Tag: analysis

The beauty of low margins

i love this, and wish more companies aspired to it. for example, i want my bank to have the lowest possible overhead: no branch offices, no warm bodies, etc.

Amazon, as best I can tell, is a charitable organization being run by elements of the investment community for the benefit of consumers. The shareholders put up the equity, and instead of owning a claim on a steady stream of fat profits, they get a claim on a mighty engine of consumer surplus. Amazon sells things to people at prices that seem impossible because it actually is impossible to make money that way. And the competitive pressure of needing to square off against Amazon cuts profit margins at other companies, thus benefiting people who don’t even buy anything from Amazon.

Mall Death

excellent. strip malls are some of the worst man-made features on the planet and the more bulldozing, the better.

we’re seeing clear signs that the e-commerce revolution is seriously impacting commercial real estate. Online retailers are relentlessly gaining share in many retail categories, and offline players are fighting for progressively smaller pieces of the retail pie. A number of physical retailers have already succumbed to online competition including Circuit City, Borders, CompUSA, Tower Records and Blockbuster, and many others are showing signs of serious economic distress.

Great Filter Day

Assume that since none of the ~10^20 planets we see has yet given rise to a visible expanding civilization, each planet has a less than one in 10^20 chance of doing so. If so, what fraction of this 10^20 filter do you estimate still lies ahead of us? If that fraction were only 1/365, then we face at least a 12% chance of disaster. Which should be enough to scare you. To make sure we take the time to periodically remember this key somber fact, I propose that today, the day before winter solstice, the darkest day of the year, be Filter Day.

Is information or ignorance stronger?

In the Web 2.0 age, when many see 100s of articles every day, are we more informed than previous generations were?

this is fascinating. i especially liked this tidbit about how high culture used to be disseminated:

In cigar-making factories in New York City, lectors sat on high stools reading Shakespeare, Marx, Engels, Darwin, Hugo, Balzac, and Tolstoy as cigar rollers performed their work.

UAV analysis

What will the market look like for gizmos that prevent airborne cameras from imaging your face? Or what about when small, VTOL drones are actually moving stuff around in the real world. That stuff could conceivably be your latest, packet-switched delivery from Amazon, or it could be the latest methamphetamine delivery from your drug dealer; it will be hard to tell the difference without physical inspection. Law enforcement will want to track — and almost certainly to inspect — those cargoes, and many a sender and recipient will want to thwart both tracking and inspection.

Service economy displacement

unless your skill level is in the top 1% worldwide the great leveling will happen. protectionism will not save you.

At this point in the article Stiglitz stumbles. He mistakenly assumes that in our current depression/dislocation, technological improvement caused a loss of manufacturing jobs (productivity and portability overseas) that has forced a migration of workers to service industries. This has led to a decline in incomes across the board and stubbornly high unemployment.

Unfortunately, the reality is more dire. This technology shift also made it possible to shift service jobs around the world too. As a result, this is a recipe for an inevitable collapse in US and EU incomes (the effects of which are already being seen huge government deficits due to low tax receipts), a knock on global depression, and political chaos.

What are the solutions? Stiglitz would have you believe it is more government spending. An effort to build infrastructure and do more training. I don’t believe that will work. Most governments are already near bankruptcy and this crisis is global and not national.

China Leadership Transition

Over the past few months, several people have written asking me to offer a short “primer” on China’s upcoming leadership transition, which begins next year. The handover to a new president and premier has generated plenty of speculation in the press, about who the leaders are and what is will all mean, but sometimes it’s useful to go back and fill in the very basics, since China has a unique and in some ways quite confusing political system.

The first and most important thing to understand about that political system is that it is composed of 3 parts. In the US, we have the executive, legislative, and judicial branches of government. In China there is the Party, the Army, and the State. Unlike in the US, where the 3 branches are co-equal and are specifically designed to check and balance each other’s powers, in China the Party is supreme and rules over the other 2 elements. China’s “leadership transition” involves coordinated handovers of power involving all 3 parts of the political system.

kremlinology applied to china’s leadership