Thursday, May 31, 2018

Meanwhile, In Florida

From WFLA-TV, Tampa:
Florida woman named Crystal Methvin arrested again on drug charges
Thanks mom, dad.

"Robert Shiller Thinks Bitcoin Will Probably Go Extinct, But If You Want To Trade It During His Final Exam, Then Go Ahead And Be A Moron"

We are fans of the Professor.*
From DealBreaker:
When last I checked in on imaginary internet money, the DoJ was launching an investigation into “possible” market manipulation in Bitcoin, Ethereum and other iterations of what, on multiple levels, looks like a giant global pyramid scheme (get it? “multiple levels”, “pyramid scheme”).
While that’s all fine and good, it kind of misses the point. As I explained via a Sopranos reference, asking if there’s manipulation going on in cryptocurrencies is like asking if there’s prostitution going on at the Bada Bing! . That is, of course there’s manipulation in that market. But the larger issue is that the whole damn thing is suspect. Going after Bitcoin spoofers is like arresting hookers at the Bing. You’re missing the forest for the trees.
I joke a lot about the absurdity inherent in Bitcoin and cryptocurrencies and proponents of the market don’t do themselves any favors by doing shit that reinforces stereotypes (see here and here, for instance). But in all seriousness, there is virtually no chance these “assets” survive in their current form. That doesn’t mean the concept of cryptocurrencies and/or the theoretical underpinnings of the market are going away, but it does mean that if you’re betting on, say, Bitcoin in its current form to rally unimpeded to infinity on the way to supplanting traditional currencies printed by developed market central banks, you are a moron. Plain and simple. It ain’t gonna happen.
One person who agrees is Nobel Prize-winning economist Robert Shiller (and really I don’t even know why I bother because citing mainstream economists in an effort to convince cryptocurrency acolytes they’re wrong is an exercise in futility by definition), who earlier this week chatted with CNBC about what the future is likely to look like for Bitcoin.
His overarching message was that it might well just go the way of the dinosaurs, but he couched it in friendlier terms than that. To wit:
Bitcoin won’t look anything like it is today. It will have a different name, if it exists. There will have been many hard forks changing it and changing it. And, it’ll be a matter of dispute whether it exists or not.
Yes, “a matter of dispute whether it exists or not.” Of course that assumes it still exists in one form or another and while, as alluded to above, it’s likely the concept isn’t going away, it’s possible that it will, in which case there will be no “dispute” and the only people claiming it’s still around will be the people who swear to Christ that Megalodon is still swimming around out there somewhere.
In any event, the punchline to the whole Shiller video comes when he describes an exchange he had with a student who insisted on keeping his laptop open during finals so he could ensure he didn’t miss an “opportunity” to trade fucking Bitcoin....MORE, including video.
*As noted, kind of fond of old Doc Shiller.

Here's his his September 4, 2007 call:
Some U.S. Housing Markets could drop 50%- Shiller

In addition to publishing "Irrational Exuberance" in March, 2000 with the NASDAQ hitting its all time closing high of 5048 (subsequent low 1114, how's a 78% decline grab ya?) he is the keeper of the Cowles Commission records.* From one of our Forecasting Equity Returns posts: 
A subject near and dear to my heart. I may be the only person I've ever met who read every page of "The Cowles Commission's Common Stock Indexes 1871-1937".
[you must be a blast at parties -ed]
Here's his Yale homepage.

And Irrational Exuberance.

Here's Common Stock Indexes...
....My favorite tidbit is the listing, among the pre-1871 industrials, of New York Guano.
Some things never change.

Here’s Yale’s (and my) gift:
It leads to a big ‘ol hog of a PDF.
Here's "New York Guano".

Over the years Professor Shiller has also picked up some tchotchkes, including an Econ. Nobel.
The Cowles connection probably has more utility and a few other folks have thought so as well.
In addition to Shiller several other Cowles associates have won Nobel prizes for research done while at the Cowles Commission.

These include Tjalling Koopmans, Kenneth Arrow, Gerard Debreu, James Tobin, Franco Modigliani, Herbert Simon, Lawrence Klein, Trygve Haavelmo and Harry Markowitz". -Marginal Revolution

See also Professor Cowen's "What do I think of the Cowles Commission?".

Which I put in:
"Robert Shiller's Favorite Financial Innovation: An IPO For The USA"

"China Turns to Robotic Policing"

From Ozy:

China is turning sci-fi policing films into reality. 
In the 2011 CBS show Person of Interest, reclusive computer scientist Harold Finch builds an artificial intelligence system called “the Machine” that compiles and analyzes troves of data to predict murders. Finch and his henchman, John, then chase down the perpetrator and prevent the crime. Public security officials in the Chinese autonomous region of Xinjiang, it turns out, are turning that fiction into fact.

An enormous data-driven program that pulls from health records, financials, vehicle checkpoints and police reports to identify individuals likely to commit crimes in China’s politically sensitive northwest region has just been revealed. Launched in 2016, the “big data” policing initiative in Xinjiang is one of many law enforcement initiatives the country is launching, drawing on its growing capabilities in the fields of AI and robotics.

At Beijing’s Tiananmen Square, Taser-wielding robots patrol crowds of tourists. While the robots negotiate their own path along designated routes, the Tasers are activated by an officer controlling the bot remotely. In Zhengzhou, the capital of China’s central Henan Province, similar police robots that look like armless Daleks roam the high-speed train station. They use facial-recognition software to help officers identify suspects, interact with customers and answer their questions. Police officers at the station wear facial-recognition sunglasses, developed by Beijing-based tech company LLVision, which pick out fake IDs and identify wanted criminals. And in the central metropolis of Wuhan, the Ministry of Public Security has teamed up with tech giant Tencent to develop a fully automated police station driven by the latter’s AI technology.
 A drone operated by the traffic police patrols a highway in Guangzhou, capital of south China’s Guangdong Province, during the three-day May Day holiday in 2016
These technologies, which could help fix weaknesses in China’s public security infrastructure, have also sparked concerns of misuse. But they highlight key factors helping China pull ahead in the use of AI in policing. The country, which recently declared its goal of emerging as a global leader in AI and robotics, is channeling heavy investments in these fields. And as a single-party state, it can marry that technology with policing while facing fewer questions than its democratic counterparts.

“While a number of countries, including the U.S., boast the technological capabilities China is integrating into law enforcement, political considerations make it difficult for these countries to follow suit,” says Kam C. Wong, a former Hong Kong police officer and professor emeritus at Xavier University. The use of AI in policing does happen in the U.S., but it usually requires extenuating circumstances, he says....MUCH MORE
Also at OZY:
Will That Be Cash, Credit, Fingerprint or Iris Scan? 

Related, last April's "Meanwhile in China: "City installs water-spraying poles to stop pedestrian traffic violations"".

"Uber, Waymo in talks about self-driving partnership: Uber CEO"

From Reuters:
Uber Technologies Inc [UBER.UL] is talking with Alphabet Inc’s autonomous driving unit Waymo about using its technology on Uber’s ride-hailing app, Uber Chief Executive Dara Khosrowshahi said on Wednesday, signaling a possible thaw in relations between the firms.

Khosrowshahi said on stage at the Code Conference that Uber’s relationship with Waymo was “getting better” since Uber in February agreed to pay Waymo $245 million in shares to settle a legal dispute over trade secrets.

“We’re having discussions with Waymo. If something happens, great. If not, we can live with that, too,” Khosrowshahi said....MORE

"GM Soars After Soft Bank Invests $2.25BN In Its Driverless-Car Unit"

"Soars" might be a bit much but the stock is up 10.8% on a generally down day.
$41.92+4.09, last.

From ZeroHedge:
Step aside Tesla and Uber: there is a new-selfdriving cool kid in town.

On Thursday morning, tech-investing giant SoftBank Vision Fund, which over the past year has been spending money like the Swiss National Bank buying US stocks on tilt, announced it would will invest $2.25 billion in General Motors Co.’s driverless-car unit valuing it at $11.5 billion, creating a new start in the ongoing fierce battle by tech companies and startups to become the first to commercialize autonomous vehicles.
SoftBank Vision Fund will take a 19.6% stake in GM Cruise Holding
GM said that the fund, an affiliate of Japan’s SoftBank Group, will take a 19.6% stake in GM Cruise Holdings LLC, a newly formed entity primarily made up of Cruise Automation, the driverless-car developer that GM acquired in early 2016 for around $1 billion.

The Vision Fund’s investment will be staggered, coming in two tranches: an initial $900 million payment, and another of $1.35 billion once Cruise’s autonomous vehicles are ready for commercial deployment.

The deal will provide not only a major financial backer - a la what Uber tried to do with Warren Buffett and failed - but will also "afford GM increased flexibility with respect to capital allocation" as it plows more money into developing a network of autonomous ride-share vehicles, targeted for sometime next year, GM said....MORE

China's Ant Financial raises $10 billion at $150 billion valuation: sources

Starting to talk real money.
From Reuters, May 28:
Ant Financial Services Group, operator of China’s biggest online payment platform by market share, Alipay, has closed its latest funding round having raised $10 billion from a clutch of global and local investors, five people with direct knowledge of the matter told Reuters.

Ant’s first fundraising targeting global money values the firm at $150 billion, the people said, compared with about $60 billion after its previous fundraising in April 2016.

A number of global sovereign wealth funds and private equity firms joined the fundraising as main investors. They include Singapore’s sovereign fund GIC Pte Ltd [GIC.UL] and state investor Temasek Holdings (Private) Ltd [TEM.UL], as well as U.S. private equity firm Warburg Pincus LLC [WP.UL], the people said.

Malaysian sovereign fund Khazanah Nasional Bhd [KHAZA.UL] has also joined as a major investor, one of the people said.

The funding round also brought in private equity firm Carlyle Group LP and venture capital firm Sequoia Capital, which typically invests in early-stage start-ups, three of the people said.

The amount and investor line-up are finalised and the transfer of funds is underway, the people said....MORE

"Intel vs. Nvidia: Future of AI Chips Still Evolving" (INTC; NVDA)

Tiernan Ray At Tech Trader Daily, May 30:
This morning I attended a most interesting conference on artificial intelligence at the Penn Club in midtown Manhattan. The meeting featured startups, as well as chip-equipment giant Applied Materials (AMAT), and it was hosted by Pierre Ferragu, who recently left his post as tech analyst at Bernstein, to take up a new role covering many areas of tech at New Street Partners, a research-only firm with no brokerage business. (My profile of Ferragu was published in April.)
The focus was very much on what kinds of chips will be used for “accelerating” articulated intelligence approaches such as “deep learning.”

And it was a good survey of the varying opinions of how dominant Intel (INTC), Nvidia (NVDA), and Xilinx (XLNX) will be in the future of computing.

The speakers generally agreed that silicon for AI of one sort or another will be a $15 billion market annually sometime in the next five years, and that number, they agreed, may turn out to be too conservative. The question is what kinds of chips will those be?

The most extreme view was offered by Niel Viljoen, who is founder and chief executive of one startup, Netronome, which is making a network-acceleration chip.

Viljoen’s view is that Intel’s microprocessors will be more and more a minority of computing as new kinds of chips take over. “The CPU will be less involved with every bite,” said Viljoen.
“The architectures” of chips, he said, “will be about fabrics and the accelerators, and something we didn't touch on, memory, how it is organized and how that distribution happens” for memory chips such as DRAM.

Although Nvidia’s prominence is recognized in AI, with its GPUs, the speakers were pointing to a future in which many kinds of chips will be used, including very novel types that focus more heavily on memory circuitry rather than just compute circuitry. That view was reinforced by another startup, Mipsology, which is making software to better use “field-programmable gate arrays,” the programmable chips sold by Intel and Xilinx and Lattice Semiconductor (LSCC).

Mipsology’s CEO, Ludovic Larzul, explained that some tasks in deep learning require traditional “branching” instructions, computer commands that follow a more narrow “if/then/else” structure, which doesn’t sit well with GPUs.

Another startup presented the case for an entirely different kind of chip for AI. Syntiant, which just came out of “stealth mode” a couple weeks ago, and most of whose executives came from Broadcom (AVGO), is making a  chip that is focused on memory, and that uses analog chip expertise more than digital-semiconductor approaches, more akin to what one finds in companies such as Analog Devices (ADI).

As CEO Kurt Busch described the company's chips, “We are doing the computation in memory […] We are 100% eliminating that memory bandwidth bottleneck” in conventional memory chips.
Syntiant focuses on using those memory chips for “edge” devices, things like cars and smartwatches and other things with tight power constraints and that can't always connect to cloud data centers for machine learning.

Busch’s example of edge AI was traffic cameras. “There are traffic cameras on every corner, and they are taking all the license plates they see and sending those images to the cloud,” he said. “Why not instead have the cloud tell the cameras we are looking for this particular license plate, and just have the cameras that see that license plate send their images to the cloud....MUCH MORE

Mary Meeker’s 2018 internet trends report: All the slides and highlights

I'm sure a lot of folks have this, The Verge was the first we saw with the recode piece somehow stuck in one of the feedreaders.

From The Verge:
Mary Meeker, a former Morgan Stanley internet analyst and now partner at venture-capital fund Kleiner Perkins Caufield & Byers, delivered her annual internet trends report at this year’s Code conference in California today (May 30). Here are her slides:
—insert 224 slides here—
Some highlights:
  • Global smartphone shipment growth has fallen to effectively nil.
  • Growth in the world’s number of internet users has also slowed to about 7% in 2016, down from 12% in 2016.
  • Roughly 50% of the world, about 3.6 billion people, now have some access to the internet.
  • The average adult spends about 6 hours per day with a digital device.
  • Wifi is everywhere: There are around 450 million wifi networks in the world, up from about 100 million five years ago.
  • There are three messaging apps—WhatsApp, Facebook Messenger, and WeChat—that each have more than 1 billion monthly active users....

And from recode (who host the Code Conference, hence the puzzlement at the order of arrival):

Mary Meeker’s 2018 internet trends report: All the slides, plus analysis
Here’s a first look at the most highly anticipated slide deck in Silicon Valley.
,,,Here are some takeaways:
  • 2017 was the first year in which smartphone unit shipments didn’t grow at all. As more of the world become smartphone owners, growth has been harder and harder to come by. The same goes for internet user growth, which rose 7 percent in 2017, down from 12 percent the year before. With more than half the world online, there are fewer people left to connect.
...MUCH MORE, including video

Wednesday, May 30, 2018

"The /Other/ Russia Story"

I've been meaning to tell some of the story of the "S" boys: Summers, Steyer and Shleifer, in serial form but here Mr. Warsh sketches an overview that I couldn't match.
No one who was investing in Russia during that time-period has clean hands, no one, including Mr. Browder who hit the newswires earlier today.

For more on Mr. Summers and what he, Rubin and Greenspan did to Brooksly Born, three of the most powerful men in the world, creators of the financial crisis vs. the woman who tried to sound the alarm, see also:
"The Essential Larry Summers: How He and Alan Greenspan Laid the Groundwork for the Financial Crisis and Larry Lost $1.8 Billion for Harvard "

First up, from Economic Principals' "About" page:
...Who is EP’s proprietor?
David Warsh covered economics for The Boston Globe 22 years and, earlier, reported on business for The Wall Street Journal and Forbes and from Saigon for Pacific Stars and Stripes and Newsweek . He is a graduate of Harvard College in Social Studies and a two-time winner of financial journalism’s Loeb Award. In 2004 he was the J.P. Morgan Prize Fellow at the American Academy in Berlin.
What does EP cover?
EP reports mainly on university economics, as it affects historical awareness, political debate and public policy. It seeks to put under-noticed economic journalism in touch with a wider audience. EP is not about the business cycle.
Who reads it?
Economists, lawyers, journalists, managers, policy-makers, educators, lobbyists, investors, citizens — anyone interested in the connections between university economics and the rest of the world....
And from Economic Principals, May 20:
It may seem like an odd time to bring up the other Russia story, this being the first anniversary of Special Counsel Robert Mueller’s probe. But as it happens, there has been a break in this neglected case – or, rather, two of them.

It was slightly more than a year ago that President Trump fired FBI director James Comey and, the next day, told Russian officials visiting the Oval Office that Comey was “crazy, a real nut job.” He continued, “I faced great pressure because of Russia.  That’s taken off.”  Two weeks later Mueller was appointed, and his Russia investigation has only escalated since then, sprawling into several unexpected corners.

The New York Times offered readers a helpful graphic last winter: “Most of the stories under the ‘Russia’ umbrella generally fall into one of three categories: Russian cyber attacks; links to Russian officials and intermediaries; alleged obstruction.”

There is, however, another aspect of the Russia story, a category altogether missing in the Times’ classification scheme, an obviously thorny topic that almost no one wants to discuss: the proverbial elephant in the room.

It concerns the extensive background to the 2016 campaign – the relationship between the United States and Russia over the long arc of the twentieth century, and, especially, the years since the end of the Cold War.  This aspect is complicated, involving all five US  administrations since the Soviet Union dissolved itself at the end of 1991. It is a difficult story to tell.

I backed into it slowly, having followed for many years the Harvard-Russia scandal of the 1990s. In 1993, the US Agency for International Development, a semi-independent unit of the State Department, hired Harvard University’s Institute for International Development to provide technical economic assistance to the Russian government on its market reforms. Eight years later, the Justice Department sued Harvard for having let its team leaders go rogue.

Harvard economist Andrei Shleifer and his deputy, Jonathan Hay, were accused of investing in Russian securities, and of having established their wives at the head the line to obtain a license to enter the nascent Russian mutual fund industry. The suit was settled in 2005. The government recovered most of the money it had spent. The incident played a part in Harvard University president Lawrence Summers’s resignation the following winter. As Shleifer’s friend and mentor, Summers had distanced himself  via recusal.

After Boris Yeltsin had died, in 2007, I wrote a column about the failures of US policies in the 1990s. Thereafter I followed developments with increasing interest and alarm, particularly after the Ukraine crisis of 2014. And in the summer of 2016, when it seemed likely that Hillary Clinton would be elected president, I set out to collect some of the columns I had written and to add some additional narrative material in order to call attention to the entanglements she and her advisers would bring to the job. That project was supposed to take one year. It took two.

Because They Could: The Harvard Russia Scandal (and NATO Expansion) after Twenty-Five Years (CreateSpace) was finally published on Amazon last week – 300 pages and a relative bargain at $15. Alas, almost as quickly as the book went on sale, Amazon took it down, to make sure I actually owned the collected columns: their cloud computers had discovered these were also “freely available on the web” — in the archives of Economic Principals. Artificial intelligence at work: shoot first and ask questions afterwards.  As of May 24, Because They Could is back in print.The book consists of three main parts.

The first is a recap of the scandal as it appeared in the newspapers, from the front page of The Wall Street Journal, in August 1997; to Harvard’s decision, in March 2001, to try the case rather than settle the government suit; to September 2013, when Summers withdrew from the competition with Janet Yellen to head the Fed. These 29 columns, written as the story unfolded, introduce first-time readers to the scandal, and remind experts of what and when we knew and how we knew it.

The second part concerns the Portland, Maine, businessman whom the Harvard team leaders inveigled to start a mutual fund back-office firm in Russia, then forced out of its ownership. It turns out there was a second suit, overlooked for the most part because Harvard settled, paying an undisclosed sum in return for a non-disclosure agreement. This now-familiar tactic insured that John Keffer, whose Forum Financial at that point was one of the largest independently-owned mutual fund administrators in the world, and a significant presence in Poland, would be unable to tell his story. Only his filings and the massive documentation of the government case remained.

The third consists of six short essays on aspects of the US relationship with Russia since 1991. These relate a brief history of NATO expansion, which took place despite the administration of George H.W. Bush pledging in exchange for Russia agreeing to the reunification of Germany that the US would not further enlarge NATO; tell something of the US press corps in Moscow during those twenty-five years; identify a key issue in Russian historiography; express some sympathy for ordinary Russians and even for Vladimir Putin himself; and seek to separate the accidental presidency of Donald Trump from all the rest, the better to understand why he has so little standing in in the matter.

Also included is a short paean to the news values of The Wall Street Journal and two appendices. One is Shleifer’s letter to Harvard provost Albert Carnesale as the USAID investigation built to its climax. The other is the heavily-annotated business plan, drafted by Hay’s then-girlfriend, Elizabeth Hebert, later his wife, to make it appear to have been written by Hay, and backed financially by Shleifer’s wife, hedge-fund proprietor Nancy Zimmerman, offering control of Keffer’s company to Thomas Steyer, of Farallon Capital (who had been Ms. Zimmerman’s principal backer), and Peter Aldrich, of AEW Capital Management, a director of the National Bureau of Economic Research.

Preparing to espouse these unpopular views has made me snap to attention on the rare occasions when they are expressed in the mainstream press – not on the op-ed pages, where they mostly represent reflexive ballast-balancing, but in the news pages, where some deeper form of institutional judgment is at work. That was the case last Sunday, when an 8,600-word article in the Sunday New York Times Magazine presented the case that the United States shared the blame for the current disorder. “The Quiet Americans” startled me (though not the designer, who illustrated it with a standard what-makes-Russia-tick? design). The dispatch itself was a significant advance in the other Russia story....

Also on Larry Summers: 

Frontline's "The Warning": Now Taking Prop Bets on When Obama Fires Larry Summers' Ass 
The guy is not just arrogant. He was way, way wrong. Summers will be leaving the administration to "persue other interests" Here's the video from PBS...
Welt am Sonntag: "Dirty Larry auf dem Campus"
Democratic Underground: "The Unofficial DU 'Give Crook Larry Summers a Nickname' Contest"

"Microbes set to alter the economy"

From Nature:
Gene editing stands to accelerate the engineering of microbes for industrial production of food ingredients, pharmaceuticals, biofuels, chemicals and biomaterials. There is a risk, however, that microbial biotechnologies could destabilize economies and employment in the developing world that depend on supplying naturally occurring ingredients. For example, a biosynthetic process for making a precursor of the antimalarial drug artemisinin has been developed, which could threaten the jobs of farmers who harvest its natural source, the plant Artemisia annua.

Microbial processes hold promise for global sustainable development: they are cheaper, consume less energy and pollute less than oil-based manufacturing, and they use renewable feedstocks (V. de Lorenzo et al. EMBO Rep. 19, e45658; 2018). Yet it is imperative that international stakeholders assess and address any social-justice problems that could arise from such applications (see C. G. Acevedo-Rocha in Ambivalences of Creating Life 9–53; Springer, 2016). Long-term commitment will be necessary to close the communication gap between scholars from different disciplines, cultures, values and generations (see also S. Jasanoff and J. B. Hurlbut Nature 555, 435–437; 2018).

Have A Start-Up? DON'T Step Into Google and Facebook’s “Kill Zone”: (FB; GOOG)

This piece makes a natural follow-up to last August's "Facebook’s willingness to copy rivals’ apps seen as hurting innovation" (FB).
From ProMarket:

Google and Facebook’s “Kill Zone”: “We’ve Taken the Focus Off of Rewarding Genius and Innovation to Rewarding Capital and Scale”
A Stigler Center panel explores the implications of tech giants’ dominance on innovation and startups.
Earlier this week, Treasury Secretary Steven Mnuchin joined a growing number of public officials concerned about the impact of Internet monopolies when he called on the Justice Department to look into the power that digital platforms like Google have over the US economy. “These are issues the Justice Department needs to look at seriously,” he told CNBC, “not for any one company, but obviously as these technology companies have a greater and greater impact on the economy, I think that you have to look at the power they have.”

Mnuchin’s comments followed a 60 Minutes report that examined the enormous power Google wields over potential competitors thanks to its monopoly in online search and search advertising. “If I were starting out today, I would have no shot of building Yelp,” said Jeremy Stoppelman, co-founder and CEO of Yelp, during the segment. Yelp has long argued that Google has abused its dominance in local search to favor its own services over competitors such as itself, and is currently attempting to convince European competition authorities to launch a fresh antitrust case against the company.

“If you provide great content in one of these categories that is lucrative to Google, and seen as potentially threatening, they will snuff you out,” added Stoppelman. “They will make you disappear. They will bury you.”

The sentiment that startups effectively have no chance of competing against the “Big Five” tech giants—Alphabet, Amazon, Apple, Facebook, and Microsoft—is one that has become increasingly common among tech entrepreneurs and venture capitalists in recent years. “People are not getting funded because Amazon might one day compete with them,” one founder told The Guardian. “If it was startup versus startup, it would have been a fair fight, but startup versus Amazon and it’s game over.” As the author and media scholar Jonathan Taplin pointed out in an interview with ProMarket, the very notion that someone could start a new search engine that competes with Google “is just laughed at by the venture capital community.”

Investors and entrepreneurs, said the venture capitalist Albert Wenger during a panel discussion at the Stigler Center’s annual antitrust conference last month, are now wary of entering into direct competition with giants like Google and Facebook. Both companies, along with Amazon and Apple, effectively have a “Kill Zone” around them—areas not worth operating or investing in, since defeat is guaranteed.

Tech platforms, after all, have endless resources at their disposal to either purchase or crush new upstarts they perceive as threats. Increasingly, startups that operate in areas coveted by tech giants face a similar choice: sell—or get crushed. The Big Five have made over 436 acquisitions in the last decade, with little to no challenge from antitrust authorities. When startups refuse to sell, they find themselves facing an unlevel playing field. Snapchat, which turned down a $3 billion acquisition offer from Facebook in 2013 (and a $30 billion bid from Google in 2016), is a case in point: after it failed to acquire Snapchat, Facebook simply cloned many of Snapchat’s key features, using its vast reach to completely undercut its growth. This is not an uncommon occurrence.

“The Kill Zone is a real thing,” said Wenger, a managing partner at Union Square Ventures and an early investor in Twitter. “The scale of these companies and their impact on what can be funded, and what can succeed, is massive.” He went on to quote one angel investor who told him that he only invests “in things that are not in Facebook’s, Apple’s, Amazon’s or Google’s kill zone.”

The kill zone, noted Wenger, is not a new phenomenon. Microsoft had a similar kill zone around it when it dominated the tech industry in the late 1990s. “It was a similar playbook, where Microsoft would see, ‘What kind of things are doing well on my platform?’” he said. “Then they would just absorb those into the platform itself. That is a playbook that’s being exercised by Amazon, by Google, by Facebook, by all the big digital platforms.”

All this has profound implications for the startup ecosystem and for the future of innovation. Is the dominance of digital platforms, routinely hailed as the most innovative companies in the world, actually hindering innovation? Much of the Stigler Center panel, moderated by Fortune magazine’s executive editor Adam Lashinsky, revolved around this very question. In addition to Wenger, it featured patent expert Elvir Causevic, managing director and co-head of Houlihan Lokey’s Tech+IP Advisory practice; Glen Weyl, a principal researcher at Microsoft Research New England and a senior research scholar at Yale’s economics department and law school; and Matt Perault, director of public policy at Facebook.

While opinions as to how to address the power of digital platforms and spur innovation varied wildly, most of the panelists seemed to agree on one basic premise: the size and scope of digital platforms has become an impediment to innovation.

“Small Companies No Longer Have Access to Patent Protection”
Innovation used to be associated with small companies and entrepreneurs. There’s a reason why the garage has taken such an important place in the mythology of the tech industry: Silicon Valley, as we know it, is the product of entrepreneurs starting companies in their garages, from Bill Hewlett and Dave Packard in the late 1930s, through Steve Jobs and Steve Wozniak in the 1970s, to Larry Page and Sergey Brin in the 1990s.

But the vaunted garage is little more than a myth in today’s Silicon Valley. The rise of digital platforms has been correlated with a historic decline in startups: new business formation in the US has declined by more than 40 percent since the late 1970s and is near a 40-year low. At the same time, as the New York TimesFarhad Manjoo pointed out last year, the technology industry has gradually become “a playground for giants.”...MUCH MORE
HT: this morning's Alphaville Further Reading post links to a different ProMarket post, jogging  memories of the above.
Possibly related:
"Winners And Losers In The Patent Wars Between Amazon, Google, Facebook, Apple, and Microsoft"
"How the Internet Cartel Won the Internet and The Internet Competition Myth"

Update, Bill Browder: "Just cleared Spanish immigration at Madrid airport "

From Mr. Browder's twitter feed:

Data-Bait: Using Tech to Hook Globe’s Multi-Billion-Dollar Fishing Cheats

We're a month late getting to this but it's important for the maintenance of the resource and we'll probably be referring back to the tech if not the fishies. 
From Reuters via gCaptain:
In 2016, a Thai-flagged fishing vessel was detained in Seychelles on suspicion that it had been fishing illegally in the Indian Ocean, one of the world’s richest fishing grounds.
The Jin Shyang Yih 668 was caught with help from technology deployed by FISH-i Africa, a grouping of eight east African countries including Tanzania, Mozambique and Kenya.

But as the vessel headed to Thailand, which pledged to investigate and prosecute the case, it turned off its tracking equipment and disappeared. Its whereabouts remain unknown.

Such activity is rampant in the global fishing industry, experts say, where illegal, unreported and unregulated (IUU) fishing is estimated to cost $23.5 billion a year.

However, a range of non-profit and for-profit organizations that are developing technology solutions to tackle IUU say it is a matter of time before vessels can no longer vanish.

“The industry is developing very fast … basically the oceans will be fully traceable. There is no place to hide,” said Roberto Mielgo Bregazzi, the co-founder of Madrid-based FishSpektrum, one of the few for-profit platforms.

With backing from Google, Microsoft’s Paul Allen and Leonardo DiCaprio, among others, such platforms also track fishing on the high seas and in marine reserves, aided by radio and satellite data that send vessels’ locations and movements.

They use satellite imagery, drones, algorithms and the ability to process vast amounts of data, as well as old-fashioned sleuthing and analysis, to help countries control their waters.

Algorithms could identify illegal behavior, Mielgo Bregazzi told the Thomson Reuters Foundation, including predicting when a fishing vessel was about to meet its quota, triggering an alarm.

Bradley Soule, the chief fisheries analyst at OceanMind, a non-profit, said technology can help even rich countries, which might otherwise struggle to process the volume of data broadcast by hundreds of thousands of vessels.

Organizations such as his crunch that data and help to differentiate between normal and suspicious activity.

“The bulk of the threat is non-compliance by mainly legal operators who skirt the rules when they think no one’s looking,” said Soule, who helps Costa Rica monitor its waters.

Others go further. Trygg Mat Tracking (TMT), a Norway-based non-profit, digs up data on a vessel’s identity, its owners, agents and which company provides the crew. Its approach saw a South Korean ship in 2013 pay a then-record $1 million fine....

"The Race is On for European AI Research"

From EE Times:
With Samsung Electronics announcing its new artificial intelligence research lab based in Cambridge, it seems that the race is on across Europe to develop AI centers of excellence, with investments allocated to AI from both government and industry.

With Samsung Electronics announcing its new artificial intelligence (AI) research lab based in Cambridge, it seems that the race is on across Europe to develop AI centers of excellence, with investments allocated to AI from both government and industry.

The Samsung AI Center, Cambridge (SAIC-Cambridge) will be chaired by Professor Andrew Blake, a pioneer in the development of the theory and algorithms for computer vision and former director of Microsoft’s Cambridge Laboratory. With this center, Samsung aims to expand its R&D workforce in the U.K., including AI experts, from the current 250 to 400 in the near future.

This is part of a global plan from Samsung Research, the advanced R&D hub of Samsung Electronics. In addition to the U.K. hub, it also announced the opening of a new center in Toronto, Canada, and Moscow, Russia, bringing its total number of AI development centers to five, taking into account the ones that it already has in Seoul, Korea, and Silicon Valley in the U.S.

In Cambridge, U.K., the institute opens up new opportunities for fundamental research in AI and will facilitate greater cooperation with the U.K.’s academic community on the development of advanced technologies. Seunghwan Cho, executive vice president of Samsung Electronics, said, “This new artificial intelligence research center in Cambridge is one of the key milestones in the long-term strategy of the company. In this new world of connected devices and services based on AI, Samsung’s vision is to help people do their jobs and live their lives better.”

Because AI is being adopted in virtually every facet of today’s day-to-day lives and society, Samsung says, “We are at the brink of realizing near-exponential possibilities to make our lives easier through this powerful new technology.” Internet of Things (IoT) devices embedded with AI are expected to generate a vast array of data that can provide insights into lives, analyze complex usage patterns, and seamlessly enable intelligent services.

The press statement from Samsung says that the company chose the Cambridge area because it is a global epicenter of machine learning and one of the world’s foremost hubs for AI research and development, home not only to world-class talent but also some of the most well-renowned AI scholars with whom it will cooperate closely. The company will implement the results of its global network of AI research centers — including Cambridge — by building an open ecosystem of devices leveraging user-oriented AI to bring value back to users.

Professor Blake: a pioneer in computer vision
Professor Andrew Blake added, “The center’s research will help us to better understand human behavior, exploring areas like emotion recognition, and further expand the boundaries of user-centric communication to develop AI technologies that ultimately improve people’s lives.”

Professor Blake has a long history in electronics, computer vision, and artificial intelligence and was previously also a research director at The Alan Turing Institute. He founded the computer vision group at Microsoft in 1999, and in 2011, he and colleagues at Microsoft Research received the Royal Academy of Engineering MacRobert Award for their machine-learning contribution to Microsoft Kinect’s human motion-capture. Previously, at Oxford University, he was a pioneer in the development of the theory and algorithms that make it possible for computers to behave as seeing machines.

Between 1978 and 1980, he was a scientist with the electro-optics group of Ferranti in Edinburgh. He is currently also a scientific advisor to FiveAI, a developer of autonomous vehicles, which plans to demonstrate trial passenger services in London in late 2019.

U.K. and EU AI research funding heats up
The Samsung news comes after both the European Union (EU) and the U.K. government both indicated their announcements to develop the best in AI research capabilities. In April, we highlighted how chipmakers are expanding R&D in France’s new AI push. Since then, both the U.K. and the EU have made indications of further investment in AI....MORE
Top 10 British Artificial Intelligence Startups
Machine Learning Guru Pedro Domingos on the Arms Race in Artificial Intelligence
"The Top-10 French Artificial Intelligence Startups" 

Capital Markets: "Italian Reprieve, Euro Bounces, Trade Tensions Rise"

From Marc to Market:
After what a 15-sigma event yesterday in the Italian bond market, a reprieve today has seen the euro recover a cent from yesterday's lows. While the political situation in Italy is worrisome, many observers suspect that the new banking rules exacerbated the illiquidity that explains outsized moves. Italy's 10-year bond yield is off nearly 20 bp today, and the two-year yield is off almost 90 bp. Italian stocks have also stabilized, gaining about 0.5% near midday. IWith the highest coupons in several years, Italy's bond auction was well received in terms of bid-to-cover ratios.

To be sure the political situation remains unresolved. It seems that the Five Star Movement is more willing to find a solution short of elections, but the League is taking more strident tones. Perhaps the strategy is rational and not driven by personalities. The latest SWG poll covering May23-May28 showed the League with 27.5% support, up from around 17% in the March election. M5S, on the other hand, has seen its support slip to 29.5% from nearly 33% in March. Weekly tracking polls concur that the League is the only party that has gained support since the election.

Outside of Italy, and Spain, which holds a confidence vote at the end of the week, the other notable development has been heightened trade tensions. Pressure was going to mount in any event, ahead of the June 1 expiration of the exemptions from the US steel and aluminum tariffs. While Europe has been lobbying hard for a permanent exemption, it does not seem likely. NAFTA negotiations are ongoing, and it is not clear what the Trump Administration will do for Canada and Mexico. However, adding to this the Administration indicated that it is moving forward with the tariff on $50 bln of Chinese imports to retaliate for intellectual property right violations.

Reportedly, a list of specific products will be released in around two weeks. New curbs may be announced on sensitive technology as well, ahead of the next round of talks that are to begin in a few days. New restrictions on Chinese investment in the US and enhanced export controls are thought to be ready by the end of next month.

Recall that when the US first announced the actions on intellectual property, China threatened to retaliate. That is when Trump countered with a threat of tariffs on another $100 bln of Chinese goods. This time there did not seem to be an immediate response.

Economic data released today may have helped soothe investors' nerves. Both Japan and Germany reported considerably stronger retail sales than the market expected. In Japan, April retail sales rose 1.4%. The median forecast was for a 0.5% increase after a 0.7% decline in March. German retail sales rose 2.3% in April. It is the largest increase since October 2016. The median forecast was for a 0.5% increase. The March decline was shaved to 0.4% from -0.6%.

Separately, Germany reported a strong employment report. Unemployment fell by 11k in May, which nearly matches the three-month average. Unemployment fell by an average of almost 22k a month in 2017. The unemployment rate unexpectedly edged down to 5.2% from 5.3%. Germany states also reported preliminary May CPI figures and the national report will be released shortly....


"'Unprecedented' hailstorm destroys Bordeaux vineyards"

From AFP via The Local, May 28:
Winemakers in western France in the famed Bordeaux and Cognac areas were inspecting damage to their vines on Sunday after an "unprecedented" storm saw pebble-sized hailstones cause widespread destruction. 
The bad weather struck around midday on Saturday in the Gironde area where many of France's most well-known red wines originate, as well as further north in the Charente and Charente-Maritime regions. 
"It's a shock, it was a hailstorm of unprecedented violence for 10 minutes," the head of a winegrowers association in the Cotes-de-Bourg area, Didier Gontier, told Franceinfo radio on Sunday.
He said that an area of around 2,000 hectares had been affected which could bankrupt some growers, particularly those already affected by a late frost last year, he added....MORE

"British businessman accused of being a "serial killer" by Vladimir Putin after fighting anti-corruption campaign arrested in Spain on Russian arrest warrant"

From The Mirror, 30 May:
Bill Browder has previously spoken of his fear that he will be killed by the Russian government
A British businessman branded a "serial killer" by Russian President Vladimir Putin has been arrested in Spain.

Bill Browder, who has previously said he fears for his life, said he was arrested on an Interpol arrest warrant this morning.

Mr Browder has led a campaign calling for justice after his Russian lawyer died in prison after uncovering a huge fraud believed to involve Russian officials.

Earlier this year the hedge-fund manager, one of the Kremlin's most high-profile public enemies, told MPs: “What the Russians would like to do more than anything is arrest me and get me back to Russia and then kill me in the control of their own system."

And he added: “I’m at risk, at high risk. I don’t spend my life living in fear, but I am definitely at risk.”...MORE

Tuesday, May 29, 2018

George Soros at the European Council on Foreign Relations, May 29, 2018 "How to Save Europe"

From the ECFR:

Keynote speech at ECFR's Annual Council Meeting in Paris 29 May. 2018. 
Check against delivery. 
It is good to be here. Thank you. I think this is the right place to discuss how to save Europe. 
The European Union is in an existential crisis. Everything that could go wrong has gone wrong. First I will briefly explain how this happened and then I will explore what can be done to reverse the trend. 

In my youth, a small band of visionaries led by Jean Monnet transformed the European Coal and Steel Community into the European Common Market and then the European Union.People of my generation were enthusiastic supporters of the process.

I personally regarded the European Union as the embodiment of the idea of the Open Society. It was a voluntary association of equal states that banded together and sacrificed part of their sovereignty for the common good. The idea of Europe as an open society continues to inspire me. 
But since the financial crisis of 2008 the European Union seems to have lost its way. It adopted a program of fiscal retrenchment which led to the euro crisis. This transformed the Eurozone into a relationship between creditors and debtors where the creditors set the conditions that the debtors had to meet. The debtors couldn’t meet those conditions and that created a relationship that is neither voluntary nor equal.

As a result, many young people today regard the European Union as an enemy that has deprived them of jobs and a secure and promising future. Populist politicians exploited the resentments and formed anti-European parties and movements.
Then came the refugee crisis of 2015. At first most people sympathized with the plight of refugees fleeing from political repression or civil war, but they didn’t want their everyday lives disrupted by a breakdown of social services. They were also disappointed by the failure of the authorities to cope with the crisis. 

When that happened in Germany, the AfD was empowered and it has grown into the largest opposition party. Italy has suffered from a similar experience recently and the political repercussions have been even more disastrous: the anti-European parties almost took over the government. Italy is now facing elections in the midst of political chaos.  

​Indeed the whole of Europe has been disrupted by the refugee crisis. Unscrupulous leaders have exploited it even in countries that have accepted hardly any refugees. In Hungary, Victor Orban based his reelection campaign on falsely accusing me of planning to flood Europe, Hungary included, with Muslim refugees. 

He is now posing as the defender of his version of a Christian Europe that is challenging the values on which the European Union was founded. He is trying to take over the leadership of the Christian Democratic parties, which form the majority in the European Parliament. 

​In recent weeks not just Europe but the whole world has been shocked by President Trump’s actions. He has unilaterally withdrawn from a nuclear arms treaty with Iran thereby effectively destroying the transatlantic alliance. This development will put additional pressure of unpredictable force on an already beleaguered Europe. It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality.   

​What can be done to save Europe?
​Europe faces three pressing problems: the refugee crisis; territorial disintegrations as exemplified by Brexit; and the austerity policy that has hindered Europe’s economic development. Bringing the refugee crisis under control may be the best place to start. 

​I have always advocated that the allocation of refugees within Europe should be entirely voluntary. Member states should not be forced to accept refugees they don’t want and refugees should not be forced to settle in countries where they don’t want to go. 

The voluntary principle ought to guide Europe’s migration policy. Europe must also urgently reform or repeal the so-called Dublin Regulations which have put an unfair burden on Italy and other Mediterranean countries with disastrous political consequences. 

The EU must protect its external borders but keep them open for lawful migrants. Member states in turn must not close their internal borders. The idea of a “fortress Europe” closed to political refugees and economic migrants alike violates both European and international law and in any case it is totally unrealistic.

​Europe wants to extend a helping hand towards Africa (and other parts of the developing world) by offering substantial assistance to democratically inclined regimes. This would enable them to provide education and employment to their citizens. They would be less likely to leave and those who did would not qualify as refugees. At the same time, European countries could welcome migrants from these and other countries to meet their economic needsthrough an orderly process. In this way migration would be voluntary both on the part of the migrants and the receiving states. Such a “Marshall Plan” would also help to reduce the number of political refugees by strengthening democratic regimes in the developing world. 

​Present day reality falls substantially short of this ideal. First and most importantly, the European Union still doesn’t have a unified migration policy. Each member state has its own policy, which is often at odds with the interests of other states.  

​Second, the main objective of most European countries is not to foster democratic development but to stem the flow of migrants. This diverts a large part of the available funds to dirty deals with dictators, bribing them to prevent migrants from passing through their territory or to use repressive measures to prevent their citizens from leaving. In the long-run this will generate more political refugees.

Third, there is a woeful shortage of financial resources. We estimate that a meaningful Marshall Plan for Africa would require at least 30 billion euros a year for a number of years. Member states could contribute only a small fraction of this amount even if they were ready to do so.
​How might such a plan be financed then? It’s important to recognize that the refugee crisis is a European problem and it needs a European solution. The European Union has a high credit rating and its borrowing capacity is largely unused. When should that capacity be put to use if not in an existential crisis? Throughout history, the national debt always grew at times of war. Admittedly, adding to the national debt runs counter to the prevailing addiction to austerity; but the austerity policy is itself a contributing factor to the crisis in which Europe finds itself. 

Until recently it could have been argued that the austerity is working and we must persevere with it because the European economy is slowly improving. But looking ahead we are now facing the termination of the nuclear arms deal with Iran and the destruction of the transatlantic alliance.  This is bound to have a negative effect on the European economy and cause other dislocations. The strength of the dollar is already precipitating a flight from emerging market currencies. We may be heading for another major financial crisis. The economic stimulus of a Marshall Plan should kick in just at the right time. 

That is what has led me to put forward an out-of-the-box proposal for financing it. I won’t go into the details, but I want to point out that the proposal contains an ingenious device that would enable the European Union to borrow from the market at a very advantageous rate without incurring a direct obligation for itself or for its member states. This also offers considerable accounting benefits. Moreover, although it is anout-of-the-box proposal, it has already been successfully used in other contexts, mainly in general revenue municipal bonds in the US and also in surge funding for infectious diseases.

But my main point is that an existential crisis is no longer a figure of speech but the harsh reality. Europe needs to do something drastic to escape it. It needs to reinvent itself.
That is what President Macron sought to initiate by proposing what he calls Citizens’ Consultations. This initiative needs to be a genuinely grassroots effort. The transformation of the Coal and Steel Community into the European Union was a top-down effort and it worked wonders. But times have changed. Ordinary people feel excluded and ignored. Now we need a collaborative effort that combines the top-down approach of the European institutions with the bottom-up initiatives that are necessary to engage the electorate. 

​I mentioned three pressing problems. I have addressed two of them: migration and austerity. That leaves territorial disintegration exemplified by Brexit. I don’t have time to deal with other examples, especially in the Balkans. I will do so in a separate article to be published next week.
Brexit is an immensely damaging process, harmful to both sides. Most of the damage is felt right now when the European Union is in an existential crisis, but its attention is diverted to negotiating a separation agreement with Britain. That’s a lose-lose proposition, but it could be converted into a win-win situation. 

Divorce will be a long process, probably taking more than five years. Five years is an eternity in politics, especially in revolutionary times like the present. Ultimately, it’s up to the British people to decide what they want to do. It would be better however if they came to a decision sooner rather than later. That’s the goal of an initiative called the “Best for Britain,”which I support. 
Best for Britain fought for, and helped to win, a meaningful parliamentary vote which includes the option of not leaving at all.  

This would be good for Britain but would also render Europe a great service by rescinding Brexit and not creating a hard-to-fill hole in the European budget. But the British public must express its support by a convincing margin in order to be taken seriously by Europe. That’s what the Best for Britain is aiming for by engaging the electorate.  It will publish its manifesto in the next few days. 

​The economic case for remaining a member of the EU is strong, but it will take time for it to sink in. During that time the EU needs to transform itself into an association that countries like Britain would want to join, in order to strengthen the political case. 

Such a Europe would differ from the current arrangements in two key respects. First, it would clearly distinguish between the European Union and the Eurozone. Second, it would recognize that the euro has many unresolved problems and they must not be allowed to destroy the European Union. 
The EU is governed by outdated treaties that assert that all member states are expected to join the euro if and when they qualify. This has created an absurd situation where countries like Sweden, Poland and the Czech Republic have made it clear that they have no intention to join, yet they are still described and treated as “pre-ins”.

The effect is not purely cosmetic. It has converted the EU into an organization in which the Eurozone constitutes the inner-core and the other members are relegated to an inferior position. There is a hidden assumption at work here, namely that various member states may be moving at different speeds but they are allheading to the same destination. This has given rise to the claim of “an ever-closer union” that has been explicitly rejected by a number of countries. 

This claim must be abandoned. Instead of a multi-speed Europe we should aim at a “multi-track Europe” that would allow member states a wider variety of choices. This would have a far-reaching beneficial effect. Right now, attitudes towards cooperation are negative: member states want to reassert their sovereignty rather than surrender more of it. But if cooperation produced positive results, attitudes may improve and some objectives, like defense, that are currently best pursued by coalitions of the willing may qualify for universal participation. 

Harsh reality may force member states to set aside their national interests in the interest of preserving the European Union. That’s what President Macron was urging in his Aachen speech and he was cautiously endorsed by Chancellor Merkel who is painfully aware of the opposition she faces at home. 

If Macron and Merkel succeeded in spite of all the obstacles, they would follow in the footsteps of Jean Monnet and his small band of visionaries. As I said before, that small band needs to be replaced by a large upsurge of grass-roots pro-European initiatives. I and my network of Open Society Foundations will do everything in our power to help support those initiatives. 
Thank you.
### End of speech ### Check against delivery. 
George Soros Founder and Chair, Open Society Foundations.

Controversial Seattle ‘head tax’ may head south: Silicon Valley cities weigh tax on tech giants

From GeekWire:
Seattle is an innovator in a lot of things — from speciality coffee to cloud computing to commercial spacecraft.

Could that innovation now spread to municipal tax codes?

Seattle last week gained national attention after the City Council passed a so-called “head tax,” which levies a $275 tax per employee per year on companies with annual revenue of $20 million or more. The controversial tax, which would raise about $45 to $49 million, was applauded by affordable housing advocates, but criticized by members of the business and tech community, arguing that it amounts to a tax on jobs.

Now, the concept of taxing big corporations — in an effort to build affordable housing and offer homeless services — is catching on Silicon Valley.

Bloomberg’s Eric Newcomer reports that San Francisco, Mountain View, Cupertino and East Palo Alto are now considering similar taxes to the legislation passed in Seattle, potentially changing the dynamic between big tech companies and the communities in which they operate.

“Google has billions of dollars in cash floating around,” Mountain View mayor Lenny Siegel told Bloomberg. “They made billions off the tax bill. They can afford to spend a little more here.”
Google is headquartered in Mountain View, but also maintains a sizable operation in the Seattle area, with engineering offices in Kirkland (not subject to the head tax) and Seattle’s Fremont neighborhood (subject to the head tax). It has a market value of $746 billion.
Mountain View is considering a head tax of $250 to $300 per employee, with Bloomberg reporting that the city council is considering a vote for next month. It would raise about $10 million. Cupertino — home to Apple’s headquarters — also is considering a head tax to fund housing and transportation, as is East Palo Alto, which just voted to send the measure to voters this November....MORE

"Gene Simmons Sees Dow 30,000"

Is it any wonder the satire sites are struggling?*
Just kidding, that's an attempt at a cheap laugh, Simmons is actually pretty sharp, though a bit pretentious.

Here's Barron's, May 25:
KISS frontman Gene Simmons stopped by recently to talk with Barron’s about the music business, investing, politics, and his latest business ventures, including soda and cannabis. Our conversation, below, has been edited for length and clarity.

Barron’s: If KISS were starting out now in the age of music streaming, would you be as successful?

Gene Simmons: You’d have to go back in a time machine to when there was civility and structure, because it’s chaos now. As soon as Napster and schmapster and schmeckle-head and all the rest of them started to download and file-share for free—stealing—it was the hole that sunk the Titanic.
I’m a rich son of a b— and all that, but we came before. It breaks my heart that a new band starting today doesn’t have a chance in hell of making it. There’s no model that works. There’s plenty of talent out there, but play a quick game: From 1958 to 1988 you had Elvis, the Beatles, the Rolling Stones, Jimi Hendrix, David Bowie, and Madonna. But since 1988, who are the new Beatles?

Who is the greatest American rock band of all time?
The Americans don’t have it. We invented this thing—rhythm and blues and rock ’n’ roll, all that—but the English do it much better. The Beatles and the Stones and just a thousand bands. In America. . .the Grateful Dead? Bums with guitars around their necks. Guys that should be on Duck Dynasty instead of onstage. Three Dog Night. . .Three Dog Night?

What about Creedence Clearwater Revival?
But you don’t care who’s in it. They’re not stars. The English are stars.

You have a tour coming up—a farewell tour.
I didn’t say that.

OK, a tour. The Wall Street Journal reports that Taylor Swift is raising ticket prices to combat scalping, even if some seats go unsold. Is that a good idea?
That’s called capitalism. Supply and demand. Everything is arbitrary. You stretch the rubber band as far as it can go before it snaps. You would rather stretch more if it can go. Taylor can raise her ticket prices. She is enormously popular, and she’ll do just fine. Now, can a reunion of Three Dog Night do that? No—because the demand isn’t there.

What’s the most you have ever heard of someone paying for a seat at a KISS concert?
Fifty grand.

Do you know that person?
Well sure, because we charge 50 grand now for me to visit your home and tell you how nice your curtains are for two hours.

You spoke at the Money Show in Las Vegas. Do you handle your own investments?
I don’t sit at home and press buttons and buy. I like to keep my snoot close to the ground, and anything I decide to invest in I actually know something about. The Warren Buffett school of do your goddamn due diligence, kick the tires yourself, learn as much as you can, and then—from a position of being informed—tell your guys, you know, “I think this is good. What do you think?”

Do you invest in Spotify Technology?
No. You’re buying perception. Perception is value. We agree that diamonds and gold are valuable because we agree on it. If women weren’t interested in diamonds, diamonds would be f—.

Are you optimistic about the stock market?
Yes. When I rang the bell at the New York Stock Exchange in 2008, the Dow was right under 8000. A broadcaster asked me what I thought about disaster—Black Friday, Sunny Tuesday, and so on. I said, what are you talking about? America invented this. In other countries, the despots and dictators invest in America. Am I the first one saying buy low, sell high? It’s a good time. You like biotech? Buy biotech. You eat burgers? Buy McDonald’s. Invest in what you know. We are now at 24,700, something like that, and there is no question in my mind we are going to go past 30,000.

At the end of the day the masses aren’t aware of the market or where the Dow is. All they want to know is, can I feed my family and is the country safe? One is political and the other is economic. You try to pick, hopefully, the people who can represent you that can fulfill those two wishes

We should look at ourselves the way terrorists like the al-Aqsa Martyrs’ Brigades and Al-Qaeda do. They think of us as just Americans. We are the ones who say “Democrats” and all that. We see a difference, they don’t see a difference at all. They just think we are all Americans. Hey, that’s a good idea. Let’s all be Americans, because the people that don’t agree with you and may be on the lower floor—actually, it’s their America as well....

Principal, Motion Wealth Advisors, estimated net worth $300 million+  
Gene Simmons Sees Dow 30,000 

*Praise Be: The Pan Arabia Enquirer Is Back In Business
After a long hiatus, last linked on our pages in 2015's:   

Middle East satire site concedes defeat after labourers forced to run Qatari marathon in flip-flops
Editors at semi-popular Middle East satire news website The Pan-Arabia Enquirer yesterday revealed that they had “given up” in their long-running struggle to keep ahead of reality.

The announcement came following last week’s news that labourers working in Qatar had been coerced into taking part in a marathon, with many bussed in from their dormitories and forced to run in jeans and flip-flops as part of a failed bid to break the world record for number of participants.

“Honestly, simply cannot compete in these sorts of conditions,” said Enquirer acting editor Baltimore Stafford in a statement.

“Over the years, we’ve had to deal with a growing trend of real-life trying to outdo satire, especially in Saudi Arabia, but this is beyond our capabilities. To be honest, we could have probably worked around the whole ‘labourers forced to take part in marathon’ bit, but with the addition of flip-flops, jeans and the fact it was a shambolic attempt to break a record, we’ve had to concede defeat.”
I am finding it difficult to choose just one post to highlight PAE's triumphant return so here is what one of the feedreaders looked like earlier today (links at the timestamps):....

Watch Out Bayer/Monsanto: Robots fight weeds in challenge to agrochemical giants

Bayer may get U.S. approval for the merger as soon as today.
From Reuters:
YVERDON-LES-BAINS, Switzerland/CHICAGO (Reuters) - In a field of sugar beet in Switzerland, a solar-powered robot that looks like a table on wheels scans the rows of crops with its camera, identifies weeds and zaps them with jets of blue liquid from its mechanical tentacles.

Undergoing final tests before the liquid is replaced with weedkiller, the Swiss robot is one of new breed of AI weeders that investors say could disrupt the $100 billion pesticides and seeds industry by reducing the need for universal herbicides and the genetically modified (GM) crops that tolerate them.

Dominated by companies such as Bayer, DowDuPont, BASF and Syngenta, the industry is bracing for the impact of digital agricultural technology and some firms are already adapting their business models.

The stakes are high. Herbicide sales are worth $26 billion a year and account for 46 percent of pesticides revenue overall while 90 percent of GM seeds have some herbicide tolerance built in, according to market researcher Phillips McDougall.

“Some of the profit pools that are now in the hands of the big agrochemical companies will shift, partly to the farmer and partly to the equipment manufacturers,” said Cedric Lecamp, who runs the $1 billion Pictet-Nutrition fund that invests in companies along the food supply chain.
In response, producers such as Germany’s Bayer have sought partners for their own precision spraying systems while ChemChina’s Syngenta [CNNCC.UL], for example, is looking to develop crop protection products suited to the new equipment.

While still in its infancy, the plant-by-plant approach heralds a marked shift from standard methods of crop production.

Now, non-selective weedkillers such as Monsanto’s Roundup are sprayed on vast tracts of land planted with tolerant GM seeds, driving one of the most lucrative business models in the industry.

But ecoRobotix, developer of the Swiss weeder, believes its design could reduce the amount of herbicide farmers use by 20 times. The company said it is close to signing a financing round with investors and is due to go on the market by early 2019....MORE
As is true with so much news, The Onion was ahead of the pack with their 2005 reporting on the plowborgs of Idaho and Nebraska:

Government May Restrict Use Of Genetically Modified Farmers
DC—The Department of HyperAgriculture announced Monday that it will begin investigating possible restrictions on the cultivation, implementation, and breeding of genetically modified farmers, weighing possible safety and health risks against the farmers' dramatically increased yield and efficiency. 

"As evidenced by the many strong opinions regarding these farmers, we can all agree that more research needs to be done," said Secretary of HyperAgriculture Roald McDonald in a press conference this morning. "Whatever happens, we cannot let our growing population's need for more and better foods lead us recklessly into the creation of 'Frankenfarmers.'"

McDonald added: "That said, I can't deny the benefits of an agricultural laborer who subsists on common weeds, grows his own exo-overalls, sweats pesticides, and whose six arms end in retractable plows, scythes, and harrows."

Several larger North American corporate states are already using GM farmers to perform specialized or time-sensitive tasks. Monsanto-Idaho has successfully used a gene-gineered strain of Mountain Anderson farmer....MORE

Saudi's $500 billion mega-city NEOM is attracting 'overwhelming' interest from investors

Over the years we've mentioned that one of the least stressful ways to increase the size of your net worth is to find a fire hose of money and stand next to it knowing that just being near the splashing can be worth as much as a lifetime of work in Tanzania's artisanal garnet mines.

So yeah, seeing the attraction of a half-trillion dollar flow we'll repeat the story, whether it turns out to be true or not.*

From CNBC:
  • With ambitious plans to transform its economy as part of the crown prince's Vision 2030, Saudi Arabia is hoping to boost foreign direct investment (FDI).
  • It hopes ambitious mega projects like the futuristic city of NEOM will attract FDI.
With ambitious plans to transform its economy as part of the crown prince's Vision 2030, Saudi Arabia is hoping to boost foreign direct investment (FDI) into the country as it embarks on a post-oil era and ambitious mega projects like the futuristic city of NEOM.

Ibrahim Al-Omar, governor of the Saudi Arabian General Investment Authority (SAGIA), said foreign direct investment (FDI) was growing in Saudi Arabia.

Official figures from the World Bank show FDI net inflows were $7.453 billion in 2016 while net outflows were $8.936 in the same year.

Since then, however, Saudi Arabia's Crown Prince Mohammed bin Salman has appeared to take the reigns on t/ransforming the economy and society by introducing a raft of liberalizing reforms. An anti-corruption purge led by the crown prince last year caused concern among some business leaders, but Al-Omar said foreign investment was now growing, but didn't give more detail.

"We have seen a growth for foreign investment — about 50 percent comparing the first quarter this year to the same period last year. Also, the (FDI) inflows we have seen about 40 percent," Al-Omar told CNBC's Hadley Gamble as she hosted a session on the Saudi Arabian FDI landscape at the Gateway Gulf investment forum in Bahrain...MORE 
*As noted in the outro from 2015's "Free Money In China":
...I am reminded of one of the stories of the gold rushes, this one I think happened in Colorado. The original rush was on the eastern slope of the Rocky Mountains. A miner, tired of the competition decided to spread a rumor that gold had been discovered on the other side of the Rockies and as the rumor spread it was embellished and more and more of those who were finding nothing in the Pikes Peak area decided to cross the mountains and try their luck.

Finally, the original rumor monger announced to his remaining friends that he was joining the migration further west. One of the friends pointed out that he had started the tale to which he replied: "I dunno, the way these guys are acting there must be something to it".

Human nature, it was ever thus.