Posts tagged 'Technology'

Innovating fast or slow? Gates vs Wolf edition

At the FT’s 125 forum on Wednesday night, Bill Gates, Microsoft co-founder and Bill & Melinda Gates Foundation co-chair spoke with the FT’s editor Lionel Barber about topics as far ranging as philanthropy, AI, climate change and management.

But if there was one core takeaway from the evening’s discussion it was Bill Gates’ adamant stance on the pace of innovation, which he described as currently taking place at its fastest rate ever. All this, he suggested was leading to a “supply-side miracle” with hugely deflationary consequences for the global economy as a whole. (A truncated version of the interview is now available here.)

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Carbon bubbles and artificial intelligence

Institutions like Carbon Tracker have proved that reframing collective action arguments in dollar cost terms can be highly effective at mobilising the world’s top asset holders to take action.

In the case of climate change, asset holders took note when the associated risks were presented as a carbon bubble threat on the basis that fossil fuel assets aren’t really wealth if they can never be burned (at least not if we’re to spare the planet from life-threatening climate change) .

But, it turns out, there may be another equally effective way of framing the argument. Read more

Techcrunch discovers finance may be technological

If you ever needed proof that California-based techies live in a bubble of self-deluded superciliousness, where (to their minds) nothing of any value ever happened until Silicon Valley or Ayn Rand ideologues came along, look no further than the following article from Techcrunch posted this weekend.

As the opener paragraphs report (our emphasis):

Money is pouring into fintech. In 2014, global investment in financial technology startups spiked to more than $12 billion. That’s three times what it was just a year prior, according to Accenture. There have also been some huge funding wins this year. Most recently, zero-commissions trading app Robinhood announced $50 million round and financial education site NerdWallet attracted $64 million in funds. Those are big, headline-grabbing numbers.

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21 Inc and the plan to kill the free internet

Details of the hottest, most secretive bitcoin start-up in Silicon Valley have finally been revealed by chairman and soon-to-be CEO Balaji Srinivasan of 21 Inc in a post on Medium. They are, by and large, exactly what FT Alphaville reported them to be. Cold sharp summary: Bitcoin mining devices in toasters.

Calling this a simple internet of things play, however, would be lazy. To really put the audacity of Srinivasan’s vision into perspective one first has to go back in time to the days of the early internet. Read more

How we’ve all been duped into subsidising our employers

Paul Donovan, economist at UBS, is perplexed by cyclically abnormal levels of capital spending relative to borrowing costs in key western economies.

All the more so given that the sluggish capital spending story is also being accompanied by a significant increase in the number of businesses.

Since these two facts don’t logically tally up, what exactly is going on?

One point to consider, Donovan notes on Tuesday, is that capital spending by and large is associated with replacement investment. For new businesses this usually takes the form of start-up capital spending instead. Read more

The new Hanseatica, now with robot dogs

So, Apple has taken advantage of the drop in Swiss funding costs to issue SFr1.25bn of bonds.

A no-brainer funding opportunity for Apple? Or…, alternatively, a sign of things to come: corporates replacing petrodollar and sweatdollar sovereigns as the key accumulators of trade surpluses in the global economy, and issuing debt in a bid to sterilise the effects of too much liquidity on capex they can’t control?

If it’s the latter, we should beware of Andrew Keen’s concerns about the perils of a winner-takes-all tech economy, where a handful of geeks inadvertently become the new masters of the universe, thanks to their cunning monetisation of things Tim-Berners-Lee-types would never have dreamed of rationing to the great tech-ignorant. We’ve dubbed it Silicon Valley’s “god complex” before. Read more

Reining in the tech gods

The FT’s Gillian Tett reports from Davos that the Powers that Be may finally have noticed how — while they were busy regulating the banks — the technology companies quietly moved into what was once their unregulated turf.

Via Wednesday’s Davos dispatch:

Large technology companies will experience the same collapse in reputation as banks have endured in recent years unless they rapidly change their policy approach, business leaders cautioned in Davos. Their warning was directed at the influential heads of technology companies, such as the Silicon Valley giants, who were told they needed to recognise that self-regulation will not be sufficient to stave off mounting public alarm about issues such as privacy.

“Self-regulation, no matter what you do, is just not going to be good enough [for tech companies],” said Paul Achleitner, chairman of the supervisory board of Deutsche Bank. He pointed out that a self-regulatory approach had been previously employed by banks — but notably failed to quell a political backlash against their over-reach.

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Do you have a finance degree from the university of Bitcoin?

As the Bitcoin price crumbles….


… and the capital hole (economic flaw) at the heart of all cryptocurrency schemes is exposed, we thought we’d uncharacteristically look at what was actually good about the phenomenon of Bitcoin. Read more

Tech bubble or no tech bubble?

Last Thursday the below snapshot of techies panhandling for funding on the side of the street hit Valley Wag:

This came a few days after the WSJ reported that Bill Gurley, the Benchmark Capital investor who backed Snapchat and Uber warned that in Silicon Valley these days “no one’s fearful, everyone’s greedy, and it will eventually end.” Read more

Anticipating the quantum computing risk

Last week we attended the SINET conference on cyber-security innovation.

One discussion we didn’t get the chance to follow up on at the time, but which we think is worth coming back to, related to the speed of technological development, and how the invention of quantum computing systems and artificial intelligence could soon pose a serious risk to global cyber defences.

James Mawson, editor-in-chief of Global Government Venturing, wrapped up the key points nicely in an editorial (our emphasis):

The speed of technology change makes the challenge of security an issue. Michael Trevett, senior information risk owner at the UK government’s Cabinet Office, in a networking lunch on risk management in a world of fast-paced technological change, posed a series of questions about how organisations could cope with the speed of change. If technology improves so rapidly, identifying what is important and protecting that rather than everything might be helpful, he said.

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When creative destruction becomes creative devastation

John Komlos of the Ludwig-Maximilians University in Munich proposes in a new paper that ‘creative destruction’ has become devastating, not just destructive:

the destructive power associated with Schumpeterian creative destruction has increased markedly relative to their creative component, in contrast to previous epochs. Creative destruction’s gentle winds have mutated into cyclones of destruction.

Thus, our sense of well-being will probably not keep pace with even the slow economic growth being predicted by Gordon, Summers, and Krugman. While the economy will be growing, albeit slowly, we predict that our sense of well-being will be mysteriously lagging well behind.

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Rise of the Bond villains

- Our economy needs investors like Mr Zorin. California welcomes him with open arms.
- May I quote you on that, Mr Howe?
- Certainly. Is there anything else I can tell the Financial Times?

The dialogue is from A View to a Kill, in which James Bond — a la Roger Moore — poses as an FT reporter “James Stock” to figure out whether tech billionaire Max Zorin is simply a savvy microchip entrepreneur or a megalomaniac eugenicist with a plan to takeover the world.

The Bond cannon provides a few other characters who, as we’ll explain below, no longer seem quite so fantastically fictional. Read more

Robots, jobs and TFL strikes

On a morning which saw London grind to a halt because of a two-day strike by Transport for London workers protesting the closure of ticket offices (that is, due to automation)…

FT Alphaville was invited to participate in a panel debate about the implications of technological progress on jobs and labour, organised and hosted by the think-tank Resolution Foundation.

(Though to be fair, the tube strike didn’t seem to impact attendance and almost all of us arrived on time.)

Chairing the event was Channel 4 News’ Faisal Islam. Joining yours truly among the panelists was economist and author Diane Coyle, of Enlightenment Economics, Alan Manning, Professor of Economics at LSE and Michael Osborne, machine learning expert and associate professor at Oxford University. Read more

Designed in California, taxed in never never land

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Squish puny humans, investment theme du jour

Bank of America Merrill Lynch strategist Michael Hartnet favours themes this year.

Theme number one: it doesn’t feel pity, or remorse, or fear. And it absolutely will not stop.

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Non-monetary effects of research evolution

Ever since Robert Gordon made his assertion that all the low hanging technological fruit has been picked, evidence to the contrary has been piling up.

It’s worth noting, first off, that Gordon’s paper was relatively backward looking. It arrived at its conclusions by taking trends prior to 2007 and projecting them forward, largely ignoring the 2008 crisis that occurred. It also measured innovation in terms of dollar denominated growth. Read more

It’s not finance, it’s Cy-fi

Nanex, the market analysts who like to create visual representations of the markets, have animated half a second of trading activity in Johnson & Johnson stock. The results are quite intoxicating to watch:

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Deep thoughts on civilisation from Jeremy “Hari Seldon” Grantham

If you submit to theoretical physicist Geoffrey West’s urban development theories, then you’ve probably aware of the idea that humanity is set to face a critical crunch point soon enough (if not already). And by crunch point, we mean — either humanity throws everything it’s got at speeding up technology to ensure its resource consumption-to-population footprint becomes manageable, or we wither away.

(The Roman Empire, by the way, is perhaps the best example of a civilisation which failed to make the next great technologically leap to the carbon age and did actually wither.) Read more

Counterintuitive insights that are only now making the mainstream now

We just saw this post from Pragmatic Capitalism’s Cullen Roche on the supply of assets.

It offers a nice chart showing net issuance of “safe” assets, from Citi’s research team:

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“Phish and dips,” or, How to write the AP tweet hacking story when you don’t really care

1.) Steal headline from Lorcan. On Twitter.

2.) Multiple choice test to decide your condescending lede!

Question: When a fake (hacked!) Associated Press tweet about a White House attack moves the stock market down, then it recovers really fast — but maybe not making anyone much money — this is a referendum on the credibility of:

a) Twitter

b) Associated Press

c) The stock market

d) How FT Alphaville makes a living

e) All of the above

f) None of the above, shut up and get off Twitter

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Skidelsky on robots and more leisure

Love him or loathe him, Robert Skidelsky’s prose always makes for a good read.

His latest offering comes by way of Project Syndicate and relates to the issue of robots and the rise of automation. To what degree are we really approaching a leisure society and how best to respond to the changes afoot? Read more

This is not 1994

Dario Perkins at Lombard Street Research has a great little note out on Tuesday arguing why it’s absolutely wrong to assume the current bond sell-off is in any shape or form a repeat of 1994.

As he notes (our emphasis): Read more

Why a “free” market changes everything

Something very significant may be happening to labour and the capital reallocation process.

And arguably it’s down to technology and crowd-sourcing.

But before you shout: “this is what Marx always said, Ricardo and the Luddites were well ahead of you on that one”, we would propose what we’re talking about is a complementary trend not one that necessarily validates or duplicates what the above have said perfectly. Read more

The FT Alphaville podcast, with Dylan Grice

Welcome to FT Alphaville’s extraordinarily infrequent podcast… (click through for the podcast link).

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The robot economy and the new rentier class

It seems more top-tier economists are coming around to the idea that robots and technology could be having a greater influence on the economy (and this crisis in particular) than previously appreciated. Paul Krugman being the latest.

But first a quick backgrounder on the debate so far (as tracked by us). Read more

Culled UBS traders replaced with algos

It’s bad enough finding out that you’ve been made redundant when your pass fails to let you in to the building. But finding out that you’ve been sacked and replaced by a computer (which has more or less made your skills redundant)? That’s even worse.

So spare a thought for David Gallers, former head of CDS index trading at UBS, who was let go last week, to be replaced by snazzy new algo. Read more

The geopolitics of computer trading

You can’t accuse Her Majesty’s Government’s Office of Science computer trading review of failing to think ahead…

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A time of hoarding and inflation fears, 1930s edition

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How technology is killing the Asian growth miracle

George Magnus of UBS has a 29-pager out on Monday questioning if the Asian miracle may finally be over? FT Alphaville is still poring through the details, but couldn’t wait to bring you a substantial chunk of the note which is dedicated to the role of technology and its impact on Asian market dynamics.

We’ve noted on more than one occasion that economists may be missing a trick when it comes to how technology is changing the global economy. More so, that developments like 3D printing, could even pose a black-swan risk for Asia in their own right. Read more

Nasdaq’d

The full Citigroup blast against Nasdaq’s handling of the Facebook IPO is well worth a read. (Big hat-tip to NYT Dealbook, click to enlarge)

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