Hi All,
I hope you all are doing well and staying healthy during this time. Last week 5M more people filed for unemployment. At this point 26.5M people have filed for unemployment. In 4 weeks. This is unprecedented.
I hope you don’t need this but if you are in the US and are reading this here is a link of open jobs. And if you’d like to add your name as a jobseeker here are two lists Google Sheet | ParachuteList. First Round has a curated set of links as well.
Times we live in.. Free gas? Naah we’ll pay you!
U.S. oil prices went negative on Monday, as a futures contract set to expire this week dropped to -$40.32 — the lowest since 1946, just after World War II, according to Bloomberg. The move suggested American producers are paying customers to take oil off their hands as they struggle to find storage. The coronavirus pandemic is hitting global demand for oil, which is projected to fall by a record amount this year, according to the International Energy Agency. Lower prices — also spurred by technical factors in trading and a price war between Russia and Saudi Arabia — can help consumers, but may push producers to bankruptcy and threaten some efforts to cut pollution.
Interesting note from Arkinvest on Auto Loan delinquencies (all content below written by ArkInvest)
Based on the success of ride hailing networks and the shift from gas-powered to electric vehicles, ARK believes that the risks to auto loans and the asset-backed securities supporting them are not well understood and could cascade through the global auto ecosystem. As shown below, the percent of auto loans delinquent by 90 days or more has been rising for almost four years and is approaching levels last seen during the Global Financial Crisis (GFC) in 2008 and 2009. During the GFC, most people prioritized servicing their auto loans over their mortgages because, in the absence of ride-hailing, they relied importantly on cars to keep their jobs.
During the coronavirus crisis, the situation has flipped. Forced to work from home, breadwinners are prioritizing the servicing of their mortgages, especially now that ridesharing offers an alternative to car ownership. As a result, the percentage of delinquent auto loans could double or more, approaching levels similar to mortgage loans or even credit cards during the GFC.
Moreover, investors probably have overestimated the value of the underlying collateral supporting auto loans. While the stock of used vehicles predominantly is gas-powered and human-driven now, the shift to electric and then autonomous vehicles is likely to destroy the residual value of used vehicles.
Who is at risk? Service accounts for a third of auto dealerships’ gross profit will be in harm’s way because the cost of maintaining electric vehicles is a fraction that of gas-powered vehicles, particularly those with over-the-air software updates. Financing and insurance accounts for another third of dealers’ gross profits, both of which should be disrupted in the shift from gas-powered to electric vehicles. Traditional auto manufacturers also have significant exposure to auto loans on their balance sheets and have been incentivizing sales with cheaper financing. If auto loan delinquencies and defaults continue to rise, dealerships could go bankrupt and auto makers could lose both their distribution networks and their ability to generate sales with cheap financing
And this one from ArkInvest on short haul flights being replaced by autonomous vehicles. I can totally see myself doing this rather than dealing with airports
While ARK previously concluded that autonomous cars could provide transportation at a cost lower than the fuel necessary for walking, further research suggests that they should be able to undercut short-haul flight costs as well, as shown below. To avoid airports and airplanes in the future, consumers probably will choose to kick back and watch Netflix or sleep in autonomous taxi backseats. Flights covering 700 or fewer miles, especially routes like 230 miles from Los Angeles to Las Vegas, are particularly at risk.
Note also in the graph above that the cost per mile of short haul flights today is equivalent to that of used cars. As social distancing and travel restrictions subside, consumers are likely to opt increasingly for travel by car as opposed to cramped planes with passengers potentially infected by viruses and bacteria. At less than half the cost per mile, autonomous taxis should accelerate that migration.
The government bailout might be a short-term fix, but the longer-term outlook does not seem promising, as the airline industry is likely to lose share to autonomous taxi networks from its most profitable routes.
COVID & Tech this week
This analysis from Venmo on how spend has changed was interesting. This is based on emojis used on Venmo.
Instagram’s duo (Systrom and Krieger.) have been busy creating an antisocial network. Virality in a different sense I guess. California we’re doing well but we have to step it up!
“Rt” measures the average number of people who become infected by an infectious person. The higher above the number 1, the faster COVID-19 races through a population, while a number below one shows the virus receding. For example, Rt.live displays that Georgia has the highest, most dangerous Rt score of 1.5 while New York is down to 0.54 thanks to aggressive shelter-in-place orders.
Feeling stressed? Emotional Health During the Coronavirus Crisis: How to Cope with Anxiety and Manage Stress at Work
“Here’s what I mean by protecting your own emotions as a manager: If you get overly anxious, you're going to start furiously sending emails at night, frantically trying to catch up or make progress on something that suddenly seems so important. That's when you really stress out your reports, because then they're going to feel obligated to respond right away, and then their stress ripples through the company,” says Fosslien. “So managing your own anxiety and emotions is critical to leading your team through these teams.”
Returning to work? Here is what your company may decide to do to ensure a Covid free workplace : Challenges in reopening tech offices: Distancing and testing
News and the writer …
News is but putty in the hands of the creator. We’re all aware of American journalism that tends to the left or right and how the very same story can be twisted. Just this evening from techmeme on the DOD JEDI contract, two articles:
Links to the actual articles : Microsoft JEDI Contract Was Proper, Pentagon Watchdog Says and Pentagon barred from discussing Trump in JEDI contract probe
A person reading the first headline will assume nothing was wrong with the way the JEDI contract was handled. A person reading the second headline would think that there was political interference … now lets translate this to COVID-19 coverage and this article on how Chinese state propaganda worked:
In contrast, the most popular social media posting on Li Wenliang in the U.S. media (27,263 Reactions, 43,190 times shared) mentions that he was “threatened” and that he had “sounded the alarm” on coronavirus.
Other articles and posts in U.S. media link Li Wenliang’s case to censorship and suppression in China, mentioning how Chinese netizens have demanded freedom of speech since the details of Wenliang’s story were brought to light.
How do you think China handled it? Read this article
The conditions that would end lockdown:
While in principle I agree with this, this is not enough. This leaves a lot to interpretation. For example what does “risk of importing … can be managed”?
Things are changed but permanently? Will we shake hands like we used to? Sit near strangers on public transport? Unlikely until the risk of infection is eliminated or until the risk of death is eliminated (cure or vaccine)
New Guidance From WHO On When To End A Coronavirus Lockdown : Goats and Soda
Ben Evans on COVID and forced experiments. How the world is experimenting online. Fast and furious : COVID and forced experiments
Weddings | Politics (UK cabinet) | Religious worship are all happening online now. Get with the program!
Is the US a developed country? The rules for what makes a country developed have changed. In the way that China skipped desktop computers, India credit cards and went to phones and mobile wallets it does seem like the United States will go through a similar “skip cycle” : As School Moves Online, Many Students Stay Logged Out
The skip cycle could be related to
Wireless internet
The next tech epoch?
Flying cars?
Autonomous public transportation?
And this week’s dozen:
It's time to build from Marc Andressen - a case for reinvesting in the United States. It is kinda weird but it is almost as if the United States did not read up on disruption theory. Complacency (among other reasons) has caused the rise and fall of other great empires. History repeats itself so we either learn now or we’re done for : IT'S TIME TO BUILD. Ben Thompson has come up with a super interesting take on why we have this problem (and the last few paragraphs are super interesting) - It all really boils down to
Tech is more scalable; easier to make money so why bother with harder companies (The one place I admire but also detest Uber)
Venture capital funding models disallow for companies that could be big hits (but become big misses)
Who wants to deal with government and regulation? Not that you can’t build a successful business without it (pre-internet companies are clearly aware of how to do this, be successful, and win - all around the world with all types of government)
If the United States does not truly build again bringing in new talent, immigration in the next one-two-three decades will become harder if not impossible.
This read on enterprise chasms was interesting. Arguably every company that starts with self service wants to go upstream or the other way around since the market exists, you can serve it, and it's got an upper bound in terms of SAM, TAM etc so why let someone else capture it? Why crossing the chasm doesn't work
Good read on what makes a great product manager : Good Product Managers, Great Product Managers
This was a great read. You can’t control some health situations. It is important to make the most of the time you have; please yourself and not others : The Devastating Decline of a Brilliant Young Coder
Don’t fail fast.. learn fast : Why You Don’t Have to Be a Rocket Scientist to Think Like One
It was a simple question no one had thought of asking before. After the Mars Polar Lander crash, we had narrowly focused on the problem with our lander. But the risk wasn’t isolated to the landing system. Any number of random things could break our spacecraft while traveling nearly forty million miles through outer space and landing on a Martian surface littered with scary-looking rocks.
This was a brilliant albeit long read on human psychology. Behavioral econ. is truly a fascinating subject! The Psychology of Human Misjudgment, by Charlie Munger
Radical candor : Radical Candor: The Secret To Helping Your Team Do Its Best
There’s such a giant human dimension to management. Word. Treat people the way you would want to be treated. Never ever assume malice or incompetence. Ask. Never assume. You will be surprised. This was a really really really good read. Managing people is knowing people!
How to make deadlines motivating : How to make deadlines motivating, not stressful
First drafts. Very applicable to any writing. The key is to START. Tear It Up and Start Again
What are you living for?
What virtues are important to you? Resume or eulogy? I mean in some ways this is part of Maslow’s hierarchy. At what point does self actualization kick in? At a certain age? Salary level? Title? There is no one answer; the answer lies within your own personality for the kind of person you want to be; after all when you are dead does it really matter (to you) what people say about you? The article talks about turning a career into a calling. Maybe i'm being skeptical here but that is harder for a lot of people - I for one don't know what my calling is and maybe i'll never figure it out or maybe i don't even have a calling? Who knows? Opinion | The Moral Bucket List
External success is achieved through competition with others. But character is built during the confrontation with your own weakness.
Helicopter parenting es no bueno (picked up those three words from watching Money Heist!)
What leader are you? It depends on your parents
The more overprotective their parents, the less the teens were perceived as having leadership potential by others, and the less likely they were to actually be in leadership roles. Statistically, this link was explained by the fact that the teens with helicopter parents tended to have lower self-esteem, which in turn was associated with being less confident about being a leader.
In the same vein this read on children in America. Protecting children (and I don't have kids so take this with a pinch of salt) is similar to preventing them from building up their immunity by being exposed (in the right way needless to say). This immunity is what keeps such kids healthy. For me it was street food. To date I never get sick from food. In the same way parents need to understand that being anxious and dealing with anxiety is good for the child : Parenting Kids With Anxiety
Innovation builds on top of prior innovation. No rocket science there but if you take certain examples (one I like to think about is air travel or education) has there really been any “innovation”? Planes are higher quality sure, education uses tech (BigTech is trying to penetrate with seeding technology which has been the case for decades - calculator companies, software companies have done this forever)
To me the real question is why has some innovation dried up? Standing on the Shoulders of Giants: The Key to Innovation