April 12, 2018

If you were only to read one thing…

Bloomberg Gadfly – Mark Zuckerberg Refuses to Admit How Facebook Works – Shira Ovide  4/12

  • “The most troubling takeaway from two days of congressional hearings on Facebook Inc. was this: Mark Zuckerberg didn’t want to explain how the social network operates.” 
  • “Zuckerberg found it hard to plainly acknowledge that Facebook tracks users from device to device, collects information on websites people visit and apps they use, gathers information on people’s physical locations, collects phone call logs from Android smartphones and pulls in some online activity from people who don’t even have Facebook accounts.”
  • “Zuckerberg declined to acknowledge that Facebook’s ad system and products are informed by all of this information gathering on and off the social network. If Facebook were a true bargain with users — they get a useful, free service in exchange for seeing advertising based on their interests and activity — then Zuckerberg should be comfortable explaining how it all works.”
  • “Instead, given the option to articulate Facebook’s relationship with users (and non-users), he dodged. A lot.”
  • “He said he couldn’t answer queries from Senator Roy Blunt, who asked on Tuesday whether Facebook tracks users across their computing devices or tracks offline activity. The answer to both is yes. During the House committee hearing on Wednesday, Zuckerberg claimed not to know what ‘shadow profiles’ are, even though this term has been used for years to describe Facebook’s collection of data about people who don’t use its services by harvesting the inboxes and smartphone contacts of active Facebook users. (Zuckerberg reluctantly acknowledged that Facebook gathers information on people who aren’t signed up for Facebook for what he said were ‘security purposes.’)”
  • “Most people do not understand the scope of Facebook’s data collection. Lawmakers tried more than once to get Zuckerberg to say this, but he never did. Here’s a piece of evidence lawmakers could have showed the CEO: In a survey conducted recently by Digital Content Next, a trade group of news organizations that is frequently critical of Facebook, a majority of respondents said they didn’t expect the social network to track use of non-Facebook apps to target ads, collect their physical location when they’re not using Facebook or harvest information from non-Facebook websites that people visit. Spoiler alert: Facebook does all of those things.”  
  • “It’s not people’s fault if they don’t know how Facebook works. If Zuckerberg and Facebook were comfortable with the data-based bedrock of their business, he should be able and willing to explain all the ways Facebook collects data on everyone and how it uses it.”
  • “It felt as though the company made a calculated decision to deflect rather than talk openly about the scope of Facebook data collection and its data-based ad system. And to me, that was a sign that Facebook is embarrassed about what it does for a living.”


Newsweek – Why Are Californians Fleeing the Bay Area in Droves? – Mark J. Perry 2/15

  • “Operators of a San Jose U-Haul business say one of their biggest problems is getting its rental moving vans back because so many are on a one-way ticket out-of-town. Nationwide, the cities with the highest inflows, according to Redfin, are Phoenix, Las Vegas, Atlanta, and Nashville.”
  • “To help balance truck inventories and take advantage of higher demand in some rental markets than others, it’s natural that U-Haul would implement demand-based, dynamic pricing. Based on market forces, U-Haul charges higher prices in locations like San Jose with higher outbound than inbound demand and truck shortages, and lower prices in markets like Las Vegas with higher inbound than outbound demand and truck surpluses.”
  • “And that’s what the price data in the table above show. For example, demand must be extremely high for outbound trucks leaving San Jose for Las Vegas, and a one-way rental for the 525-mile trip is almost $2,000. But the price for a 26-foot truck going in the opposite direction from Las Vegas to San Jose is only $121, with four days of travel allowed!”
  • “In contrast, a one-way car rental from Hertz from the Las Vegas airport to the San Jose airport for four days is about $800 for a compact car and about $1,300 for a full-size car and $2,100 for a Chevy Suburban SUV! So it must be the case that U-Haul trucks are in such short supply in San Jose that it offers them almost for free ($121) when they are coming back from places like Las Vegas and Phoenix (also $121 for a one-way rental to San Jose).”
  • “And U-Haul is pricing all truck sizes at that price (about $120) for one-way rentals to San Jose from Las Vegas and Phoenix: 10-foot, 15-foot, 20-foot and 26-foot trucks.”

Bloomberg Businessweek – Massive Debt, Massive Interest Payments – Alexandre Tanzi 4/11

Worthy Insights / Opinion Pieces / Advice

FT – Bondholders seek smart money edge in Venezuela’s debt – Jonathan Wheatley 4/11

  • “If there is any smart money in Venezuela these days, it is probably in a $2.5bn, 8.5% bond issued by PDVSA, the state oil company, due on October 27, 2020. Despite being declared in default, it trades around 85 cents on the dollar, suggesting investors believe they still have a good chance of getting paid.”
  • “Compare that with a $650m 8.5% bond issued by Elecar, a state electric utility, that matured on Tuesday, April 10. On the day that investors were due to be paid 100% of their money, it was trading at 38 cents on the dollar. While this suggests that most investors do not expect to be paid, it also shows that some still do. This may turn out to be very smart money; or it may not.”
  • “All the signs at present point to the latter. As the FT revealed this week, Venezuela stopped making payments on its sovereign bonds last September. It has repeatedly blamed missed payments on the operational complications caused by US sanctions imposed in August, which are certainly considerable. Nevertheless, when it has wanted to make payments, even if it has made them late, it has managed to do so. About $2.5bn has been received by holders of PDVSA and Elecar bonds since November 2, when President Nicolás Maduro said he would restructure and refinance roughly $100bn of state and quasi-state debt.”
  • “Holders of the PDVSA 8.5% bond of 2020 have a better chance of making good. This is because they have a claim on the bond’s collateral: 50.1% of Citgo, PDVSA’s US refining and distribution company.”

FT – America’s long goodbye to the Middle East – Edward Luce 4/11

Mauldin Economics: The Telegraph – JP Morgan sounds alarm over US economic data that could signal recession – Ambrose Evans-Pritchard 4/9

Markets / Economy

WSJ – Silicon Valley Long Dominated Startup Funding – Now It Has a Challenger – Phred Dvorak and Yasufumi Saito 4/12


WSJ – Daily Shot: US Total Oil Production 4/6

Cryptocurrency / ICOs

WSJ – Bitcoin’s Hype Vanishes Just Like That: ‘We’re in the Boring Phase’ – Steven Russolillo 4/12

  • “…in the past few months, bitcoin has faded off the front pages of newspapers and it no longer dominates people’s social-media feeds. Global internet searches for the word ‘bitcoin’ have fallen by over 80% from December, according to Google Trends.”
  • “Bitcoin’s average daily trading volume this month is about 70% lower than on the most active days at the end of last year, according to bitcoinity.org. That includes steep declines on some of the biggest U.S. platforms, including Gemini, an exchange founded by Cameron and Tyler Winklevoss, and San Francisco-based Coinbase. At one point in December, Coinbase was the most-downloaded free app in Apple Inc.’s App Store. Now, it doesn’t make the top 200.”

Environment / Science

FT – Global warming to give colder winters and hotter summers – Clive Cookson 4/11

  • “Global warming is weakening the circulation of the North Atlantic ocean, which plays a crucial role in the world’s climate, including keeping winters in western Europe relatively mild.”
  • “Two international research teams have published separate studies in the journal Nature, which together add powerful evidence to fears that the system of ocean currents known as the Atlantic Meridional Overturning Circulation or Amoc is losing strength.”
  • “Amoc’s strength has declined by 15% since the mid-19th century and is now at its weakest for at least 1,500 years — and probably since the end of the last big Ice Age 11,500 years ago — said David Thornalley of University College London, lead author of one study by scientists at UCL and Woods Hole Oceanographic Institution.”
  • “If the weakening continues, the impact on Europe and the US east coast could be serious. Winter weather is likely to become less stable, with more outbursts of extremely cold air from the Arctic.”
  • “It could have the opposite effect in summer. For example, the 2015 European heatwave was paradoxically linked to record cold in northern Atlantic waters that year. That promoted an air pressure system that funneled warm winds from the south into Europe. Further afield, a weakened Amoc tends to push African rainfall belts southward, increasing the risk of drought in the Sahel.”
  • “The UCL/Woods Hole collaboration used various techniques to estimate changes in Amoc. One measured the size of grains in cores drilled from sediments on the seabed; larger grains meant a stronger current. The other examined remains of microscopic sea creatures in the sediments, which indicate water temperature at the time. The analysis suggested that the weakening began at the end of the so-called Little Ice Age around 1850, when the world started to warm after two exceptionally cold centuries.”
  • “In the second study, scientists at the Potsdam Institute for Climate Impact Research in Germany used climate model data to confirm that sea surface temperature patterns are a good indicator of Amoc’s strength. Then, analyzing temperature data, they showed that Amoc weakened more rapidly since 1950 in response to recent global warming.”

Health / Medicine

WSJ – How Death Strikes Around the U.S. – Betsy McKay and Renee Rigdon 4/10


WSJ – Daily Shot: Chinese Investment Into the U.S. Fell Sharply in 2017 – Josh Zumbrun 4/10

Middle East

Bloomberg – Saudis Shoot Down Missiles, Drones as Middle East Tensions Flare – Mohammed Hatem, Alaa Shahine, and Nour Al Ali 4/11

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