Economics: Rising Antitrust Creates More Bureaucracy, Threatens Productivity And Innovation & Slows Global Economic Growth

 (Drivebycuriosity) - It seems that there is a global spring for antitrust. In China the authorities suspended the IPO of online finance giant Ant Group (with a target of $300 plus billion valuation), claiming that the company may hurt their customers and disturb China`s financial system.  The Chinese government also started an investigation into the e-commerce giants Alibaba (investor in Ant) & Tencent. The regulators want to curb their power, alleging that these companies act as monopolists and that they treat competitors and business partners unfair. Europe is performing a similar attack on the global online giants. The allmighty European Commission began an investigation into Amazon, assuming that they "illegally distorted competition" and abuse their dominance. The authority also started an antitrust investigation in Apple, claiming that they are distorting competition as well. The European Union already extracted about $10 billion from Google for alleged "antitrust violations". 

The American authorities are participating in the global antitrust campaign. Recently a bipartisan group of Washington DC lawmakers, the House Judiciary Subcommittee on Antitrust, published a 400 page report, claiming that Big Tech is abusing their market powers ( cnbc). The paper includes accusations against Google, Amazon, Apple & Facebook and contains plans how to regulate them. The coming Biden administration is expected to regulate Amazon, Google, Apple & Facebook stronger than the previous government. 

It seems there is much in common between American, Chinese & European trust busters. They all want to curb the power & growth of the global mega-companies. Mighty government authorities - and politicians - all over the world are aiming to gain more power and to expand their influence at the expense of the online goliaths. 

Apparently they dislike companies like Amazon, Google & Apple which are huge & growing fast, even though that Big Tech operates efficient and provides valuable services for the community, otherwise they would lose their customers. "Customer trust is hard to win and easy to lose" ( Bezos). The trust busters ignore that the Big Tech companies are the engines of global economic growth because they create value with a rapid speed. The current Covid-19 crisis with lockdowns & quarantines would be even less bearable without cheap & fast deliveries by Amazon, useful information provided by Google search & maps and powerful but affordable devices like iPhones, iPads & Macbooks. Customers love Big Tech, otherwise they would shun them, bureaucratic regulators hate them.

The antitrust campaigns are throwing sand into their gears of the global economy and creat friction (washingtonpolicy). The crusade leads to more  bureaucracy which " is the death of any achievement” according to Einstein. New regulations and inquiries reduce the productivity & efficiency of Big Tech companies; they shrink their abilities to further innovate because they are occupying management capacities and are slowing decision processes.  

The Big Tech`s strategic thinkers will be preoccupied with new regulations & inquiries and will have less time & energy for innovations. Instead of thinking about new products & services for their customers and to improve existing ones the strategists will have to think about new laws and how to comply with external bureaucrats and investigations. The anti tech campaigns also come with high costs which will lower the capabilities to hire new talents, they also will curb salaries of the employees and translate into higher prices for the customers. Costs & bureaucratic frictions create headwinds which will slow growth of innovative & successful companies and with them the global economy.

There is a negative side effect as well. The anti-Big-Tech campaigns in East & West employ thousands of high paid lawyers and are burning so a lot of tax payers money which otherwise could be used for education or health care. The anti-tech crusades create a lot of highly attractive job opportunities for anti-trust lawyers and bureaucrats which attract many young talents. Instead moving into technology, medical research and other sciences, which would benefit the society, these people are wasting their talents in unproductive skirmishes. As a result the anti-tech crusade will slow down global economic growth and will harm everybody who does not live from the money of the taxpayers.

 

 

Economics: In Praise Of My Ebook Reader

(Drivebycuriosity) - Some years ago I moved from Bonn, Germany, to New York City. My library of 1,000 plus books had to stay behind, not enough space in the small Manhattan flat where I am living now. Since then I buy & collect just ebooks which I read on my Amazon Kindle.

Ebooks take no place, an important issue in Manhattan. They are often cheaper than the printed version. When ebooks are published than they usually cost about the same like the paperback version, cheaper than a hardcover (prices are set by the publisher). I notice that prices for ebooks on my Amazon wish list often get reduced after a while, then they are even cheaper than paperbacks. And there are myriads of self published books, novellas & short stories which cost less than $3, often just 99 cents.

Ebooks have just the weight of one Kindle - less than many books, very fortunate when I am traveling. Wherever I am with my ebook reader I have access to myriads of books - no trouble of carrying too much weight on a flight. This is also an advantage when I am sitting in a park and I am reading there.

Ebooks don´t need an extra light. When I am reading in the night I don´t trouble my wife too much with a reading light, no need to steal her sleep.

Now I am trying to survive through the Covid-19 crisis. I had to skip my travel plans for the time being and I reduced going out & shopping to avoid infection. Thanks to my Kindle there is no need to take a risk and to go to a bookshop (if they are still open). The ebook reader gives me access to libraries of books which I can instantly download & read, very fortunately when there is not much else to do.  The Kindle became a really good friend in the Covid-19 crisis.

 

Stock Market: Happy Thanksgiving 2020

 (Drivebycuriosity) - This year we experience a very different Thanksgiving. The US are suffering a third wave of Covid-19 infections with new records of known cases & surging hospitalizations. Smart & considerate people stay at home and minimize personal contacts to avoid infecting themselves and others. Caution & fear are curbing businesses even more than lockdowns & quarantines ( nber.org). Many industries, including physical shops, restaurants & airlines, are suffering. 

But the US stock market climbed to new all-time highs anyway. The S&P 500, the gauge for the US stock market, gained 12% YTD and climbed about 15% since Thanksgiving 2019. As usual the market looks ahead.  Someday the pandemic will end and a row of vaccines are in the making, creating the hope that the crisis will soon be finished.

Economy - and stock markets - are getting a lot of help from an accelerating technological revolution spurred by the Covid-19 crisis. Internet - and other software applications - are helping everyone to deal with lockdowns and social distancing. Microsoft`s CEO Satya Nadella said that “two years of digital transformation took place in two months” ( microsoft ). The CEO of Bill.com, an online clearing service, said: "We believe the ongoing pandemic has accelerated the need for businesses to focus on digital transformation” (seekingalph). 

The Covid-19 Pandemic changed many habits. The crisis forces many people to work, learn, shop, educate & entertain from home which is fostering digitization and raising efficiency & productivity of the economy ( driveby ). Online sales worldwide are surging, more people are working from home, they are binge watching Netflix & Amazon Prime, listening via Spotify, reading Kindle books, surfing Facebook & Twitter and businesses are running more & more on cloud computing. Not only consumers are changing, corporations adapt as well. We are witnessing an accelerated shift toward digital technologies that are faster, less expensive, more productive and raise creativity.   

I suppose that the stock market climb will continue in 2021 and beyond. During the recessions of the years 2001/02 & 2008 and the current crisis companies restructured and reduced costs significantly in order to survive. When Covid-19 is defeated they will be much fitter and more efficient than before. I believe that this learning process will continue and will translate into a long term trend of rising company profits & stock markets.

Happy Thanksgiving

Science Fiction: Beyond The Dragon's Gate By Yoon Ha Lee

  (Drivebycuriosity) - Artificial Intelligence (AI) is getting more and more important in our lives. AI is also gaining more attention in the science fiction genre. There are already a myriad of novels & short stories dealing with machine learning. I especially enjoyed Ian McEwan´s novel "Machines like me" about a humanoid robot ( my review ).

 I just finished a very short story (16 pages $0.99) by the American-Korean author Yoon Ha Lee with an interesting new take on the topic (amazon). The plot is set in a war in some future. Anna Kim, a scientist & software expert, got kidnapped by the military and trapped in a spaceship, an orbital star fortress. The military are in a deep mess because the AIs who had controlled their hyper-sophisticated spaceships and fought their wars suddenly committed suicide and sacrificed their ships. Anna gets the order to communicate with the last remaining AI and to find out what happened in order to prevent the total disaster.

There is not much happening. But I enjoyed Yoon Ha Lee´s style and how she described Anna`s world, the strange spaceship and the even weirder AI. The story woke my appetite for more tales by the author.

 

 

Contemporary Art: All Figured Out - A Group Exhibition @ Zürcher Gallery, New York

 

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(Drivebycuriosity) - Covid-19 or not, Manhattan`s art galleries are open again, at least some of them. The ambitious Zürcher Gallery (33 Bleeker Street New York) hosts a group exhibition focused on figurative paintings, called "All Figured Out" (through December 20, 2020 galeriezurcher ). I display here my favorites, a very subjective selection as usual. 

On the top of this post you can see an image by Marc Desgrandchamps followed by 2 works by Lois Dodd.

 

Above 3 images by Matt Bollinger. I had already reported about Bollinger`s 2017 show @ Zürcher ( driveby).

 

Above 2-times Kyle Staver.

 

Last but not least: Charles Garabedian.

 

To be continued.

  

 

Netflix: Binge Watching The Queen`s Gambit

  (Drivebycuriosity) - In the recent days I have been binge watching the biopic "The Queen`s Gambit" on Netflix (imdb). A girl, nine years old, became an orphan and lands in an orphan home where she get`s introduced into chess. She has lots of talent and develops an obsession for the game which starts an astonishing chess career. The show follows her personal development & struggles and her steep rise in the world of chess (this is a spoil free blog. You can read a synopsis here wikipedia).

It was a real joy watching Anya Taylor-Joy as Beth Harmon, the chess prodigy. She had me already impressed as leading character in "The Witch" (driveby ). The character is mesmerizing, super smart, sexy & highly ambitious; the beauty and the genius - and maybe a little bit also the beast. Tyler Cowen and other commenters see some Asperger traits, but why not ( marginalrevolution valneil  ). 

 I had fun observing her when she destroyed her opponents in the tournaments, but I also liked other characters like the stoic Soviet champion Vasily Borgov (incarnated by Marcin Dorociński), her sweet, generous & caring foster mother, who acted almost as the big sister, (Marielle Heller as Mrs. Alma Wheatley ) and the geeks who supported Beth mentally and gave her advice.

The tournaments are dramatically staged - the camera often focuses on Taylor-Joy`s amazing eyes - waking my appetite to retry the game again sometimes. The cinematography captured the 1960s perfectly with fancy clothes and decadent Parisian hotels & bars, supported by a wonderful soundtrack with an eclectic selection of contemporary songs.

It seems that the fictional story seems got inspired by the career of legendary Bobby Fisher, the American answer to the Russians who dominated the world of chess then (wikipedia ). The show is a must see.

Economics: China`s Strong Economic Recovery Is Organic & Sustainable

 (Drivebycuriosity) - China`s economy is continuing her strong recovery from the Covid-19 crisis. This night we learned that China´s industrial production grew in October 6.9%, retail sales advanced 4.3% & foreign direct investment gained 6.4% - all numbers YoY ( tradingeconomics).

 

( source)

 

 

 The US might even have better recovery numbers for retail & GDP but there is a huge difference. America needs huge stimulus programs by the government to recover and pumped some trillions of dollars into her economy while keeping interest rates at zero. China abstained from such measure. China does not have huge stimulus programs and government checks and China´s benchmark interest rates is still 3.85% ( cnbc). China´s economy recovered on her own strength (aus eigener Kraft).

 China´s fast recovery from the corona crisis is no surprise. Beijing responded early, fast and consequently to the pandemic. Apparently the population has enough discipline for hand washing, mask-wearing & social distancing. As a result China´s numbers of new infections, active cases and deaths fell to almost zero (worldometers ).

The success allowed the quick reopening of China`s economy and the return to normality. China`s economy might even get stronger when the corona crisis has past. History shows that consumer and businesses are more willing to change behavior during setbacks. Innovations typically gain traction during tumultuous times: they get cheaper, faster, more convenient, more productive, more creative.  Companies are streamlining operations and are getting more efficient & productive as they always do when they are challenged. China will overtake America sooner than many think!