad categories. There are “easy” problems, the ones that can be solved in a polynomial number of steps — if the size of the problem is denoted by n, the number of steps grows as, for example, n² or n³. These problems can (generally) be solved efficiently on a computer. And there are “hard” problems, for which the best known algorithm takes an exponential (such as 2ⁿ ) number of steps — far too many for a computer to carry out efficiently. Only a handful of natural problems, including graph isomorphism, seem to defy this dichotomy; computer scientists have struggled for decades to figure out just where graph isomorphism belongs.

Babai, a professor at the University of Chicago, had presented in late 2015 what he said was a “quasi-polynomial” algorithm for graph isomorphism. His work appeared to place the problem, if not firmly in the easy zone, then at least in its suburbs. But on January 4 he announced that while his algorithm still works (with some small tweaks) and has now been carefully checked by other computer scientists, it doesn’t run as fast as he had thought. It is “sub-exponential,” which moves the problem back into the suburbs of the hard zone....MORE

"Deciphering Iran’s sudden currency fluctuations"

From al-Monitor's Iran Pulse:

Recent fluctuations in the free market rate of the Iranian rial have caused concerns within the country’s business community that the currency may experience a sharp decline in value due to economic and political upheavals.

The Iranian economy has been operating with a multitiered exchange rate system for the past three decades. Currently, there are two official exchange rates: the official interbank (forex chamber) rate, which is used by banks for official hard currency transactions, and the so-called free market rate, which is used by licensed foreign exchange bureaus for all other transactions using the hawala system. Traditionally, the free market rate has been a valid indicator of the mood in the Iranian economy. The last major collapse of the rial value came about in the second half of 2012 when harsh sanctions prevented the Central Bank of Iran (CBI) from repatriating needed hard currency to manage the artificially kept rate of 11,000 rials to the US dollar. At that time, the free market rate collapsed to 30,000 rials to the greenback and caused a massive backlash leading to major economic decline in 2013.

However, ever since the election of President Hassan Rouhani in June 2013, the free market rate had experienced a relatively stable period, gradually moving from 30,000 rials against the US dollar in the summer of 2013 to about 35,000 rials in the summer of 2016.

Notwithstanding, in the past few months, the Iranian rial has been experiencing a roller-coaster ride, and as of Jan. 4 the rial has lost about 13% of its value against the US dollar since Sept. 15, 2016. The decline of the free market rial/US dollar rate since the US presidential election amounts to about 7%. The rate (currently at 39,500 rials to the US dollar) had actually reached 41,000 toward the end of December 2016, but bounced back when the CBI assured currency traders that it would. In fact, the governor of CBI, Valiollah Seif, has opined that the real value of the rial would be around 36,000 rials to the greenback. Respected experts such as Ali Dini Torkamani underline the fact that the CBI is in a monopoly position to determine the exchange rate; however, it is important to dissect some of the technical and psychological reasons that have led to the recent fluctuations.

One reason for the loss of value to the US dollar is the general appreciation of the greenback against other currencies. Incidentally, the Iranian rial is priced against a basket of currencies that does not include the US dollar. In fact, the rial is more influenced by the fluctuations of European currencies (especially the euro), which also lost value against the US dollar in the past few months. To prove the point, in the period between Sept. 15, 2016, and Jan. 4 of this year, the free market value of the Iranian rial only lost 5% against the euro. Other proof for the impact of the strengthening of the US currency is the fact that the official interbank rate of the rial lost about 3.3% of its value against the US dollar between Sept. 15, 2016, and Jan. 4. In the same period, the interbank rial exchange rate actually appreciated against the euro.

There are also obviously psychological aspects that need to be taken into account. The election of Donald Trump in the United States and the anticipation of renewed anti-Iran policies and sanctions, the extension of the Iran Sanctions Act by the US Congress, uncertainties about the international oil price and domestic political developments have all contributed to a fragile domestic currency market and an atmosphere in which many economic players resort to buying hard currency as a hedging mechanism.

The fact that the planned rate unification has been delayed by more than a year (it was originally envisaged for March 2016) is an indication of the complexities of the Iranian economy. Expectations were that the implementation of the nuclear deal and the eventual lifting of sanctions would actually strengthen the Iranian rial, but the rial has lost value in both markets....MORE

Saving Dogs In the U.S. And In Russia

First up, from the Des Moines Register:

Man helps save 'lucky dog' from icy river

One Iowa man's quick actions Monday morning helped save the life of a dog stuck in icy river water in Madison County.

Jerry Romine, 56, of West Des Moines was traveling on a dirt road near Winterset with his dog, Lucy. After Romine stopped so Lucy could relieve herself, he heard barks from another dog by an old bridge near the Middle River.

Romine put Lucy back in his truck and headed that way.

"I looked around the bridge and the dog took off running and was barking at this other dog in the water," he said.

The dog in the water, Sam — a 13-year-old Labrador mix — was holding on for his life, having just his head and upper body sticking out of the icy river. Romine said Sam's wails "made my blood curdle."...MORE

The Winterset Fire Department helped save Sam, a 13-year-old Labrador mix, after he got stuck in the 

Middle River on Monday, Jan. 2, 2017, near Winterset, Iowa. (Photo: Jerry Romine/Special to the Register)

HT: Naked Capitalism

And from Only in Russia:

Russian guy fights his way through a frozen lake to rescue a dog. pic.twitter.com/erzx6sP7k5

— Only In Russia (@CrazyinRussia) December 18, 2016

"Wall Street’s Most Outspoken Stock Bull Reverses, Now Top Bear"

It might be time to locate the exits and maybe start edging toward them.

From Bloomberg:

• Thomas Lee of Fundstrat sees S&P 500 finishing 2017 at 2,275
• Cites policy risk, flatter yield curve as first-half headwinds

Wall Street’s most vocal champion on U.S. stocks over the past two years is now its biggest bear.

Thomas Lee, managing partner and co-founder of Fundstrat Global Advisors in New York, published a note today saying the S&P 500 Index will finish the year at 2,275, about 3 percent lower than the median of 18 strategists surveyed by Bloomberg. His caution stems from policy risk and a yield curve adjustment he sees translating into an S&P 500 decline to 2,150 by mid-year before the index rebounds.

The “bond market is signaling inflation confusion,” and a flattening long-term yield curve, he wrote in a client note on Friday. That “generally leads to a 5 to 7 percent selloff,” he said.

It was Lee’s bullishness that made him the least accurate strategist on Wall Street in 2015, when the S&P 500 slid 0.7 percent. He doubled down in 2016 as the benchmark climbed 9.5 percent, and while his target overshot once again, he correctly predicted that the Federal Reserve’s decision to wait until December to hike rates and a recovery in corporate earnings would underpin stock gains into year-end....MORE

"Anti-Surveillance Clothing Aims to Hide Wearers From Facial Recognition "

From the Guardian:

Hyperface project involves printing patterns on to clothing or textiles that computers interpret as a face, in fightback against intrusive technology

An image of a Hyperface pattern, specifically created to contain thousands of facial recognition hits. 

Photograph: Adam Harvey 

The use of facial recognition software for commercial purposes is becoming more common, but, as Amazon scans faces in its physical shop and Facebook searches photos of users to add tags to, those concerned about their privacy are fighting back.

Berlin-based artist and technologist Adam Harvey aims to overwhelm and confuse these systems by presenting them with thousands of false hits so they can’t tell which faces are real.

The Hyperface project involves printing patterns on to clothing or textiles, which then appear to have eyes, mouths and other features that a computer can interpret as a face.

This is not the first time Harvey has tried to confuse facial recognition software. During a previous project, CV Dazzle, he attempted to create an aesthetic of makeup and hairstyling that would cause machines to be unable to detect a face. 

Speaking at the Chaos Communications Congress hacking conference in Hamburg, Harvey said: “As I’ve looked at in an earlier project, you can change the way you appear, but, in camouflage you can think of the figure and the ground relationship. There’s also an opportunity to modify the ‘ground’, the things that appear next to you, around you, and that can also modify the computer vision confidence score.”

Harvey’s Hyperface project aims to do just that, he says, “overloading an algorithm with what it wants, oversaturating an area with faces to divert the gaze of the computer vision algorithm.”...MORE

HT: Marginal Revolution

For more on CV Dazzle  we have on offer 2013's How to Hide From Cameras:

2016's Adversarial Images, Or How To Fool Machine Vision:

but this raises its own set of problems, not the least of which is taking a half hour to apply just so you can go down to the lobby.

Or more generally:
"Live a modern life while frustrating the NSA"

Is Snap Inc. Building a Wearable Face Recognition Device for the National Security Agency?

For folks too busy having a real-world life to keep up with this stuff, Snap is the recently created parent company of double-decacorn Snapchat (think Google/Alphabet) which, deciding it would be more than just the app, rolled out video recording "Spectacles" to do image capture and upload:

They would now like you to think of them as a "digital lifestyle" platform, thank you very much.
They've also hired bookrunners for a potentially blockbuster IPO early next year.

From Hackernoon, Oct. 3:...

Want to Know Where the Cameras Everywhere Culture Is Heading?

"The Paranoid World of London's Super-rich: DNA-laced Security Mist and Superyacht Getaway Submarines"

Decisions to Make At CES: Bluetooth Enabled Vibrating Hotpants or A $200 Smart Hairbrush?

Why not get both!

From Quartz:

...Kérastase Hair Coach

This $200 smart brush from L’Oreal and Nokia uses a gyroscope to assess brushing speeds, an accelerometer to count brushstrokes, and a microphone to “capture the hair’s soundwaves.” It then sends information about hair health to your phone—there’s an app that tracks your “hair score”—and employs haptic vibrations to guide and improve brushing techniques. The app also doles out product recommendations.

An app that states the physically obvious—dry scalp, dandruff, hair loss—isn’t much improvement over a regular mirror. And a brush bearing bad news (you’re balding!) seems like a mean gift for your self-esteem. Here’s what would be smart: A brush that washes, dries, and brushes our hair for us....

... Essential Vibrating Connected Jeans

Spinali Design’s vibrating hotpants (they also come in shorts, regular jeans, capris, and a skirt) feature sensors on the belt that get hooked up via Bluetooth to a smartphone app. For now, the smart jeans are just wearable GPS: They can guide you through directions by vibrating on the right or left side. But the French company has ambitious plans to integrate “security alerts, home support, [and] geolocation of your children.” Spinali has previously made connected bikinis that notify the wearer if they’ve been out in the sun too long. Also known as: sunburn.

...MORE

Breakfast With NVIDIA's CEO: "‘Reflecting on Destiny Meets Serendipity’" (NVDA)

Tiernan Ray at Barron's Tech Trader Daily brings in the story:

Jan. 5, 2016     12:40 P.M. ET

Thursday morning, Nvidia (NVDA) founder and chief executive Jen-Hsun Huang followed his keynote at the Consumer Electronics Show the night before with a breakfast Q&A for a few journalists and I was fortunate enough to be invited.

Huang’s most interesting statement about the big picture came at the end of the talk, when he reflected on Nvidia’s success at the moment in “machine learning” and artificial intelligence, characterizing it as “destiny meets serendipity“:

The destiny part is, we created a processor that is very good at data processing at high throughput. The serendipity part is that machine learning needs a great computational engine, and so when this elegant algorithm came together with the GPU, it was destiny meets some amount of serendipity.

Huang reiterated his three themes of the night before: the video game market is becoming more and more one of the dominant activities of the culture, and the PC is the best way to do it; the home is going to become a center of A.I.; and your car, using lots of Nvidia trips, is going to “become an A.I.,” including autonomous driving, but also the co-pilot functions of monitoring the behavior of the human driver, through things like lip-reading.

Among interesting tidbits Huang offered were that the co-pilot function in the car is harder to do, from a compute standpoint, than is the self-driving function.

“It takes a full Xavier,” he said, referring to the company’s octal-core driving compute chip.
As far as all the other entrants into the self-driving market, Huang boasted of the company’s work for Tesla (TSLA) (Huang himself drives a Model S), and said Nvidia would be ahead of the competition, ultimately, in terms of actual shipping volume of cars with advanced autonomous driving.

He was asked about small companies, and what they can do in this time of cloud computing giants.

“This is a great time for startups,” said Huang. “We are working with 1,500 startups today, we’ve never been able to work with this many in our company’s history.”

Huang predicted the rise of numerous small businesses, really startups, that have particular data, saying they will make a big business out of their data by using A.I. to process and analyze it. “This is a really good time for startups,” he repeated, likening such data-rich companies to micro-breweries.

Asked about how the company will build out the network of GPUs to support its “GeForce Now” gaming service, Huang said there were a number of ways to do it, including co-location of Nvidia’s own gear in data centers....MUCH MORE

The stock was down little yesterday, up a little today (+1.62) at $103.36.

"Will OPEC Deliver Its Output Cut Deal? Here’s How We’ll Know"

From Bloomberg, Jan 5, 7:00 pm EST:

• Prices will be ‘whipsawed’ as output data emerges: Barclays
• Oil held in storage is ‘key unknown’ for analysts: EIA

The promise of production cuts from OPEC and its partners sent oil rallying in 2016. Now traders want proof they’re delivering on those vows. It won’t come easy.

The challenge: Building a coherent picture from the morass of data that emerges at each step along the process, from the wellheads where the oil is produced, to the tankers that carry it, and the depots that store it.

Unlike in the U.S., where output is published weekly, members of the Organization of Petroleum Exporting Countries can take months to disclose their production. Beyond that, their data can be at odds with independent surveys, and countries have been known to cheat on such deals. With a rising U.S. rig count offering a bearish undertone, each new hint on the accord’s implementation can be expected to swing prices.

"The market could be whipsawed more by data and headlines than in the past," said Michael Cohen, head of energy commodities research at Barclays Plc in New York, in a telephone interview. "Data lags will be the primary problem in tracking cuts."

Brent crude, the global benchmark, has surged 22 percent since Nov. 29, the day before the deal was sealed among OPEC’s members. The grade was trading at $56.62 a barrel at 4:03 p.m. in London. Future price increases for crude will depend on a wide variety of signposts. Here’s a breakdown on what to look for:

1. Upstream
The first indications will come at the start of next month, when media outlets such as Bloomberg, Thomson Reuters and Platts publish surveys of production. Estimates from institutions such as the International Energy Agency and U.S. Energy Information Administration arrive a week or two later.

As “no one’s counting barrels at Abqaiq,” the Saudi oil-processing facility, these have to be modeled on computers, Barclays’ Cohen says.

“While we consider official production data published by OPEC governments, we come up with our own estimates,” said Lejla Villar, an analyst who estimates OPEC output at the EIA, part of the U.S. Energy Department. “We look at crude oil loadings, estimated domestic consumption and refinery runs, storage, and whatever else might be relevant.”

OPEC won’t publish production levels until the middle of next month. Even then, the waters will be muddied as the organization provides two sets of data: the one used to monitor the agreement, compiled from the surveys described above, and numbers submitted directly by member governments, which can differ significantly....MUCH MORE

Brent $56.39 -0.50
WTI    $53.40 -0.36

"Economists React to the December Jobs Report: ‘Very Close to Full Employment’"

From Real Time Economics:

Job creation slowed in December but other details pointed to a tightening labor market. The economy added 156,000 jobs last month, while the jobless rate rose slightly to 4.7% as more Americans entered the labor force. Workers’ hourly wages grew 2.9% over the past 12 months, the strongest yearly gain in more than seven years. Here’s how economists and analysts reacted to Friday’s report.

“For the year, the economy averaged job creation of about 180,000 per month—a solid result, but one that represents the slowest pace since 2012. While this is partially reflective of the slowdown in the pace of economic growth, it also reflects a labor market that is increasingly tight. Employers are simply having a harder time filling open positions as the economy nears full employment.“—Jim Baird, Plante Moran Financial Advisors

“This solid report further underlines the Fed’s point in December that the economy is now very close to full employment. Job growth was decent and wage growth is picking up nicely. But the only real show in town is Donald Trump’s inauguration. The economy is doing well and doesn’t obviously need the shot in the arm that Trump is planning on providing. The interaction between the Fed and Trump, and the resulting policy mix, is likely to be the defining theme for investors this year.”—Luke Bartholomew, Aberdeen Asset Management

“The rebound in hourly earnings reflects the unwinding of the calendar quirk which depressed the November data, and lifts the [year-over-year] rate to 2.9%, the highest since June 2009. With productivity growth trending at less than 1%, the Fed cannot allow wage inflation to rise much above 3% if it is to forecast 2% inflation with a straight face….In short, this report tells the Fed not to delay further tightening. We think rates will rise again as soon as March, provided we have some clarification on the likely extent of fiscal easing by then.”—Ian Shepherdson, Pantheon Macroeconomics

 ...MORE

Also at Real Time Economics:
The December Jobs Report in Seven Charts

Media: Hulk Hogan Attorney Now Representing Self-Proclaimed Inventor of Email Files Suit Against TechDirt Founder

This may be a step too far for attorney Harder as he risks exposing his client, Shiva Ayyadurai, to a train of events resembling Oscar Wilde v Marquess of Queensberry, but substituting a civil action for the criminal charge in that famous trap.

From the Hollywood Reporter:

Self-Proclaimed Inventor of Email Files Defamation Lawsuit Against Techdirt's Mike Masnick

This is the latest case from attorney Charles Harder, who previously represented Hulk Hogan against Gawker. 

Techdirt founder Mike Masnick will be going toe-to-toe in court with Charles Harder, the Hollywood attorney who famously represented Hulk Hogan in the sex tape lawsuit that brought down Gawker.

On Wednesday, Harder's client Shiva Ayyadurai filed a $15 million libel lawsuit in Massachusetts against Masnick, Leigh Beadon and Techdirt parent company Floor64 Inc. over articles that doubted Ayyadurai's claim to have invented email.

Ayyadurai previously sued Gawker in a lawsuit that many suspected was funded by Silicon Valley billionaire Peter Thiel. Ayyadurai recently settled the claim for $750,000.

He and Harder now have a new legal target.

For Techdirt, Masnick writes a wonky tech policy blog that has earned a loyal following for taking strong stances on issues like copyright, net neutrality, security issues and other topics. His name provokes eye-rolling among many studio lawyers thanks to his frequently hostile attitude toward aggressive intellectual property actions. He was one of the noisiest antagonists toward the Stop Online Piracy Act a few years ago. He's also credited with coining the term, "The Streisand Effect," to describe the phenomenon of how attempts to censor information often lead to more awareness of the very information someone is trying to hide. The phrase came after entertainer Barbara Streisand aimed more than a decade ago to suppress photographic images of her Malibu, Calif., residence.

Masnick has been on the receiving end of many cease-and-desist demands through the years — he isn't shy about writing about them — but mostly has escaped lawsuits. Until now.

Ayyadurai first takes issue with an article posted Sept. 2, 2014, headlined, "Why is Huffington Post Running a Multi-Part Series to Promote the Lies of a Guy Who Pretended to Invent Email?"

The article in question accused Ayyadurai of perpetuating a "fake story" of what he supposedly invented at the University of Medicine and Dentistry of New Jersey in 1978.

"By all accounts, it was a perfectly decent email system that allowed the UMDNJ staff to send electronic messages," wrote Masnick at the time. "Further, no one doubts that, in 1981, Ayyadurai registered the copyright on his program, which was called EMAIL. The problems are that (1) email was invented long before 1978, (2) the copyright is merely on the specific software code, not the idea of email, and (3) while Ayyadurai may have independently recreated the basics of email (and even added a nice feature), none of his work was even remotely related to what later became the standards of email. What's most sickening about this is that as part of this new PR campaign, Ayyadurai is ridiculously arguing that the reason no one believes him isn't because he's simply wrong, but because they can't stand to believe that 'a dark-skinned immigrant kid, 14 years old,' invented email, and that it was done in 'one of the poorest cities in the US' rather than at a famous university. "...MORE

FX: "That Trump Trade in full [Update]"

Depending on what, if anything, passes the Congress, tax reform could have a significant strengthening effect on the dollar, driving the DXY to anywhere from 108 to >110 and EUR/USD to .95. That would slam the brakes on U.S. exports but make it cheaper to go buy Europe, at least the yummy bits.

From FT Alphaville:

With thanks to Bank of America Merrill Lynch’s Flow Show, who do say US stocks, banks, loans and value stocks may be vulnerable to any wobbles in enthusiasm for Trump the president, rather than the tweeting Potus-elect.

Who, by the way, is “very very serious about a protectionist US trade policy”, according to Nomura’s Bilal Hafeez:

He has flip-flopped on many issues over the years, but not on trade policy. In 1999 when he last considered running as President he was pro-choice and pro-wealth tax, today he has flipped those views. But back then, on China’s entry to WTO he was a vocal critic even as the Republican Party was supportive with figures like Paul Ryan, Tom Price (soon-to-be Health Secretary) and Bush supporting it.

Nomura is in the dollar weakness camp, which is definitively not a popular Trump trade so far. Trump has been almost silent on the question of dollar strength, and his nominee for the Treasury has ducked questions on the subject.*

A couple of previous notable Republican Presidents have been responsible for currency intervention, as seen in this handy chart....

...MORE

Dollar index 101.73 up .20; euro 1.0613 down 0.0009.

Related at Alphaville:
What has happened before will happen again, CNH short squeeze edition

FX: "Dollar Consolidates Losses, Peso Firms while Yuan Reverses"

From Marc to Market:

The US dollar is consolidating yesterday's losses against the major currencies, giving it an apparently firmer tone today ahead of the monthly employment report.   Even though the Turkish lira continues to be sold to new record lows, the focus in the emerging markets in recent days has been the Mexican peso and Chinese yuan.  

Mexico's central bank is believed to have intervened in the Asian session for the first time.  This is helping the peso stabilize now.  Still, its 0.4% gain against the dollar (~MXN21.33), only manages to pare this week's loss to 2.9%.  The major trigger this week has been tweeted by the US President-elect objecting to investment in Mexico by the auto industry.    Since NAFTA and the loss Canada's preferential treatment, as well as Mexico's trade agreement with the EU, auto production is organized on a continental basis and Mexico now accounts for roughly 40% of the auto jobs in North America.  

Last February, when Mexico last intervened, the central bank also raised interest rates 50 bp between meetings.  Energy tax increases went into effect at the start of the year.  This coupled with the drop in the peso will likely boost price pressures.  The risk of a rate hike before the February 9 meeting rises if the intervention.  

Next week Mexico reports December CPI.  The year-over-year rate is expected to rise to 3.4% (from 3.3%).  It would be the highest since late-2014.  However, raising rates to defend a currency is a limited strategy especially when the domestic economy is already struggling.  Next week, Mexico also reports December industrial production.  It was off.14% in year-over-year in November.    Another course open to it is to change the intervention tactics and take a page from Brazil's playbook and use swaps, which do not have a direct claim on reserves.  

China does not have the same limitation in this regard as Mexico.  It is not that its reserves are a multiple of Mexico's.  Instead, it is that Chinese can squeeze offshore yuan deposit rates sharply higher, to instill in speculators that the yuan is not a one-way market while having little impact on the onshore interest rates.  In any event, after the biggest two-day rally on record, the offshore yuan (CNH) fell 0.7% today, and the onshore yuan (CNY) slipped 0.6%.   On the week, CNH is up 2%, while CNY is up a little less than 0.4%.   Yesterday's gap created by the sharply lower dollar opening has been filled.  

Chinese shares are eased to pare this week's gains; the Shanghai Composite gained almost 1.9%.  Most Asian equity markets, save China, Japan and India posted small gains, but the MSCI Asia Pacific Index lost 0.2% after a two-day 3% rally.   European shares are also seeing this week's gains pared.   The Dow Jones Stoxx 600 is off 0.25% near midday in London.  Some markets are closed or thinly traded due to the holiday.  Most sectors are seeing profit-taking, though the real estate sector is bucking the trend....

...MORE 

Central Sierra Nevada Mountains Expecting 20 Feet of Snow In the Next 10 Days

Let's hope it's powder.
From the Los Angeles Times via KTLA TV:

20 Feet of Snow Expected at Mammoth Mountain in Next 10 Days: Report

Another blizzard swept Mammoth Mountain on Wednesday, the precursor to a string of storms expected to bring up to 20 feet of fresh snow in the next 10 days, the resort says.

Since Tuesday, 26 to 48 inches of fresh snow had fallen, with the deepest totals at the summit. Plows were working furiously to keep lots and streets clear.

Normal resort operations could be affected as personnel struggle to deal with the snow.
The cause of the snow? One of those “atmospheric rivers” that forecasters refer to in particularly generous storms like this. In the next week and a half, the Sierra resort is expecting three of those wet cycles.
Click here to read the full story on LATimes.com.

That LA Times story is headlined:

Mammoth mega-storm expected to drop up to 20 feet; 'God help us'

Here's the Weather Channel forecast for Mammoth Mountain, it pretty much looks like snow every day from Saturday to the 17th.

Uber Accuses NYC Of Snooping On Its Passengers: "They Want Full Details Of Every Trip You Ever Take"

I don't care who you are, David Plouffe, Kalanick, whoever, that accusation, coming from Uber, is funny.

Granted, not as funny as when the lady running Didi Chuxing, Jean Liu, said Travis Kalanick was tiny that Uber's efforts in China were 'cute'. And then when Uber announced a $3.5 billion injection from the Saudis and she said "Oh, we have more than that coming" and then when she announced closing a $7.3 billion fundraising round and then when she ran Uber out of China.

Yeah, not as funny as that but still pretty funny.

From Zerohedge:

One month ago, the highest-valued private company in the world, with a valuation of $68 billion, Uber got in trouble with privacy advocate when it was revealed that the ride-hailing company can now track its passengers' locations after they are dropped off and even when their app has been closed. As revealed in a new update to Uber's app, the global taxi service could collect passenger data up to five minutes after a journey has finished.

On its website Uber said: 'Uber collects your location data from the time of trip request through five minutes after the trip ends, including when the app is in the background.

The firm defended itself by saying that the data will cut down on the frustrating back-and-forth often experienced by customers, as drivers try to ascertain exactly where their passengers are.

And while mobile apps tracking every habit of its users is hardly new, a new twist emerged this morning, when Uber sent out a notification to its users, accusing none other than New York City of demanding that it hand over all its "sensitive" passenger info data, including "where you’re dropped off, as well" in an attempt to "to piece together the full details of every trip you ever take," a move which creates "serious privacy risks."

From the email sent to clients:

Today, New York City requires Uber and other companies to hand over a lot of sensitive personal passenger data, including where you're picked up on every trip. Now, New York City wants more. They're trying to force companies to tell them where you’re dropped off, as well.

In other words, they want to piece together the full details of every trip you ever take. Several independent privacy experts have said this policy creates "serious privacy risks." And that it would give the government "and anyone else who accesses this information a comprehensive, 360-degree view into the movements and habits of individual New Yorkers." Click below to send a clear message that enough is enough...MORE

Related:
Dec. 21
"Uber Update Lets You Set a Friend's Location as a Ride Destination"

Well, that makes it both tracking you in real time and accessing your phone's contacts announced this month.
Or, as Gizmodo put it: "Uber's Latest Update Is Even Creepier Than Its Last One"
I have a certain fondness for that locution, see below....

Dec. 2, 2016
Uber Is Now Tracking You After Your Trip
Creepy...  

In Which The FT's Izabella Kaminska Uses the B Word

From FT Alphaville:

The B word strikes again

An ironic pattern is emerging in the world of bitcoin. When times are stable and currency-status inducing (i.e. when Bitcoin trades at a consistent level, encouraging its use as an actual medium of exchange) bitcoin evangelists run quiet. Months go by without a single abusive or gloat-ridden tweet to those who have been sceptical about the crypto currency’s potential to takeover the financial world.

Yet, when the currency begins to soar exponentially — and in so doing undermines its capacity to be used as a reliable medium of exchange — the gloating becomes vitriolic and abusive. Which is weird, because as we’ve argued countless times before extreme volatility and even appreciation does bitcoin its greatest disservice....MORE

See also the first comment from 'Vlade':

Bitcoiners fail to understand that a property[sic] currency has three tasks:...

And Ms K's response.

Earlier:
Bitcoin May Not Be A Store Of Value: Plunges 31% In China

On Corporatism

The ZeroHedge link a couple posts back reminded me of one of the better econ graphics extant.
A partial repost from 2014:

Over the years I've mentioned* that yes, "I do know the distinction between Fascism and vertical syndicalist corporatism based on guilds" but that I use the terms fascism and corporatism interchangeably....

...A handy cheat sheet last seen in Socialism, Capitalism and Bitcoin:

NVIDIA: How Have Citron Research's Previous Tweets Affected Their Targets? (NVDA; TSLA)

Don't mention the Tesla.

We'll have more on NVIDIA and The Consumer Electronics Show in a little bit. After yesterday's keynote speech by Mr. Huang the stock opened on an uptick but is now trading down $1.61 (-1.55%) at $102.78.
Tesla $223.26 down $3.73 on the day.

From Benzinga:

Citron Research activist short seller and newsletter author Andrew Left has earned a reputation for accusing companies of fraud and deception and profiting off of their downfall.

This week, Left turned his attention to 2016 market leader NVIDIA Corporation NVDA 0.17%, tweeting that he believes the market “is disregarding headwinds” for the company and predicting shares would return to the $90 level in 2017. NVIDIA stock plunged 6.8 percent on the day of Citron’s tweet and were down 3 percent on the final trading session of the year.

Here’s a look at several other times Citron has moved the market with a tweet.
In December 2015, Citron tweeted that Express Scripts Holding Company ESRX 0.72% was the “Philidor of the pharma industry.” The stock tanked 6.7 percent.

In November 2015, Citron tweeted that Mallinckrodt PLC MNK 0.35% was a “far worse offender” of the drug reimbursement system than Valeant. Mallinckrodt stock plummeted 14 percent.

In March 2016, Citron targeted Tesla Motors Inc TSLA 1.33% on Twitter, calling for the stock to dip “to $100 by year’s end.” The $100 prediction didn’t come true, but Tesla’s shares fell 3.1 percent following the tweet.

In June 2016, Left delivered a cryptic tweet about Facebook Inc FB 0.25%, saying that he would not be commenting on Facebook and that the focus should “be on the Orlando tragedy and not mkt valuations.” Facebook shares dipped 2.2 percent.

In December 2015, Left tweeted that Mobileye NV MBLY 0.57% was “short of the year” for 2016. Shares tanked nearly 7 percent....

...MORE

Crispen Odey’s Hedge Fund Announces Its Worst Ever Annual Loss

From Bloomberg:

• Crispin Odey’s bearish bets suffered as stocks surged in 2016
• He was one of the market’s most prominent backers of Brexit

Crispin Odey’s main hedge fund slumped 49.5 percent in 2016, its worst annual decline since it began trading in 1992, according to an investor letter.

The billionaire, who last month complained that “mindless” passive investing was driving out active fund managers, saw his bearish bets against stocks suffer amid a surge in equities. His Odey European Inc. fund lost 3.4 percent in December, the letter shows.

Odey warned in October that U.K. stocks could slump 80 percent as the economy suffered a recession and higher inflation following the Brexit vote. His fund’s loss lags behind a more than 4 percent gain by peers, according to preliminary estimates from data provider Eurekahedge.

“Even if his assessment is correct, the problem with ultra-bearish bets is the timing,” said Jacob Schmidt, chief executive officer at investment advisory firm Schmidt Research Partners in London....MORE

Aye lad, there's the rub.

If interested see also:
Dec. 29
Crispin Odey Doesn't Sound Crazy But...
Dec. 9
In Which FT Alphaville's Bryce Elder Shreds Former Big Wheel Hedgefunder Crispen Odey
Nov. 3
Follow-Up: "Odey Hedge-Fund Assets Dip 60% as Clients Shun ‘Bitter Pill’"
Nov. 2  
The Stress May Be Getting To Hedgie Crispin Odey--UPDATED
Oct.4 ZeroHedge
For Crispin Odey This Is The Endgame: Hedge Fund Billionaire Goes All In Betting On "Violent Unwind" Of QE Bubble
Sept. 16 
Crispin Odey Is Getting Crushed
Aug. 13 Zerohedge
Billionaire Crispin Odey, Who's Had A Pretty Terrible Year, Is Betting Everything On Gold
May 23 
Hedge Funder Crispen Odey Has Become a Parody of.....Crispen Odey 

Bitcoin May Not Be A Store Of Value: Plunges 31% In China

From ZeroHedge:

Another Bubble Bursts - Bitcoin China Crashes Over 30%

First it was Chinese stocks, then Chinese real estate (twice), then Chinese commodities (twice), and now Chinese Bitcoin's bubble has burst as a massive short squeeze on the offshore Yuan combined with comments on 'virtual' capital controls has sparked a bloodbath in the cryptocurrency from 8,896 yuan to 6,101 yuan in the last few hours...a 31% collapse.

Despite the collapse - BTC China is only back at 2 week lows...

For those chasers, don't say we did not warn you, as we noted previously, for those buying into bitcoin here on the momentum, most of which originates in China, we urge readers to be cautious as by now the PBOC has certainly noticed that the digital currency remains one of the final, and most successful, means of bypassing capital controls in China. Should Beijing mandate that bitcoin no longer be a means to illegally transfer capital offshore, there is risk of a dramatic, and sharp, drop in its price.

Also at ZeroHedge:

Bitcoin Bloodbath As Mexican Peso Surges After Central Bank Intervention
A Stunned Wall Street Reacts To China's "Bear-Crushing" Yuan Carnage

Barclays: 13 Potential Black Swans in 2017 (incl. riots in Chile, Musk delivers model 3 on time) TSLA

From FT Alphaville:

Barclays considers Elon Musk a potential commodity ‘black swan’ of 2017

To be fair, the list is 13 risks long and it’s mostly populism driven. But there is some Elon, as advertised:...MUCH MORE

Pretty funny, especially in light of this analyst report yesterday, via Barron's Stocks to Watch blog:

Tesla Motors: 4 Elon Musk Tweets to Expect in 2017

Tesla Motors (TSLA) released its delivery numbers yesterday, and while the number of cars that reached consumers during the fourth quarter disappointed, investors haven’t seemed to mind: Tesla shares have jumped 4.7% to $227.20. Don’t count Barclays’ Brian Johnson and team, who reiterated their underweight rating, among the bulls. They offer four Tesla predictions for 2017 in the guise of potential Elon Musk tweets...MORE

Here's the format Benzinga used, imagined Musk tweet then analyst comment.

Tweets Expected

Tweet 1: “Great progress so far on Model 3, but still have a number of tweaks ahead — thus will take a little longer than expected.”

Tesla is likely to announce a Model 3 delay, given the “high risk of execution missteps, a challenged track record on meeting timelines, cost challenges, and potential impact from an otherwise full plate of initiatives in ’17,” Johnson wrote.

Tweet 2: “Time to derisk a capital raise.”

The analyst assumed a $1.5 billion capital raise in Q1 2017, while noting that the company had a track record of cash burn and that the markets may not be as accommodating as it had been previously to a capital raise being undertaken to fund operating losses....

...MORE

Byron Wien Announces Ten Surprises for 2017 (with six also-rans)

From Blackstone, Press Release Jan. 3:

New York, NY, January 3, 2017.
Byron R. Wien, Vice Chairman of Multi-Asset Investing at Blackstone, today issued his list of Ten Surprises for 2017. This is the 32^nd year Byron has given his views on a number of economic, financial market and political surprises for the coming year. Byron defines a “surprise” as an event that the average investor would only assign a one out of three chance of taking place but which Byron believes is “probable,” having a better than 50% likelihood of happening.

Byron started the tradition in 1986 when he was the Chief U.S. Investment Strategist at Morgan Stanley. Byron joined Blackstone in September 2009 as a senior advisor to both the firm and its clients in analyzing economic, political, market and social trends.

Byron’s Ten Surprises for 2017 are as follows:

1. Still brooding about his loss of the popular vote, Donald Trump vows to win over those who oppose him by 2020.  He moves away from his more extreme positions on virtually all issues to the dismay of some right wing loyalists.  He insists, “The voters elected me, not some ideology.”  His unilateral actions throw policy staffers throughout the government into turmoil.  Virtually all of the treaties and agreements he vowed to tear up on his first day in office are modified, not trashed.  His wastebasket remains empty.
   
2. The combination of tax cuts on corporations and individuals, more constructive trade agreements, dismantling regulation of financial and energy companies, and infrastructure tax incentives pushes the 2017 real growth rate above 3% for the U.S. economy.  Productivity improves for the first time since 2014.
   
3. The Standard & Poor’s 500 operating earnings are $130 in 2017 and the index rises to 2500 as investors become convinced the U.S. economy is back on a long-term growth path.  Fears about a ballooning budget deficit are kept in the background.  Will dynamic scoring reducing the budget deficit actually kick in?
   
4. Macro investors make a killing on currency fluctuations.  The Japanese yen goes to 130 against the dollar, stimulating exports there.  As Brexit moves closer, the British pound declines to 1.10 against the dollar, causing a surge in tourism and speculation in real estate.  The euro drops below par against the dollar.
   
5. Increased economic growth, inflation moving toward 3%, and renewed demand for capital push interest rates higher across the board.  The 10-year U.S. Treasury yield approaches 4%.
   
6. Populism spreads over Europe affecting the elections in France and Germany.  Angela Merkel loses the vote in October.  Across Europe the electorate questions the usefulness of the European Union and, by the end of the year, plans are actively discussed to close it down, abandon the euro and return to their national currencies....

...MORE

Shipping: Maersk, Alibaba Team Up To Offer Space On Container Ships

Putting the freight forwarders on the endangered species list.
From Reuters, Jan. 4:

Maersk, Alibaba team up to offer online booking of ship places

Maersk, the world's largest container shipping line, has teamed up with Alibaba (BABA.N) to allow customers to reserve space on its vessels through the Chinese company, illustrating growing cooperation between e-commerce and logistics firms.

Maersk, a unit of Denmark's A.P. Moller-Maersk (MAERSKb.CO), began offering the service to Chinese shippers on Alibaba's OneTouch booking website on Dec. 22, a spokeswoman for the shipping line said on Wednesday.

Shippers traditionally go through freight forwarders to book space for goods on container vessels, but lines such as Maersk are allowing cargo owners to book directly via the internet. 

For their part, e-commerce companies are increasingly venturing into logistics activities to try to gain better control over their supply chain networks.

Amazon.com (AMZN.O) has registered a Chinese business as a freight forwarder and has leased aircraft to handle more of its own deliveries in the United States.

Alibaba, owner of China's largest e-commerce platforms, has been making inroads into logistic services in recent years by taking stakes in couriers and buying warehouses. The company was not immediately available to comment on the Maersk relationship....MORE

"Venetians, Volcker and Value-at-Risk: 8 Centuries of Bond Market Reversals"

You had me at VaR.
Not that there's anything wrong with Venetians...

Via Mark Thoma at Economist's View:

Paul Schmelzing of Harvard University:

Venetians, Volcker and Value-at-Risk: 8 Centuries of Bond Market Reversals: The economist Eugen von Böhm-Bawerk once opined that “the cultural level of a nation is mirrored by its interest rate: the higher a people’s intelligence and moral strength, the lower the rate of interest”. But as rates reached their lowest level ever in 2016, investors rather worried about the “biggest bond market bubble in history” coming to a violent end. The sharp sell-off in global bonds following the US election seems to confirm their fears. Looking back over eight centuries of data, I find that the 2016 bull market was indeed one of the largest ever recorded. History suggests this reversal will be driven by inflation fundamentals, and leave investors worse off than the 1994 “bond massacre”.

Bond “bull markets” since 1285 ...

Construction Used to Be More Labor Intensive (and other pictures you may not have seen before) CMB

This link is pretty much the definition of eclectic.

From Messy Nessy Chic:

In the Grand Scheme of Things

As you can imagine, I collect a lot of images from the internet. And sometimes, I need to unload them to clear some space on the old laptop. So this is me, doing that, in a meaningful way. I hope you’ll find the theme of today’s spring clean larger than life…

Workers pose during construction of 60-story tall Chase Manhattan Bank headquarters in NYC, 1959.

The house that Donald Trump couldn’t buy. circa 1991. 

The time Donald Trump’s empire took on a stubborn widow and lost – source.

...MANY MORE

Previously from Messy Nessy:

Picasso Pics For Sale, Cheap (chateau included)
The Man Who Sold The Eiffel Tower, Twice and A (bath) Room With A View
Art Institute of Chicago Recreates Van Gogh's Bedroom, Puts it On Airbnb
Huh, Apparently The Barbie Doll Began Life As a High-end German Call Girl Named Lilli

"Will US Inflation Reach The Fed’s Target This Year?"

From The Capital Spectator:

Inflation expectations have been ticking higher lately, according to several sources, signaling that headline measures of year-over-year price indexes could reach the Federal Reserve’s 2% inflation target in 2017 for the first time in several years.

Market-based estimates of future inflation have been trending up in recent months, based on the yield spread between nominal and inflation-indexed Treasuries. The the yield spread on 10-year Treasuries, for instance, touched 1.98% on the first trading day of the year, based on daily data via Treasury.gov—close to the highest level in well over two years.

The Cleveland Fed’s inflation nowcast is even higher. The January 2017 estimate for the year-over-year change in the headline consumer price index is 2.28%, up from the 2.07% in December. The core CPI nowcast is a bit softer, but the current nowcast tops 2.0% as well. The key takeaway: this model’s anticipating that the 1.7% annual pace in headline CPI through November (the current report) will soon exceed the Fed’s 2.0% target....MORE 

We last visited Cleveland on Dec. 21: "Cleveland Fed: Hope for U.S. Productivity Growth"

Tesla: "The Gigafactory Has Been Activated" (TSLA)

The stock is up $9.61 (4.43%) at $226.60.
From Bloomberg: 

Tesla Flips the Switch on the Gigafactory
Musk meets a deadline: Battery-cell production begins at what will soon be the world’s biggest factory—with thousands of additional jobs.  

 
Tesla Motors Inc.'s Gigafactory, as of this week Source: Tesla

The Gigafactory has been activated.

Hidden in the scrubland east of Reno, Nev., where cowboys gamble and wild horses still roam—a diamond-shaped factory of outlandish proportions is emerging from the sweat and promises of Tesla CEO Elon Musk. It’s known as the Gigafactory, and today its first battery cells are rolling off production lines to power the company’s energy storage products and, before long, the Model 3 electric car. 1 
 
The start of mass production 2 is a huge milestone in Tesla’s quest to electrify transportation, and it brings to America a manufacturing industry—battery cells—that’s long been dominated by China, Japan, and South Korea. More than 2,900 people are already working at the 4.9 million square-foot facility, 3 and another 4,000 additional jobs (including temporary construction work) will be added this year through the partnership between Tesla and Panasonic. 4

By 2018, the Gigafactory, which is less than a third complete, will double the world’s production capacity for lithium-ion batteries and employ 6,500 full-time Reno-based workers, according to a new hiring forecast from Tesla.

The Expansion of the Gigafactory

The full activation of the Gigafactory carries existential significance for Tesla, representing a new sense of urgency at a company known for its unreachable deadlines. After missing almost every aggressive product milestone it set for itself over the last decade, Tesla must prove to investors and customers that it can stay on schedule for its first mass-produced car.

There are promising signs. Wednesday marks the third successful target Tesla met for the New Year. The company fulfilled its promise to rapidly complete a massive battery storage project to back up the grid in California 5 ; it promptly rolled out promised software upgrades to cars equipped with new Autopilot hardware 6 ; and now its begun battery cell production at the Gigafactory. 7  That said, the company did fall short of its target to deliver 80,000 cars in 2016, reporting just 76,230 completed in time....MUCH MORE

Yesterday: 

"2017 Is the Make-or-Break Year for Tesla’s Gigafactory", Musk To Speak at the Plant Tomorrow (TSLA)

We'll be back with more.

Union Square Ventures' Fred Wilson: "What Is Going To Happen In 2017"

From A VC, Jan. 1, 2017:

Happy New Year Everyone. Yesterday we focused on the past, today we are going to focus on the future, specifically this year we are now in. Here’s what I expect to happen this year:

• Trump will hit the ground running, cutting corporate and personal taxes, and eliminating the preferential treatment of carried interest capital gains. The stock market has already factored in these tax cuts so it won’t be as big of a boon for investors as might be expected, but the seven and half year bull market run will be extended as a result of this tax cut stimulus before being halted by rising rates and/or some boneheaded move by President Trump which seems inevitable. We just don’t know the timing of it. The loss of capital gains treatment on carried interest won’t hurt professional investors too much because the lower personal tax rates will take the sting out of it. In addition, corporations will use the lower tax rates as an excuse to bring back massive amounts of capital that have been locked up overseas, producing a cash surplus that will result in an M&A boom. This will lead to an even more fuel to the fire that is causing “old line” corporations to acquire startups.

• The IPO market, led by Snapchat, will be white hot. Look for entrepreneurs and the VCs that back them to have IPO fever in 2017. I expect we will see more tech IPOs in 2017 than we have since 2000.

• The ad:tech market will go the way of search, social, and mobile as investors and entrepreneurs concede that Google and Facebook have won and everyone else has lost. It will be nearly impossible to raise money for an online advertising business in 2017. However, there will be new players, like Snapchat, and existing ones, like Twitter, that succeed by offering advertisers a fundamentally different offering than Facebook and Google do....

• ...Google, Facebook, and to a lesser extent Apple and Amazon will be seen as monopolists by government and individuals in the US (as they have been for years outside the US). Things like the fake news crisis will make clear to everyone how reliant we have become on these tech powerhouses and there will be a backlash. It will be Microsoft redux and the government will seek remedies which will be futile. But as in the Microsoft situation, technology, particularly decentralized applications built on open data platforms (ie blockchain technology), will come to the rescue and reduce our reliance on these monopolies. This scenario will take years to play out, but the seeds have been sown and we will start to see this scenario play out in 2017....

...MORE

Indirect HT to Alpha Ideas who linked to the AVC post immediately preceding this one:
What Did And Did Not Happen In 2016