November 4, 2013

All that tech glitter is not gold

Posted in Global Economy · 95 comments ·
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Last week was a tale of two economies. One is beaten down, depressed and contracting; the other is upbeat, optimistic and expanding. But be warned because, in a few short years, the former will be copying the latter and the latter will be imitating the former. That’s the way it goes. Investors who put money in selective banks now will do very well, while those who chase the fashionable chimera of companies allegedly ”worth” billions but without profits will get creamed.

Contrast the effervescence of the Dublin Web Summit (which was a brilliant success, hats off to Paddy Cosgrove) with the dejection and bleakness in the banking sector. The high-tech sector is roaring ahead, while the local banking sector appears to be mortally wounded.

Many people are making the mistake of extrapolating today’s realities out into the future and suggesting things go in straight lines. We hear that the smart money is all in tech, financing the dreams of a new generation, and supposedly it is only dinosaurs who remain in old businesses like banking and local financing of basic industries.

Today, I am going to be deeply unfashionable and argue that the opposite is the case. The world doesn’t work in straight lines; rather, it goes in a cycle and is more of a pendulum than an arrow.

Common sense should tell you that when you see a man arriving at a summit in a sports car, fawned over by a political leader, and entering the arena to the tune of James Bond, your critical faculties should not only not desert you, they should be sharpened.

When he tells a rapt uncritical audience of believers that he is going to colonise the universe with his and other people’s money, you should become very worried. In fact, these are moments that will be looked back on as evidence that this industry – or at least a large part of it – is completely mad.

The tech bubble has its hipster companies that make no money, yet are being bought and sold for billions; everyone is cool, young and almost evangelical about the future but, financially, it is a very dangerous place.

On Planet Tech, everything that glitters is potentially gold. Billions of dollars are being pumped into follies that are attempting to change the world, sometimes with little compelling business reason.

Last month, I was at a tech conference on the west coast of America, and it reminded me of being in a room with the Moonies. Everyone was a believer; everyone was without an element of doubt that technology could change the world for the better. Privacy was a thing of the past and an open-all-day, never-switched-off connected world could only be positive. This may or may not be true. It remains to be seen.

When you stand back and look at the industry and its epicentre, Silicon Valley, you see that some people have simply made too much money too quickly and don’t know the value of the stuff. Equally, others who are getting into the game now in the expectation that they, too, will make billions of dollars don’t know the meaning of risk.

Historically, this combination of recently rich people who misdiagnose luck with genius, lots of easy money and nonchalance when it comes to risk, tends to end very badly.

As always in a bubble, those in the middle of it don’t know it is a bubble, and their enthusiasm becomes more and more delirious as each company is floated and more easy money is made.

This bubble is made even more inflated because in this connected, linked world where instant communication can hype things up instantaneously, we see the hype machine driving the hype machine. Twitter and Facebook, both investments – or soon to be investments – are themselves driving up their own value by being the chief propaganda platform for their own bubble.

All the while, lower and lower interest rates are driving cash out in search of the next big thing and, in a world awash with cheap money, it is easy to lose sight of the basics, like profits and value. The sheer momentum of the bubble bulldozes any critical thinking.

Billions of dollars will be lost in this tech industry in the coming years.

When you have new trendy on-line magazines, eulogising entrepreneurs as unique ”visionaries” rather than simply as very creative, hard-working, lucky people as we have had in every generation since the beginning of time, you should pinch yourself.

The modern tech industry, financed by its seed, private equity investors and investment banker executives, who are themselves beneficiaries of the same bubble, will lose fortunes as they chase valuations higher and higher.

But you wouldn’t think that today.

It is a bubble to beat all bubbles, and more money will be lost in that game than almost any other bubble in history because more money has gone into it that any other similar episodes.

Sure, there will be some winners. There are already many winners and, when our neighbours get rich, we tend to lose some of our financial judgment. The more people who are cheerleading the bubble, the longer it will last; but nothing lasts forever.

In contrast, when you see banks closing down, large chunks of debts being written off, huge mortgage arrears and an industry almost afraid of its own shadow, it’s worth considering that things will only get better for this business.

Over the next few years, the banking business will recover. Not the speculative nonsense of the boom years, but – let’s hope – the slow, unimaginative business of lending to people who want to invest and taking deposits from those who want to save.

Just as the collapse of this sector was inevitable after the bubble years, so is its eventual rebirth and rejuvenation. A country needs a banking system and so, at some stage, there is money to be made – and inevitably this will attract new entrants and new investment. The banking departures we saw this week were more a result of the sins of the past than a reflection of the opportunities that will exist in the future.

In contrast, giving billions to people who want to fly close to the sun, no matter how brilliant they are, will end, like Icarus, in a dreadful crash landing.

David McWilliams hosts Kilkenomics next weekend. Tickets at kilkenomics.com

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  1. Subscribe. Looking forward to reading this one.

  2. EugeneN

    This is a slight bit over the top. Firstly its fairly common knowledge that tech booms and busts, and that happened fairly recently – the web 2.0 bubble. Secondly its really not the case that this is going to be a bigger bubble than the housing bubble. I mean you are comparing the potential losses of investors in some companies with the massive debt and destruction of wealth of entire countries because people bought houses fairly valued at 200K for 500K. Housing is far more destructive. The losses here will be the kind of losses which silicon valley took on the chin in 2001, if there are any. Lastly this new bubble, largely mobile based, is one where there is actual money to be made; in the dot com boom people were setting up websites, trying to get millions of users ( which is easy if stuff is free) and then IPO’ing for billions. These days I am not really aware of much in the way of crazy IPOs of that sort, the aim seems to be to make profit, not IPO before you do. And apps which make money – like Hailo etc. – actually have proper business plans. People have to download the app, and that in itself is a greater commitment to that “ecosystem” than bookmarking a website.

    And is there far too much money chasing companies and startups, I am sure there is, what else would venture capital do? It’s still preferential, to my mind, that cash did go there. This year 1.2B of Irish cash will go to…..buying houses. Once again. The super rich will be buying houses in the UK, until that dries up. The new bubble is the same as the old bubble.

    • michaelcoughlan

      Hi Eugene,

      Let me respond respectfully to your post. If a company which exists only in cyberspace fails it vanishes completely.

      When a building company fails with unsold housing ummits those units still exist even though the company is liquidated. If you take the definition of wealth literally “wealth is an abundance of valuable resources or material possesions you will see that unsold housing units are still considered valuable”.

      The wealth isn’t destroyed building houses it’s destroyed when the capital is mis allocated to people who are gombeens and who don’t create wealth but are merely gate keepers put in a position of power over true wealth creators by their buddies in positions of influence.

      The same mis allocation of capital is now occurring in the tech industry once again as happened before and as in my industry the building industry.

      • 5Fingers

        Companies in cyberspace are people with knowhow. They never vanish. Anyway, tech is not as virtual as you think – it is an enabler. Buildings too will benefit or be made irrelevant with technology which the tech literate in the building sector will do.

        Saying there is overallocation to Tech is like saying overallocation to “English” or “Mathematics”. It is meaningless.

        Proper allocation implies the idea that somehow you can plan innovation. You can’t. What is important is that people like you are in there finding out about it and participating rather than cling on to gold for dear life – which may have more of a relative downturn than you expected. There are no guarantees. Your participation as an experienced tech person in the building sector is crucial. Be seeing ya!

        • michaelcoughlan

          Hi 5fingers,

          Let me correct a number of errors you make. First a company Is a separate legal entity to a person and when
          It fails it vanishes completely. The people move on to other projects employments etc. I didn’t say over allocation I said mis-allocation. The measure of wealth creation is called return on capital/equity employed. No revenue and profits is no return and you will see very quickly where capital has been mis-allocated.

          Your right about tech in building though. The next generation technology is 3d building information modelling called Bim. I have a certain amount of expertise in this area but it’s only at the earlier stages of implementation in Irish industry with only leading companies adopting it so watch this space. I just bought more gold. It’s only a small percentage of my portfolio but I’m not letting go.

          Michael.

          • 5Fingers

            No errors. AND Cyber It’s not about websites and IT.

            Work in progress is a residual whether knowledge, software (highly resaleable if built correctly just like buildings), patents or buildings or furniture. It is only a misallocation if you missed spotting it. Knowledge is the key and that is not always available…One saw the wealth, the other did not. Preconceived ideas will wipe you out.

          • michaelcoughlan

            You are entitled to your opinion. Miss allocation is more than you say it is. I don’t have pre conceived ideas. Wealth is something that is created and first seen in the imagination of the wealth creator. It’s not something which pre exists.

      • EugeneN

        You missed my point that this particular tech boom – mobile based as it is – is not the same as the previous dot tech boom in that there is clearly not the rush to IPO based on companies with no actual income as with web 2.0. And my other point, that it would hardly be that disastrous if the “bubble” did collapse, as it would only affect a few silicon investors and not house holders. Those were my only points, and you missed both to talk about a generic tech bubble, without even assuming there is one.

        The latest mobile “bubble” is really only affecting initial seed capital, as companies are not IPO’ing, the general destruction of wealth can’t really happening. ( If you were to name big IPOs recently it would be Twitter and FB, both are safe enough and revenue making before their public offering).

        And the seed capitalists only have to be right about 10% of the time. I don’t think there is any bubble here, in fact.

  3. Pat Flannery

    I’m not sure what David is getting at in this one, other than beware of bubbles.

    Maybe his fear of bubbles is a bit like fear of flying. It is hard for someone who survived a crash, even predicted it, to board another airplane.

    But the flying public soon forgets. So it is with investors. There will always be another bubble, somewhere, in some new industry. Life goes on.

  4. David,
    An enjoyable read and one that reminds me of my time in New York in The late 90′s working on an equity desk. Almost daily young pimple faced near teens would parade past our desk and be led to the senior traders desk in the middle of our trading floor. Minutes later the market bell would toll and the teenagers would become billionaires within seconds, as their profitless incubated firms shares would go public. It was a surreal experience. Alas, many of these investments went to zero!

    I think an even more dangerous cause for the current tech adoration is the fact that “tech” is now ubiquitous and wondrous and has a far greater following with the public. Secondly and possibly more importantly is – the rules of monetary policy have been “fixed”. The reserve banks for the world are printing money to beat the band and now that this genie is out of the bottle it can not be stopped and can only lead to rampant inflation, with doses of deflation on either side.

    The equity bubble is being driven by and large by freshly minted dollars in bank balance sheets. That’s why I believe investors should seek investments that protect against systemic risks, inflation and most importantly diversify their portfolios. Gold glitters for a reason.

    With inflation risks mounting you can bet your bottom dollar that interest rates will be raised (they are currently at 0.50% in Europe)to take the heat out of spending and in the process make bust the average household balance sheet, collapse banks and massively deflate the stock market. Ireland’s population makes up 1% of the EU, Germany matters, Ireland doesn’t. We will likely be collateral damage in this great gamble.

    Regards
    Stephen Flood
    (Views are my own)

    • michaelcoughlan

      Very insightful Stephen.

      Thank you for this. It’s real heavy weight stuff since you worked as a trader in Newyork. Are you still trading for a living?

      Michael.

      • Thank you Michael.

        I do not trade for a living any more. Most of my activity was in the agency side as opposed to the heavier proprietary side, so really working orders for clients who called the market. I got out just after 9/11 and while still in my twenties. It was an amazing experience and I met many great people.
        Stephen

    • frankwalters

      Nonsense, in the 90′s how many ‘teenagers’ did you see become ‘billionaires’? You would find it hard to name more than a few rare cases. Coming from a man who pitches gold.

      • Actually quite a lot really. I note that you seem to discount what I say based on a single aspect of what I do for a living. Perhaps you should focus on the ball and not the man.
        Stephen

  5. JapanZone

    I have no argument with the gist of this article (Beware the Bubble!), but the current tech bubble (not the first, not the last) is a very different animal to our recent credit/property bubble. While the latter was truly smoke and mirrors and resulted in widespread and long-term damage for the vast majority, the “new economy” is shaping the future in a myriad of ways, and creating far more than simply overvalued Facebook shares.

    And while my inner cynic was immediately awoken by the sight of Kenny hitching a ride with Elon Musk, can we simply dismiss as a mad showman someone who in his early 40s includes on his resume PayPal, Tesla Motors and SpaceX?

  6. whatamess

    Our host says:
    “Over the next few years, the banking business will recover. Not the speculative nonsense of the boom years, but – let’s hope – the slow, unimaginative business of lending to people who want to invest and taking deposits from those who want to save.”

    I don’t see the $motivation for any growth in boring banking

    “Just as the collapse of this sector was inevitable after the bubble years, so is its eventual rebirth and rejuvenation”

    i sure wish i could be SO SO optimistic !

    That timeless nugget of “nothing lasts forever” ,eh David

    hmmmmmm

    • whatamess

      Newton’s first law of motion

      An object at rest stays at rest and an object in motion stays in motion with the same speed and in the same direction ,unless acted upon by an EXTERNAL force

      FULL separation of the banks NOW with Glass Steagall,is the force needed!

      then an environment of boring banking can be motivated to grow and bubbles bursting won’t napalm us again and again and again,forever

      • Mr. bonbon?! Is that you?!

      • michaelcoughlan

        You risk falling into the sane trap as bonbon. Endlessly ranting on about GS is a waste of time an effort. Launch your petition or stop wasting your energy and time. You have made your point and I’d say most people agree with you but your going to piss people if if you keep trying to drag everything back to your own views etc.

        Respectfully,

        Michael.

        • bonbon

          A Brutish reply. See below how real economics works.

          • michaelcoughlan

            Hi bonbon,

            Good to hear from you. British am I now? I love when you post because the more you post the more you damage yourself. It’s no problem to manage you and people like you bonbon. Your like a nasty reef in a much used shipping lane. Once you can be identified and a large lighthouse placed to identify you everyone will know to steer clear because you’ll always be there to damage the odd unsuspecting
            victim. The pity for us is that in recent times you haven’t been posting your nonsensical rhetoric. Whether you post or you dont however the advantage is ours.

            Love cuddles and kisses,

            Michael.

          • bonbon

            I actually wrote “Brutish”. Correctly pronounced.

          • michaelcoughlan

            So it seems. I’m not brutish either.

        • whatamess

          Michael

          While you are busy exchanging golden fleeces for filling up with petrol , i will continue to share,not my opinion or view,but the antidote!
          ( FDA approved for decades! )

          Even at a cost of pissing people off?yes.
          You were recently so worried that there is impending war,when the world is engulfed in FLAMES right now! And it will continue to BURN.until an external force acts on it

          • “While you are busy exchanging golden fleeces for filling up with petrol”

            Hohoho! Christmas is coming!

            Touché Michael!

            (Don’t take it too seriously lads).

          • michaelcoughlan

            I don’t know whether you and bonbon are the same person or not whatamess but I can tell you this from your post you will achieve nothing at all in life if your sole purpose is to piss people.

            Split the banks you say? with what? One of David’s hydrogen bombs used to dig a moat around London? You won’t even
            Launch a petition. When challenged to do do so you responded saying your off your ass response was to urge others to act. No off your ass response there. It’s leadership people need to demonstrate not supervision. You don’t even have
            the courage to post in your own
            name.

            Finally Whatamess the sad fact for you is that you suffer from the same mental disease as bonbon. You look at the world like a sociopath in that everyone ELSE is wrong except you. You prove this over and over again by clearly demonstrating that you have no
            intention of ending your tirade irrespective of whiter other people find it distressing or may piss them off which is exactly how a psychopath thinks.

            Poor you and poor bonbon.

          • bonbon

            The Brute of the Blog title goes to you.

          • bonbon

            That’s for @michaelcoughlan !

          • michaelcoughlan

            “brute of the blog”

            Once again bonbon you demonstrate your madness. If there is such a title it isn’t for you to say who gets it as you don’t own the site. Your consistent blasé regarding other people’s property rights demonstrates over and over again your true nature.

            Keep posting bonbon the more you do the more you damage yourself.

            Love cuddles and kisses,

            Michael.

          • whatamess

            yea Bonbon !

            you and your obsession with “property rights” …

            just build a bridge and get over it

            LOL

      • Ryu Hayabusa

        @whatamess

        Good Evening.

        Banksters don’t understand the idea of conservation of momentum or energy… or conservation of endless reams of credit for that matter.

        QE to infinity and beyond..

        http://www.youtube.com/watch?v=ejwrxGs_Y_I

  7. Paul Divers

    Good article. Tech can be nauseating.

  8. 5Fingers

    A most excellent article with one big flaw. It reinforces the notion of a Tech Sector as something different from other sectors. With the result it risks polarising between nerds and the more “conservative sensible” class (sounds a little like old fashioned bankerism). David, YOU YOURSELF are part of the Media Tech Sector courtesy of this Blog and Kilkenomics etc So are Banks, Property and Medicine etc. The show in question is a load of hype for sure and it is right to be anxious as set out in the rest of the article.

    The key to tech is diversification – and the Web summit was rubbish in that regard. I wholeheartedly agree with the dangers of hype and uncritical followership and you posing awkward questions.

    As for the banks recovering, the hope is they do a little more diversification of their portfolio. They now know (I hope naively) that predicting and sure things are bunkum. Let them become technologists and get involved rather than chuckling in the background waiting for the genuinely sincere to be wiped out. Rule should be if a Banks Portfolio is greater than 10% property, the CEO should be fired.

  9. bonbon

    So we are now to be given a choice between different Brutish geometries :

    “Today, I am going to be deeply unfashionable and argue that the opposite is the case. The world doesn’t work in straight lines; rather, it goes in a cycle and is more of a pendulum than an arrow.”

    We all know Shatter’s brutish choice of geometry : “It is timely that we make the most of this annual return to where we were” – Carpe Horam.

    This is the “business cycle” economics of various pundits, quite the contrary, very fashionable in brutish circles.

    The insane belief in the common senses would lead to the brutish conclusion that no other geometry need apply (to quote Maxwell).

    Is’nt it time to dump imperial economics, and move to the higher domain of LaRouche-Riemann? Have a look at the geometry of economic development with energy flux-density and steel :
    The Fusion Torch
    The physical economics of the step-wise jumps in productivity demand neither the Brutish “straight lines”, nor Shatter’s (and DMcW’s) circles and pendulums. And the fusion economy is high-tech, physical economically. It makes the “glitter” that DMcW correctly is wary of, look like a damp squib!

    PS. Cripes, when I hear “pendulums”, are we far from dowsing economics?

  10. EMMETTOR

    Interesting that many of the comments here show how correct David’s analysis is. Maybe people need to believe that the “tech industries” will lead to a revival of some sort in our moribund western economies and this might explain why I see so much blind and frankly naive belief in these shiny new baubles/bubbles. Perhaps, having allowed so many of our real industries migrate out of the capitalist system, into China, with whom we cannot compete because they’re playing by different rules, this represents, not a bright new future but a pathetic scramble for the few scraps we have left. Describing banking as “boring”, with a corollary of “tech” being “interesting” is not a valid critique of either industry’s ability to present a viable business model. What will the income stream for these industries be, sidebar advertising? As it stands, half the adverts on websites are for other websites. Or is it expected that people will pay subscriptions for Facebook, etc? If this isn’t another bubble, where’s the money?

    • bonbon

      That’s good :
      “As it stands, half the adverts on websites are for other websites”.
      An economy of barbers who cyclically or alternatively ( circles and pendulums ) crop hair, is about as viable a business model.

      The worm in this is the geometry, unquestioned, passionately defended, but insane. At least DMcW in the lead is grasping, desperately perhaps, like Hamlet, at

      “The undiscovered country from whose bourn.
      No traveler returns”.

      I believe things have gone so far now that to

      “rather bear those ills we have
      Than fly to others that we know not of?”

      is not an option. Economists cannot Hamlet-out anymore.

    • EugeneN

      No it is not expected that people pay subscriptions for Facebook, but that Facebook will make money from ads. You know, as they are already doing. Where is the money, in advertising? Where is that money being lost from? TV and Newpapers etc.

      As for Facebooks profits – from the latest report and via the NYT.

      http://www.nytimes.com/2013/10/31/technology/rising-mobile-ad-sales-propel-facebook-profit.html?_r=0

      Facebook, which operates the largest online social network, reported Wednesday that its profits doubled in the third quarter, to $621 million, after excluding expenses related to stock options. I am not sure how your idea that FB can’t be profitable could be more wrong (but I remember that people also thought that Google wouldn’t be profitable).

      This is no more “smoke and mirrors” than the money which keeps ITV, or partially keeps RTE alive. Ads are ads. And Mobile ads can, in fact, be a much better sell than TV ads, they can be directed to the level of someone’s street.

      Which is why the present boom ( not really a bubble) is a mobile, not a web boom, and mobile is not really a wealth destroyer in the same way as the web was. In fact the movement away from free newspaper websites to paid apps ( like the Times) is generating money, as is the move away from pirated music to Spotify, iTunes music etc. Maybe not enough, but the mobile boom is not the web bubble.

      Also, since the rest of the western world is in recession, its unlikely that the mobile advertising boom will disintegrate when the world gets back on track. As advertising will increase, and sales of devices will take off even more. I wouldn’t bet against this one.

  11. frankwalters

    Your talking down of Elon Musk is uncalled for. Space X and Tesla and both cutting edge companies that will do more to advance technology than most. The kind of company you reference that have billion dollar valuations with little or no revenue have nothing in common with either of Musk’s businesses.

  12. McGoo

    “Investors who put money in selective banks now will do very well, while those who chase the fashionable chimera of companies allegedly ”worth” billions but without profits will get creamed.”.

    It’s just not that simple:

    1. How are we to select these banks that will do well? How do we obtain accurate information about their financial situation? I certainly don’t believe anything they say, and investing in just one bad bank could easily wipe out any profits made by investing in a number of good banks.

    2. Everyone knows that most tech companies will go bust, but a few will become the biggest most profitable companies on earth. Since no one knows which, the answer is to invest in all of them. One Google or Facebook will cover the losses made on all the ones that died.

  13. bonbon

    Instead of Icarus flying too close to the Sun, bring the Sun’s fusion plasma to Earth. Now, the Luddites and Saboteurs (wooden shoe throwers) like to point up at Icarus and his ballistic trajectory, but to use that for a Brutish agenda is plainly daft.
    Above here the Fusion Torch video is the antidote.

    Breugel’s The Fall of Icarus(Wiki) is a beautiful economics portrait – there no one pays any attention to the legs, but to the economy of that time. Today the characters would all drop everything and bail-in the hapless Icarus.

  14. “..it reminded me of being in a room with the Moonies. Everyone was a believer; everyone was without an element of doubt that technology could change the world for the better. Privacy was a thing of the past and an open-all-day, never-switched-off connected world could only be positive.”

    Tech is a cult, like Finance, like the Moonies. Here’s what happening ‘going forward’. After Snowden, no serious person drinks the Kool Aid that a networked world is hip, happening or ‘could change the world for the better’ without ruthless local and transnational goverment supervision. It could do, but only once the Big Gov, Big Corp 5 Eye Nation + Irish G2 & Vatican Spy Machine is reigned in. Download Collusion and see how anonymous you are as you surf the web. I don’t bother with screen names and haven’t for a decade since i was tipped off about all this whilst protesting the Iraq war and animal torture/slaugher regimes. I’ve deliberately, wilfully trashed my online Web 2.0 identity by merging real/fake personas/avatars/C.Vs and ‘overexposure of real/fake autobiography’ so no-one can reliably data-mine me without spending inordinate amounts of time and money cross-referencing the data blizzard. Not even GCHQ. Track Me Not.

    http://www.cs.nyu.edu/trackmenot/

    Trust me, certain Corporate HR depts get/will soon get all your ‘radical views’ here linked to your official C.V if they have the NSA/GCHQ or Irish Security State Apparatus contacts. It’s not that this site is suspect, they all are…there’s 40k US corporate security state employees with top level access to all your data. Does anyone seriously imagine that isn’t being shared surreptitiously, whilst the Tech fan boys/girls eulogise and evangelise for you to share your every data point? Can you imagine the commercial advantage you gain by breaking a few silly taboos about ‘privacy’ prematurely, before the herd are educated as to why they should be monitored 24/7/365 by marketeers on behalf of politicians and bankers?

    Soon, if not already, there’ll be an ‘Online Singularity Event’ where your credit-rating, employment, pseudo-anonymous and Social Network data status are linked to the Tamagotchi devices that enslave you and report back on you. Then, with ubiquitous embedded cctv/facial recognition/fingerprint technologies and embedded chips in nearly every household device/restaurant/shop, the scene is set for the end of Net Neutrality and for the New Online Serfdom of curated service on the basis of wealth and stasus. That will mean different prices, response times, availability of goods and services depending on your overall ‘consumer profile score’. The future is, in fact, about the convergence of Banking, Government and Technology to roar us back to the C18th Bloodline Privilege which is the goal of Neoliberal Economics. Unless this wake-up call is heeded, then Anonymous will issue a fatwa/edict and totally trash the economic utility of data mining Web 2.0. Track me, yes, openly, with my permission, but not whilst you’re also hiding a DarkWeb, a Silk Road used by the 5 Eye Nation spies.
    The claim is that it’s just ‘meta-data’, but that’s bollocks. When you ring a call-centre, the computer may soon know who you are, how much you earn, what your health is, your porn preferences, and will direct you to the ‘appropriate’ response. If you’re poor, old, ill or otherwise ‘economically inactive’ you’ll wait 15 minutes to get an answer. If you’re rich, 5 seconds. A bespoke web stratified on hierarchical lines of privilege: the very antithesis of Tim Berners Lee dream. He still seems to believe in the dream, but after Snowden, I’m very clear that it’s the crisis of The Corporation vs The Country that will define how/if the benefits of Open Data are democratically shared with citizens, governments and corporations as equals. Or if the walled garden/locked data Ecosystem models of the Social Media Corporations reap all the benefits for their Bankster and Big Government enablers. They claim they didn’t know they were being shafted by back door dildo programmes like Tempora, but that’s untenable.

    I value Capitalist Entrepreneurialism and I’m about to do that gig myself. But it’s now obvious that some Corn-Pone Hitler good ol’boy who siezes control of the Democrats/GOP and gets to be Prez has absolutely everything lined up for the clampdown. It’s funny, Herd Culture Consumers are meant to share their data in trust, but when Snowden shares the data of the scam merchants, he’s a traitor? I’m looking forward to monitoring the debates at Kilkenomics to see if any of this is on the radar screen of celebrity economists yet. Or if it’s dismissed as ‘tin foil hat’ conspiracy. It’s not tin-foil hat, it’s fact. The Snowden revelations have a long way to go. As do those of “Cardinal Snowden”. Forget Da Vinci Code, truth is stranger than fiction…about The Enigma device, Hitler’s Pope, de Valera and…The Entity. Lots of stuff dismissed as ‘conspiracy’ is now shown to be facts, hidden in plain sight from those who chose not to see. Expect fireworks from the Germans over all this… I never say, trade, or receive anything of importance online. Only in mediaeval Latin in ‘confession’, with a white noise machine cranked up.

  15. bonbon

    I wonder when DMcW would have been in a room full of Moonies?
    For the dossier :
    Is Your Clergyman or Congressman a Moonie?

    I wonder how much of the money in various bubbles came from “true believers”?

  16. bonbon

    The seemingly inability of ex-Tigers to think out of the trap laid by Brutish bubbly “economics” is best put in focus by
    How to Create a New Fusion Economy, And Why .

    We stand on the threshold of an age of universal machines!

  17. bonbon

    It is rapidly becoming a choice between Fusion Economics and such jigs as Kilkenomics. Obsession with falling Icarus’ or dodging their landings is one thing. Bruegel’s painting should be a lesson!

    • michaelcoughlan

      “It is rapidly becoming a choice between Fusion Economics and such jigs as Kilkenomics”

      Only in your head god love you.

    • You’ve been captured by a cult. I watched the techno-singularity porn that is “Nuclear NAWAPA: Gateway to the Fusion Economy”. What nonsense. Do you lot even understand the difference between geophysical capital and income, stocks and flows? It’s like any other snake-oil sales pitch, just ignore all the problems technology has caused to date because the next set of technologies will magically be free of dysfunction. Really? It’s just more technological exoskeletal Singularity bullshit. As for the ‘worker productivity gains’ stuff, didn’t any of ye think to include robotics as rendering such human efficient increases largely redundant? It’s technological fundamentalism, another absurd quasi-cult religion like economics. There’s the usual belief in Utopia, as if some new grade of steel will lead to Nirvana for humans, who will be the only species left if this stuff destroys the last remaining habitats for other species. I guess you think you’ll end up on Pandora in a few centuries, still inventing ever more ridiculous technologies to avoid existential reality. I begin my autobiography with the line “if books were going to change anything for the better, it would have happened by now”. I think the next line needs to be “if economics and technology were going to change anything for the better, it would have happened by now” I’m sure various Caesars thought it would all be grand if they just erased the forests of Germania and put the tribes of the Isles of Wonder to the sword to build their ‘efficient’ Roman roads. That didn’t stop their Collapse and no amount of fusion dreaming can stop ours. It’s a shame you’re not going to Kilkenomics as I’d like to grill you in person..maybe next time…I’m wondering how you balance the cognitive dissonance of watching this guff whilst trying not to think of a glowing pink elephant called “Fukushima”. No to Hinckley C. No to more radiation in the Irish Sea. If we’re lucky, there’s be bicycles for all and pain relief for cancer & anaesthesia for operations. And music non stop: the technological singularity is going to be that of Kraftwerk’s eco man-machine, not this silly Star Trek nonsense.

      ???????Tschernobyl v??????Harrisburg ??????? Sellafield ????Hiroshima ???? Fukushima ???????? Nihon demo Houshanou ?????????? Kyoumo itsumademo ???????? Fukushima Houshanou ????????Kuuki Mizu Subete ???????? Nihon demo Houshanou ????????Imasugu Yamero There’s radioactivity also in Japan Today and Forever Fukushima Radioactivity Air Water Everything There’s radioactivity also in Japan Stop Right Now

      http://www.kraftwerk.com/concerts/index-livevideo.html

      • michaelcoughlan

        Hi Andrew,

        “You’ve been captured by a cult”

        I tried to tell him this god love him.

        “It’s a shame you’re not going to Kilkenomics as I’d like to grill you in person”

        I’m not surprised he is not. He dosent even have the courage to post in his own name.

        “I’m wondering how you balance the cognitive dissonance of watching this guff whilst trying not to think of a glowing pink elephant called “Fukushima””

        That’s easily explained. Just like many of the bankers in control he is so blinded by his own madness he doesnt see the correlation between the two therefore doesn’t suffer from the negative effects psychologically speaking.

      • EugeneN

        Andresw you are a total loon. Trying to parse that inarticulate rant ( and did you really write an autobiography?) I see your “argument” is mentioning the bad things that technology – almost entirely nuclear technology – has wrought ignoring the good stuff which keeps you alive, your children alive, your parents alive and lots of people cured in hostels day by day by day. I suppose scientists and doctors never can expect much thanks from the religiously minded.

        Sure, the “singularity” is a cult, but very real technological progress isn’t. And “productivity per worker” includes machines, of course. We aren’t physically “working” – which is a scientific term – harder than the 19th century, we produce more stuff because smart people maintain and write the software for the machines who are working harder than we did, or could. Result: more stuff.

        Why does David attract the loons?

        • Clearly, you think your opinion is authoritative. It isn’t. Not to me, anyway. Just because you struggle to ‘parse’ my comment doesn’t mean it’s obtuse.

          This planet doesn’t exist for just one species and their absurd techno fantasies.

  18. Ryu Hayabusa

    I think his Purpleness puts it fairly succinctly on this one.

    http://www.youtube.com/watch?v=KXdrgiAEjwo

  19. Ryu Hayabusa

    @whatamess,

    What a shot across the boughs!

    That Fort Minor ain’t a playa..

    He’s a wannabe Fitty or Dr. Dre.

    He got no game! ;)

  20. whatamess

    i’ll show you creativity RYU and he ain’t no wannab neeeeva…you feel me?

    Far from the power of Hydrogen’s isotopes

    BUT

    MJ’s got game !!

    maybe start at 30.30

    http://www.youtube.com/watch?v=VOqnQjl0870

  21. [...] All that tech glitter is not gold | David McWilliams Common sense should tell you that when you see a man arriving at a summit in a sports car, fawned over by a political leader, and entering the arena to the tune of James Bond, your critical faculties should not only not desert you, they should be sharpened. When he tells a rapt uncritical audience of believers that he is going to colonise the universe with his and other people’s money, you should become very worried. In fact, these are moments that will be looked back on as evidence that this industry – or at least a large part of it – is completely mad. The tech bubble has its hipster companies that make no money, yet are being bought and sold for billions; everyone is cool, young and almost evangelical about the future but, financially, it is a very dangerous place. Sign in or Register Now to reply [...]

  22. [...] in their pockets) and it all seems to be flooding into the Tech Venture industry, creating what David McWilliams suggests is a bubble. It does appear as if we’ve been here before circa 2000 in the period leading up to the dot com [...]

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