Mind Matters Natural and Artificial Intelligence News and Analysis

CategoryEconomics

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unicorn

Why People Keep Investing in Cool Companies That Lose Money

If money is all that matters, a beautiful loser is still a loser,… But wait. IS money all that matters when we are buying unicorns (exciting startups)?

Recently, we’ve been looking at unicorns — those tech companies that are just so Now! that, like Uber, Airbnb, and DoorDash, they are part of our everyday conversation. But as Gary Smith and Jeffrey Funk have noted, they don’t make money. And seldom or never have. For years on end. The recent downturn could mean some don’t survive. So Mind Matters News asked Dr. Funk, “Why don’t people notice, year after year, that these companies are not good investments? Is the buzzy idea more important than the financial outcome?“ Here’s what he told us: There are many ways to answer this question. My favourite answer uses Nobel Laureate Robert Shiller’s concept of irrational exuberance. Some of the following words are Read More ›

Peter Thiel with George Gilder at COSM 2021

Peter Thiel Will Be Luncheon Keynoter at COSM, November 9

Billionaire venture capitalist Thiel made waves earlier this year, calling Warren Buffett and other investment gurus a “finance gerontocracy”

Some iconic tech venture capitalists go with the flow — and then there’s Peter Thiel: In an age when some computer scientists prophesy that AI will soon rise up and destroy mankind, he says no, that’s not happening; the big story is the End of Privacy. He also sees Big Tech innovation as slowing down, in the sense that most Wow!! new developments are successfully hyped riffs on earlier ones. He goes so far as to say that, contrary to expert views, cryptocurrency is not just a flash in the pan. At Bitcoin 2022, he blasted “Warren Buffett, Jamie Dimon, Larry Fink as ‘finance gerontocracy.’” That is, they are over the hill though not yet under it. So Thiel is Read More ›

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unicorn on gold cube mountain . start up, illustration concept of leader on a market.3d rendering. 3d illustration.

Warning: Unicorn Stocks May Be Nearing Bankruptcy, Fire Sales

Uber, Airbnb, and DoorDash seem so lifestyle-friendly … they even became part of our vocabulary

In an article today, Jeffrey Funk and Gary Smith puzzle over the way investors have “rained cash” on unprofitable companies like Uber, Airbnb, DoorDash, etc. Yes, they are icons of popular culture. No, unlike Apple and Google, they do not make money: Here are their stats from the table the authors offer: Company Founded Funds Raised Cumulative LossesUber Technologies 2009 $25.2 billion $31.7 billionAirbnb 2008 $6.0 billion $6.0 billionDoor Dash 2013 $2.5 billion $4.6 billion Only one of the 15 companies they list — including some other culture icons — has ever had a profitable quarter: Any hopeful arguments that profitability is just around the corner ring hollow when every company is at least nine years old and two are Read More ›

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Macro image of a motherboard with the inscription

How Safe Is Our Tech If It Depends on Non-Free Nations?

Europe’s energy woes, in the wake of the Russia–Ukraine war, should spur us to take the question seriously

Keith Krach, former chairman and CEO of Docusign, the app that enables you to conveniently buy a house in Delaware while selling one in Oregon, is speaking at COSM (November 9–11 in Seattle). Docusign was of immense help during the COVID pandemic when in-person transactions were often impractical, illegal, or just impossible. Go here to get the Early Adopter rate before September 15. Krach, former Under Secretary of State and current Chairman of the Krach Institute for Tech Diplomacy at Purdue University, has been thinking a good deal about our future and new technology. He is committed to the importance of rehoming technology Americans need in the United States, as he told Fierce Electronics recently: Our adversaries, starting with the Read More ›

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China Taiwan and USA flag print screen to microchip on electronic board for symbol of military conflict war and economic business partnership concept.

Taiwan Has Bet Its Uncertain Future on Advanced Microchips

An increasingly belligerent China has long claimed to own Taiwan, which manufactures 90% of the world’s *advanced* microchips

Taiwan is the world’s largest manufacturer of microchips*, and not just by a small margin. Taiwan manufactures 65% of the microchips used in everything from smartphones to missiles. This compares to the U.S. at 10% and China at 5%. South Korea and Japan produce the rest. More important, Taiwan manufactures 90% of the world’s advanced microchips. In other words, without Taiwan, the world’s supply of microchips would come to a standstill, something that has been keenly felt since 2021 when chip shortages affected the auto industry. So far, the world’s dependence on Taiwan’s chips has protected the self-governing island nation from a potential invasion or ruinous trade sanctions from China. Earlier, we looked at U.S. House Speaker Nancy Pelosi’s visit Read More ›

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Set of red glass dice isolated on black background. 3d rendering - illustration.

Don’t Worship Math: Numbers Don’t Equal Insight

The unwarranted assumption that investing in stocks is like rolling dice has led to some erroneous conclusions and extraordinarily conservative advice

My mentor, James Tobin, considered studying mathematics or law as a Harvard undergraduate but later explained that I studied economics and made it my career for two reasons. The subject was and is intellectually fascinating and challenging, particularly to someone with taste and talent for theoretical reasoning and quantitative analysis. At the same time it offered the hope, as it still does, that improved understanding could better the lot of mankind. I was an undergraduate math major (at Harvey Mudd, not Harvard) and chose economics for the much the same reasons. Mathematical theories and empirical data can be used to help us understand and improve the world. For example, during the Great Depression in the 1930s, governments everywhere had so Read More ›

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technician with wafer

Pelosi’s Visit to Taiwan Matters to China. And to Your Computer

China staged an impressive display of military firepower at U.S, lawmaker Nancy Pelosi’s visit Taiwan — prominent in the globally crucial semiconductor “chips” industry

U.S. House Speaker Nancy Pelosi’s visit to Taiwan at the beginning of August included a meeting with Mark Liu, head of the Taiwan Manufacturing Semiconductor Corporation (TMSC), which is the world’s largest producer of computer microchips — and makes most of the world’s advanced ones. Plans for Pelosi’s visit were first reported in Financial Times, after the trip was rescheduled due to COVID. China responded to the announcement with a global propaganda to present the visit as an act of defiance against the U.S. One China Policy. The U.S. One-China Policy recognizes the People’s Republic of China as the sole legal government of China but it does not necessarily agree with the PRC on Taiwan being a part of China. Read More ›

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Metaverse world NFT Art Gallery Avatars and VR Glasses 3D Illustrations

Are NFTs a Bubble That Has Just Plain Popped for Good?

Despite the crypto crash, they seem to be developing a life of their own — in ticket sales, for example

Here’s the first part of Episode 3 of the discussion between computer engineering prof Robert J. Marks and computer engineering grad students Adam Goad and Austin Egbert on that wild new online world. They’ve been discussing what gives NFTs (non-fungible tokens) their value. Now, in “The NFT Anti-bubble” (August 18, 2022), they are looking at how NFTs are faring in the vast crypto crater. What still sells?: https://mindmatters.ai/wp-content/uploads/sites/2/2022/08/Mind-Matters-200-Adam-Goad-Austin-Egbert.mp3 This portion begins at 00:15 min. A partial transcript, notes, and Additional Resources follow. Robert J. Marks: We have talked about non-fungible tokens kind of hitting the skids. Is this a bubble pop? Are non-fungible tokens going to disappear as kind of an interesting thing in history? Or are they going to Read More ›

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NFT non fungible tokenscrypto art on colorful abstract background. Pay for unique collectibles in games or art. 3d render of NFT crypto art collectibles concept

What Gives NFTs (Non-Fungible Tokens) Their Value?

But first, a tour through the seamier side of the internet, supported in large part by the very blockchain that mints NFTs

Here’s the second part of Episode 2 of the discussion between computer engineering prof Robert J. Marks and computer engineering grad students Adam Goad and Austin Egbert on the wild new online world of digital money, fan gear, contracts, and art. In the first part, Adam and Austin explained how digital collectibles — non-fungible tokens (NFTs) — work (or don’t). In this second part, What are NFTs?, they look at how people use them, with a sidestep into the swashbuckling world of crypto crime: https://mindmatters.ai/wp-content/uploads/sites/2/2022/08/Mind-Matters-199-Adam-Goad-Austin-Egbert.mp3 A partial transcript, notes, and Additional Resources follow. The discussion continued with the NBA’s use of NFTs as the new “trading cards.” How are NFTs like or unlike the iconic cards? Adam Goad: That one Read More ›

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Debanking… When Your Bank Acts Like a Political Party

In Canada, ordered by the government, banks began to act like the party in power. Panic, chaos, and bank runs ensued

Earlier this year, we looked at debanking, during the Convoy protests in Canada. The government ordered the banks to freeze the private bank accounts of protesters against the federal government’s contested COVID-19 policies. As we’ll see, debanking, in various forms — where the bank decides, for political reasons — to freeze or end accounts, is becoming a “thing” in the United States too. What really happens? An investigation uncovered some sobering findings: The government invoked the rarely used Emergencies Act on February 14, insisting that doing so was constitutional (“Charter compliant”) and that freezing individuals’ bank accounts “did not amount to a seizure” of them. What happened afterward might give pause for thought: The banks were essentially handed a list Read More ›

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Crypto Virtual Museum and Metaverse internet NFT display as a futuristic streaming media symbol as augmented reality and computer media concept.

When You Buy a Non-Fungible Token (NFT), What Do You Own?

You are buying someone’s digital idea. Just what legal rights that NFT confers is an open question. But the NBA is now selling them…

In the first episode of the discussion between computer engineering prof Robert J. Marks and computer engineering grad students Adam Goad and Austin Egbert (here and here), the discussion started with the projected metaverse and slowly turned to the wild world of cryptocurrencies and non-fungible tokens — like Twitter founder Jack Dorsey’s first tweet. What’s worth knowing about this burgeoning digital world? Here are Bob, Adam, and Austin again in Episode 2, What are NFTs?, Part 1: https://mindmatters.ai/wp-content/uploads/sites/2/2022/08/Mind-Matters-199-Adam-Goad-Austin-Egbert.mp3 This portion begins at 00:10. A partial transcript, notes, and Additional Resources follow. Robert J. Marks: We have been talking to Adam Goad and Dr. Austin Egbert both at Baylor University about Web3. Web3, which uses distributed computing, is the tool that’s Read More ›

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Business, finance, savings money, wages, payroll or accounting concept : Calendar with pink marker circle in word payday for remind

Can Your Social Media Posts Sink Your Credit Rating? Maybe…

With AI tools, your posts or the time of day you apply for a loan might matter. Is that fair to you? Did you even know?

University of Georgia law prof Lindsay Sain Jones and Virginia Tech law prof Janine Hiller offer what should be startling news: What does your SAT score mean for your ability to pay off a car loan? What does your Facebook feed say about your chances of landing a mortgage? And, what does your propensity for snacking on road trips mean for your credit score? The answers: More than you think. Traditional credit scoring is based on a person’s demonstrated ability to take on debt and pay it off. But with the dawn of larger data pools and access to more sophisticated modeling programs, lenders and credit agencies are taking more nonfinancial factors into rating creditworthiness, particularly those without an extensive Read More ›

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Big eye watching a group of people 3D rendering

AI Would Run the World Better Than Humans, Google Research Claims

Don’t believe the headlines: Google’s inhouse game does not show that AI is ready to rule the world

Sixty years ago, conservative provocateur William F. Buckley wrote, “I would rather be governed by the first 2,000 people in the telephone directory, than by the Harvard University faculty.” Buckley was a Yale man, but his barb was not intended to compare Harvard to Yale. He later explained: Not, heaven knows, because I hold lightly the brainpower or knowledge or generosity or even the affability of the Harvard faculty: but because I greatly fear intellectual arrogance, and that is a distinguishing characteristic of the university which refuses to accept any common premise. Now may be the time to update Buckley’s incendiary remarks: I would rather be governed by the first 2,000 people in the telephone directory, than by a black Read More ›

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Brain for Hire: The Internet Makes Academic Cheating Much Easier

Dave Tomar, who wrote essays for students for hire for a decade, then wrote a book about it, thinks 40% of students cheat at least once

For many years, Dave Tomar was that bane that universities always claim to be doing something about but can’t (or anyway never) do — an essay writer for hire. Wait. Wasn’t the internet supposed to end cheating? The search engine reveals all, right?… No. Read on. In The Complete Guide to Contract Cheating in Higher Education (Academic Influence, 2022), Tomar, long a freelance writer and now a plagiarism expert, explains: Yes, that happened when Google became the default search engine in 2000 and the usual copy-paste and essay mill methods no longer worked. But… Cheaters and their enablers would just need to get more creative. If, before, there were just online repositories of essays and the people who curated them, Read More ›

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The Brave Search Engine Survives. So Does Privacy Still Matter?

Despite Google’s overwhelming dominance, Brave clocked 2.5 billion searches since this time last year

Last year, we wrote about the Brave search engine, headed up by Mozilla pioneer Brendan Eich. Brave Search offered the first true alternative to Google since Bing by introducing a third English language index and protecting user privacy. A nice idea, many have thought, but who really cares? So what if Big Tech makes largely unaccountable billions from marketing our information, as long as the social media services it provides remain free? So perhaps surprisingly, Brave is hanging on. Tech maven Jacob Carpenter noted recently at Fortune that, while Google owns 92.5% of the search market business according to StatCounter, that number hasn’t changed much over a decade. And Brave is reporting 2.5 billion searches from its current search engine’s Read More ›

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Stock Market Management

Some Economic Models are Alluring, Others are Useful

In some markets, prices are affected by market forces and in others, like the job market, they are not

Statistician George Box is credited with the aphorism, “All models are wrong, but some are useful.” Unfortunately, as the brilliant economist Ed Leamer, once quipped, “Economists are like artists. They tend to fall in love with their models.” A large part of the art of economics is distinguishing between attractive models and useful models. The traditional bedrock of economics is the demand-and-supply model. Every introductory economics course explains how demand and supply are related to price and how the equilibrium price is where demand is equal to supply. This can be a very useful model for predicting how changes in demand and supply affect prices and trades — if we make the tempting assumption that the market price is equal Read More ›

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Why Giving the Second Best Guy a Chance Is a Smart Move

Business prof Gary Smith explains…

Gary Smith, author of The AI Delusion, has some interesting advice for those who think that a star athlete wins only on performance: It doesn’t quite work that way: A study by two business school professors, Cade Massey and Richard Thaler, found that the chances that a drafted player will turn out to be better than the next player drafted in his position (for example, the first quarterback drafted compared to the second quarterback drafted) is only 52%, barely better than a coin flip.Yet, teams pay much more for early draft picks than for later picks. Even leaving salary aside, teams that trade down (for example giving up the first pick in the draft for the 14th and 15th pick) Read More ›

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Inflation, dollar hyperinflation with black background. One dollar bill is sprayed in the hand of a man on a black background. The concept of decreasing purchasing power, inflation.

Will Higher Prices Disarm Russia? It’s Complicated…

The effects of hyperinflation are subtle, but very real

The annual rate of consumer price inflation in Russia was 9% in February and 17% in March. For producer prices, the March number was 27%. Is Russia headed for hyperinflation, with prices increasing at triple-digit rates or more? I don’t know, but it is worth remembering what happens during hyperinflations. Many people believe that higher prices make everyone worse off. This is not true. Buyers pay more, but sellers receive more. One person’s higher price is another’s higher income. If all prices and incomes were to increase by the same amount — say 10 percent — everyone’s real, inflation-adjusted income would be unchanged. The true costs of inflation are more subtle. In practice, within every inflation, some prices increase more Read More ›

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We studied together now were graduating together. Portrait of a group of students taking selfies on graduation day.

Historically Black Colleges/Universities Crush School Rankings

According to a new metric that rewards per-dollar effectiveness as opposed to the benefits of lavish endowments, they took three spots out of the top five

While popular rankings of colleges and universities — like that of U.S. News and World Report — have always been top secret, journalist Malcolm Gladwell, working with a team of Reed College researchers, managed to “crack the code.” And, as Academic Influence tells it, an unhappy truth emerged: What troubled Gladwell is that schools like Dillard University and Reed College could never, given the way college rankings were set up, receive the recognition they deserved. The whole ranking system was rigged against them. Gladwell focused especially on Dillard University, an HBCU [historically Black college or university] in New Orleans. By making its mission to serve underserved populations, Dillard was, in effect, getting penalized by U.S. News & World Report, which puts a premium in its Read More ›

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Empty colored carbonated drink bottles. Plastic waste

Urban Mining: Turning Urban Waste Into Valuable Products

Renowned synthetic chemist Jim Tour shows how we can turn discarded plastics into graphene, a product useful in industry

There’s a gold mine, so to speak, in the garbage but it takes a gifted chemist to develop processes that turn the trash to valuable industrial materials. At COSM 2021, James Tour talked about his team’s work in developing such processes: The Nanotech Revolution: Our Zero-Waste Energy Future (November 11, 2021) Dr. Jim Tour, Professor of Chemistry at Rice University, gives a riveting tour of how waste products can be converted to graphene, an extremely valuable material with a host of useful applications—from medical applications to new strong and lightweight materials to an energy source for zero CO2 emissions. Tour and his team have developed methods for turning carbon waste into graphene, an allotrope of carbon that can be stacked Read More ›