Amerika

Posts Tagged ‘silicon valley’

Democracy’s Google Problem

Tuesday, September 19th, 2017

Trust the United Nations to say that the world not as the world is.

They tell us that democracy is barely breathing in Venezuela. The only thing slowing its breathing is its constant gorging at the trough. Democracy is eating Venezuela like a buffet after the Oakland Raiders arrive. French President Macron accidentally and egregiously told the truth about what was happening over there.

“The generalised and systematic use of excessive force during demonstrations and the arbitrary detention of protesters and perceived political opponents indicate that these were not the illegal or rogue acts of isolated officials,” the report said. The extent of the violations “points to the existence of a policy to repress political dissent and instill fear in the population to curb demonstrations at the cost of Venezuelans’ rights and freedoms”, it (Macron, I presume) added.

The Unelected Cucking Caudillo of the UN (UCCUN) then held forth on what a democracy should do when bad things happen to people who protest election results.

“The government must ensure there are prompt, independent and effective investigations of the human rights violations allegedly committed by the security forces,” as well as by pro-government groups and armed protesters, Mr Zeid said.

But what if a good, solid working majority of the voters get off on the “the generalised and systematic use of excessive force during demonstrations and the arbitrary detention of protesters and perceived political opponents?” If Antifa forms a government in the US or Great Britain, wouldn’t they want Nazi-punching inaugurated as an Olympic Sport?

The flaw in democracy is the flaw in human individuals amplified by groupthink, hive-mind and committee mentality behavior. Once a majority of We The People (WTFP) wants your sorry posterior dirt-napped, you are going down. Democracy demands it — and no emperor, king or dictator is as cruel a master as the mob. Ask Jesus and Socrates.

And if you don’t believe that the will of the people is perverse, puerile, perverted, pusillanimous and frequently in accordance with the true spirit of Mordor, then you need to get your ass off the couch and meet more of the fine folk in your neck of the woods. So democracy in Venezuela delivers. It’s the product Macron’s mom, oops, I mean his wife probably instructed him to object to.

Joel Kotkin gives us the #Cuckservative version of the same sort of whinge. He tells us that President Trump damaged democracy and Silicon Valley will finish it off.

The Silicon Valley and its Puget Sound annex dominated by Google, Apple, Facebook, Amazon, and Microsoft increasingly resemble the pre-gas crisis Detroit of the Big Three. Tech’s Big Five all enjoy overwhelming market shares—for example Google controls upwards of 80 percent of global search—and the capital to either acquire or crush any newcomers. They are bringing us a hardly gilded age of prosperity but depressed competition, economic stagnation, and, increasingly, a chilling desire to control the national conversation.
Jeff Bezos harrumphs through his chosen megaphone, The Washington Post, about how “democracy dies in the dark.” But if Bezos—the world’s third richest man, who used the Post first to undermine Bernie Sanders and then to wage ceaseless war on the admittedly heinous Donald Trump—really wants to identify the biggest long-term threat to individual and community autonomy, he should turn on the lights and look in the mirror.

Now, as America’s version of the democratic Visigoth Holiday threatens to wind on down, even Matthew Yglesias over at Vox started to take notice. Journalism’s extra from the set of Eyes Wide Shut ponders with furrowed brow that a company that owns over 80% of its market and maintains a fleet of offshore cruise ships to house its illegal immigrant workforce, might just be exerting a wee tad bit of influence over Matthew’s beloved Democratic Party.

All businesses lobby on behalf of their interests, and in recent years that lobbying has increasingly expanded to include more focus on things like think tanks and other aspects of the “deep” influence game. Google has been especially an especially aggressive player at deep influence. The Wall Street journal reported in July, for example, that they’ve spent millions of dollars subsidizing academic research that backs Google policy positions, often mapping out the thesis to be proven and then shopping to find the scholar to do the work. Google’s money, not always disclosed, has backed donations to think tanks across the ideological spectrum as well as more prosaic forms of influence peddling like campaign contributions. What makes Google somewhat unusual for such a big company is that it’s fairly closely aligned with the Democratic Party. Dozens of people moved from jobs at Google to jobs in the Obama administration, and vice versa, over its eight-year span.

We’ll walk Matthew through a gentle black-pilling here and let him see how The Matrix really works. Google finds it refreshingly pleasant and surprising that the Democrats are so willing to align themselves with its long-term corporate strategy. They find it particularly surprising how benign their acquisition of this old and once-proud political monopoly of coercion has actually been. There have been occasional hiccups along the way, but then again, what Megacorporation hasn’t had to spin-off or terminate a few unprofitable divisions.

And yes, dozens of people have moved back and forth between Google HQ and their subordinate Obama White House. It was a high-risk acquisition, that Obama White House, and somebody had to fly out there and provide a bit of technical expertise. So democracy has been surprisingly effective for Goolag, Crapple, Zuckerface, et al, but all good love affairs come to an end. Google owns politicians the way Wall Street money managers own positions in Walmart or Caterpillar.

They hope that they know when to hold ’em, know when to fold ’em, know when to walk away, and never let those positions have any normative influence on their beliefs. Perhaps, as President Trump LBOed their butts out of DC and the EU decided to tax them as perhaps a rainy-day fund in case the Brexit actually leaves the building, Google thinks their democracy position is reaching its shelf life and smells like last Thursday’s delivery from the milkman. So as Google begins to think it has a democracy problem — and democracy wants to think itself potent enough to even solve a Google problem — something will have to be done.

Now Google properly evaluates ROI on democracy based on how frequently their paid politicians win and then how well they behave and stay bought once in office. If they get Hillaried, or if their protégés/catamites defect to Bernie or The Donald, then Google has a dilemma on its hands. They can double-down on the information control and politician-buying, or they can cut their losses and divest. They can be Amerikan and start moving all their jobs to China.

Democracy, on the other hand, has two options of its own to deal with their Goolag problem. We’ll describe these options as Roosevelt I and Roosevelt II.

  • Roosevelt I (AKA The Tedster) involves dusting off an old law known as The Sherman Anti-Trust Act and hammering the crap out of the Silicon Valley Oligarchs. Break their companies and make them spin off tentacles the way Judge Green dismembered AT&T. This would lead to something akin to the regional Baby Bells and a briefly less efficient Internet. After that, innovation will kick in and Google and Twitter will seem about as advanced as old, early 1990’s brick cell phones. If democracy beats Google, this is how I’d want it all to go down.
  • Roosevelt II (AKA Evil Amerikan Emperor) involves making the Internet into some sort of giant TVA. Theoretically, at least, nationalization of social media would make Goolag, Faceberg, Twatter, et al, have to work around the First Amendment in order to censor, say Baked Alaska. They would be licensed public carriers rather than private enterprises. But what if democracy goes into end-stage demotic decline here as badly as it has in Venezuela? Well, then the voters would demand “The generalised and systematic use of excessive force during demonstrations and the arbitrary detention of protesters and perceived political opponents.” Twitter’s Memory Hole Committee wouldn’t keep the people waiting. They’d be GLAAD to get cracking on that one pronto. The Roosevelt II option would only make the Internet more Orwellian than it already is.

So if you beat Google with democracy, you get totalitarianism. If you democratize Google, you get authoritarianism. Only smashing Goog-hole or smashing democracy — or ideally, smashing both Goolag and mob rule — will resolve the issue in a favorable manner for the commonweal of the society. Is there any conceivable chance that we can embrace healing power of and on this one?

Dot-Com 3.0 Bust Goes Mainstream As People Pull Away From Silicon Valley Services

Wednesday, September 13th, 2017

As mentioned here before, the Dot-Com 3.0 boom — the years after the iPhone when social media took over — is heading straight for collapse, even as efforts are being made to fight that inevitable end.

The recurring problem that Dot-Com 3.0 faces is tied up with SJWs: our new media overlords have cultivated an audience who fanatically uses their product, but this is not a particularly relevant or effective audience, being made up mostly of obese blue-haired baristas, financially insolvent food service workers, committed Leftist basement-dwellers and angry minorities.

Everyone else is gradually fleeing these services as they become increasingly toxic. In the meantime, in order to curry favor with their audience of SJWs, these giant internet corporations have become manipulative and are starting to resemble Soviet-style indoctrination in their relentless advance of narrative, leading to a growing movement to nationalize them as utilities to neutralize their bias:

The new spotlight on these companies doesn’t come out of nowhere. They sit, substantively, at the heart of the biggest and most pressing issues facing the United States, and often stand on the less popular side of those: automation and inequality, trust in public life, privacy and security. They make the case that growth and transformation are public goods — but the public may not agree.

The tech industry has also benefited for years from its enemies, who it cast — often accurately — as Luddites who genuinely didn’t understand the series of tubes they were ranting about, or protectionist industries that didn’t want the best for consumers. That, too, is over. Opportunists and ideologues have assembled the beginnings of a real coalition against these companies, with a policy core consisting of refugees from Google boss Eric Schmidt’s least favorite think tank unit. Nationalists, accurately, see a consolidation of power over speech and ideas by social liberals and globalists; the left, accurately, sees consolidated corporate power.

This distrust of Silicon Valley is expressed in a recent poll which found that 52% of respondents believe that Google’s search results are biased, and 65% do not want to be tracked. At the same time, Spain has fined Facebook for privacy violations in how it collects data on users.

In the meantime, others have discovered that Silicon Valley has been inflating its usage figures — sort of like a fake Nielsen rating showing more watchers than were actually there — to the point of absurdity, and they have been doing this for years in order to evade one crucial report that showed, two years into the reign of the iPhone and mobile computing, that display ads on social media were worthless.

Silicon Valley has been dodging that one for some time, and their solution has been to cultivate a fanatical audience of SJWs instead of a broader audience of normal people. That in turn has helped enforce a split: on the internet, you are either a fanatical Leftist or someone who is skeptical of the internet. That skepticism has fueled questioning about the value of social media and internet use as an activity, especially since it represents to this generation what daytime television did to the 1980s: people with no purpose, not much hope, and very little else to do.

It is possible that the “always on” nature of social media is making us miserable:

But in 2012, when the proportion of Americans who own smartphones surpassed 50 percent, she noticed abrupt changes in teen behavior and emotional states.

…Among other things, teens are: not hanging out as much with friends, in no rush to drive, dating less, having less sex, and getting less sleep. Most alarming, despite their continual connectivity, they are lonely. And rates of teen depression and suicide have skyrocketed since 2011.

…“Much of this deterioration can be traced to their phones. It’s not just the technology, I should stress, it’s really the social media, which is the most common risk they are facing.”

One factor in this is that social media is driven by Fear Of Missing Out (FOMO) which causes people to obsessively tune in many times throughout the day and night, with many users taking their phone to bed in order to consume more media. This leads to an inability to ever detach from the narrative, which means they are not at rest even when sleeping, and a lack of sleep, which increases delusionality, hallucinations and psychotic behavior:

The primary outcome measures were for insomnia, paranoia, and hallucinatory experiences

…Compared with usual practice, the sleep intervention at 10 weeks reduced insomnia (adjusted difference 4·78, 95% CI 4·29 to 5·26, Cohen’s d=1·11; p<0·0001), paranoia (−2·22, −2·98 to −1·45, Cohen's d=0·19; p<0·0001), and hallucinations (−1·58, −1·98 to −1·18, Cohen's d=0·24; p<0·0001). ...It provides strong evidence that insomnia is a causal factor in the occurrence of psychotic experiences and other mental health problems.

Paranoia might be understood as “inverse solipsism,” meaning that it assumes a focus on the individual by wide-ranging external forces. Both posit the individual as the center of all activity, or origin of all meaning, and as such, the individual assumes that any activity out there is directed at them, in a mild form of one of the symptoms of schizophrenia.

Social media can induce this by compelling the individual to constantly interact with a symbolic representation of the world, and this token quickly obfuscates actual reality, which is both wider and less clear-cut and therefore, more ambiguous and threatening. As one writer found, this creates a pathology like addiction:

The landscape of my days has come to resemble my computer screen. The constant stream of pings and swooshes is a nonstop cry for my attention, and on top of that, everything can be clicked on, read, responded to, and Googled instantaneously. I sense a constant agitation when I’m doing something, as if there is something else out there, beckoning—demanding—my attention. And nothing needs to be deferred. It’s all one gratifying tap of the finger away.

…I am a writer by profession, and about a year ago I found myself unable to produce. I attributed my paralysis to writer’s block, freighted with psychological meaning, when in fact what I suffered from was a frightening inability to remain focused long enough to construct a single sentence.

…My therapy, of my own devising, consists of serial mono-tasking with a big dose of mindful intent, or intentional mindfulness—which is really just good, old-fashioned paying attention.

Living a virtual life means that the real life is ignored, which is why so many people seem to live in neckbeard nests where the computer is the only functional object, a gleaming device of firm lines surrounded by the more detailed organic forms of crumpled clothing, discarded wrappers, cigarette butts, detritus and dirt.

Social media requires people buy into that online life, and while many normal people use it periodically, its compulsive users — mostly SJWs — have become its focus. For those it becomes compulsive, with them fearing to go more than a few moments without checking for updates. Facebook, Google, et al. have figured that if they cannot have everyone use their service, they want to cultivate the largest fanatical audience that they can, which is why politics, lifestyle and social media use converge.

In a broader sense, Dot-Com 3.0 mindlock reflects the conditions of modernity, which are defined by control. The individual demands to control nature, especially the nature within, by asserting his individuality through equality; this creates a herd which must be taught to boo the enemy and cheer the good guys; that in turn makes the individualists enforce those boos and cheers on each other, causing a spiral where the society gradually eliminates any notice of reality and focuses exclusively on symbols.

The cart goes before the horse, the tail wags the dog, the world is turned upside-down. While we chase the One True Ring of power and control, we sleepwalk into a Brave New World style society based on what people want, instead of their suppression. Democracy, equality, pluralism and tolerance encourage us to be as weird as we want to be, and we slowly drift farther from reality, becoming more miserable as we do so, until the end seems like a good thing.

Social media just tapped into our mania for control through symbolism. If you replace the complex knowledge of the world as whole with a single interface of symbols that claim to control it all, people — or at least some types of people — become addicted. This addiction creates a hive mind for the purpose of excluding anything but what it wants to believe, and reality is pushed far away.

At this point, the populist wave has brought a backlash against unreality, and the unrelenting defense of unreality from the social media crowd is what is pushing Dot-Com 3.0 into collapse. The audience they need, the normal middle class, is fleeing, and the legbeards and blue-hairs are taking over at the same time regulators close in and investors shy away. The carnage will be delicious.

Silicon Valley Sees The Pavement Approaching At Terminal Velocity

Tuesday, July 18th, 2017

As mentioned here before, the dot-com 3.0 and Silicon Valley economic miracle is about to come to a crashing end. The internet simply is not worth as much money any more, and instead of contracting, the market expanded, and now the economy will balance the ledger by destroying fake value.

The primary driver for this is the failure of internet advertising as it becomes clear that in addition to not paying much attention to internet ads, people of the sort wanted by advertisers are finding ways to avoid them or the internet entirely. Ad prices have been steadily dropping and now advertisers are ditching them for TV and radio:

“The major issues in digital is that the supply chain still has way too many touch points in it and it lacks transparency,” says Pritchard.

In January, Pritchard threatened to boycott spending with the digital ad behemoths (Google, Facebook, major ad networks etc.) unless they worked to make the system more transparent. He now says the ecosystem is about 40% of the way there, largely thanks to the pressure major advertisers (P&G, Unilever, etc.) are putting on the system.

Pritchard says radio and out of home (billboard) marketing have also been showing increasingly positive results.

The majority dollars don’t even make it to publishers:Citing industry studies, Prichard says that only 40% of dollars reach publishers after payouts to ad tech vendors, and up to another 25% of dollars could be wasted on ad fraud and problems with ad viewability (ads not loading right or ads that aren’t actually viewed by humans).

In other words, the dot-com companies are hiding how ineffective ads are, how much fraud there is and how much those big FANG — Facebook, Apple, Netflix, Google — companies are taking as middlemen. These are all signs of a failing ad regime.

The “Myspace effect” has kicked into full gear where the upper half of society — the desired group for advertisers, because they are responsive to advertising for more than low-end consumer goods — are fleeing Facebook, Twitter, Instagram and other social media and hiding out in messaging apps instead.

Internet companies told us that television and radio were dead, but this was wishful thinking. In actuality, television and radio have a better chance of reaching their audience because they are linear formats, so people are less likely to navigate away from ads. In addition, they tend to be local, instead of spammed across the internet, and people can keep their privacy with them.

Newspapers are the only real losers here, since people read those online, but it is unclear how much people even care anymore. The news content is light and the headline usually tells the story, so skimming Drudge or Real Clear Politics provides most of what these consumers need.

In the meantime, Google has become a victim of its own success. Its PageRank algorithm, which gives massive preference to popular sites, effectively disenfranchised people from putting content on the web to have those sites — including Wikipedia — simply scrape it. All the good content is going behind paywalls. This means that Google searches are less effective these days.

While all this is crashing down, the savvier investors are noticing that this looks a lot like a bubble right before a crash and bailing out:

It’s a bubble that is different — but the same — as the last time. In 2000, start-ups like pets.com were able to go public and jack up share prices even as they were losing hundreds of millions of dollars.

…Venture capitalists and private equity investors keep the bubble going by buying into it at higher and higher valuations. The smartest ones guarantee their own success by taking rich advisory fees along the way and exiting before disaster via the secondary market for private shares. And this is, as behavioural economist Peter Atwater recently pointed out to me, unusually liquid thanks in part to central bank-enabled easy money.

…These days, a glut of money eager to bolster gains in a low-return world has lifted the economy of Silicon Valley to ridiculous heights. Yet the real winners are likely to be the small number of platform groups such as Amazon, Google, Facebook and Apple that can use their network effect to capture and control the data, which have become the new oil in our digital economy.

The middleman effect is revealed: large companies take the profits, and everyone else is using Silicon Valley as an investment for the purpose of sale, not as a long-term investment. A pyramid of hype rises from the sweaty, neckbearded wasteland of digital royalty, and other than a few who got in early, everyone is going to lose.

As the mom and pop investors figure out that digital is a ruin, they are going to shatter the value of those stocks which are purchased merely to speculate and resell them, and this will in turn create a domino effect of closures in Silicon Valley. That in turn will have consequences for America’s economy, built in part on anticipation of more easy wealth from the digital demesne.

That leaves us with a country top-heavy in debt, built on top of false expectations, that has sacrificed its productivity for this dream because by claiming it was an “ideas and services economy” it could justify globalism to itself. After the first set of dominoes fall, another larger set will begin its collapse.

Dot-Com 3.0 Collapse Is Here And Will End Western Economies

Thursday, July 6th, 2017

As mentioned frequently here before over the past few cheerfully oblivious years of manic investment in technologies of dubious value, the great collapse has finally gone mainstream:

Last month Robert Bouroujerdi, chief investment officer at Goldman Sachs, and most definitely someone who does remember the last dotcom boom, published a report in which he cautioned of the growing risks presented by the meteoric rise of the Big Five tech behemoths: Apple, Amazon, Facebook, Alphabet and Microsoft.

Bouroujerdi noted that in the year to the start of June, these companies added a total of $600bn of market capitalisation – the equivalent of the gross domestic product of Hong Kong and South Africa combined. Parallels to the 1999-2000 crash are becoming increasingly evident, he said.

…Tech companies are deeply intertwined: when one falls it often takes scores of others down with it and often psychology dictates that the more a stock falls the more likely it is to fall further. Imagine rats scuttling for the exit on a sinking ship. No one wants to be caught inside a cabin and sink.

In other words, it is like a really successful strike when bowling: you hit the middle pins hard enough that they knock the outer pins down. Already we are seeing second- and third-tier tech companies quietly shutting the doors and sending everyone home, and a resulting mass exodus of those who lost the employment lottery in California to other states. But that is nothing compared to what is coming.

Bubbles in the market — huge wealth booms created between the time when the herd becomes fascinated with a New Thing and the time when they realize it is worthless — are classically compared to houses of cards. If any structural piece is removed, or the top crumbles, the whole thing falls in the classic domino effect where the fall of each piece triggers the instability of others.

On the other hand, bowling is an invisible dependency. There is no obvious link between the other pins and the central four. Yet when those pivotal pins go flying, the others go down like bystanders hit by shrapnel during a suicide bombing. Silicon Valley is a giant invisible dependency, not only within itself, but because much of our interlinked economy depends on Silicon Valley:

In 2014, Silicon Valley innovation workers produced $225,000 in added value per employee annually, according to an analysis by Collaborative Economics of federal data. The next closest in productivity was New York City, where tech workers produced an average of $205,000 in added value per year.

This creates tragic conditions where the economy cannot sustain a massive loss in value in Silicon Valley:

As a proportion of GDP, American corporate profits are higher than they have been at any time since 1929. Apple, Google, Amazon and their peers dominate today’s economy just as surely as US Steel, Standard Oil and Sears, Roebuck and Company dominated the economy of Roosevelt’s day.

…The McKinsey Global Institute, the consultancy’s research arm, calculates that 10% of the world’s public companies generate 80% of all profits. Firms with more than $1 billion in annual revenue account for nearly 60% of total global revenues and 65% of market capitalisation.

…The number of listed companies in America nearly halved between 1997 and 2013, from 6,797 to 3,485, according to Gustavo Grullon of Rice University and two colleagues, reflecting the trend towards consolidation and growing size.

And so we come to the ugly word consolidation. This happens when markets are dying, not thriving: the margins on what is being produced shrink as time goes on and the newness of the product fades, and since the big profits are no longer there, companies merge and acquire one another so that a few market-dominant firms can absorb whatever wealth is left in using ten-year-old or twenty-year-old ideas to churn out a product by rote.

We have seen radical compression of the markets over the past few years. The closing of American malls. The domination of the internet by Google (and technically non-profits that serve Google goals like Wikipedia). The tightening up of supply chains like Sysco. Grocery store mergers, and the simultaneous reduction in the number of big box store brands and increase in their territory. Everything is Walmart or Costco now.

With consolidation comes the bowling-pin effect. Hit any one of these sectors of the economy hard enough, and odds are that it will careen into another, and that into another. Hit a big enough sector and they all go down. Are you scared yet? Let us travel down memory lane to the last time that a giant bubble popped, namely the government-created housing crash of the early 2000s:

His most successful effort was to impose what were called “affordable housing” requirements on Fannie Mae and Freddie Mac in 1992. Before that time, these two government sponsored enterprises (GSEs) had been required to buy only mortgages that institutional investors would buy–in other words, prime mortgages–but Frank and others thought these standards made it too difficult for low income borrowers to buy homes. The affordable housing law required Fannie and Freddie to meet government quotas when they bought loans from banks and other mortgage originators.

At first, this quota was 30%; that is, of all the loans they bought, 30% had to be made to people at or below the median income in their communities. HUD, however, was given authority to administer these quotas, and between 1992 and 2007, the quotas were raised from 30% to 50% under Clinton in 2000 and to 55% under Bush in 2007. Despite Frank’s effort to make this seem like a partisan issue, it isn’t. The Bush administration was just as guilty of this error as the Clinton administration. And Frank is right to say that he eventually saw his error and corrected it when he got the power to do so in 2007, but by then it was too late.

…By 2002, Fannie and Freddie had bought well over $1 trillion of subprime and other low quality loans…As a result, in 2008, before the mortgage meltdown that triggered the crisis, there were 27 million subprime and other low quality mortgages in the US financial system. That was half of all mortgages. Of these, over 70% (19.2 million) were on the books of government agencies like Fannie and Freddie, so there is no doubt that the government created the demand for these weak loans; less than 30% (7.8 million) were held or distributed by the banks, which profited from the opportunity created by the government.

There are two parts to this disaster: the bowling ball, which was a relatively minor mortgage meltdown, and the pins, which were the vast investment by government and the many for-profit companies helping it. That ball was going to hit hard regardless, but the pins were set up to fall and so they took down other parts of the economy as well, stalling out the whole thing.

Imagine if that recession were a multiple of the one that is coming.

Just for fun, let us look at a true disaster scenario, the Great Depression:

This was a period when the American public discovered the stock market and dove in head first. Speculative frenzies formed in both the real estate markets and on the New York Stock Exchange (NYSE). The lead-up to October 1929 saw equity prices rise to all-time high multiples of more than 30 times earnings, and the benchmark Dow Jones Industrial Average (DJIA) increase 500% in just five years.

The NYSE bubble burst violently on Oct. 24th, 1929, a day that came to be known as Black Thursday. The following week brought Black Monday (Oct. 28) and Black Tuesday (Oct. 29); the DJIA fell more than 20% over those two days. The stock market would eventually fall almost 90% from its 1929 peak.

In other words, it was a typical bubble. The markets seemed to take off, and the herd rushed in for an orgy of rampant speculation just like they did in the California Gold Rush in 1848. But just like in that feeding frenzy, most people were losers and only a few walked away with the gold, and the ones who did best were the ones who got out early and transferred that money to other investments.

In the new California digital Gold Rush, you will most likely see the same thing: the 1% of 1% who are real winners here will be the people who got in early, grabbed the easy money, and then got out and put that money into something tangible and self-renewing like real estate, industry or agriculture. They do not mind that these new investments are not high yield; they are stable, and Silicon Valley is not.

The old Gold Rush made San Francisco a major city; the new Dot-Com mania has made it the center of the world, or at least its inhabitants think so.

Now let us consider some of those outer pins. There are several debt bombs looming. The first is the welfare/consumerism debt bomb, followed by the pension debt bomb, the entitlements debt bomb, the government debt bomb, the education bubble, the consumer debt bomb and the demand-side economics bubble.

With the “Me Generation” set to clock out and trigger a 50 megaton airburst of retirement obligations for government, there is no way our economy will survive. The wealth boom of the victorious Allies in WWII is going to come home to roost in 2020-2040 as the Baby Boomers die off, and since all of our wealth since has not matched it, the markets are going to re-adjust the value of the false wealth through a recession.

Add to that the fact that we are dependent on debt, both in public and private, to international banks and foreign nations, many of which are unstable, and you can see how there is a layer of bowling pins behind the bowling pins of our economy. When we go, they go. When they go, everything goes.

The best part is that almost no one understands how our society works, and so they are all oblivious to the actual risk we face:

It seems that that never have so many known so little about so much. In areas where most of America resides, no one gives much if any thought to the seamless integration of so many moving parts that allow them to transport themselves to the grocery store, and get food – to utilize a myriad of appliances, utilities, technologies, and conveniences independent of their skills, education, resources, etc.

Most people, it seems, do not ever think about what would happen to their ideology and lifestyle after about ten days if the trucks, trains, and airplanes were unable to deliver untold tons of everything like clockwork. Look at the behavior of the people in the face of a few days’ disruption because of a snow storm.

So we have prime conditions for an apocalyptic market endgame. Our debt was borrowed to fund worthless stuff, just like the housing bubble. Our products are aging and no longer good for high margin returns. Markets are consolidating to a few big actors, and they are often dependent on government. Individual consumers have over-invested in these scheme and taken on a huge debt load. The entire structure is propped up and waiting for just the right strike to disintegrate entirely.

On the plus side, we have known for years that modernity was not sustainable. Modernity began with our notions that we as individuals were more important than social, natural or divine order. That creates the groundwork for the trends, fads, and panicked stampedes that create this market boom-bust cycle just like in the Great Depression. Not to mention consumerism, vapidity, mountains of landfill, environmental holocausts and a growing sense of existential dread. The death of modernity will be painful, but a blessing in disguise.

Let’s go bowling!

Looking Forward To The Dot-Com 3.0 Crash And Recession

Saturday, May 27th, 2017

Without strong leadership, humans act as a herd. They constantly look for what is new so that they can participate, and as soon as that becomes clear to them, they rush toward it.

Nature however is not binary because it has introduced time. What is new is recognized by a gradually increasing group of people, and as they crowd it, the original participants get out and watch the formerly new thing crash as the herd converts it into the same old stuff.

You can see this with monkeys in the wild. One monkey finds a tree with lots of fruit, and starts screeching. The others then rush over, afraid of missing out and hoping to capitalize on this new popularity, and strip the tree bare.

In the meantime, some of the monkeys who found that tree earlier have moved on to new trees, and are keeping mum about it. The monkeys who screech depend for their popularity on being recognized as those who find new things, even if they find them after the really good opportunities are gone. They get their power from introducing the clueless to better options, not good ones.

Humans play the market the same way. Whatever succeeds immediately finds a whole herd of people who are very excited about it, and they invest in it, bloating it to the point where the consequences between intelligent acts and repetition of the past is blurred, so it repeats itself until it crashes and then the herd moves on to a new fascination, like a crowd at an amusement park.

As mentioned here before, our current economy is a fragile mess based on tech companies selling gadgets to morons who are subsidized by the state, in order to make our current appear “in demand” so that we can borrow and tax even more.

Now it becomes clear that the post-1990s Silicon Valley boom may be fragile and ready to pop:

During rising stock markets you can use an indicator like the advance-decline line to confirm that the uptrend is still in place. When the overall stock market is rising but more individual securities are declining than rising,, that can be a signal that the market is not “acting right” and the uptrend could be in trouble. It could be signaling that there could be a change in direction coming.

…The advance-decline line was crashing beginning in early-1999, while stocks continued to rise for another year or so. The fact that so few stocks were carrying the market higher with a falling advance-decline line was a big warning sign for the coming dotcom crash.

As we watch the leaders of the market separate from the rest, it becomes clear that we live in a house on stilts where a few of those stilts are carrying most of the weight. If anything happens to them — as seems likely as history repeats itself — we are in for a big crash.

Dot-Com 3.0 Crash Gains Momentum

Tuesday, January 10th, 2017

As the ad revenues fall because people realize that a dot-com 3.0 collapse is coming because the advertising numbers are fake and the customers not buyers, the industry is waking up and taking notice of the grim fact that the internet industry is moribund and will soon fall as the markets devalue fake assets:

There’s a peculiar tone emanating from the social media space. It’s a little hard to hear, but if you listen closely, it’s there none the less. That sound is the sudden gasp of realization that the most dominating reasoning and defense that encompassed the entire social media space may in fact being laid-to-waste right before their screens. That horror?

The eyeballs for ads model doesn’t work.

…A 300% increase in readership didn’t mean squat to paying advertisers because – all they were getting was the bill for more “ad sales” and no sales. So they in-turn are now stating: Thanks, but no thanks.

The “ads for eyeballs” model reveals the core weakness of capitalism: it can be captured by commerce itself through the idea of consumerism, which is that it does not matter who the consumers are so long as there are enough of them. If a company needs 5% of the market to survive, under this theory, it needs only a certain number of warm bodies.

However, industry is discovering that not all warm bodies are the same. The ideal audience remains the American middle class, who shop carefully for good values and are loyal to brands. The new urban audience of beige people buying trendy products because of a media blitz is not working because their tastes are fickle and their loyalty non-existent. Companies will go to their graves for the mistake of choosing this audience.

In the meantime, the businesses that thrive are as always those who hit that sweet spot with the valued consumers, which means that who matters more than raw numbers. As in philosophy and politics, a wave of realization is hitting the West that “equality” is a denial of reality and will lead to our doom.

Silicon Valley Death Vigil Begins

Sunday, January 1st, 2017

Humans destroy everything they touch. Something new is invented, and most people are afraid, so natural leaders take up its cause and make it great. Others see that this is a good thing and worth participating in, so they flock to it, but they do not alter their thinking, which fits the old way more than the new. In this way, these entryists bring the old into the new and bloat it while widening (destroying) its focus.

The old way involves what failed before, which is what humans always try because we are wired for individualism, which requires us to demand guaranteed social inclusion from any group. However, since our individualism makes us blind to the fact that other people are different from us, this includes the aggregate lot of incompetents, grifters and mental health cases that accumulate over time. Without the wisdom of Darwin to cut these people free, the human social group then submerges the new thing in the same patterns of failure that have been with us since the dawn of time.

Silicon Valley is such a case. A few engineers and managers invented the internet, but once it became commercialized, in came the fools. They wanted to do to it what they do to everything: dumb it down, remove what makes it unique, and by so doing, make it “accessible” to everyone and anyone, resulting in its genericization and thus, reduction to the same broken patterns that we see everywhere.

As a result, we are now witnessing as an oversold industry collapses from its own internal weight. The managers looked out there and saw a sea of hopeful faces belonging to those who depend on Silicon Valley for their own dreams of wealth, and so instead of contracting operations and keeping quality high, they expanded inclusiveness — becoming social heroes in the process — but adulterated quality, ensuring doom. This is what always happens with prole rule.

We know that Silicon Valley is doomed because it essentially follows the television model, where advertising pays for free services, and Silicon Valley advertising is based on a lie:

The updated results based on March 2009 comScore data…indicated that the number of people who click on display ads in a month has fallen from 32 percent of Internet users in July 2007 to only 16 percent in March 2009, with an even smaller core of people (representing 8 percent of the Internet user base) accounting for the vast majority (85 percent) of all clicks.

The news gets worse: most of those who click frequently are from the “daytime TV audience” of those living on invariant incomes of under $40,000 a year:

While many online media companies use click-through rate as an ad negotiation currency, the study shows that heavy clickers are not representative of the general public. In fact, heavy clickers skew towards Internet users between the ages of 25-44 and households with an income under $40,000. Heavy clickers behave very differently online than the typical Internet user, and while they spend four times more time online than non-clickers, their spending does not proportionately reflect this very heavy Internet usage.

In other words, a small part of the consumer base accounts for most of the internet activity, and this group represents not healthy profit from the middle classes, but the buying habits of those who have little and will achieve little. This same type of bad measurement afflicts the entertainment industry and many consumer goods and services industries, who have calibrated their content toward the lowest common denominator without realizing the limited purchasing power of this group, and consequently find themselves in slow but steady decline.

We might even see this as a design flaw of democracy. When everyone is equal, what matter is the count of warm bodies, not who these warm bodies are. Through that metric, governments and businesses attract what is seen as a large group, but is really a small group compared to the Silent Majority, and by doing this, misses actual events in favor of symbolic events that do not represent the wider, more nuanced answer.

This decline is manifesting in reduced internet advertising and the exhaustion of social media, once viewed as the future of the Western economies, which are now presumed to be “services based” instead of oriented toward the production of goods.

As these industries fade away, it makes sense to reflect on the consequences of equality which causes us to ignore the variation in our current audience. Back in the glory days of business, the buying public was a middle class comprised of relatively similar individuals. Now it is a mix of classes, races, sexes, and lifestyles/philosophies who have nothing in common, meaning that the only statistical hits we get for popularity are in these un-representative aggregates who are not the desired consumer.

Much of the dot-com censorship we see floating about now arises from the recognition by companies that their audience has shifted, and an attempt to make “safe spaces” so even more of these zombie daytime TV watchers show up, in a vain hope to produce more profit from the people who are left over once everyone else bails out.

We are already seeing this phenomenon break into the public view as both Twitter and Facebook have admitted that they mistakenly calculated more ad impressions than they delivered. The next step is for them to reveal that these ads are being seen by non-buyers.

That phenomenon has manifested itself in a loss of the blind and blithe confidence that Americans have had in the dot-com miracle, and for that reason, an increasing skepticism has led to discovery of the fraudulent nature of many dot-com businesses:

The drama has some investors predicting more disasters. “What if Theranos is the canary in the coal mine?” says Roger McNamee, a 40-year VC veteran and managing director at Elevation Partners. “Everyone is looking at Theranos as an outlier. We may discover it’s not an outlier at all.”

Part of the problem lies in our tendency to mistake ideology for reality. We see a mental image that comports to what ideology tells us “should” be true, and then purchase accordingly, which because others follow us works for a short while. The circular Ponzi scheme allows industry to invent fake money, government to tax it heavily, and then empowers government to dump that money onto citizens through entitlements and social welfare, which they then spend on tangible goods. This keeps the economy afloat for a short while, but inevitably, a market correct begins and panic sets in as the herd searches for “the next big thing” to invest in so that we can all keep enjoying the fake value of our money.

As these different threads of the dysfunction knit together, the over-valued dot-com economy will begin its death cycle. As with earlier dot-com collapses, this will begin with a slow withdrawal by the smart money and the smarter users, then a rapidly accelerating fight over the remaining users, following by lapsing into irrelevance and being sold at low cost like MySpace.

If this hits during the first years of a Trump presidency, America will face an economic recession of massive size as the economy readjusts to cover for the fake wealth that was created by the dot-coms, especially social media. This will have rippled effects in Europe and Asia, and could result in a currency crash as it becomes clear that the economy backing those currencies was grossly over-valued and its government administrators ignored this reality.

Quotable (#8)

Wednesday, October 26th, 2016

On the question of city planning, the Houston Chronicle offers a fertile paradox:

Other research revealed the conditions that create pockets of poverty, and found a downside to ethnically mixed cities: People in different groups tend to live apart. “Here’s Mr. Diversity, extolling the virtues of diversity in large cities,” Florida says. “And what comes back to smash you over the head is that large diverse cities also incubate a horrific level of sorting and segregation.”

We must fix the way people are broken by forcing them to live together even if they do not want to. This requires us to assume that absolutely zero thought, or pure Biblical evil, went into their choices. In the meantime, everyone wants to live with people like them for the sake of comfort and enjoyment. This is because people befriend, work with, date and marry people who understand their worldview, most of which is genetic.

This brings to mind another mental health moment (via Outside In) in which reality confronts human social intentions:

Silicon Valley, the 50 square miles of land in the US that has created more wealth than any other place in human history but has still achieved very little in becoming a more inclusive, truly diverse place.

Luckily, this problem is ending as the Silicon Valley bubble popped. SiVal was probably adding value to the economy up until the 2000s as it made tedious tasks more efficient, but since that time, it has been dedicated to producing more services which add no value and instead replace functional parts of the economy. When the bubble pops, many formerly useful functions will have to be rebuilt at a time when the economy is recapturing false value as losses. At that point, it will be unwise to walk in the city without looking up for falling bodies.

The Camera Lies

Friday, September 9th, 2016

elizabeth_holmes_-_theranos

So… which one of these is closer to reality? Fascinating, the gulf between them.

In the meantime, the article about the rise and fall of Elizabeth Holmes and Theranos is both tragic and disturbing. How do such fake valuations get passed along so easily? Or is that the case?

And then there is this:

In some ways, the near-universal adoration of Holmes reflected her extraordinary comportment. In others, however, it reflected the Valley’s own narcissism. Finally, it seemed, there was a female innovator who was indeed able to personify the Valley’s vision of itself—someone who was endeavoring to make the world a better place.

The old question: did history make the person, or the person make history? She came along at the right time to inherit $4 billion from investors and valuation of her company. And yet, it seems, it was vaporware all along.

And, is it worth giving up your soul, for twenty pieces of silver?

Aiming The Google Nudge

Sunday, May 15th, 2016

obey_trigglypuff

Meet the new boss. Same as the old boss. Meet the new media; same as the old one. I suggested the probability of social media conglomerates joining the SJW convergence and thereby attempting to steer the direction of Amerikan politics to the favored direction in which Cthulhu insists upon swimming. Some days I hate it when I turn out to be absolutely correct in my negativity.

I first opined the following:

Perhaps the terms Google Nudge, Google Auction or even worse; Google Veto need to be added to the lexicon. This new anti-democratic influence on political decision-making is emerging because of a confluence of technology, ideology and material means to effect said dominance. The technology is the internet search engine, the ideology is Progressive Liberaltarianism* and the material means is the obvious wellspring of vast wealth that has been accumulated in Silicon Valley.

So, no, you are not paranoid if you believe that Facebook is just another boring, predictable font of leftist propaganda. It, like every other so-called news outlet, perceives a mission to push political discourse (even) further towards leftist memes. Former contractors for Facebook describe the exercise below.

Facebook workers routinely suppressed news stories of interest to conservative readers from the social network’s influential “trending” news section, according to a former journalist who worked on the project. This individual says that workers prevented stories about the right-wing CPAC gathering, Mitt Romney, Rand Paul, and other conservative topics from appearing in the highly-influential section, even though they were organically trending among the site’s users.

Alrighty then, you Alt-Right-Delete Paranoid. How could the good, shiny-happy people at Facebook possibly empower a Google Nudge as described in your previous histrionic screed? I mean Facebook Pinkie-Swears that this is how it works in Zuckerberg’s Magical Kingdom of Equestria.

How does Facebook determine what topics are trending? Trending shows you topics that have recently become popular on Facebook. The topics you see are based on a number of factors including engagement, timeliness, Pages you’ve liked and your location.

It starts with a certain non-political corporate goal. Mark Zuckerberg wanted to dominate the primary news market via the Facebook platform. Again, in and of itself, this isn’t SJW Entryism. Here’s how the corporation described its aims according to Gizmodo.

An estimated 600 million people see a news story on Facebook every week, and the social network’s founder Mark Zuckerberg has been transparent about his goal to monopolize digital news distribution. “When news is as fast as everything else on Facebook, people will naturally read a lot more news,” he said in a Q&A last year, adding that he wants Facebook Instant Articles to be the “primary news experience people have.” This would be accomplished via the trending news subjects of Facebook.

Facebook, however, did not think highly of journalists and treated them like galley slaves.

According to five former members of Facebook’s trending news team—“news curators” as they’re known internally—Zuckerberg & Co. take a downright dim view of the industry and its talent. In interviews with Gizmodo, these former curators described grueling work conditions, humiliating treatment, and a secretive, imperious culture in which they were treated as disposable outsiders.

And yet these were disposable outsiders with considerable power and a politically overdetermined view of what should constitute “trending news”. Here’s how they were left to their own considerable devices.

The trending news section is run by people in their 20s and early 30s, most of whom graduated from Ivy League and private East Coast schools like Columbia University and NYU. They’ve previously worked at outlets like the New York Daily News, Bloomberg, MSNBC, and the Guardian…According to former team members interviewed by Gizmodo, this small group has the power to choose what stories make it onto the trending bar and, more importantly, what news sites each topic links out to. “We choose what’s trending,” said one. “There was no real standard for measuring what qualified as news and what didn’t. It was up to the news curator to decide.”

But there was one black sheep amongst the Ivy League Lefty herd. Gizmodo describes his effective subversion below.

The former curator was so troubled by the omissions that they kept a running log of them at the time; this individual provided the notes to Gizmodo. Among the deep-sixed or suppressed topics on the list: former IRS official Lois Lerner, who was accused by Republicans of inappropriately scrutinizing conservative groups; Wisconsin Gov. Scott Walker; popular conservative news aggregator the Drudge Report; Chris Kyle, the former Navy SEAL who was murdered in 2013; and former Fox News contributor Steven Crowder. “I believe it had a chilling effect on conservative news,” the former curator said.

None of this surprises. The media consists of trained Cathedral functionaries who function in accordance with their training. Mark Zuckerberg and Facebook may or may not have selected these people for the purpose they served. It really doesn’t matter. Nor does Facebook matter as a platform. It’s not the platform, it’s the individuals that stand on it.

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