Free eLetters

December 2020

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 Tech IPO Mania of 2020 Has Matched if Not Exceeded 1999-2000

December 14, 2020John Banks

On their Vitalogy album, the 1990s megaband Pearl Jam has a track titled “This is Not For You.” It would make a good theme song for initial public offerings (IPOs), as in: When you see a hot initial public offering and feel tempted to buy it, remember: “This is not for you.” Hot tech IPOs are liquidity events for the venture capital firms that built huge stakes for pennies on the dollar years earlier, and payday bonanzas for connected Wall

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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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The Dollar Smile Puts Investors in a Happy Place

December 8, 2020John Banks

As a general rule, the U.S. dollar is strong under two conditions. If the dollar is strong, either the economic outlook is exceptional for the United States alone, or the outlook is bad — possibly crisis-level bad — for the rest of the world (and potentially for the United States, too). These conditional extremes — where the dollar is strong either in times of notable U.S. strength or notable global distress — create a phenomenon known as “the dollar smile.”

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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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Revisiting the Great British Bicycle Bubble of 1896

December 4, 2020John Banks

In 1890s Britain, the bicycle represented a social and environmental breakthrough. Public enthusiasm for bicycles — and for the shares of publicly traded bicycle manufacturers — then fueled the Great British Bicycle Bubble of 1896. The bubble inflated quickly, with share prices in British bicycle companies tripling in the space of months in 1896, even as the number of bicycle companies expanded more than five-fold. But then a flood of low-cost American bikes invaded the market, and the mood soured.

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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

Privacy Concerns are Not an Existential Threat to Bitcoin

November 30, 2020John Banks

On Nov. 24 we asked, “When will Bitcoin have a meaningful correction?” The very next day, a concerning piece of news triggered a correction-worthy sell-off into the Thanksgiving holiday (crypto markets never close). But the Bitcoin correction then self-corrected, almost wholly reversing over the weekend that followed. At the worst point of the correction — or perhaps call it a crypto flash-crash — Bitcoin in U.S. dollar terms (BTC/USD) was down close to 16% from its pre-Thanksgiving high. But as

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