Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” - Kenneth Boulding

We apologize for the lack of posts over the last weeks, which is due to us starting a new position. Some of the links below were published 2-3 weeks ago but their relevance as stood the test of this (short) period of time.

We were never quite technological enthusiasts and would probably be best described as part of the ‘late majority’ adopters or even laggards. This reflects a philosophy in which new technologies must be proven both safe and secured before we adopt them. The problem with the vast majority of new technologies flooding the market is that the speed of change happens so quickly that most of them are discarded quite rapidly (some type of natural technological selection), resulting in an expensive gadget being thrown away. We wore the Fitbit for 6 months before finding out that we could practice sports without needing an electronic device to record everything. Also it rusted.

The world is awash in technologies and they are slowly transforming the world in big ways. Not Twitter or Tesla, but actual digitalization of companies’ operations and processes. Yet the problem is that this accelerated pace of change is both an enabler of climate change and the perceived solution to this catastrophic future. Electric cars will not save the world, but dramatic plastic use may help. Paperless billing is a great gadget but it won’t make up for all the power generated to cool the ‘cloud’ servers, which are not ethereal but actual locations with massive energy needs.

It is somewhat oblivious to most of us that we’re actually speeding toward a catastrophic future. It won’t happen overnight, but just like Al Gore’s frog, we will slowly boil until too late. Meanwhile, driven by our insatiable desires, short term attention span and requirements for instant gratification, we will continue to consume too much until we are faced with global warming’s consequences: disrupted food supplies, migration from poor countries, natural resources conflicts (especially water, land and minerals), and a disorderly de-growth.

Spending money during the low interest period after the Great Financial Crisis would have kicked off change. Instead, austerity and politically charged programs were implemented to further increase inequalities, so that a select few can get ever richer -and the self destroying madness continues to spread. Faced with an existential crisis, the elites prefer to build bunkers on private islands instead of taking the lead in the fight against our own destruction. If not them, who will save us from ourselves?

Dire Consequences of Ignoring Trade in Climate Change Targets: On Track to 3.5 C Temperature Increase by 2100 – Climate agreements to reduce CO2 footprint are seriously flawed in two ways: 1. they follow the Carbon Kuznets Curve (CKC), which states that as GDP per capita reaches a certain level, carbon emission fall. 2. they exclude trade (imported carbon). Since developed economies have outsourced their most polluting industries to emerging countries, the CKC reveals only a partial picture: carbon consumption continues to rise, though not at the national level but thanks to imported carbon. The Paris agreement is little more than band aid on a degenerative disease.

What the Headlines about Tesla, Snap, and Twitter “Earnings” Should Have Said – Tesla, Snap, and Twitter all reported quite appallingly bleak results but their stocks remain at abnormally high valuation, partly thanks to the press issuing misleading headlines. Tech companies allow investors to believe in self fulfilling narratives, something that has always ended badly once reality set in.

Can Uber Ever Deliver? Part Thirteen: Even After 4Q Cost Cuts, Uber Lost $4.5 Billion in 2017 – Following the pattern established in the above article, Uber reported a USD 4.5 billion US GAAP operating loss that was either entirely dismissed as ‘reporters’ focused on Uber’s ‘adjusted’ operating loss of USD 2.2 billion, without detailing on the USD 2 billion gap. Also, Uber manipulated revenues by including the discounts given to clients (reporting full fare instead of the ones actually paid). But so far so good, Uber is on its way to an IPO.

The Dystopian Technologies Being Used to Control Workers – Various control technologies are being developed for low pay, physically demanding work, just like Amazon. However, this trend may backfire as employees are even less productive when knowing they are monitored. In the meantime, more suffering and pressure is likely to take a rising toll on these workers.

Big Reset Looms for Corporate Credit Market – Even though the Fed hiked its rate in late December, the credit party continues unabated, with potential serious consequences for the more fragile borrowers.

Picture of the day: “Frame-breakers, or Luddites, smashing a loom. Machine-breaking was criminalized by the Parliament of the United Kingdom as early as 1721, the penalty being penal transportation, but as a result of continued opposition to mechanisation the Frame-Breaking Act 1812 made the death penalty available.

About Carlito Riego

"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi