Fred’s Views - Issue 11
A weekly summary of what I’ve found interesting at the intersection of economics, finance and technology.
WeWork–sorry, The We Company–has filed for IPO, and the related mandatory documentation has left many (most?) journalists and analysts scratching their heads. The filings shows large losses, a very convoluted corporate structure, very unusual corporate governance and 10 pages of risks related to the founder… It’s hard to shake the feeling that this signals a stock market peak, and with other recent recessionary signs it seems like we might be in for a bleak autumn season.
It turns out algorithmic funds have performed among the best in the recent market turmoil, because the algorithms take positions without human second thoughts. This is obviously the base case for using them in the first place, although it remains to be seen when and how they will break… Read (FT $)
German-based challenger bank N26 is facing some growing pains, mainly related to regulatory compliance, unsurprisingly. I’m all for disrupting the financial services industry, but it’s interesting to watch these startups rediscover banking from first principles and eventually come to the conclusion that there’s a reason the industry is how it is… Read (FT $)
Not quite sure what purpose a “Central Bank Digital Currency” serves, given that national currencies are pretty much just numbers in computer systems today anyway, but China developed one. Also of note: “China’s CBDC will not rely entirely on a pure blockchain architecture, as this would not allow the currency to achieve the throughput required for retail usage.” Read (The Block)
Amazon’s Jeff Bezos is giving lots of money to charities without telling them what to do with it and is causing bafflement as a result. Channeling Giridharadas here, but two things come to mind: first, this urge to control how charitable donations are spent implies that the donor knows best how to fix the problem, which, to put it mildly, is unlikely; second, maybe instead of relying on charity donations to fix societal issues, levy more taxes… Read (Vox)
Facebook also uses humans to review speech transcribed to text, completing the grand slam among all the big tech firms using the technology. It seems a bit like speech recognition has been stuck in the same place for the last 20 years, close, but just not good enough… Read (Bloomberg $)
This NYT investigation into Youtube’s effect on Brazil is fascinating. From the political perspective, but also from a public health perspective, due to its spread of disinformation regarding Zika, for example. The argument that these platforms are not responsible for the content they serve up has really become impossible to make. Read (NYT $)
Huawei’s tribulations show that technology will become more affected by geopolitics, marking the end of an era of increasing globalisation and freedom. Read (Brookings)
This article summarises some Interesting findings on loyalty, how it can be a driver for good or for bad depending on the organisational culture, and how it relates to rule-breaking, whistle-blowing etc. Goes some way to explain some of the less desirable corporate behaviour we’re witnessing from time to time. Read (FT $)
Apple has developed augmented-reality art walks in a few cities. Sounds like this could bring a different level of engagement to art, eventually, and it must open interesting possibilities for artists… Read (Wired)
That’s it for this week’s edition. As always, thanks for reading and please forward this to anyone who you think might be interested, it would be much appreciated.