News

December 2020

A Super-Contagious New COVID-19 Strain Overshadows Stimulus Success

December 21, 2020John Banks

Republicans and Democrats finally got their act together and came to agreement on a $900 billion stimulus effort for struggling Americans and small businesses. Congress is rushing to finalize the bill alongside a last-minute effort to fund the U.S. government for the remainder of the fiscal year. There were compromises galore, and many were disappointed with various aspects of the final result. Still, at $900 billion or so, it will be the second-largest relief effort in history (behind only the

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One of the Biggest Hacks in History Puts the U.S. and Russia on a Collision Course

December 15, 2020John Banks

Russian government hackers broke America’s cybersecurity defenses. They got into high-level departments like the U.S. Treasury and the Department of Commerce. They may have infiltrated hundreds of Fortune 500 companies, along with other sensitive areas both public and private. They may have accessed email accounts and who knows what else. Worse yet, the breach may have gone undetected for nine months — from March 2020 through mid-December (last week). It was only on Saturday, Dec. 12, that the U.S. National

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The Federal Trade Commission and 46 States Threw the Book at Facebook (and Missed)

December 11, 2020John Banks

On Wednesday, Dec. 9, another tech juggernaut weathered a firestorm in the form of two major lawsuits. In October, as we explained on Oct. 22, the Department of Justice (DOJ) went after Google in one of the biggest trust-busting actions in decades. But the case appeared weak, and the share price of Alphabet, Google’s parent, shrugged off the news and rose more than 15% in the weeks that followed. This time the tech giant in the crosshairs is Facebook Inc.

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The Week the Pandemic Started to End — as the Depths of Covid Winter Begin

December 10, 2020John Banks

“But soft, what vaccine through yonder needle jabs?” The second person in the U.K. to officially receive the Pfizer COVID-19 vaccine was an 81-year-old man named William Shakespeare. He didn’t say those words, but he should have. There is a long way to go, and darkness dead ahead. For the United States, the worst is yet to come in terms of hospital system breakage, small business strain, and daily death tolls in the thousands. But still, with a major Western

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Uber is Giving Up Self-Driving Cars (and Flying Ones, Too)

December 9, 2020John Banks

For Travis Kalanick, the prior CEO of Uber, self-driving cars were an inevitable destiny. For Dara Khosrowshahi, Uber’s current CEO, they are an expensive distraction to get rid of. Uber has a five-year-old self-driving car unit known as Advanced Technologies Group (ATG). The unit has roughly 1,200 employees, many of them in Pittsburgh, Pennsylvania (a self-driving mecca due to the long-time robotics focus of Carnegie Mellon University). In 2019, Uber’s self-driving unit raised capital as a standalone entity with a

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Hydrogen is Finally Getting Past the Hindenburg

December 7, 2020John Banks

Is hydrogen the fuel of the future? There are deep-pocketed players who believe so, and national governments are providing the carrot-and-stick incentives to potentially make it happen. For hydrogen to take off in the 2020s, it will have to overcome a dark past. The Hindenburg disaster of 1937 was one of the most famous aviation accidents of all time, and hydrogen was the culprit. The Hindenburg was an 804-foot Zeppelin, also known as a German Airship. Zeppelins were cutting-edge technology

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What is Section 230, and Why is it Stirring Up Drama on Capitol Hill?

December 3, 2020John Banks

The National Defense Authorization Act (NDAA) is an annual bill, passed by Congress, that authorizes the U.S. defense budget. It is the primary means by which America funds its military. For fiscal year 2021, the NDAA laid out a defense budget of just over $740 billion. That money is used for everything from paying soldiers to running military bases to maintaining the nuclear arsenal (and a whole lot more). Because the NDAA is so important — America does not have

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Electric Vehicle Sales Trends in Europe Show the Insanity of Tesla’s Valuation

December 2, 2020John Banks

Tesla’s valuation is spectacular nonsense. Tesla is in a bubble — one of the biggest bubbles of all time — and when the bubble pops, overleveraged bulls are going to get killed. We have seen this over and over throughout history. Later this week, we will revisit the Great British Bicycle Bubble of 1896. To give you a sneak preview, the Pollyanna optimism and disregard for basic math that drove a bubble in bicycle manufacturers — the original low-emission transport

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Under Janet Yellen, the U.S. Treasury Will Usher in a New Era of Modern Monetary Theory (MMT)

December 1, 2020John Banks

On Nov. 20 we said the next U.S. Treasury Secretary would be pro-MMT, meaning, they would be a de facto believer in, and wielder of, Modern Monetary Theory. And so it comes to pass. Janet Yellen, the incoming Biden administration’s pick for U.S. Treasury Secretary, is probably the most technocratically skilled and ideologically suited person on the planet for bringing about a new MMT era. It is important to remember that Modern Monetary Theory (MMT) is not just a wild,

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November 2020

Britain’s Green Industrial Revolution is a Sign of the Investing Times

November 23, 2020John Banks

“Imagine Britain when a Green Industrial Revolution has helped to level up the country,” wrote U.K. Prime Minister Boris Johnson in a Financial Times opinion piece on Nov. 17. “You cook breakfast using hydrogen power before getting in your electric car, having charged it overnight from batteries made in the Midlands,” Johnson went on. “Around you the air is cleaner; trucks, trains, ships, and planes run on hydrogen or synthetic fuel.” Johnson’s imagery of a Green Industrial Revolution was the

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Tesla Will Be Added to the S&P 500 (and May Soon be a Sell, or Even a Short)

November 18, 2020John Banks

Congratulations are in order for Tesla bulls: The S&P 500 Index Committee announced this week Tesla will be added to the S&P 500 in December. Tesla shares (TSLA) jumped 13% on the news, sending Tesla’s market cap to nearly $420 billion. The Tesla chart is intriguing. If Tesla breaks down from here, it is definitely a sell and could even be an attractive short sale. There is a history of wildly overhyped growth stocks reaching their valuation pinnacle, and then

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The Largest Trade Agreement in History Just Got Signed — With China at the Center

November 17, 2020John Banks

If you thought globalization was dead, think again. In some ways, it is stronger than ever. There are certainly factors that favor protectionism, and trade wars, and a withdrawal from partnerships and agreements. But there are also powerful forces pushing in the other direction. These counterforces have the potential to produce more globalization over time, not less, with greater cooperation between nations. One important factor is the growing rift between the United States and China. With each passing day, it

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