• Tag Archives Uber
  • The United States Of Unicorns

    The United States is home to 105 unicorn companies valued at $1B+.
    As of 7/25/2017, CBInsights.com reports that six private US companies are worth over $10B. The two most valuable unicorns in the US are Uber ($68B) and Airbnb ($29.3B). Palantir Technologies and WeWork, both valued at $20B, are tied for third.
    Of the top four highest valued, only WeWork (which is based in NYC) is headquartered outside California.
    California has the highest unicorn ‘population’ of any US state by far, with 62 billion-dollar startups inside its borders. New York ranks second with 15, followed by Massachusetts and Illinois with five each. Eight other states and the District of Columbia are also home to at least one company worth $1B+.

    This post was published at Zero Hedge on Aug 6, 2017.

  • One Hedge Fund CIO’s Conversation With His Uber Driver

    In his latest weekly letter to clients, One River CIO Eric Peters shifts his attention away from his two favorite topics of monetary policy and capital markets, to unveil a streak of contrarian skepticism on the topic of “technological disruption”, and in his trademark anecdotal style, present a hypothesis that would be most unwelcome in virtually every Econ 101 class and Venture Capitalist Headquarters: stating that “we should be careful not to overlook the possibility that today’s disruptive technology companies may be not much more than mechanisms to drive wages down to subsistence levels’ alleging that ‘these companies rely less on technological innovation per se, but on changing employment styles and reducing total wages, while imposing harsher working conditions.”
    His conclusion: ‘the nature of technology depends very much upon what the public can be induced to put up with.’
    And just to make his view more palpable he presents the following conversation with his Uber driver:

    This post was published at Zero Hedge on Jul 9, 2017.

  • “Technology Is Replacing Brains As Well As Brawn” – Challenging The ‘Official’ Automation Narrative (& Social Order)

    Academics and economists have repeatedly underestimated the impact that immigration and automation would have on the labor market. As data on productivity gains and labor-force participation clearly show, the notion that innovation ultimately creates jobs by allowing workers to focus on higher-level problems is an illusion. If it were true, then why aren’t we already seeing more of the 20 million prime-age men who have inexplicably dropped out of the labor force welcomed back in?
    As we’ve noted time and time again, after decimating American manufacturing jobs in the 1990s, automation is now coming for service-industry workers like those in the retail and food-service industries. Earlier this week, we shared an analysis from Cowen that showed new kiosks being adopted by McDonald’s will result in the destruction of 2,500 jobs at its US eateries. And now, Bloomberg has published a ‘quick take’ questioning this ‘official’ narrative and pointing out the very real carnage that service sector workers are already facing. In it, the reporters noted how economists have repeatedly misjudged how our capacity to innovate would impact the labor market. For example, 13 years ago, two leading economists published a paper arguing that artificial intelligence would never allow a driverless car to safely execute a left turn because there are too many variables at work. Six years after that, Google proved it could make cars fully autonomous, threatening the livelihood of millions of taxi and truck drivers. And now Google, Uber, Tesla and the big car manufacturers are all exploring and testing this technology. Ford has said it plans to introduce a fully autonomous car by 2021.

    This post was published at Zero Hedge on Jun 26, 2017.

  • Cab Drivers Union Says Chicago Taxi Industry Near Collapse

    In addition to repaying loans on their medallions, taxi operators also have to pay thousands of dollars each year in city expenses, like the ground transportation tax and medallion license renewal fee – expenses that rideshare drivers are not subject to. (Cab Drivers United/ Twitter)
    Ghana-born John Aikins has been a cab driver in Chicago for two decades. About 15 years ago, he decided to go into business for himself by taking out a loan with his wife to purchase a medallion – a city-issued license to operate a taxi – for $70,000. Paying it off within a few years thanks to a steady stream of passengers, they took out loan for a second medallion five years ago, using the first as collateral. Watching his medallions appreciate in value over the years, Aikins planned to eventually sell or lease them to other drivers, a common practice in the industry. ‘I hoped it would be my retirement investment, and I had planned to retire this year,’ Aikins told In These Times.
    But with the introduction of Uber and other rideshare companies to the city – which can operate without the expensive, city-issued medallions – Aikins has seen his clientele plummet over the past three years, making it increasingly hard to keep up with his medallion loan payments.

    This post was published at Zero Hedge on Jun 18, 2017.

  • How Much Do People Actually Make From “Gigs” Like Uber And Airbnb

    Coined shortly after the financial crisis in 2009, the so-called ‘gig economy’ or ‘sharing economy’ refers to the growing cadre of companies like Airbnb, Lyft, and TaskRabbit – platforms that employ temporary workers who provide a wide variety of services: delivery, ridesharing, rentals, and odd jobs. A recent Pew study estimated that nearly a quarter of all Americans earn some money through these platforms.

    This post was published at Zero Hedge on Jun 16, 2017.

  • When Will Janet Live Up To Her Reputation?

    I am asking you to put aside all your notions about monetary policy for a moment, and think about the next couple of points with an open mind. Forget about scary Central Bank balance sheets. Fight the urge to worry about the unprecedented quantitative easing programs. Dismiss the warning cries of the frightening levels of debt. Ignore the apocalyptic forecasts of coming stock market crashes. Let’s just have a look at the data. And most of all, let’s not worry about what should be done, but think about what will be done.
    Rightly or wrongly, the Federal Reserve has a dual mandate. They are tasked with maximizing employment and maintaining price stability. Although many will debate what constitutes price stability, the Federal Reserve has interpreted it as a 2% inflation rate. You might think this absurd, so be it. It is what it is. Complaining will get you about as far as yelling at clouds.
    When Janet Yellen took the reins of the Federal Reserve, many pundits predicted a period of exceptionally easy monetary policy as she was widely viewed as a uber dove. But has her reputation proved deserved?

    This post was published at Zero Hedge on Jun 14, 2017.

  • The Internet Helped Kill Inflation In America, Says Credit Suisse

    Whether or not San Francisco Fed President John Williams is right about US inflation and employment being about as close to the central bank’s targets as investors have seen – as he told CNBC two days ago – is irrelevant: The central bank is going to raise interest rates two more times this year no matter what happens to consumer prices, says Credit Suisse Chief Investment Officer for Switzerland Burkhard Varnholt.
    That’s because it’s pointless waiting around for prices to rise when the real reason inflation is low – and will likely remain low – has nothing to do with the Fed, but with a structural shift in the US economy that’s being driven by technology giants like Amazon and Uber. Burkdard says these companies have ‘turned most companies and sectors into price takers rather than price makers.”
    ‘Well look, inflation has been gone for quite some time and what’s really killed inflation clearly isn’t the Federal Reserve’s monetary policy but the Internet – it’s the sharing economy, the network economy it’s the uber-deflationary companies like Uber, Amazon, Airbnb and the like who have transformed most companies and most sectors into price takers rather than price makers.’

    This post was published at Zero Hedge on May 30, 2017.

  • The First Crack Appears In The Second Tech Bubble

    By now everyone knows it: what is going on with a handful of tech stocks is remarkably similar to the irrationally exuberant events from the first tech bubble at the turn of the century.
    Four weeks ago, Goldman pointed out that in 2017, just 10 companies are responsible for half of the entire S&P’s rally YTD with the top five, AAPL, FB, AMZN, GOOGL, and MSFT – have accounted for nearly 40% of returns.
    Shortly thereafter, when looking at the latest set of 13F filings we found that virtually every prominent hedge fund has piled into the most prominent tech names: As Bloomberg noted, with an average gain of 26% , “it’s hard to overstate the influence of just six stocks on the U. S. stock market in the first quarter: Facebook Inc., Apple Inc., Amazon.com Inc., Microsoft Corp., Alphabet Inc. and Netflix Inc.”
    This was shown just days later by Bank of America which showed that annualized tech inflows are now the strongest this century, running at an unprecedented 25% of AUM, which BofA dubbed a “sign of renewed exuberance.”

    This post was published at Zero Hedge on May 30, 2017.

  • Peso Pounded As Political Risk Re-Emerges In Mexico

    The Mexican peso tumbled more than 1% this morning, more than every other major emerging-market currency except the South African rand.
    Bloomberg reports that traders were anticipating a victory for the opposition Morena party in this weekend’s gubernatorial elections in the state of Mexico, according to Win Thin, Brown Brothers Harriman & Co.’s head of emerging markets in New York.
    And the peso is back at one-week lows

    This post was published at Zero Hedge on May 30, 2017.

  • Personal Spending Growth Tumbles To 7-Month Lows After Dramatic Revisions

    Having weakened to unchanged for the last two months, April saw personal spending rise 0.4% MoM (as expected) and personal income rise 0.4% MoM (as expected). However, year-over-year growth in spending (+4.3%, weakest since Sept 2016) and income (+3.6%, weakest since Jan 2017) both signaled a rolling over of the post-Trump exuberance (just in time for another rate-hike by the The Fed).
    Major (upward) revisions to spending data seems to have exaggerated April’s demise…

    This post was published at Zero Hedge on May 30, 2017.

  • Seth Klarman On ‘Trumptopia’: “Investors Are Being Too Trusting”

    Via RealInvestmentAdvice.com,
    Baupost Group’s Seth Klarman laid out his concerns with the market in a recent client letter…
    ‘Risk, Klarman wrote, is the most important consideration when investing, and investors are being too trusting. When share prices are low, as they were in the fall of 2008 into early 2009, actual risk is usually quite muted while perception of risk is very high. By contrast, when securities prices are high, as they are today, the perception of risk is muted, but the risks to investors are quite elevated.’
    The problem with overvaluation and investor exuberance is they are clear hallmarks of historical bull market peaks. This is particularly the case when there is a central asset, or asset class, that investors are piling headlong into without regard to the consequences. As I addressed recently:
    ‘When it comes to investing, ALL investors, individual and professionals, are subject to making ‘stupid’ decisions. As Idiscussed recently: At each major market peak throughout history, there has always been something that became ‘the’ subject of speculative investment. Rather it was railroads, real estate, emerging markets, technology stocks or tulip bulbs, the end result was always the same as the rush to get into those markets also led to the rush to get out. Today, the rush to buy ‘ETF’s’ has clearly taken that mantle, as I discussed last week, and as shown in the chart below.’

    This post was published at Zero Hedge on May 29, 2017.

  • What Keeps Bank of America Up At Night

    It has been a painful, bruising intellectual exercise for BofA’s HY credit strategist Michael Contopoulos, who after starting off 2016 uber-bearish, was – together with every other money manager and advisor – taken to the woodshed, and forced to flip bullish, kicking and screaming, and advising BofA clients to buy the same junk bonds he told them to sell just a few months prior. Now, thanks to Trump, he may be finally seeing a glimmer of the bearish light returning, and in a note published this morning, Contopoulos asks whether the US is looking at a replay of 2014 and 2015, when as a reminder, a false dawn turned out to be an ugly dusk, and forced first the BOJ, then the ECB to intervene aggressively with even more QEasing.
    As BofA admits, “the last two weeks have further underpinned our belief that the market has had misplaced optimism in the new administration’s reform agenda, while we find more and more evidence that suggests the macro environment echoes that of 2014 and 2015. Meanwhile, the market environment has closely tracked that of late 2013 and early 2014, when expectations for higher rates, low defaults and strong fundamentals caused a bid for risk that sent yields to sub-5% until geopolitical risks shocked investors (a plane being shot down over Ukraine). Once cracks were exposed in 2014, and illiquidity concerns replaced a FOMO (fear of missing out) attitude, the ensuing collapse in crude left investors woefully unprepared for the troubles of the next year and a half.”

    This post was published at Zero Hedge on May 25, 2017.

  • ECB Warns Of “Excessive Exuberance” In House Prices; Sees Financial Instability Due To Higher Yields

    In an unexpected two-part warning from the ECB, the European Central Bank warned of ‘excessive exuberance’ in some European housing markets, driven by offshore buyers, that could spread to other areas in a ‘ripple effect.’ Separately, the ECB also said “debt-sustainability concerns” have risen in the past six months amid a potential increase in yields and political uncertainty in some countries.
    We start with the latter warning, which we find ironic as it is a function of the ECB’s own policies of keeping rates suppressed at record lows to promote inflation, and now that inflation has finally emerged, the ECB is worried about the spillover and unwind of its policies. “Risks to financial stability stemming from financial markets remain significant,’ the ECB said in its Financial Stability Review. An abrupt bond-market repricing could ‘materialize via spillovers from higher yields in advanced economies, in particular the United States.’
    The ECB also warned that euro-area banks remain vulnerable as low interest rates and a big stock of non-performing loans in some regions challenge profitability. It cited structural challenges in the industry, including overcapacity and too little income diversification.

    This post was published at Zero Hedge on May 24, 2017.

  • “Somewhat Underwhelming” US Manufacturing Slumps To 8-Month Lows As Services Rebound Amid Soaring Costs

    Weak Chinese PMIs and ‘steady’ European PMIs were trump by German IFO exuberance overnight ahead of US PMIs. Having tumbled to their lowest level since September, May preliminary US PMIs were mixed with Manufacturing slumping to 8-month lows and Services rebounding to 4-month highs.
    The overall compoosite PMI rose modestly but the divergence betwen manufacturing and services is widening once again (and remember that has never ended well for services)
    Measured overall, average cost burdens increased at a robust pace during May. This was driven by the steepest rise in service sector input prices since June 2015.

    This post was published at Zero Hedge on May 23, 2017.

  • #Carmageddon for Rental Car Companies: Wolf Richter on WRKO Boston

    Shares of global rental car conglomerate Hertz have plunged over 76% since last July, including Tuesday’s dive after its ‘earnings’ fiasco. On Wednesday, shares fell 2.4% to $12.48. Liquidity problems loom on the horizon and its business model is threatened by disruptions, including rideshare companies.
    Corporate customers and tourists are switching their ground-transportation dollars to rideshare companies, particularly Uber. This shift also dents sales for automakers and pressures prices down in the used car market, at the worst possible time, just when the US is sinking deeper into a ‘car recession.’
    Here I am with hosts Barry Armstrong and Chuck Zodda, on Boston Business Radio WRKO, Financial Exchange Network, taking it from there:

    This post was published at Wolf Street on May 11, 2017.

  • The Case of the Missing U.S. Stocks

    In the last 20 years, the U. S. stock market has undergone an alarming change that too few people are aware of or talking about. Between 1996 and 2016, the number of listed companies fell by half, from 7,300 to 3,600, according to a recent report by Credit Suisse. This occurred despite the U. S. economy growing nearly 60 percent over the same period.
    What’s even more flummoxing is that the U. S. seems to be the only developed country that lost so many stocks. Most other countries actually gained around 50 percent.
    This matters because the U. S. stock market accounts for a little over half of the entire global equity market, meaning a huge (and growing) number of investors and fund managers now have fewer options to choose from than they did only a couple of decades ago.
    So why’s the pool of publically-traded companies shrinking? We can point to a few different culprits.
    For one, merger and acquisition (M&A) activity has strengthened in recent years, and when an M&A takes place, a company is consequentially delisted (if it was listed before the deal). The same thing happens, of course, when a company goes out of business.
    Another reason could be the growth of private capital, which allows companies to raise funds without having to go public. Between 2013 and 2015, the amount of private money invested in tech start-ups alone tripled from $26 billion to $75 billion, according to consulting firm McKinsey. As a result, more and more software firms are managing to reach $10 billion in value before their IPO. Think wildly successful companies like Dropbox, Airbnb, Pinterest, Uber – all of which, for now, have avoided selling shares to public investors.

    This post was published at GoldSeek on 10 May 2017.

  • Hertz Gets Crushed after ‘Even Worse than Expected’ Loss

    #Carmageddon and Uber did it. For Carl Icahn, it just doesn’t let up.
    Shares of Hertz Global Holdings plunged 18% in late trading on Monday to $12.25 after it reported another fiasco quarter, missing even the terribly low analysts’ expectations.
    On Sunday I postulated: ‘Expectations for Q1 are so low that it will be hard to report ‘worse than expected’ numbers.’ But buffeted by all sides, Hertz managed unexpectedly to pull it off.
    Global revenues in the first quarter fell 3.4% year-over-year to $1.9 billion. In the US, revenues fell 3.8% to $1.35 billion.
    Its ‘total revenue per unit per month,’ a key industry metric, fell 5% globally to $889. In the US, it fell 8% to $928.
    Despite the deteriorating revenue metrics, the average number of vehicles in the fleet rose 4% to 478,000 in the US and 2% internationally to 150,400. More vehicles translate into higher costs.
    On the revenue side, Hertz is getting hammered by rideshare companies. Corporations and non-expense-account tourists are shifting their ground transportation spending to rideshare companies, particularly Uber, from taxis and rental cars. Here are the numbers that I pointed out yesterday.

    This post was published at Wolf Street on May 8, 2017.

  • Here We Go Again: NY Fed Cuts Q2 GDP To 1.8% From 2.3% (Atlanta Fed Still At 4.2%)

    It appears that the Atlanta Fed and NY Fed GDP trackers have decided to flip.
    While last quarter, it was the Atlanta Fed which started off optimistic, predicting just shy of 3% in Q1 GDP growth, only to slash it all they way down to 0.4%, the NY Fed kept its exuberance – in big part due to reliance on soft data – until the bitter 0.7% Q1 GDP announcement by the BEA last week.
    But, it’s now a new quarter, and everything resets, and while the Atlanta Fed has once again started off strong, expecting 4.3% initially although modestly trimming its exuberance to 4.2% in Q2 GDP yesterday – a number which we expect to decline materially once again – this time the NY Fed, perhaps wishing to avoid another quarter of mockery, is far more cautious, and in its latest just released Nowcasting report, the NY Fed now expected Q2 GDP to grow by only 1.8%, down from 2.3% due to “negative surprises from the ISM manufacturing survey as well as import and export data only partly offset by positive surprises from the employment report.”

    This post was published at Zero Hedge on May 5, 2017.